DANI WOOLTEX CORPORATION & ORS.versusSHEIL PROPERTIES PVT. LTD. & ANR.

                  [2024] 6 S.C.R. 761 : 2024 INSC 433

                   Dani Wooltex Corporation & Ors.
                                  v.
                   Sheil Properties Pvt. Ltd. & Anr.
                       (Civil Appeal No. 6462 of 2024)
                                  16 May 2024
               [Abhay S. Oka* and Pankaj Mithal, JJ.]

                            Issue for Consideration
       When can the power under clause (c) of sub-section (2) of section
       32 of the Arbitration and Conciliation Act, 1996 be exercised; Is it
       the Arbitral Tribunal’s duty to fix a meeting for hearing; Whether the
       failure of the claimant to request the Arbitral Tribunal to fix a date
       for hearing, per se, is the ground to conclude that the proceedings
       have become unnecessary; Whether abandonment of claim by a
       claimant can be a ground to invoke clause (c) of sub-section (2)
       of section 32.

                                    Headnotes
       Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
       section (2) of section 32 – When can the power under clause
       (c) of sub-section (2) of section 32 of the Arbitration and
       Conciliation Act, 1996 be exercised:
       Held: The power under clause (c) of sub-section (2) of Section 32
       of the Arbitration Act can be exercised only if, for some reason,
       the continuation of proceedings has become unnecessary or
       impossible – Unless the Arbitral Tribunal records its satisfaction
       based on the material on record that proceedings have become
       unnecessary or impossible, the power under clause (c) of sub-
       section (2) of Section 32 cannot be exercised – If the said power
       is exercised casually, it will defeat the very object of enacting the
       Arbitration Act. [Para 21(a)]
       Arbitration and Conciliation Act, 1996 – Is it the Arbitral
       Tribunal’s duty to fix a meeting for hearing:
       Held: It is the Arbitral Tribunal’s duty to fix a meeting for hearing
       even if parties to the proceedings do not make such a request – It
       is the duty of the Arbitral Tribunal to adjudicate upon the dispute
       referred to it – If, on a date fixed for a meeting/hearing, the parties
* Author
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       remain absent without any reasonable cause, the Arbitral Tribunal
       can always take recourse to the relevant provisions of the Arbitration
       Act, such as Section 25. [Para 21(b)]
       Arbitration and Conciliation Act, 1996 – Whether the failure of
       the claimant to request the Arbitral Tribunal to fix a date for
       hearing, per se, is the ground to conclude that the proceedings
       have become unnecessary:
       Held: The failure of the claimant to request the Arbitral Tribunal
       to fix a date for hearing, per se, is no ground to conclude that the
       proceedings have become unnecessary. [Para 21(c)]
       Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
       section (2) of section 32 – Whether abandonment of claim by
       a claimant can be a ground to invoke clause (c) of sub-section
       (2) of section 32:
       Held: The abandonment of the claim by a claimant can be a
       ground to invoke clause (c) of sub-section (2) of Section 32 – The
       abandonment of the claim can be either express or implied – The
       abandonment cannot be readily inferred – There is an implied
       abandonment when admitted or proved facts are so clinching that
       the only inference which can be drawn is of the abandonment –
       Only if the established conduct of a claimant is such that it leads
       only to one conclusion that the claimant has given up his/her claim
       can an inference of abandonment be drawn – Even if it is to be
       implied, there must be convincing circumstances on record which
       lead to an inevitable inference about the abandonment – Only
       because a claimant, after filing his statement of claim, does not
       move the Arbitral Tribunal to fix a date for the hearing, the failure
       of the claimant, per se, will not amount to the abandonment of
       the claim. [Para 21 (d)]
       Arbitration and Conciliation Act, 1996 – Clause (c) of sub-
       section (2) of section 32 – A part of first appellant’s (D) property
       was permitted to be developed by S under Development
       agreement – A MOU was also executed between the first
       appellant and M, by which first appellant agreed to sell another
       portion of property to M – Dispute arose – A consensus was
       reached between all the three parties to appoint a Arbitrator –
       Arbitral Tribunal had to deal with claims filed by both S
       and M – M’s claim culminated in an award on 06.05.2017 –
[2024] 6 S.C.R.                                                            763

  Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


     However, arbitral proceedings based on claim filed by S did
     not proceed – First Appellant filed an application invoking
     the Arbitral Tribunal power under Clause (c) of sub-section
     (2) of section 32 of the Arbitration Act contending that S had
     abandoned arbitral proceedings – Following, the Arbitral
     Tribunal terminated arbitral proceedings – However, the Single
     Judge of the High Court directed the tribunal to continue with
     the proceedings – Propriety:
     Held: The question is whether S abandoned its claim filed before
     the Arbitrator – S had regularly attended meetings held to hear
     M’s claim – During the period during which the claim of M was
     heard, at no stage, the Arbitrator suggested that the claim of S
     could be heard simultaneously – On the contrary, from the conduct
     of the parties and the Arbitrator, an inference can be drawn that
     M’s claim was given priority – In any case, there is no express
     abandonment – Even if it is to be implied, there must be convincing
     circumstances on record which lead to an inevitable inference
     about the abandonment – In the facts of the case, there was no
     abandonment either express or implied – In a case where the
     claim is abandoned, the Arbitrator can take the view that it would
     be unnecessary to continue the proceedings based on the already
     abandoned claim – In this case, the inference of the abandonment
     has been drawn by the Arbitrator only on the grounds that S did not
     challenge the M award and took no steps to convene the meeting
     of the Arbitral Tribunal – The failure to challenge the award on M’s
     claim will not amount to abandonment of the claim filed by S – In
     the claim submitted by S, a prayer was made in the alternative for
     passing an award in terms of money against the first appellant –
     Therefore, there was absolutely no material on record to conclude
     that S had abandoned its claim or, at least, the claim against the
     first appellant. [Para 20]

                              Case Law Cited
     NRP Projects Pvt. Ltd. & Anr. v. Hirak Mukhopadhyay & Anr., 2012
     SCC OnLine Cal 10496; Kothari Developers v. Madhukant S Patel,
     Arbitration Petition (L) No.29362 of 2022; Lalitkumar V Sanghavi
     & Anr. v. Dharamdas V Sanghavi & Ors. [2014] 3 SCR 558 : 2014
     (7) SCC 255; Godrej and Boyce Manufacturing Company Limited
     v. Municipal Corporation of Greater Mumbai & Ors. [2023] 6 SCR
     56 : 2023 SCC Online 592 – referred to.
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                                  List of Acts
       Arbitration and Conciliation Act, 1996.

                              List of Keywords
       Exercise of power under clause (c) of sub-section (2) of section
       32 of the Arbitration and Conciliation Act, 1996; Abandonment of
       claim; Arbitral proceeding becoming unnecessary and impossible;
       Express and implied abandonment of claim; Absence in arbitral
       proceedings; Fixing of date of hearing by Arbitral Tribunal.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No.6462 of 2024
       From the Judgment and Order dated 03.07.2023 of the High Court
       of Judicature at Bombay in ARBP No.472 of 2021
                          Appearances for Parties
       Nakul Divan, Sr. Adv., Gaurav Agarwal, Mahesh Agarwal, Rishi
       Agrawala, Ankur Saigal, Gaurav Mehta, Ms. S. Lakshmi Iyer, Vikrant
       Shetty, Ms. Vidisha Swarup, Ms. Tansi Fotedar, Ms. Soumil Jhanwar,
       E. C. Agrawala, Advs. for the Appellants.
       Shekhar Naphade, Sr. Adv., Vikas Mehta, Farah Hashmi, Ms.
       Aishwarya Dash, Prashant Pratap, Adith Nair, Vinayak Sharma, Sahil
       Gandhi, Ruben Vakil, Advs. for the Respondents.
                  Judgment / Order of the Supreme Court
                                     Judgment
       Abhay S. Oka, J.
1.     Leave granted.
2.     In this appeal, the issue involved is about the legality and validity of
       the order of termination of the arbitral proceedings under clause (c) of
       sub-section (2) of Section 32 of the Arbitration and Conciliation Act,
       1996 (for short, ‘the Arbitration Act’) passed by the Arbitral Tribunal.
       FACTUAL ASPECTS
3.     A brief reference to the factual aspects will be necessary to
       appreciate the issue. The first appellant, Dani Wooltex Corporation,
       is a partnership firm that owned certain land in Mumbai. The first
[2024] 6 S.C.R.                                                            765

     Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


        respondent, Sheil Properties (for short, ‘Sheil’), a private limited
        company, was engaged in real estate development. The second
        respondent, Marico Industries (for short, ‘Marico’), is also a limited
        company in the consumer goods business. A part of the first
        appellant’s property was permitted to be developed by Sheil under
        the Development Agreement dated 11th August 1993 (for short, ‘the
        Agreement’). A Memorandum of Understanding (MOU) was executed
        by and between the first appellant and Marico, by which the first
        appellant agreed to sell another portion of its property to Marico.
        Under the MOU, Marico was given the benefit of a certain quantity of
        FSI/TDR. Marico issued a public notice inviting objections, to which
        Sheil submitted an objection and stated that any transaction between
        the first appellant and Marico would be subject to the Agreement. The
        dispute between the first appellant and Sheil led Sheil to institute a
        suit (Suit no.2541 of 2006) for the specific performance of the MOU
        as modified by the alleged consent terms. The first appellant and
        Marico were parties to the said suit. Marico also filed a suit (Suit
        no.2116 of 2011) against the first appellant herein, and Sheil was
        also made a party defendant to the suit. A consensus was reached
        amongst the three parties, and a senior Member of the Bar was
        appointed as the sole Arbitrator. The order of appointment of the
        sole Arbitrator was passed on 13th October 2011 in the suit filed by
        Marico. The order records that the dispute in the suit was referred
        to the arbitration. On 17th November 2011, the suit filed by Sheil
        was disposed of by referring the dispute in the said suit to the same
        sole Arbitrator. Thus, the Arbitral Tribunal had to deal with the claims
        filed by Sheil and Marico, both against the first appellant. Both Sheil
        and Marico filed their respective statements of claim. It appears that
        the arbitral proceeding based on Marico’s claim was heard earlier,
        culminating in an award on 6th May 2017. For whatever reasons, the
        arbitral proceeding based on the claim filed by Sheil did not proceed.
4.      The first appellant addressed a communication to the Arbitral Tribunal
        on 26th November 2019, followed by another communication dated 7th
        January 2020 requesting the Arbitral Tribunal to dismiss the claim of
        Sheil on the ground that the company had abandoned the claim. In
        response, the Arbitral Tribunal fixed a meeting on 11th March 2020.
        As Sheil did not attend the meeting, the next meeting was fixed
        on 18th March 2020. The meeting scheduled for 18th March 2020
        was not held. Due to the COVID-19 pandemic, the next meeting
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       could be held only on 12th August 2020, when the Arbitral Tribunal
       directed the first appellant to file a formal application for dismissal
       of the claim of Sheil and permitted Sheil to file a reply. Accordingly,
       on 27th August 2020, the first appellant filed an application invoking
       the Arbitral Tribunal’s power under clause (c) of sub-section (2) of
       Section 32 of the Arbitration Act. The contention raised by the first
       appellant in the said application was that Sheil’s conduct of not taking
       any steps for eight years shows that the said company abandoned
       the arbitral proceedings. Sheil filed an affidavit and specifically
       contended that no ground was made out to act under Section 32(2)
       (c) of the Arbitration Act. Sheil also raised other factual contentions
       and denied the allegation of abandonment.
5.     The Arbitral Tribunal passed an order on 1 st December 2020
       terminating the arbitral proceedings in the exercise of power under
       Section 32(2)(c) of the Arbitration Act. The Arbitral Tribunal relied
       upon a decision of the Calcutta High Court in the case of NRP
       Projects Pvt. Ltd. & Anr. v. Hirak Mukhopadhyay & Anr1. Sheil
       filed an application before the High Court of Judicature at Bombay to
       challenge the legality and validity of the order of the Arbitral Tribunal
       by taking recourse to Section 14(2) of the Arbitration Act. By the
       impugned judgment and order, the learned Single Judge set aside
       the order of termination of the proceedings passed by the Arbitral
       Tribunal and directed the Arbitral Tribunal to continue the proceedings.
       We may note here that I.A. no.180843 of 2023 reveals that on 26th
       July, 2023, the learned sole Arbitrator informed the parties of his
       unwillingness to continue as the sole Arbitrator.
       SUBMISSIONS
6.     Mr Nakul Divan, the learned senior counsel appearing for the first
       appellant, pointed out that the learned Single Judge of the High Court
       of Judicature at Bombay in her judgment dated 13th January 2023 in
       the case of Kothari Developers v. Madhukant S Patel2 held that
       the Arbitral Tribunal was entitled to invoke its power under Section
       32(2)(c) of the Arbitration Act if it is proved that the proceedings have
       become unnecessary due to the claimant’s inaction. He submitted



1    2012 SCC OnLine Cal 10496
2    Arbitration Petition (L) No.29362 of 2022
[2024] 6 S.C.R.                                                           767

     Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


        that Section 14 of the Arbitration Act does not empower the Court
        to second-guess the Arbitral Tribunal, especially when the decision
        of the Arbitral Tribunal is based on the appreciation of facts and a
        plausible view has been taken. The learned senior counsel further
        pointed out that the Arbitral Tribunal attempted to ensure Sheil’s
        participation in Marico’s arbitration. After the award in the case of
        Marico, Sheil declined to attend the meeting held on 11th March
        2020 by the Arbitral Tribunal. It is submitted that there is nothing on
        record to indicate that the arbitration based on Sheil’s claim was to
        proceed after Marico’s arbitration, and there is no material placed
        on record to that effect. He submitted that the Arbitral Tribunal had
        rendered a finding of fact on the stand taken by Sheil, which cannot
        be disturbed by the Court. He submitted that Sheil’s plea that it was
        awaiting the decision in the Marico arbitration could not be accepted
        as the Arbitral Tribunal never indicated that the arbitration based on
        Sheil’s claim would proceed only after the Marico arbitration was
        over. He submitted that Sheil took no interest in moving the Arbitral
        Tribunal for a long time since 2012. He submitted that the word
        “unnecessary” used in Section 32(2)(c) of the Arbitration Act will
        have to be widely or liberally interpreted.
7.      Mr Shekhar Naphade, the learned senior counsel appearing for Sheil,
        contended that without recording a positive finding that it is either
        unnecessary or impossible to continue the proceedings, the power
        under Section 32(2)(c) of the Arbitration Act cannot be exercised.
        Relying upon the decision on this Court in the case of Lalitkumar V
        Sanghavi & Anr. v. Dharamdas V Sanghavi & Ors.3, the learned
        senior counsel submitted that the Court, while exercising the power
        under Section 14(2) of the Arbitration Act, is required to go into the
        issue of the legality of the termination of mandate by the Arbitral
        Tribunal. He submitted that the abandonment cannot be inferred.
        He relied upon a decision of this Court in the case of Godrej and
        Boyce Manufacturing Company Limited v. Municipal Corporation
        of Greater Mumbai & Ors4. He submitted that suits filed by Marico
        and Sheil were separate suits, and, therefore, arbitral proceedings
        were also separate. Marico and Sheil had not sought any relief


3     [2014] 3 SCR 558 : (2014) 7 SCC 255
4     [2023] 6 SCR 56 : 2023 SCC Online 592
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       against each other. However, as there was an overlap between the
       two references concerning the enforceability of the consent terms,
       the parties agreed to proceed with Sheil’s reference after Marico’s
       reference was decided. He further submitted that after preliminary
       directions were issued on 8th November 2011 regarding the filing of
       pleadings, no further directions were issued by the sole Arbitrator in
       the reference of Sheil. He submitted that the decision of the Calcutta
       High Court in the case of NRP Projects Pvt. Ltd.1 is confined to the
       facts of the case before it. He submitted that Marico’s reference took
       six years, and that is the reason for postponing Sheil’s reference. The
       learned senior counsel would, therefore, submit that the interference
       made by the High Court in the arbitral proceedings under Section
       14 of the Arbitration Act was certainly justified.
       CONSIDERATION OF SUBMISSIONS
8.     Chapter V of the Arbitration Act contains provisions regarding the
       conduct of arbitral proceedings. If parties do not agree on the
       timelines for filing statements of claim and defence, under sub-
       section (1) of Section 23, the Arbitral Tribunal has the power to
       determine the timelines for filing pleadings. Sub-section (4) of Section
       23, incorporated with effect from 23rd October 2015, provides that
       the filing of pleadings (statements of claim and defence) shall be
       completed within six months from the date the learned Arbitrator or
       all the learned Arbitrators, as the case may be, receive notice of
       their appointment in writing.
9.     After the pleadings are complete, the next stage is of hearing. Sub-
       section (2) of Section 24 provides that parties shall be given sufficient
       advance notice of any hearing or meeting of the Arbitral Tribunal for
       inspections of documents, goods or other property.
10. The issue of the parties’ default is dealt with in Section 25 of the
    Arbitration Act. Section 25 reads thus:
            “25. Default of a party.—Unless otherwise agreed by the
            parties, where, without showing sufficient cause,—
            (a)   the claimant fails to communicate his statement
                  of claim in accordance with sub-section (1) of
                  section 23, the arbitral tribunal shall terminate
                  the proceedings;
[2024] 6 S.C.R.                                                            769

  Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


           (b)   the respondent fails to communicate his statement of
                 defence in accordance with sub-section (1) of section
                 23, the arbitral tribunal shall continue the proceedings
                 without treating that failure in itself as an admission
                 of the allegations by the claimant and shall have the
                 discretion to treat the right of the respondent to file
                 such statement of defence as having been forfeited.
           (c)   a party fails to appear at an oral hearing or to
                 produce documentary evidence, the arbitral
                 tribunal may continue the proceedings and make
                 the arbitral award on the evidence before it.”
                                                     (emphasis added)
     Clause (a) of Section 25 of the Arbitration Act provides that on the
     failure of the claimants to communicate the statement of claim in
     accordance with sub-section (1) of Section 23, the Arbitral Tribunal
     shall terminate the proceedings. Clause (b) of Section 25 provides
     that if the respondent fails to communicate his statement of defence
     in accordance with sub-section (1) of Section 23, the Arbitral Tribunal
     shall continue the proceedings. Clause (c) of Section 25 provides that
     if a party fails to appear at an oral hearing or to produce documents,
     the Arbitral Tribunal may continue the proceedings and make the
     arbitral award on the basis of whatever evidence is available with it.
     The power to terminate arbitral proceedings on the claimant’s default
     to file a statement of claim is the only provision under the Arbitration
     Act to terminate the arbitral proceedings apart from Section 32.
11. The Arbitration Act has two provisions for terminating an Arbitrator’s
    mandate. Sections 14 and 15 are the relevant sections. The
    Arbitrator is empowered to withdraw from his office, which terminates
    his mandate. However, the arbitral proceedings continue by the
    arbitrator’s substitution.
12. The order of termination passed by the learned Arbitrator, in this
    case, gives an impression that he was of the view that unless
    parties move the Arbitral Tribunal with a request to fix a meeting
    or a date for the hearing, the Tribunal was under no obligation to
    fix a meeting or a date for hearing. The appointment of the Arbitral
    Tribunal is made with the object of adjudicating upon the dispute
    covered by the arbitration clause in the agreement between the
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       parties. By agreement, the parties can appoint an Arbitrator or
       Arbitral Tribunal. Otherwise, the Court can do so under section 11
       of the Arbitration Act. An Arbitrator does not do pro bono work. For
       him, it is a professional assignment. A duty is vested in the learned
       Arbitrator or the Arbitral Tribunal to adjudicate upon the dispute and
       to make an award. The object of the Arbitration Act is to provide
       for an efficient dispute resolution process. An Arbitrator who has
       accepted his appointment cannot say that he will not fix a meeting
       to conduct arbitral proceedings or a hearing date unless the parties
       request him to do so. It is the duty of the Arbitral Tribunal to do
       so. If the claimant fails to file his statement of claim in accordance
       with Section 23, in view of clause (a) of Section 25, the learned
       Arbitrator is bound to terminate the proceedings. If the respondent
       to the proceedings fails to file a statement of defence in accordance
       with Section 23, in the light of clause (b) of Section 25, the learned
       Arbitrator is bound to proceed further with the arbitral proceedings.
       Even if the claimant, after filing a statement of claim, fails to appear
       at an oral hearing or fails to produce documentary evidence, the
       learned Arbitrator is expected to continue the proceedings as
       provided in clause (c) of Section 25. Thus, he can proceed to make
       an award in such a case.
13. On a conjoint reading of Sections 14 and 15, it is apparent that an
    Arbitrator always has the option to withdraw for any reason. Therefore,
    he can withdraw because of the parties’ non-cooperation in the
    proceedings. But in such a case, his mandate will be terminated,
    not the arbitral proceedings.
14. Now, we come to Section 32 of the Arbitration Act, which reads thus:
            “32. Termination of proceedings.— (1) The arbitral
            proceedings shall be terminated by the final arbitral award
            or by an order of the arbitral tribunal under sub-section (2).
            (2) The arbitral tribunal shall issue an order for the
            termination of the arbitral proceedings where—
                  (a)   the claimant withdraws his claim, unless the
                        respondent objects to the order and the arbitral
                        tribunal recognises a legitimate interest on
                        his part in obtaining a final settlement of the
                        dispute,
[2024] 6 S.C.R.                                                           771

  Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


                (b)   the parties agree on the termination of the
                      proceedings, or
                (c)   the arbitral tribunal finds that the continuation
                      of the proceedings has for any other reason
                      become unnecessary or impossible.
           (3) Subject to section 33 and sub-section (4) of section
           34, the mandate of the arbitral tribunal shall terminate with
           the termination of the arbitral proceedings.”
                                                    (emphasis added)
     Section 32 provides for the termination of the arbitral proceedings
     in the following contingencies:
     a.    On making final arbitral award;
     b.    On the Claimant withdrawing his claim as provided under clause
           (a) of sub-section (2) of Section 32;
     c.    Parties agreeing on termination of arbitral proceedings as
           provided under clause (b) of sub-section (2) of Section 32; or
     d.    When the Arbitral Tribunal finds that the continuation of
           proceedings has become unnecessary or impossible for any
           other reason, as provided under clause (c) of sub-section (2)
           of Section 32.
15. Therefore, clause (c) of sub-section (2) of Section 32 can be invoked
    for reasons other than those mentioned in sub-section (1) of Section 32
    and clauses (a) and (b) of sub-section (2) of Section 32. Under clause
    (c), the mere existence of a reason for terminating the proceedings
    is not sufficient. The reason must be such that the continuation
    of the proceedings has become unnecessary or impossible. In a
    given case, when a claimant files a claim and does not attend the
    proceedings, clause (a) of Section 25 comes into operation, resulting
    in the learned Arbitrator terminating the proceedings. If, after filing
    a claim, the claimant fails to appear at an oral hearing or fails to
    produce documentary evidence, it cannot be said that the continuation
    of proceedings has become unnecessary. If the claimant fails to
    appear at an oral hearing after filing the claim, in view of clause (c)
    of Section 25, the learned Arbitrator can proceed with the arbitral
    proceedings. The fact that clause (c) of Section 25 enables the
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       Arbitral Tribunal to proceed in the absence of the claimant shows
       the legislature’s intention that the claimant’s failure to appear after
       filing the claim cannot be a ground to say that the proceedings have
       become unnecessary or impossible.
16. Therefore, if the party fails to appear for a hearing after filing a
    claim, the learned Arbitrator cannot say that continuing the arbitral
    proceedings has become unnecessary. Abandonment by the claimant
    of his claim may be grounds for saying that the arbitral proceedings
    have become unnecessary. However, the abandonment must
    be established. Abandonment can be either express or implied.
    Abandonment cannot be readily inferred. One can say that there is an
    implied abandonment when admitted or proved facts are so clinching
    and convincing that the only inference which can be drawn is of the
    abandonment. Mere absence in proceedings or failure to participate
    does not, per se, amount to abandonment. Only if the established
    conduct of a claimant is such that it leads only to one conclusion
    that the claimant has given up, his/her claim can an inference of
    abandonment be drawn. Merely because a claimant, after filing his
    statement of claim, does not move the Arbitral Tribunal to fix a date
    for the hearing, it cannot be said that the claimant has abandoned
    his claim. The reason is that the Arbitral Tribunal has a duty to fix a
    date for a hearing. If the parties remain absent, the Arbitral Tribunal
    can take recourse to Section 25.
17. Now, coming to the facts of the case, we must note here that Sheil and
    Marico had filed separate suits. In the suit filed by Marico, an order was
    passed on 13th October 2011, referring the dispute involved therein
    to the sole Arbitrator. Similarly, in the suit filed by Sheil, the order of
    reference to the learned Arbitrator was passed on 17th November
    2011. Therefore, by two separate orders, two arbitral proceedings
    were ordered to be initiated. In one proceeding, the claimant was
    Marico. The first appellant and Sheil were the respondents. In the
    other, Sheil was the claimant. The first appellant and Marico were
    the respondents. In fact, in the minutes of the preliminary meeting
    dated 8th November 2011, it is noted that the learned Arbitrator
    issued directions to Marico and Sheil to file their statements of claim.
    Therefore, even the learned Arbitrator proceeded on the footing that
    there were two distinct claimants and claims. They were directed to
    file their statements of claim in the respective arbitral proceedings.
[2024] 6 S.C.R.                                                         773

  Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


     After that, on 20th December 2011, the learned Arbitrator granted
     an extension of time to complete the pleadings. Both the claimants
     filed their respective statements of claim. The learned Arbitrator first
     conducted arbitral proceedings in which the claimant was Marico.
     Paragraph 10 of the award dated 6th May 2017 made on Marico’s
     claim is very relevant, which reads thus:
           “10. The 2nd Respondent has also filed a reply to the
           Statement of Claim. However, no evidence was led by
           the 2 nd Respondent (either documentary or oral) nor
           was any argument addressed by the 2nd Respondent to
           me, although the 2nd Respondent was present at all
           hearings of this arbitration.”
                                                    (emphasis added)
     The respondent no.2 before the Arbitral Tribunal was Sheil, as can be
     seen from the cause title of the award. Thus, Sheil was represented
     throughout before the Arbitral Tribunal during the hearing of the
     claim of Marico. Therefore, it cannot be said that the first respondent
     herein (Sheil) remained absent. On the contrary, it was present at all
     hearings. Nothing is placed on record to show that simultaneously
     with the arbitral proceedings based on the claim of Marico, any
     meeting or date was fixed by the learned Arbitrator for hearing the
     claim of Sheil. The first meeting on Sheil’s claim was fixed on 11th
     March 2020 when COVID-19 pandemic had already set in.
18. The application made by the first appellant under Section 32(2)(c)
    of the Arbitration Act, in short, raised the following contentions:
     a.    Sheil did not bother to pursue its claim for eight years after
           filing the statement of claim;
     b.    Sheil did not attend the meeting of 11th March 2020;
     c.    Sheil attended the next meeting held on 12th August 2020 and
           informed the learned Arbitrator that it wished to press its claim
           and
     d.    Sheil has abandoned its claim.
19. Sheil filed an affidavit in reply to the said application filed by the
    first appellant. In the reply, a contention has been raised that the
    reference filed by Marico was taken up first and therefore, till the
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       award was made on 6th May 2017, there was no requirement on
       the part of Sheil to take any further steps. The affidavit of evidence
       of Mr. Sanjay Patel was affirmed on 16th April 2017 and was kept
       ready. Sheil has pleaded that there was a requirement to change its
       advocate. After Sheil engaged the services of M/s. Markand Gandhi &
       Co., its senior partner fell ill and died on 1st May 2018. As regards the
       meeting held on 11th March 2020, Sheil claimed that it had deputed
       one Mr Utsav Ghosh to attend the meeting. He reached late after
       the meeting dispersed.
20. The question is whether Sheil abandoned its claim filed before the
    learned Arbitrator. As stated earlier, Sheil regularly attended meetings
    held to hear Marico’s claim. During the period during which the claim
    of Marico was heard, at no stage, the learned Arbitrator suggested
    that the claim of Sheil could be heard simultaneously. On the contrary,
    from the conduct of the parties and the learned Arbitrator, an inference
    can be drawn that Marico’s claim was given priority. Two meetings
    were convened in March 2020 in connection with Sheil’s claim. In
    March 2020, the COVID-19 was spreading its wings in our country.
    The second meeting in March 2020 was admittedly not held. In any
    case, there is no express abandonment. Even if it is to be implied,
    there must be convincing circumstances on record which lead to
    an inevitable inference about the abandonment. In the facts of the
    case, there was no abandonment either express or implied. In a
    case where the claim is abandoned, the learned Arbitrator can take
    the view that it would be unnecessary to continue the proceedings
    based on the already abandoned claim. In this case, the inference
    of the abandonment has been drawn by the learned Arbitrator only
    on the grounds that Sheil did not challenge the Marico award and
    took no steps to convene the meeting of the Arbitral Tribunal. The
    failure to challenge the award on Marico’s claim will not amount to
    abandonment of the claim filed by Sheil in January 2012. In the claim
    submitted by Sheil, a prayer was made in the alternative for passing
    an award in terms of money against the first appellant. Therefore,
    we hold that there was absolutely no material on record to conclude
    that Sheil had abandoned its claim or, at least, the claim against
    the first appellant. Till the award dated 6th May 2017 was passed
    in Marico’s claim, Sheil’s representative was always present at all
    hearings till the passing of the award. After the award, the learned
    Arbitrator never convened a meeting to deal with Sheil’s claim until
[2024] 6 S.C.R.                                                           775

  Dani Wooltex Corporation & Ors. v. Sheil Properties Pvt. Ltd. & Anr.


     11th March 2020. Hence, the finding of the learned Arbitrator that
     there was abandonment of the claim by the first appellant is not
     based on any documentary or oral evidence on record. The finding
     is entirely illegal. Such a finding could never have been rendered on
     the material before the Arbitral Tribunal. Thus, the learned Arbitrator
     committed illegality.
21. To conclude,
     a.    The power under clause (c) of sub-section (2) of Section 32 of
           the Arbitration Act can be exercised only if, for some reason,
           the continuation of proceedings has become unnecessary or
           impossible. Unless the Arbitral Tribunal records its satisfaction
           based on the material on record that proceedings have become
           unnecessary or impossible, the power under clause (c) of sub-
           section (2) of Section 32 cannot be exercised. If the said power
           is exercised casually, it will defeat the very object of enacting
           the Arbitration Act;
     b.    It is the Arbitral Tribunal’s duty to fix a meeting for hearing even
           if parties to the proceedings do not make such a request. It is
           the duty of the Arbitral Tribunal to adjudicate upon the dispute
           referred to it. If, on a date fixed for a meeting/hearing, the
           parties remain absent without any reasonable cause, the Arbitral
           Tribunal can always take recourse to the relevant provisions of
           the Arbitration Act, such as Section 25;
     c.    The failure of the claimant to request the Arbitral Tribunal to fix
           a date for hearing, per se, is no ground to conclude that the
           proceedings have become unnecessary; and
     d.    The abandonment of the claim by a claimant can be a ground
           to invoke clause (c) of sub-section (2) of Section 32. The
           abandonment of the claim can be either express or implied.
           The abandonment cannot be readily inferred. There is an
           implied abandonment when admitted or proved facts are so
           clinching that the only inference which can be drawn is of the
           abandonment. Only if the established conduct of a claimant
           is such that it leads only to one conclusion that the claimant
           has given up his/her claim can an inference of abandonment
           be drawn. Even if it is to be implied, there must be convincing
           circumstances on record which lead to an inevitable inference
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            about the abandonment. Only because a claimant, after filing
            his statement of claim, does not move the Arbitral Tribunal to
            fix a date for the hearing, the failure of the claimant, per se,
            will not amount to the abandonment of the claim.
22. Therefore, for the reasons recorded above, we concur with the
    view taken by the learned Single Judge. The appeal is, accordingly,
    dismissed with no order as to costs. As the learned sole Arbitrator
    has withdrawn from the proceedings, the parties shall take necessary
    steps to get the substituted Arbitrator appointed in accordance with
    law.


       Headnotes prepared by: Ankit Gyan                  Result of the case:
                                                           Appeal dismissed.