Calcutta High Court
Vinod Kumar Dugar vs Bijoy Kumar Loyalka & Anr on 19 December, 2014
Equivalent citations: AIR 2015 (NOC) 419 (CAL.)
Author: Dipankar Datta
Bench: Dipankar Datta
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
Present : The Hon'ble Justice Dipankar Datta
A.P. No. 395 of 2010
Vinod Kumar Dugar
vs.
Bijoy Kumar Loyalka & anr.
with
A.P. No. 396 of 2010
Jagat Singh Dugar
vs.
Bijoy Kumar Loyalka & anr.
For the petitioner : Mr. Moloy Ghosh,
in A.P. 395/2010 Ms. Sumana Sinha
Ms. Sutapa Sanyal,
For the petitioner : Mr. S. N. Mukherjee
in A.P. 395/2010 Mr. Ratnanko Banerjee
Mr. R. N. Ghose
Ms. Sayani Mondal
For the respondent : Mr. Pratap Chatterjee
no.1 in A.P. 395/2010 Mr. Ranjan Bachawat and A.P. 396/2010 Mr. Sabyasachi Chowdhuri
Heard on : June 14, 2013, July 19, 2013, August 6, 13, 16, 27 and 30, 2013, September 3, 6, 13, 17 and 20, 2013, November 12, 2013, January 31, 2014 and February 18, 2014 Judgment on : December 19, 2014
1. Scope of interference with an arbitral award is permissible on grounds limited to those, which are found in section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the Act). Section 34(2)(b)(ii) of the Act permits challenge to an arbitral award on the ground that it is in conflict with the public policy of India. The Supreme Court in its decision reported in (2003) 5 SCC 705 : ONGC Ltd. v. Saw Pipes Ltd. interpreted 'public policy of India' appearing in section 34(2)(b)(ii) and held that an award could be set aside if it is contrary to : (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. Whenever an arbitral award is challenged under section 34(2)(b)(ii) of the Act as in the petitions under consideration, the Court while examining as to whether such award falls foul of the public policy of India ought not to embark on a review thereof with microscopic eyes. The parties to the dispute having agreed to resolution thereof by arbitration to the exclusion of judicial process, the decision of the arbitrator ordinarily ought to be accepted and honoured by them. If proceedings are conducted by the arbitrator within the bounds of his jurisdiction and upon giving fair and reasonable opportunity to the parties to place their respective versions, and then a decision is rendered by him within his limitations and based on his understanding of the facts vis-a-vis the applicable law, not amounting to a brazen subversion of the adjudicatory process envisaged in the Act, the Court ought to stay at a distance. Unless it is a case of obtrusive omission on the part of the arbitrator to ensure that its award is in consonance with the public policy of India, for instance, over- stepping his brief, or proceeding in breach of the audi alteram partem rule prejudicing a party, or demonstrating bias in his conduct of the proceedings, or not noticing a fraud attempted by a party to the dispute, or resting the decision on reasons which are wrong in law, or proceeding on obvious mis- interpretation of relevant statutory provisions vitiating the award, or where the interests of justice patently attract interdiction, the Court may not be justified to interfere with errors of fact, howsoever grave it may appear to be. An arbitrator's award is also not susceptible to interdiction on grounds similar to insufficiency of evidence or wrong appreciation of evidence. This is my understanding of section 34(2)(b)(ii) of the Act and it is based on such understanding that I proceed to decide the petitions under section 34 that are before me at the instance of the award debtors.
2. A.P.No.395 of 2010 and A.P.No.396 of 2010 are the relevant petitions under section 34 of the Act presented by V.K. Dugar (hereafter VKD) and J.S. Dugar (hereafter JSD), respectively (hereafter the petitioners, wherever referred to jointly). They call in question the award dated April 26, 2010 of the arbitrator, which was made in relation to a settlement amount of Rs.33,00,000/- by a Memorandum of Understanding (hereafter the MOU) dated April 01, 1997 between them and B. K. Loyalka (hereafter BKL), being the first respondent in both the petitions, arising out of previous transactions. BKL contemporaneously presented a petition under section 9 of the Act, wherein he prayed for an interim injunction against the petitioners from alienating and/or selling off and/or encumbering and/or disposing of and/or parting with possession in any manner whatsoever its stock in trade, book debts and properties including certain premises. I propose to decide the said petition by a separate order, having regard to the fact that the report of the Special Officer appointed by a coordinate Bench by order dated July 28, 2010 is yet to be looked into.
3. The parties had prior history of business transactions while dealing with properties. It is noted that one of the properties with which they were familiar is 'Sura East'. The MOU, as one reads it, goes on to record that the petitioners had received from BKL Rs.24,00,000/- as loan payable on demand carrying interest @ 24% on quarterly rest and payable on quarterly basis. After computing and adjusting the payment due, the parties appear to have confirmed in the MOU Rs.33,00,000/- as balance outstanding on March 31, 1997. The schedule for payment was thereafter set out in the following paragraph. It is alleged by BKL that the petitioners defaulted in effecting payment as provided in the MOU, in view whereof disputes and differences arose between the parties and the matter was referred for arbitration to a sole arbitrator in tune with the arbitration agreement recorded in paragraph 6 of the MOU. Subsequently, the parties agreed to refer the disputes and differences to the arbitration of a new sole arbitrator instead of the initial one, recorded by an order dated July 24, 2003 passed by this Court in A.P. No. 131 of 2009.
4. By the award dated April 26, 2010, a sum of Rs.95,00,000/- was awarded in favour of BKL along with additional various interests. BKL has stated in his affidavit seeking injunction that as on July 20, 2010, an aggregate sum of Rs.2,62,32,162/- is due and payable by the petitioners in terms of the said award.
5. VKD and JSD have raised several grounds to assail the award of the arbitrator. The award, according to them, is patently illegal, opposed to fundamental policy of Indian law and justice, unreasoned and perverse. Learned senior counsel for JSD argued that the arbitrator did not consider his counter-claim and failed to exercise his jurisdiction by not considering his defence. Certain other admitted transactions relating to 'Sura East' property and other properties, which were allegedly co-related and referred to in the counter-statement had not been considered at all. Such other transactions required settlement of the accounts between the parties, which had not fructified and the MOU being a draft document was never finalized as evidenced from the blank space therein and later on filled up by hand. It was further contended that the amount payable, i.e. Rs.33,00,000/- (written in figures and words, and not printed), had been inserted without JSD consenting to the same and obviously without his counter-signature. Failure to exercise jurisdiction was also alleged by submitting that all the issues have not been answered. The point urged on behalf of JSD in this regard was that an application under Section 126 of the Evidence Act filed by him for rejection of the testimony of Mr. Avik Kumar Saha (hereafter AKS), who drew up the MOU, was dismissed with the observation that reasons would follow later, but unfortunately the arbitrator fell in error by not furnishing the reasons in the award. It was then submitted that BKL did not depose in support of his claim and this was a fatal omission warranting drawal of adverse inference, which the arbitrator failed to draw. On behalf of VKD, learned senior counsel argued that he was not a party to the MOU, not having signed the same, and his challenge to the impugned award is also laid under section 16(6) of the Act that there was no arbitration agreement between him and BKL. It was emphasized that there being no arbitration agreement between VKD and BKL, the arbitrator had no jurisdiction to adjudicate the inter-se claims. The arbitrator, it was further contended, applied wrong tests and even in the absence of anyone witnessing execution of the MOU by VKD, returned a finding that VKD had indeed signed the MOU. According to the petitioners, the arbitrator misconducted the arbitral proceedings and erred in law by failing to appreciate the above and other evidence in the proper perspective and by drawing wrong conclusions and in reaching improper findings, including the conclusion that the outstanding sum payable was inserted in the MOU upon JSD having agreed to the same. It was finally argued that the arbitrator had not applied his mind and awarded costs which are excessive, unconscionable, unreasonable and not commensurate with the time taken in arbitration. Consequently, the petitioners have prayed for orders to set aside the award.
6. Learned senior counsel for JSD cited the following decisions:
(a) 2007 (4) Arb. LR 179 (SC) : O.N.G.C. Ltd. v. Garware Shipping Corporation Ltd. (there is no proposition that the Courts would be slow to interfere with the arbitrator's award even if the conclusions are perverse, and even when the very basis of such award is wrong);
(b) 2007 (3) Arb. LR 531 (Cal) (DB) : Damodar Valley Corporation v. Central Concrete & Allied Products Ltd. (quantification by the arbitrator must be based on evidence);
(c) 2005 Supp. Arb L.R. 538 (J&K) : Qazi Gh. Nabi v. Qazi Jalal-ud-din and Ors. (award must comprise arbitrator's decision on all issues referred);
(d) 2007 (1) Arb. LR 447 (AP) (DB) : Transmission Corporation of A.P. Ltd.
and Anr. v. Galada Power and Telecommunication Ltd. and Ors. (non- attention paid to documents, no consideration in support of all the issues vis-à-vis every documents and no proper application in respect of the entire evidence are procedural lapses warranting intervention) ;
(e) 2009 (1) Arb LR 254 (Del) : AVI Coach Builders and Ors. v. UOI (non-
attention paid to documents implies non-application of mind in respect of evidence);
(f) (2011) 2 SCC 151 : State of U.P. and Ors. v. Combined Chemicals Company (P) Ltd. (award must give reasons);
(g) AIR 1990 SC 53 : K.V. George v. The Secretary to Govt., Water and Power Dept., Trivandrum and Anr. (award made by the arbitrator without considering counter-claims is illegal and unsustainable);
(h) (2010) 2 Cal LT 469 (HC) : Anglo Properties & Traders Pvt. Ltd. & Ors. v.
The Controller General of Patents, Designs & Trademarks & Anr. (the arbitrator has a duty to assess the evidence brought by the parties);
(i) 53 CWN 828 : Chhogmal Rawatmal v. Sankalchand G. Shah (finding based on no evidence is misconduct);
(j) (2003) 8 SCC 168 : Union of India v. V. Pundarikakshudu (it is a legal misconduct to arrive at an inconsistent finding as regards breach of contract on the part of one party or the other);
(k) (2009) 10 SCC 259 : Som Datt Builders Ltd. v. State of Kerala (mere noticing the submission of the parties or reference to documents is no substitute for reasons, which the arbitral tribunal is obliged to give);
(l) AIR 1927 PC 230 : Sardar Gurbaksh Singh v. Gurdial Singh & Anr. (the true object to be achieved by a Court of justice can only be furthered with propriety by the testimony of the party who personally knowing the whole circumstances of the case can dispel the suspicions attaching to it and the story can then be subjected in all its particulars to cross- examination);
(m) AIR 1930 Lahore 1 : Kirpa Singh v. Ajaipal Singh & Anr. (where the plaintiffs are the best persons to give evidence, their failure to go into the witness box must in the circumstances go strongly against them);
(n) AIR 1931 Bombay 97 : Martand Pardharinath Chaudhari v. Radhabahi Krishnarao Deshmukh (it is the bounden duty of a party personally knowing the facts and circumstances, to give evidence on his own behalf and to submit to cross-examination and his non-appearance as a witness would be the strongest possible circumstance which will go to discredit the truth of his case);
(o) (2006) 11 SCC 181 : McDermott International INC. v. Burn Standard Co. Ltd. and Ors. (the Court cannot correct errors of the arbitrators, it can only quash the award leaving the parties free to begin the arbitration again if it is desired);
(p) (2008) 2 Arb. LR 166 (Mad) [DB] : Chairman & Managing Director, Tamil Nadu Civil Supplies Corpn. Ltd. v. L. Hellen (the Court cannot correct the error of the arbitrator, take the role of the arbitrator and pass an award).
7. On behalf of VKD, the following judgments were cited:
(a) AIR 1987 CAL 126 : West Bengal Industrial Infrastructure Development Corporation v. Star Engineering Co. (total absence of evidence or arbitrator's failure to consider a very material document on record are good grounds for challenging the proceeding for legal misconduct of the arbitrator);
(b) (2001) 1 SCC 501 : Gaya Din (D) through LRs. & Ors. v. Hanuman Prasad (D) through LRs. & Ors. (interference is permissible where findings are perverse in the sense that they are not supported by the evidence brought on record or they are against the law or where they suffer from the vice of procedural irregularity);
(c) CLT (1999) 3 HC 354 : Union of India v. Singh Verma & Ors. (there must be a rational nexus between the facts considered and the conclusions reached);
(d) (1975) 2 SCC 236 : K. P. Poulose v. State of Kerala & Anr. (legal misconduct is complete if the arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents throwing abundant light on the controversy to help a just and fair decision);
(e) AIR 1999 SC 1341 : Ishwar Bhai C. Patel v. Harihar Behera (adverse presumption ought to be drawn against the person not entering into the witness box and not presenting himself for cross-examination, on the basis of principles contained in illustration (g) of Section 114 of the Evidence Act);
(f) AIR 1977 SC 1091 : Magan Bihari Lal v. State of Punjab (it is unsafe to base a conviction solely on expert opinion without substantial corroboration);
(g) AIR 1980 SC 531 : Murarilal v. State of M.P. (in cases where the reasons for the opinion are convincing and there is no reliable evidence throwing a doubt, the uncorroborated testimony of handwriting expert may be accepted); and
(h) AIR 2003 SC 282 : Alamgir v. State (NCT, Delhi) (since human judgment cannot be said to be totally infallible, due caution shall have to be exercised while acting on the opinion-evidence of a handwriting expert).
8. It is also recorded that Saw Pipes (supra) was cited on behalf of both VKD and JSD.
9. Per contra, learned senior counsel for BKL argued that the proceedings before the arbitrator were conducted in accordance with law and the grounds of challenge fall beyond the scope envisioned under section 34. According to him, the Court cannot re-appreciate the evidence led by the parties before the arbitrator and the award passed by him does not suffer from any legal infirmity warranting interference. On behalf of BKL it has been further argued that given the unique circumstances of the present dispute, the arbitrator could not have gone into the counter-claim, if at all, of JSD. Heavy reliance was placed on the decision reported in AIR 1963 SC 1677 : Santa Sila Devi v. Dhirendra Nath Sen wherein it was held that when the arbitrator has finally disposed of a matter, the Court should approach an award under challenge with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal. Relying on the decision reported in AIR 1989 SC 890(1) : M/s. Sudarshan Trading Co. v. The Govt. of Kerala, it was contended that even in case of a reasoned award, reasonableness of the reasons given by the arbitrator cannot be challenged since appraisement of evidence by the arbitrator is never a matter which the Court questions and considers. Much the same view was expressed in the decision reported in AIR 1997 SC 1324 :
B.V. Radha Krishna v. Sponge Iron India Ltd., which was next cited. It was contended that the arbitrator is the sole judge of the quality and quantity of evidence and it is not open to the Court to take upon itself the task of substituting its view for the view of the arbitrator on the evidence before him. The decision reported in 2008 (3) Arb LR 465 (Del) : Cmdr. S.P. Puri v. Alankit Assignment Ltd. was cited for the proposition that an arbitrator is not required to give elaborate judgment dealing with each and every ground; to satisfy the requirements of the Act, reasons should be intelligibly comprehensible. 2006 (3) Arb. LR 194 (Del) : Steel Auto Industries v. National Building Construction Corporation Ltd. was then cited, where it has been held that an award ought not to be interfered with on the ground that the conclusions of facts arrived at are wrong or just because another view is reasonably possible. Next, the decision reported in (2005) 6 SCC 462 : Bhagwati Oxygen Ltd. v. Hindustan Copper Ltd. was placed where the law has been restated that jurisdiction of the Court is limited only to certain grounds specified in the Act. The view expressed in the decision reported in 127 (2006) DLT 329 : Union of India v.
Pradeep Vinod Construction Co. that so long the view taken by the arbitrator is a plausible view, though perhaps not the only correct view and hence the award ought not to be interfered with, was highlighted. The decision reported in (2009) 5 SCC 678 : Madhya Pradesh Housing Board v. Progressive Writers and Publishers was cited in support of the argument that Courts do not exercise appellate jurisdiction and cannot reappraise evidence. Placing reliance on the decision reported in (2009) 10 SCC 374 : Uttar Pradesh Co- operative Federation Ltd. v. Three Circles, it was contended that an award can be interfered with only when it is manifest that conclusions are perverse or arbitrary. Finally, the decision reported in AIR 1925 Bombay 1 : An Attorney -
In Re was placed to the effect that where a legal practitioner is engaged by two parties, as between both the clients there can be no secrecy or privilege and that his lips are not sealed. It was, accordingly, prayed that the award be upheld and the petitions dismissed.
10. From the extensive and erudite arguments advanced by learned counsel on behalf of the parties, the following issues emerge for decision :
1) Did the arbitrator commit misconduct in failing to consider the counter-
claim of the petitioners and/or their defence?
2) Were all the issues, which were settled, answered?
3) Did the arbitrator fail to give reason in support of his conclusion for rejecting the application that was filed on behalf of JSD that AKS's evidence should not be admitted? Assuming that AKS could be allowed to tender evidence for BKL, was the arbitrator justified in relying on the evidence of AKS despite his inability to identify with certainty Exhibit A as the original of the MOU that was sent along with his letter in December, 1998?
4) Should the arbitrator have held omission of BKL to stand in the witness box to support his claim and to face cross-examination fatal for the success of the claim petition filed by him?
5) Was VKD a party to the MOU? If not, was there a valid arbitration agreement between VKD and BKL?
6) If the answer to the aforesaid question be in the affirmative, what was the extent of VKD's involvement?
7) Is the impugned award perverse and/or does it violate fundamental policy of Indian law or suffers from the vice of patent illegality or is it opposed to morality and justice, warranting interference?
8) Is the award embodying the relief to which BKL was found entitled disproportionate to his claim?
11. Let me now proceed to find answers to these issues. It would be appropriate if the path to answer issues 5 and 6 is treaded first.
Answers to the 5th and 6th issues
12. Version of VKD was that he had never seen the MOU and, therefore, the question of he being a party to the MOU does not arise. He disputed the signature on the MOU, which was alleged by BKL to be VKD's signature. However, he did not dispute the signature of JSD.
13. The arbitrator was of the view, upon perusal of the report of the handwriting expert and the signatures of VKD which were considered at the time of preparation of the expert's report, that VKD was a party to the MOU. The finding of the arbitrator in regard to the signature of VKD runs as follows:
"On a naked eye examination of the standard signatures on income- tax reports and the signature on exhibit - 'A' of Mr. V. K. Dugar does not and cannot but be said to be identical. This observation stands corroborated by the opinion-evidence of the handwriting expert."
14. The parties agreed to the arbitrator giving his finding on questions of law and fact, one way or the other. A finding of fact returned by the arbitrator based on his perception of the materials before him not violating any fundamental policy of Indian law can hardly be interfered with in view of the limited jurisdiction of the Court under section 34 of the Act. Having regard to such finding arrived at by the arbitrator, which I have no reason not to concur with, the claim of VKD that there was no valid arbitration agreement between him and BKL is without substance.
15. The argument that VKD was never involved in the transaction also stands negated because of the reasons assigned by the arbitrator at pages 38 to 40 of the award. There was no good reason for JSD to put his initial on page 1 and to sign on page 3 of the MOU where VKD's name appeared, if indeed VKD was never involved. JSD proceeding to sign the MOU despite VKD's name appearing at two places thereof is a clear indicator of VKD's involvement, is an inference of fact drawn by the arbitrator that seems to me to be unexceptionable.
16. It is, therefore, held that there was a valid arbitration agreement between BKL and VKD and the relevant issues are answered against VKD, thereby dismissing his objection under section 16(1) of the Act read with section 16(6) thereof.
Answers to the 1st and 2nd issues
17. In course of the 2nd sitting on August 23, 2003, the arbitrator with the consent of the parties settled the following issues :
"1) Did the claimant give any loan to the respondent No. 1 as alleged in paragraph 1(d) of Statement of Claim?
2) Can the claimant reply (sic rely) upon the Memorandum of Understanding (MOU) dated 1.4.1997?
3) Is the claim of the claimant barred by limitation?
4) What reliefs if any are the claimant entitled to?"
An additional issue was settled on being raised by VKD, which read :
"Did the respondent No. 2 sign any MOU as alleged?"
18. Learned senior counsel for BKL is right in his contention that no counter- claim was raised by JSD and that if at all any counter-claim had been raised, JSD would not have consented to settling of the aforesaid four issues wherein perceived counter-claim raised by JSD is conspicuous by its absence. The argument that JSD's counter-claim was not answered, thus, lacks merit.
19. That apart, the argument to the effect that the defence of JSD was not considered is equally without merit. As has rightly been observed by the arbitrator, the dispute in respect of page 2 of the MOU was confined to insertion of the amount towards balance outstanding as on March 31, 1997, in figures and in words. No dispute was raised in regard to the recital that BKL had advanced Rs.24,00,000/- as loan to JSD and VKD (the second party in the MOU) or to the firms/companies belonging or suggested by them, payable on demand, carrying interest at 24% on quarterly rest and payable on quarterly basis. Paragraph 5 of the MOU, on page 3 thereof, where admittedly JSD put his signature recorded as follows:
"5. The Second Party shall continue to make monthly payment as aforesaid till such time the entire principal amount with interest is liquidated fully as computed in terms of para no. 3 above."
20. Paragraph 3 not having been disputed by JSD, and VKD's plea that he was not a party to the MOU having been disbelieved by the arbitrator, with which I am ad idem, there can be no shred of doubt that there was absolutely no dispute with regard to the quantum of loan advanced to the petitioners by BKL. It is also on record that after the MOU was executed, certain payments were effected in favour of BKL. Nowhere in the MOU does the plea of JSD find place that payment in terms of such MOU would be effected only upon finalization of other disputes pertaining to the 'Sura East' property or otherwise.
21. Bare perusal of the issues that were settled, as noted above, does not also reveal outstanding disputes by and between BKL and the petitioners, if any, being made the subject matter of arbitration. In making the award, the arbitrator was not obliged to touch upon such outstanding disputes, if at all. Learned senior counsel for JSD urged that such failure ought to be viewed as failure to exercise jurisdiction by the arbitrator. I am afraid, there has neither been failure to exercise jurisdiction by the arbitrator nor has he acted in excess of jurisdiction and I have no hesitation in holding that the argument on behalf of JSD is a desperate attempt to have the award nullified by raising the specious plea of the same being in conflict with the public policy in India, although there is nothing on record to support it.
22. These issues are also answered against the petitioners. Answer to the 3rd issue
23. In course of proceedings before the arbitrator, an application under Section126 of the Evidence Act was filed by JSD seeking, inter alia, the following relief :
"a) The purported affidavit of evidence of Sri Avik Saha disclosed by letter dated August 28, 2003 not to be taken on record or relied upon as evidence;
b) An order of injunction restraining the claimant from relying upon or using the purported affidavit of evidence of Sri Avik Saha."
24. The arbitrator at the 5th sitting on February 27, 2004, dismissed the application holding that in the facts of the matter under consideration, applicability of Section 126 of the Evidence Act does not arise. It was further observed that the detailed reasons would follow later. It has been urged on behalf of JSD that no further reason was indicated at any later point of time or in the impugned award.
25. The Evidence Act in terms does not apply to proceedings before an arbitral tribunal in view of Section 19 of the Act. It has also not been shown to me that the parties agreed to any particular procedure to be followed by the arbitrator in conducting the proceedings. The arbitrator, therefore, had the liberty to conduct the proceedings in such manner as considered appropriate by him. Filing of an application under Section 126 of the Evidence Act, in the circumstances, was misconceived and one finds an observation at page 43 of the impugned award that the arbitrator did not consider the issue to be relevant for adjudication.
26. Even if it is accepted that the principles flowing from the Evidence Act may reasonably be adopted if the fact situation so requires, evidence adduced by AKS on behalf of BKL could not have been discarded on the ground that he was the common solicitor of BKL and the petitioners. If AKS was the solicitor of JSD alone and was privy to any privileged communication made to him by JSD, disclosure thereof might have amounted to a breach of confidence. However, the question of privilege ceases to exist if the solicitor is common. Reliance placed by learned senior counsel for BKL on An Attorney (supra) seems to be apt.
27. Having held that the contention touching Section 126 of the Evidence Act was not relevant, I do not view the arbitrator's failure to furnish additional reasons constituting the "why" for the "what" to be a vitiating factor rendering the impugned award vulnerable.
28. Moving on to answer the second part of the 3rd issue, it appears to be the version of JSD that the blank space in the MOU was to be filled up after finalization of accounts between the parties. However, he subscribed his signature on page 3 of the MOU after BKL had signed it. Page 2 containing the quantified amount in figures and words was not a part of the document, which he had signed. Such page was changed by BKL in breach of the understanding between the parties. He, however, admitted that the MOU was made by AKS.
29. The arbitrator was alive to the fact that there were certain inconsistencies in the version of AKS. However, the arbitrator accepted the version of AKS that he prepared the MOU as per instructions of Mr. S. Jalan and the matter having been finalised between the parties, he filled up the blank space in handwriting.
30. As regards filling up of the blank space, the arbitrator recorded his finding as follows:
"It is page 2 only which was disputed to the effect that the blank portion has been filled up subsequently - ..................... If the filling up of the blank portion happens to be of the same person and the evidence though in strict scrutiny may contain certain inconsistencies in other spheres the inconsistencies however cannot be treated as such so as to create a feeling of distrust to the oral testimony of Mr. Avik Saha as the undersigned has noted hereinbefore."
31. There is thus little reason to hold that the arbitrator mis-conducted proceedings before him.
Answer to the 4th issue
32. The MOU being at the centre of the controversy, to which BKL, JSD and VKD were signatories, the effect of BKL not deposing in support of the claim petition and facing cross-examination would fall for examination next. The arbitrator while dealing with the contention raised by the petitioners that adverse inference ought to be drawn for BKL did not depose in support of his claim made the following observation in his award:
"On the wake of the aforesaid, the undersigned has no difficulty in appreciating the case of the claimant and that of the non-production of the claimant in the witness box by Mr. Chatterjee cannot be taken to be a fatal issue for which an adverse inference under Section 114(g) of the Evidence Act can be drawn. The documentary evidence is there which otherwise reflects a valid transaction between the parties. Where is the scope of the claimant to come and prove the document when the maker has been called to give evidence and not much of an exception can be taken to his evidence. The undersigned is thus unable to accept the contention of Mr. Mukherjee or Mr. Ghosh in the matter."
33. Undisputedly, AKS was the maker of the MOU. BKL thought it fit to adduce AKS as claimant's witness and held himself back. If BKL was confident enough that he would sail through resting on the oars of AKS and in fact did so, can BKL's decision preferring not to support the claim petition by standing as a witness and instead adducing AKS as witness on his behalf be considered sufficiently flawed to warrant interference? Can this be a ground to brand the impugned award patently illegal? The answer is an emphatic 'NO'. It was entirely upto BKL to decide who would depose on his behalf. In fact, he had taken a risk by not standing as a witness. Fortunately for him, his claim was proved by his witness and there is no apparent reason to view the impugned award as one that is in conflict with the law of the land. At the risk of repetition I may observe that the provisions of the Evidence Act ex proprio vigore not being attracted, it was not a case of failure of justice to draw adverse inference. The decisions cited on behalf of the petitioners in this regard were in respect of proceedings where the Evidence Act did have application; that, however, is not the case here and such decisions are distinguishable.
34. It is noticed that the arbitrator has dealt with this aspect extensively. Having regard to the fact that the signatures of JSD and VKD were found to have been subscribed on page 3 of the MOU with the initial of JSD on page 1 thereof, the omission of BKL not deposing in support of the claim was not considered to be fatal. I see no reason not to concur with the discussion appearing at page 41 of the award in this behalf.
35. This issue is also answered against the petitioners.
Answer to the 7th issue
36. A decision is said to be perverse if it is based on no evidence, or if relevant evidence is not considered or if inadmissible evidence is considered. These tests have to be borne in mind while examining the point raised by the petitioners.
37. In course of discussing the aspect of effectiveness of the MOU, the arbitrator observed as follows:
"As regards the reliability of evidence in regard to the document in question though there is some amount of challenge to the same but the issue is whether the same tantamounts to be rather conclusive or the same only makes out a hazy defence or in popular parlance moonshine defence."
38. What the arbitrator recorded for relying on the evidence of AKS has been quoted above while discussing the 3rd issue.
39. Once it is admitted by JSD that he put his initial on page 1 of the MOU prepared by AKS and signature on page 3 thereof, he does not dispute the amount of Rs.24,00,000/- shown in the MOU as loan advanced by BKL, admits having made payments after execution of the MOU, AKS deposes that the blank space was filled up by him by inserting the amount of outstanding balance in figures as well as in words upon finalization of such amount by the parties, and the arbitrator proceeds on such basis to allow the claim, it is well-nigh impossible for the Court exercising power under section 34 of the Act to hold that the resultant award is one that is susceptible to judicial interdiction.
Answer to the 8th issue
40. Taking an overall view of the matter, I am inclined to the view that the issue must be answered in favour of BKL since there is no patent infirmity in the impugned award.
Conclusion
41. It does not appear to me that the petitioners were subjected to any gross injustice by reason of the impugned award. For the foregoing reasons, the petitions under consideration stand dismissed with costs assessed at Rs. 5,00,000/- to be paid to BKL by VKD and JSD in equal shares. Photocopy of this judgment and order duly countersigned by the Court Clerk shall be retained with the records of A.P. 396 of 2010. Urgent photostat certified copy of this judgment and order, if applied for, shall be furnished to the applicant at an early date.
(Dipankar Datta, J.) Later Prayer for stay of operation of the order, made by Mr. R. N. Ghose and Mr. Malay Ghosh for and on behalf of the petitioners, is considered and rejected.
(Dipankar Datta, J.)