Delhi District Court
Modi Agri Genetics (P) Ltd vs National Seeds Corporation Ltd on 1 February, 2023
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
ARBTN NO.20011 OF 2016
Date of institution: 02.12.2016
Arguments heard on: 21.01.2023
Date of order: 01.02.2023
Modi Agri Genetics (P) Ltd.
through its Managing Director
Mr. Tejprakash Dilipkumar Modi
r/o New Mondha, Nanded
TQ & DIST: Nanded -431602
Maharashtra ..............Petitioner
Versus
1. National Seeds Corporation Ltd.
through its Chairman & Managing Director
Beej Bhavan, Pusa Complex
New Delhi-110012
2. National Seeds Corporation Ltd.
through its Regional Manager
Plot no.681-690
Market Yard, Gultekdi, Pune-411037
3. National Seeds Corporation Ltd.
through its Area Manager
F-8/2, Naregaon Road, Chikhalthana Midc
Aurangabad, Maharashtra
4. Sh. Mahabir Singh Kasana
Ld. Sole Arbitrator
WZ/277A, Inderpuri, New Delhi
..............respondents
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.1
JUDGMENT
1. The petitioner herein has filed the present petition under section 34 of the Arbitration and Conciliation Act, 1996 against the award dated 21/08/2016 passed by the learned sole arbitrator. The petitioner herein was the claimant before the learned arbitrator and vide the order dated 21/08/2016, the claims of the petitioner were rejected.
2. The dispute in the present case arose out of a distribution agreement between the parties. The respondent company is a public corporation. The petitioner company was appointed as a distributor by the respondent through the distribution agreement executed between the parties. The dispute in the arbitration was with respect to the purchase by the petitioner of total 9272.30.70 quintals of Soyabean-JS 335 Seed from the respondent and the delivery to the petitioner. It was the case of the petitioner that the delivery was taken by the petitioner on 02/04/2012 as per the store requisition of the respondent and accordingly the net rate should have been ₹ 3500/-per quintal as per the price list issued by the respondent on 24/04/2012. On the other hand, it was the case of the respondent that petitioner was correctly charged with the net rate of ₹ 3800/-per quintal as shown on the bill dated 22/05/2012, as per the revised price list issued by the respondent on 09/05/2012 to be effective from 10/05/2012. It was the case of the petitioner that the respondent had illegally recovered excess amount of ₹ 2,781,810/-from the petitioner by charging excess of ₹ 300/-per quintal.
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.2
3. The learned arbitrator has set out the case of both the parties in the paragraphs 1.1 to 3.11 of the impugned award, and the same are extracted hereunder:
"1.1 The Claimant Company has purchase total 9272.70 qtls. of Soyabean-JS-335 Seed from the respondent Corporation and the delivery is given to the claimant.
1.2 A dispute has arisen between the parties regarding date of delivery of the Soyabean seed by the respondent to the applicant and accordingly rate of sale price of soyabean seed. The claimant is claiming that the delivery was taken by the claimant on 02.04.2012 as per the Store Requisition of the respondent dated 02.04.2012 and accordingly the net rate should be Rs.3500/- per quintal, as per the price list issued by the respondent on 24.04.2012. On the contrary the respondent Corporation has charged the net rate of the seed @Rs.3800/- per qtl. as shown in the bill dated 22.05.2012, as per the revised price list issued by the respondent on 09.05.2012 to be effective from 10.05.2012. As such the claimant is claiming that the respondent corporation has wrongly recovered excess amount of Rs.27,81,810/-from the claimant @ Rs.300/-(Rs.3800-Rs.3500) per quintal.
1.3 The undersigned has been appointed by Chairman-cum- Managing Director, NSC as the Sole Arbitrator vide NSC order no.8(230)/ARB/CS-NSC dated 7th May, 2014 to decide the dispute which has arisen between both the parties.
The claimant in its claim petition dated 17.03.2015 has made the following submissions:
2.1 That an amount of Rs.3,24,14,571.11 + Rs.87,86,088/- i.e. Rs.4,12,00,659.11 (which includes credit balance and deposit amount) is shown as credit balance of the claimant with the respondent Corporation as on 31.03.2012.
2.2 That the claimant purchased total 9272.70 qtls. of Soyabean-JS-335 from the respondent Corporation and the delivery seed is given to the claimant as per the Store Requisition No.15860 dated 02.04.2012 issued by the respondent Corporation.
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.3 At the time of issuing Store Requisition the sale price of Soyabean- JS-335 was not fixed/issued and so it was agreed that the bill will be issued immediately after receipt of the sale price.
2.3 That, the respondent Corporation has released the price list on dated 24.04.2012. As per the said price list, the rate fixed for soyabean-JS-335 was Rs.4700/- per quintal less Rs.1200/- per quintal towards marketing subsidy i.e. net rate Rs.3500/-per quintal. As a result, the respondent Corporation has finalized the rate @ Rs.3500/-per quintal.
2.4 That, though it was agreed to issue bill immediately after receipt of sale price, the respondent Corporation has issued the bill in the name of the claimant on 22.05.2012 i.e. after almost one month from the date of issuance of sale price list.
2.5 That the bill dated 22.05.2012 issued by the respondent Corporation in the name of the claimant discloses the rate of Soyabean-JS-335 @Rs.3800 per qtl. which is Rs.300/- higher as regard the sale price dated 24.04.2012. As a result, the respondent Corporation has wrongly debited excess amount of Rs.27,81,810/- in the account of the claimant.
2.6 That the claimant has issued various letters dated 09.04.2012, 15.05.2012, 29.05,2012, 21.01.2012 to the respondent Corporation seeking accounts statement and clarification with regards to the excess amount of Rs.300/-per qutl. in the bill dated 22.05.2012 but, all in vain.
2.7 That apart from the various written communications from the claimant and telephonic conversation with the authorities i.e. Area Manager and Regional Manager of the respondent Corporation there is no response from the respondent Corporation and on the other hand the Area Manager and Regional Manager always gave false assurances and tried to shift their burden and liability on each other.
2.8 That in all Rs.4,12,00,659.11 was credit balance of the claimant with the respondent Corporation as on 31.03.2012. Accordingly, the respondent Corporation has issued Store Requisition Note dated 02.04.2012 bearing endorsement of Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.4 issuance of bill immediately after receipt of Sale Price. The respondent Corporation has issued/published the sale price on 24.04.2012 @ Rs.3500/- per qutl. and was supposed to issue the bill @Rs.3800/- per qtl. and has illegally issued bill dated 22.05.2012 @Rs.3800/- per qtl. and has illegally recovered excess amount of Rs.27,81,810/- from the Claimant.
2.9 That, the respondent Corporation is illegally enjoying/using the excess amount of Rs.27,81,810/- of the Claimant from 22.05.2012 and so the claimant is entitled to receive interest @ 18% p.a. on the said amount from 22.05.2012 till the entire amount is received by the claimant from the respondent Corporation.
2.10 That, the respondent Corporation has issued a letter to the Claimant dated 28.10.2013. In the said letter, the respondent Corporation has narrated some calculations. The said calculations are imaginary and are against the terms and conditions of Agreement and thus are not admitted by the Claimant.
2.11 That, thereafter the claimant issued legal notice to the respondent Corporation on dated 20.01.2014 for recovery of amount of Rs.27,81,810/- alongwith interest @ 18% p.a. from 22.05.2012 till the entire amount is received by the claimant from the respondent Corporation and in alternative for appointment of Arbitrator as per clause 21 of the Distributorship Agreement. Inspite of the service of the said legal notice the respondent Corporation failed to reply the said Notice and also failed to make appointment of the Arbitrator. Thus, the claimant was constrained to file Arbitration application No.10/2014 on 02.09.2014 before the Hon'ble High Court of Bombay Bench at Aurangabad.
2.12 That, the Hon'ble High Court was pleased to issue Notice to the respondent Corporation and only after the receipt of the said notice, the respondent Corporation has made the appointment of the Arbitrator. In the light of the appointment of Arbitrator by the respondent Corporation the Hon'ble High Court was pleased to dispose off the said Arbitration application on dated 17.02.2015 and has fixed the date of appearance before the Arbitrator on dated 17.03.2015.
2.13 That the claim of the claimant may be accepted and the Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.5 respondent may be directed to pay an amount of Rs.27,81,810/- alongwith interest @ 18% per annum from 22.05.2012 till its actual realization.
3. The respondent in their reply dated 08.10.2015 has made the following submissions:
3.1 That the claimant has entered into Distributorship Agreement with National Seeds Corporation Ltd. (hereinafter referred to as "NSC" and/or "the respondents") on 27.09.2010, which prescribes the terms and conditions for the Claimant to act as a distributor of NSC. It is submitted that as per Clause no.9 of the Distributorship Agreement dated 27.09.2010, the distributor i.e. Claimant herein is bound to be sold the seeds by NSC as per the declared sale price of seeds by NSC.Thus, the claimant has no right to either decide the sale price of seeds or to claim any different sale price than declared by NSC. Clause 9 of the Distributorship Agreement is reproduced below:
"9. Seed supplies will be made to the distributor from nearest NSC office in the State from where the distributor will take delivery. However, for full truck/mini truck loads, NSC would supply on F.O.R basis direct to the destination in the area of operation indicated by the distributor provided the precise destination particulars are intimated to NSC atleast 15 days before the time of requirement or the date of dispatch of the stock from NSC so that superfluous movement is reduced/avoided. The distributor shall begin to lift the stocks within ten days of placement of seed in the concerned NSC's premises and complete the lifting within a period of one month unless/otherwise mutually agreed to for such extension. The supply of seeds will be based on its availability and the distributor is bound to sale the seed as per declared sale price of seed by NSC."
3.2 That a bare reading of the aforesaid Clause 9 of the Distributorship Agreement dated 27.09.2010 makes it abundantly clear that NSC alone has the power and authority to decide the sale price of the seeds sold to the distributors including the claimant herein and the distributor are liable to purchase the seeds at the rates fixed by NSC.
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.6 3.3 That it is submitted that NSC issued Sale price circular no.2384 dated 24.04.2012 w.r.t sale price of Soyabean JS335 seeds, wherein the sale price of RS.4700/- per quintal with a subsidy of Rs.1200/-per quintal which comes to net sale price of Rs.3500/-per quintal was declared as the ale price of soyabean JS 335 seed for the distributor. However, this sale price was revised on 09.05.2012 w.e.f 10.05.2012 to Rs.5000/-per quintal with a subsidy of Rs.1200 per quintal which comes to net sale price of Rs.3800/- per quintal as the declared sale price for the eligible farmers under the ISOPOM Scheme of Government of India, and the dealer discount as per eligibility for the distributor/dealer and was effective from 10.05.2012. Thus, the claimant is bound by the sale price of seeds declared by NSC at the time of sale of seeds.
3.4 That in the instant case, the sale of Soyabean JS 335 seeds by NSC to the claimant has taken place on 22.05.2012 and not anytime prior thereto. It is submitted that as per section 4 of the Sale of Goods Act, 1930, a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Thus, the sale of seeds in the instant case happens only on issue of the invoice by NSC and not at any time prior thereto.
3.5 That neither the seeds were sold nor delivery of seeds was given to claimant as per Store Requisition No.15860 dated 02.04.2012, because sale of seeds by NSC happens only upon issuance of invoice for the same. It is submitted that Store Requisition is a document of NSC internal to it for transfer of material from Stores to Marketing Department within NSC and is not related to any transaction of sale between NSC and the claimant herein.
3.6 That event of sale of seeds by NSC to any distributor including the claimant herein happens upon issuance of bill/invoice for the sale, which is the instant case was issued on 22.05.2012. Thus, NSC sold the seeds to the Claimant only on 22.05.2012 and not any time prior thereto and reliance upon the Store Requisition No.15860 dated 02.04.2012 is wholly misconceived.
3.7 That the fact that sale of seeds by NSC to the Claimant has Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.7 happened only on 22.05.2012 is further established from the following:
a. Fax message no.407 dated 14.05.2012 NSC, Pune office to Area Manager, NSC Aurangabad directing it to supply 9272.70 quintal of Soyabean JS 335 seeds to the Claimant herein at various destinations nominated by the claimant. The said fax message categorically states that the seeds have to be dispatched from M/s Modi Agrigenetics P. Plant Kiwala.
b. Letter dated 16/17th May 2012 sent by NSC to M/s Kailash Jhanwan Transport Contractor, Railway Goods Shed, Parbhani-431401 (Maharashtra) for delivery to seeds at the destinations nominated by the Claimant.
3.8 Thus, if the sale of seeds had happened on 02.04.2012, as claimed by the Claimant, where was the need to transport the seeds to the various destinations nominated by the claimant. The claimant has suppressed these material facts from this Hon'ble Tribunal, which amounts to material suppression in order to mislead the Tribunal. Therefore, it is submitted that NSC sold the seeds to the claimant only on 22.05.2012 and not any time prior thereto.
3.9 That the respondent had merely bailed the seeds to the claimant herein vide store requisition no.15860 dated 02.04.2012 and nothing more than that, and definitely not sold the seeds to the claimant vide the Store Requisition No.15860 dated 02.04.2012. It is submitted that a sister concern of the claimant herein i.e. M/s Modi Seeds Processing Plant Gut no.237 Kiwala Nanded acts as Seeds Organizer for NSC under the Agreement dated 27.06.2011. Thus, the soyabean JS 335 seeds procured by M/s Modi Seeds Processing Plaint Gut no.237, Kiwala Nanded was stored at the godown of the claimant at New Mondha, Nanded vide the Store Requisition No.15860 dated 02.04.2012, without any sale of the seeds to the claimant herein. The claimant is trying to take benefit of this fact and claim monies which are not owed to it under the Distributorship Agreement.
3.10 That Store Requisition is a document of NSC internal to it Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.8 for transfer of material from Stores to Marketing Department within NSC and is not related to any transaction of sale between NSC and claimant herein. Thus, without prejudice to the above, it is submitted that vide the Store requisition No.15860 dated 02.04.2012, the seeds were merely bailed to the claimant and were not sold to it, as wrongly claimed by the claimant.
3.11 That the claim petition filed by the claimant is liable to be dismissed at threshold."
4. The arguments of the parties before the learned arbitrator are set out in paragraphs 14.1 to 14.1.12 of the award, and the same are extracted hereunder:
"14.1 The claimant has reiterated its argument made in their statement of claim and also evidence by way of Affidavit. No new argument was made.
The sum total of the Arguments of the claimants is that the property in the goods passed to them on the date 02.04.2012 when Store Requisition was issued by the respondent in their favour and as such they are entitled to the sale price of Rs.3500/- per quintal as per the Respondent circular dated 24.04.2012 14.1 Arguments raised by the respondents in their pleadings and oral hearings are as under:
14.1.1 That as per clause 9 of the Distributorship Agreement dated 27.09.2010, the distributor i.e. Claimant herein is bound to sold the seeds by NSC as per the declared sale price of seeds by NSC.
Thus, the claimant has no right to either decide the sale price of seeds or to claim any different sale price than declared by NSC.
14.1.2 That NSC Sale Price issued vide Circular No. 2384 dated 24.04.2012 w.r.t. sale price of Soyabean JS335 seeds (Rs.4700- Rs.1200 = Rs.3500/--) was revised on 09.05.2012 w.e.f 10.05.2012 to Rs.5000/- per quintal with a subsidy of Rs.1200 per quintal which comes to net sale price of Rs.3800/- per quintal as the declared sale price for the eligible farmers under the ISOPOM Scheme of government of India, and the dealer discount as per eligibility for the distributor/dealer was declared and was effective Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.9 from 10.05.2012. Thus, the claimant is bound by the sale price of seeds declared by NSC at the time of sale of seeds.
14.1.3 That the sale of Soyabean JS 335 seeds by NSC to the claimant has taken place on 22.05.20112 and not anytime prior thereto. It is submitted that as per section 4 of the Sale of Goods Act, 1930, a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Thus, the sale of seeds in the instant case happens only on issue of the Invoice by NSC and not at any time prior thereto.
14.1.4 That neither the seeds were sold nor delivery of seeds was given to Claimant as per Store Requisition No. 15860 dated 02.04.2012, because sale of seeds by NSC happens only upon issuance of invoice for the same.
14.1.5 The store requisition is a document of NSC internal to it for transfer of material from Stores to Marketing Department within NSC and is not related to any transaction of sale between NSC and the claimant herein.
14.1.6 That the fact that sale of seeds by NSC to the claimant has happened only on 22.05.2012 is further established from the following:
a. Fax message no. 407 dated 14.05.2012 NSC, Pune Office to Area Manager, NSC Aurangabad directing it to supply 9272.70 quintal of Soyabean JS335 seeds to the claimant herein at various destinations nominated by the claimant. The said fax message categorically states that the seeds have to be dispatched from M/s. Modi Agrigenetics P. Plant Kiwala.
b. Letter dated 16/17th May, 2012 sent by NSC to M/s. Kailash Jhanwar, Transport Contractor, Railway Goods Shed, Parbhani-431401 (Maharashtra) for delivery to seeds at the destinations nominated by the claimant.
14.1.7 Thus, if the sale of seeds had happened on 02.04.2012, as claimed by the claimant, where was the need to transport the seeds to the various destinations nominated by the claimant. NSC sold Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.10 the seeds to the claimant only on 22.05.2012 and not any time prior thereto.
14.1.8 That NSC had merely bailed the seeds to the claimant herein vide Store Requisition No. 15860 dated 02.04.2012 and nothing more than that, and definitely not sold the seeds to the claimant vide the Store Requisition No. 15860 dated 02.04.2012.
14.1.9 That a sister concern of the claimant herein i.e. M/s Modi Seeds Processing Plant Gut No. 237 Kiwala Nanded acts as Seeds Organizer for NSC under the Agreement dated 27.06.2011. Thus, the Soyabeasn JS335 seeds procured by M/s Modi Seeds Processing Plant Gut No. 237 Kiwala Nanded was stored at the godown of the Claimant at New Mondha, Nanded vide the Store Requisition No. 15860 dated 02.04.2012, without any sale of the seeds to the claimant herein.
14.1.10 That as stated hereinabove, it is submitted that Store Requisition is a document of NSC internal to it for transfer of naterial from Stores to Marketing Department within NSC and is not related to any transaction of sale between NSC and the Claimant herein.
14.1.11 That vide the Store Requisition No. 15860 dated 02.04.2012, the seedsw were merely bailed to the claimant and werenot sold to it, as wrongly claimed by the claimant.
14.1.12 The sum total of the arguments of the respondent is that Store Requisition is not the Evidence of delivery of the goods and the property will not pass on the claimant merely an internal note.
They have relied on the farmers beneficiaries list received by the respondent from the claimant vide letter dated 12.07.2012 which indicates that sale price passed on to the farmers was as per the declared sale price of NSC as on 22.05.2012 with the relevant subsidy. The respondent has also submitted that the .......... is not entitled to the sale price circulated by the respondent on 24.04.2012 as the delivery of the seed was much later. In its support the respondent have referred to copy of dispatch Order No. 39 of 14.05.2012 for delivery of seeds in which directions for arranging supply of Soyabean-JS-335 C/S from Head....... of NSC was issued to Area manager, NSC, Aurangabad to the specific destinations prescribed therein of the claimant company. The Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.11 respondent has also based their Arguments on Clause No. 9 of the Distribution Agreement executed between the parties on 27.09.2010 which mentions the procedure of supply of seeds. The respondent has also submitted copies of their letters dated 16/17.05.2012 directing the transporters for sending the seeds from specified stores to specified destinations."
5. The paragraphs 15 to 15.8 of the award containing the findings and decision of the learned arbitrator are extracted hereunder:
"15. FINDINGS :
15.1 I have heard both the parties in the detailed hearings held in the matter and have given them the fullest possible opportunities to present their case and/or to produce and/or file any document which may have bearing on this case, I have gone through the statement of claim and evidence by way of affidavit filed by the claimant and all the documents filed alongwith it. I have also gone through the statement of defence/reply to the claim and Evidence by way of affidavit filed by the respondent and all other documents filed along with them filed by the respondent. After consideration of all these documents and the points made by both the parties during the course of arbitration proceedings, my findings on the claim are given in the succeeding paragraph.
15.2 At the outset it need be mentioned that the only issue to be decided is regarding the sale price of the Soyabean Seeds whether the claimant is to be charged @ of Rs.3500/- per quintal as issued by the NSC Circular dated 24.04.2012 or @ Rs.3800/- as per NSC Circular dated 09.05.2012.
15.3 To determine this issue involved it is pertinent to decide the date of delivery of the seeds or the date on which the property in terms of the seeds has passed on to the claimant. The only arguments advanced by the claimant is that the delivery is complete on the date on which the Store Requisition has been issued by the respondent i.e. on 02.04.202. They have not quoted any para of the agreement, or any other law/Act or Case law in support of their argument, to establish that the delivery was Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.12 completed on the date on which the store requisition was issued and subsequent steps taken by the respondent like directions issued to the Area Manager for arranging supply of the seeds on 14.05.2012 to the specific destination and Job Order dated 16/17.05.202 to the Transporter for shifting of the seeds are not relevant to determine the date of delivery of seeds.
15.4 On the contrary the respondent have based their arguments on Clause no. 9 of the Distribution Agreement dated 27.09.2010, sale of goods act and the case law. The Tribunal find merit in the arguments of the respondent that store requisition is an internal note for transfer of material from stores to marketing Division within NSC and is not related to any transaction of sale between Nsc and claimant. Delivery of seeds cannot be affected without specification of the destination of the delivery.
15.5 The claimant has not been able to file any documents to prove that the destinations were intimated by them to the respondent prior to 14.05.2012 i.e. the date on which dispatch order no. 39 was issued by the respondent to their Area Manager. It need be noted that sale of goods cannot be effected without transporting the same from the store to the specific destinations the job order for which was issued by the respondent to the transporter on 6/17.05.2012.
15.6 The farmers list submitted by the claimant vide their letter dated 12.07.2012 as per the terms of agreement also established that the sale price @ Rs.5000/- minus the subsidy of Rs.1200/- i.e. @ Rs.3800/- per quintal has been charged by the claimant from the farmers. It is legally untenable for the claimant to charge @ Rs.3800/- per quintal from the farmers and at the same seek that the price to be charged from them by the respondent should @ Rs.3500/- per quintal i.e. Rs.300 per quintal less from which they have charged from the farmers under the IsOPOM Scheme of the Government of India.
15.7 The relevant provisions of the sales of goods act and the case law submitted by the respondent also goes to establish that the delivery of the goods is not completed on the date of the issue of Store Requisition but is dependent factors like the date on which order for dispatch of seeds indicating the specific destinations and the job order issued to the Transporter.
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.13 15.8 In view of the above Tribunal find no reasons to interfere in the sale price of Rs.3800/- per quintal charged by the respondent from the claimant as per their invoice/Bill no. 20050 dated 22.05.202.
AWARD:
For the reasons explained above the respondent has correctly charged the sale price from the claimant as per their circular dated 09.05.202 and as reflected in the bill dated 22.05.2012.
Accordingly the claim of the claimant fails."
6. The learned counsel for the petitioner has primarily relied upon the Annexure-P/10 to the petition which is Fax Message No.1 dated 03/04/2012 from the Area Manager, NSC Aurangabad to the Regional Manager NSC Ltd. Pune, in which it is stated that 9272.70 qtls S.bean JS- 335 had been procured vide GR Note No.005988 dated 31/03/2012 and the same was supplied vide SR Note NO.15860 dated 02/04/2012 to M/s. Modi Agrigenetics (Pvt.) Lt. New Mondha-Nanded. It has been submitted by the learned counsel for the petitioner that this fax message dated 03/04/2012, which proved that the seeds had been supplied to the petitioner on 02/04/2012, was before the learned arbitrator, however, the learned arbitrator has completely ignored this crucial piece of evidence, and as such the award suffers from a patent illegality. The learned counsel for the petitioner has submitted that the fax message dated 03/04/2012 (Annexure-P/10) contained a clear admission of the respondent that the seeds had been supplied to the petitioner on 02/04/2012 and this was the best evidence available against the respondent. It is submitted that when the seeds were supplied on 02/04/2012, then the rate list of 24/04/2012 was applicable, and the subsequent revised price list issued by the respondent on 09/05/2012 was not applicable. It is submitted that the Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.14 impugned award suffers from patent illegality and perversity as this crucial piece of evidence has been totally ignored.
7. On the other hand, the learned counsel for the respondent has argued that the learned arbitrator has carefully dealt with the pleadings, evidence and submissions of the parties and has arrived at his decision by the correct process of reasoning. It is submitted that the scope of interference under section 34 of the Arbitration and Conciliation Act, 1996 is limited. It is submitted that the arbitrator is the master of the facts and evidence. It is submitted that the arbitrator has on the basis of the evidence and interpretation of the contract between the parties correctly passed the award and that there is no perversity or patent illegality in the decision. It is submitted that the impugned award does not call for any interference.
8. I have heard the learned counsel for the parties and I have perused the record.
9. The claimant had charged sale price of Rs.5000/- minus the subsidy of Rs.1200/- i.e. net sale price of Rs.3800/- per quintal from the farmers. This was a finding of fact arrived at by the learned arbitrator on the basis of the evidence on record. This finding of fact has not even been disputed in the present proceedings. Under the agreement between the parties, the claimant as the distributor was bound to sell the seeds at the declared sale price and subsidy, and the claimant was entitled to discount on such sale price. From the record it is revealed that as per the farmers list submitted by the claimant to the respondent, the claimant had charged sale price of ₹ 3800 per quintal from the farmers. The respondent had allowed discount to the claimant under the agreement on the basis of the sale price of ₹ 3800 per quintal as per the farmers list submitted by the claimant. In this regard, the letter dated 28/10/2013 from the respondent to the Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.15 claimant, in response to the letter dated 26/09/2013 from the claimant, is relevant. The learned arbitrator has observed in paragraph 15.6 of the award that it was legally untenable for the claimant to charge ₹ 3800 per quintal from the farmers and at the same time seek that the respondent charge ₹ 3500 per quintal from the claimant. I see no infirmity in this finding of the learned arbitrator. The claimant having itself charged and passed on sale price of ₹ 3800 per quintal to the farmers and having been allowed discount on sale price of ₹ 3800 per quintal, could not have claimed sale price of ₹ 3500 per quintal. The discount which was allowed to the claimant after all was on the basis of the sale price of ₹ 3800 per quintal as disclosed in the farmers list supplied by the claimant to the respondent. The claims of the claimant were liable to be dismissed solely on this basis.
10. I also find no infirmity in the finding of the learned arbitrator to the effect that the sale did not take effect upon the store requisition of 02/04/2012. It was the case of both the parties that the sale price on the date of delivery was to apply. It was the case of the claimant that the delivery had taken place upon the store requisition issued on 02/04/2012. On the other hand, it was the case of the respondent that the delivery had taken place only after transportation from the store to the specific destination after the job orders issued by the respondent to the transporters on 16-17/05/2012. The learned arbitrator has come to the finding that the store requisition was an internal note of transfer of material from stores to marketing division within the respondent and was not related to transaction of sale between the respondent and the claimant. The learned arbitrator has come to the finding that the delivery of the seeds could not have been effected without specification of the destination of the delivery. The learned Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.16 arbitrator has also observed that the claimant had failed to show any provision of the agreement to establish that the delivery was completed on the date on which the store requisition was issued and that the subsequent steps taken by the respondent for supply of the seats to the specific destination to the transporter were not relevant in determining the date of delivery of the seeds. On this basis, the learned arbitrator has come to the finding that the date of delivery was only after the requisite job orders issued by the respondent to the transporter on 16-17/05/2012. I find that in arriving in such conclusion there is no error of jurisdiction committed by the learned arbitrator. This finding was on a mixed question of fact and law and was arrived at on the basis of the evidence on record and interpretation of the contract, which was well within the domain of the learned arbitrator, and there is no perversity or patent illegality committed by the learned arbitrator in arriving at the findings which he did.
11. It would be appropriate to refer to the judgment of the Hon'ble High Court of Delhi in Delhi Development Authority v. Bhardwaj Brothers, 2014 SCC OnLine Del 1581, in which the scope and ambit of jurisdiction of the Court under section 34 of the Arbitration and Conciliation Act has been delineated. The relevant portion of the judgment in Bhardwaj Brothers (supra) is extracted hereunder:
"8. We have enquired from the counsel for the appellant whether not the said challenge is a challenge on the merits of the arbitral award. We have yet further put to the counsel for the appellant that as to how, misinterpretation of a contractual provision or misinterpretation of a contract by the Arbitral Tribunal constitutes a ground of challenge under Section 34 of the Arbitration Act.
9. We have in State Trading Corporation of India Ltd. supra held :
-
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.17 "5. The challenge in this appeal is on the ground that the learned Single Judge ignored that the interpretation of the contract between the parties given by the Arbitral Tribunal is contrary to the express terms and conditions thereof and the Arbitral Tribunal has given a meaning to the terms and conditions which is not contemplated in the contract. The senior counsel for the appellant thus wants us to read the contract between the parties, particularly the clauses relating to demurrage, and then to judge whether the interpretation thereof by the Arbitral Tribunal is correct or not.
6. In our view, the interpretation in Saw Pipes Ltd. supra (ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705) of the ground in Section 34 of the Act for setting aside of the arbitral award, for the reason of the same being in conflict with the public policy of India, would not permit setting aside, in the aforesaid facts. A Section 34 proceeding, which in essence is the remedy of annulment, cannot be used by one party to convert the same into a remedy of appeal.
In our view, mere erroneous/wrong finding of fact by the Arbitral Tribunal or even an erroneous interpretation of documents/evidence, is non-interferable under Section 34 and if such interference is done by the Court, the same will set at naught the whole purpose of amendment of the Arbitration Act.
7. Arbitration is intended to be a faster and less expensive alternative to the courts. If this is one's motivation and expectation, then the finality of the arbitral award is very important. The remedy provided in Section 34 against an arbitral award is in no sense an appeal. The legislative intent in Section 34 was to make the result of the annulment procedure prescribed therein potentially different from that in an appeal. In appeal, the decision under review not only may be confirmed, but may also be modified. In annulment, on the other hand, the decision under review may either be invalidated in whole or in part or be left to stand if the plea for annulment is rejected. Annulment operates to negate a decision, in whole or in part, thereby depriving the portion negated of legal force and returning the parties, as to that portion, to their original litigating positions. Annulment can void, while appeal can modify. Section 34 is found to provide for annulment only on the grounds affecting legitimacy of the process of decision as distinct from substantive correctness of the contents of the decision. A remedy of appeal focuses upon both legitimacy of the process of decision and the substantive correctness of the decision.
Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.18 Annulment, in the case of arbitration focuses not on the correctness of decision but rather more narrowly considers whether, regardless of errors in application of law or determination of facts, the decision resulted from a legitimate process.
8. In the case of arbitration, the parties through their agreement create an entirely different situation because regardless of how complex or simple a dispute resolution mechanism they create, they almost always agree that the resultant award will be final and binding upon them. In other words, regardless of whether there are errors of application of law or ascertainment of fact, the parties agree that the award will be regarded as substantively correct. Yet, although the content of the award is thus final, parties may still challenge the legitimacy of the decision-making process leading to the award. In essence, parties are always free to argue that they are not bound by a given "award" because what was labeled an award is the result of an illegitimate process of decision.
9. This is the core of the notion of annulment in arbitration. In a sense, annulment is all that doctrinally survives the parties' agreement to regard the award as final and binding. Given the agreement of the parties, annulment requires a challenge to the legitimacy of the process of decision, rather than the substantive correctness of the award.
10. Joseph Raz in his paper "The Politics of the Rule of Law" has opined that the function of the rule of law is to facilitate the integration of a particular piece of legislation with the underlying doctrines of the legal system; the authority of the courts to harness legislation to legal doctrine arises neither from their superior wisdom nor from any superior law of which they are the custodians; it arises out of the need to bring legislation in line with doctrine. The courts ensure coherence of purpose of law, ensuring that its different parts do not fight each other. The learned author has further observed that a law which is incoherent in purpose serves none of its inconsistent purposes very well. Purposes conflict if due to contingencies of life serving one will in some cases retard the other. The second basis for the authority of the courts to integrate legislation with doctrine is the need to mix the fruits of long established traditions with the urgencies of short term exigencies. In ensuring the coherence of law, the courts are expected to ensure the effectiveness of the democratic rule. In Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.19 giving weight to the preservation of long established doctrines i.e., the traditions, they protect the long term interest of the people from being swamped by the short term. We have taken the liberty to quote from the aforesaid paper since the courts are being repeatedly called upon to adjudicate on the various provisions of the re-enacted arbitration law. From the various pronouncements in the last about 18 years since re-enactment, it appears that the danger of interpreting the new Act in a manner doing away with the whole object/purpose of re-enactment is imminent. The courts continue to be inundated till date, in spite of repeal of the old Act 18 years ago, with cases thereunder also, particularly of challenge to the arbitral award. Provisions of the old and the new Act relating to inference with the arbitral award are vastly different. However, when the courts, in the same day are wrestling with a matter concerning arbitral award under the old Act and with that under the new Act, the chances of culling out the huge difference between the two are minimal. It is not to be forgotten that the courts deal with and rule on disputes where monies and properties of real persons are at stake. The courts do not decide in abstract. Thus, when in one case the courts interfere with the arbitral award for the reason of the same not rendering to the litigant what the courts would have granted to him, the courts find it difficult in the very next case, though under the new Act, to apply different parameters.
11. Arbitration under the 1940 Act could not achieve the savings in time and money for which it was enacted and had merely become a first step in lengthy litigation. Reference in this regard can be made to para 35 of Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552. It was to get over the said malady that the law was sought to be overhauled. While under the old Act, the award was unenforceable till made rule of the court and for which it had to pass various tests as laid down therein and general power/authority was vested in the court to modify the award, all this was removed in the new Act. The new Act not only made the award executable as a decree after the time for preferring objection with respect thereto had expired and without requiring it to be necessarily made rule of the court but also did away with condonation of delay in filing the said objections. The reason/purpose being expediency. The grounds on which the objections could be filed are also such which if made out, the only consequence thereof could be setting aside of the Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.20 award. It is for this reason that under new Act there is no power to the court to modify the award or to remit the award etc. as under
the old Act. A perusal of the various grounds enunciated in Section 34 will show that the same are procedural in nature i.e., concerning legitimacy of the process of decision. While doing so, the ground, of the award being in conflict with Public Policy of India, was also incorporated. However the juxtaposition of Section 34(2)(b)(ii) shows that the reference to 'Public Policy' is also in relation to fraud or corruption in the making of the award. The new Act was being understood so [see Konkan Railway Corporation Ltd. v. Mehul Construction Co. (2000) 7 SCC 201 (para 4 and which has not been set aside in S.B.P. & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618)] till the Supreme Court in Saw Pipes Ltd. (supra) held that the phrase 'Public Policy of India' is required to be given wider meaning and if the award on the face of it is patently in violation of statutory provisions, it cannot be said to be in public interest and such award/judgment/decision is likely to adversely affect the administration of justice. In para 37 of the judgment it was held that award could be set aside if it is contrary to fundamental policy of Indian Law or the interest of India or justice or morality or if it is patently illegal. A rider was however put that illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that the award is against the public policy. Yet another test laid down is of the award being so unfair and unreasonable that it shakes the conscience of the court.
12. The courts have thereafter been inundated with challenges to the award. The objections to the award are drafted like appeals to the courts; grounds are urged to show each and every finding of the arbitrator to be either contrary to the record or to the law and thus pleaded to be against the Public Policy of India. As aforesaid, the courts are vested with a difficult task of simultaneously dealing with such objections under two diverse provisions and which has led to the courts in some instances dealing with awards under the new Act on the parameters under the old Act.
13. The result is that the goal of re-enactment has been missed.
14. The re-enactment was not only to achieve savings in time and prevent arbitration from merely becoming the first step in lengthy litigation but also in consonance with the international treaties and commitments of this country thereto. Since the enactment of the Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.21 1940 Act, the international barriers had disappeared and the volume of international trade had grown phenomenally. The new Act was modeled on the model law of international commercial arbitration of the United Nations Commission on International Trade Law (UNICTRAL). It was enacted to make it more responsive to contemporary requirements. The process of economic liberalization had brought huge foreign investment in India. Such foreign investment was hesitant, owing to there being no effective mode of settlement of domestic and international disputes. It was with such lofty ideals and with a view to attract foreign investment that the re-enactment was done. If the courts are to, notwithstanding such re-enactment, deal with the arbitration matters as under the old Act it would be a breach of the commitment made under the treaties on international trade.
15. Applying the aforesaid test, we are afraid, the arguments of the senior counsel for the appellant are beyond the scope of Section
34.
16. The senior counsel for the respondent has in this regard rightly argued that the scope of appeal under Section 37 is even more restricted. It has been so held by the Division Benches of this Court in Thyssen Krupp Werkstoffe v. Steel Authority of India MANU/DE/1853/2011 and Shree Vinayak Cement Clearing Agency v. Cement Corporation of India 147 (2007) DLT 385. It is also the contention of the senior counsel for the respondent that the argument made by the appellant before the learned Single Judge and being made before this Court, that the particular clause in the contract is a contract of indemnification, was not even raised before the Arbitral Tribunal and did not form the ground in the OMP filed under Section 34 of the Act and was raised for the first time in the arguments.
17. The Supreme Court in Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran (2012) 5 SCC 306 refused to set aside an arbitral award, under the 1996 Act on the ground that the view taken by the Arbitral Tribunal was against the terms of the contract and held that it could not be said that the Arbitral Tribunal had travelled outside its jurisdiction and the Court could not substitute its view in place of the interpretation accepted by the Arbitral Tribunal. It was reiterated that the Arbitral Tribunal is legitimately entitled to take the view which it holds to be correct one after considering the material before it and after interpreting Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.22 the provisions of the Agreement and if the Arbitral Tribunal does so, its decision has to be accepted as final and binding. Reliance in this regard was placed on Sumitomo Heavy Industries Ltd. v. ONGC Ltd. (2010) 11 SCC 296 and on Kwality MFG. Corporation v. Central Warehousing Corporation (2009) 5 SCC
142. Similarly, in P.R. Shah, Shares & Stock Broker (P) Ltd. v. B.H.H. Securities (P) Ltd. (2012) 1 SCC 594 it was held that a Court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciating evidence and an award can be challenged only under the grounds mentioned in Section 34(2) and in the absence of any such ground it is not possible to reexamine the facts to find out whether a different decision can be arrived at. A Division Bench of this Court also recently in National Highways Authority of India v. Lanco Infratech Ltd. MANU/DE/0609/2014 held that an interpretation placed on the contract is a matter within the jurisdiction of the Arbitral Tribunal and even if an error exists, this is an error of fact within jurisdiction, which cannot be reappreciated by the Court under Section 34 of the Act. The Supreme Court in Steel Authority of India Ltd. v. Gupta Brother Steel Tubes Ltd. (2009) 10 SCC 63 even while dealing with a challenge to an arbitral award under the 1940 Act reiterated that an error by the Arbitrator relatable to interpretation of contract is an error within his jurisdiction and is not an error on the face of the award and is not amenable to correction by the Courts. It was further held that the legal position is no more res integra that the Arbitrator having been made the final Arbiter of resolution of dispute between the parties, the award is not open to challenge on the ground that Arbitrator has reached at a wrong conclusion.
18. If we were to start analyzing the contract between the parties and interpreting the terms and conditions thereof and which will necessarily have to be in the light of the contemporaneous conduct of the parties, it will be nothing else than sitting in appeal over the arbitral award and which is not permissible."
Before proceeding further, mention may also be made of New Delhi Apartment Group Housing Society v. Jyoti Swaroop Mittal MANU/DE/9107/2007 which remained to be noticed and where a Division Bench of this Court held that Saw Pipes Ltd. supra cannot be read as permitting a Court exercising powers under Section 34 to sit in appeal over the findings of fact recorded Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.23 by the Arbitrator or interpretation placed upon the provisions of the agreement.
10. We have in Delhi State Industrial & Infrastructure Development Corporation Ltd. supra further held that : -
"...the parties, by agreeing to be bound by the arbitral award and by declaring it to be final, agree to be bound also by a wrong interpretation or an erroneous application of law by the Arbitral Tribunal and once the parties have so agreed, they cannot apply for setting aside of the arbitral award on the said ground. Even under the 1940 Act where the scope of interference with the award was much more, the Apex Court in Tarapore and Co. v. Cochin Shipyard Ltd., Cochin (1984) 2 SCC 680 and U.P. Hotels v. U.P. State Electricity Board (1989) 1 SCC 359 held that the arbitrator's decision on a question of law is also binding even if erroneous. Similarly, in N. Chellappan v. Secretary, Kerala State Electricity Board (1975) 1 SCC 289 it was held that even if the umpire committed an error of law in granting amount, it cannot be said to be a ground for challenging the validity of the award; the mistake may be a mistake of fact or of law.
11. We are further of the view that the scope of judicial review of an arbitral award is akin to review under Article 226 of the Constitution of India of the decisions of bodies, where it is a settled principle of law (See State of U.P. v. Maharaja Dharmander Prasad Singh (1989) 2 SCC 505 and State of U.P. v. Johri Mal (2004) 4 SCC 714) that the judicial review is of the decision making process and not of the decision on merits and cannot be converted into an appeal. This is quite evident from the various Clauses of Section 34(2)(a) which prescribe the grounds of challenge on the lines of violation of the principles of natural justice in making of the award or invalidity of the arbitral agreement and nonarbitrability of the disputes arbitrated and of the composition of the Arbitral Tribunal or arbitral procedure being not in accordance with the agreement between the parties. Section 34(2)(b) adds the ground of the arbitral award being in conflict with the public policy of India. None of the said grounds are the grounds of challenge on the merits of the award. The ground of challenge of the award being in conflict with the public policy of India is explained as the award being induced or affected by fraud or corruption or being in violation of Section 75 or Section 81. Thus the grounds of challenge are akin to the grounds Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.24 of judicial review under Article 226 and not to grounds of appeal or revision. We are reminded of the merits legality distinction in judicial review as culled out by Lord Hailsham in The North Wales v. Evans (1982) 1 WLR 1155 by observing "the purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorized by law to decide for itself a conclusion which is correct in the eyes of the Court". Lord Brightman in the same judgment held that judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made and it would be an error to think that the Court sits in judgment not only on the correctness of the decision making process but also on the correctness of the decision itself. It was clarified that only when the issue raised in judicial review is whether a decision is vitiated the judicial review of the decision making process includes examination, as a matter of law, of the relevance of the factors. In our opinion the same is an apt test also for judicial review of the arbitral awards and just like a mere wrong decision without anything more is not enough to attract the power of judicial review, the supervisory jurisdiction conferred on the Court under the Arbitration Act is limited to see that the Arbitral Tribunal functions within the limits of its authority and that the arbitral award does not occasion miscarriage of justice. The Supreme Court in Mc. Dermott International Inc. v. Burn Standard Co. Ltd. (2006) 11 SCC 181 commenting on the radical changes brought about by the re-enactment of the arbitration law observed that the role of the Courts under the new law is only supervisory, permitting intervention in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice etc. and the Court cannot correct the errors of arbitrators and can only quash the award leaving the parties free to begin arbitration again.
12. Of the finality of arbitral awards, there is no doubt under our arbitration law. The Supreme Court as far back as in Union of India v. A.L. Rallia Ram AIR 1963 SC 1685 held that : -
"An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute submitted to him is ordinarily not liable to be challenged on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.25 lending the assistance of the ordinary Courts. The Courts are also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred........The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the civil courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding, if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided in the arbitration agreement."
of course the said judgment being under the Arbitration Act, 1940 proceeds to hold that an award is bad on the ground of error of law on the face of it. However the legislature while re-enacting the arbitration law has removed the ground of challenge of error of law on the face of the award. In Mc. Dermott International Inc. supra also it was held that the parties to the Arbitration Agreement make a conscious decision to exclude the Courts jurisdiction as they prefer the expediency and finality offered by arbitration. We are bound to respect the said change brought about by the legislature and cannot dogmatically review the awards on the grounds of challenge which have been intentionally taken away by the legislature.
13. It cannot also be lost sight of that non-conferring of finality on the arbitral awards not only affects the speed and expense of arbitration but also has a more subtle consequences of, extensive judicial review changing the nature of the arbitral process to an even greater extent. If arbitration becomes simply another level of decision making, subject to judicial review on merits, arbitrators may begin to decide cases and write opinions in such a way as to insulate their awards against judicial reversal producing opinions that parrot the appropriate statutory standards in conclusory terms, but suffer from a lack of reasoned analysis. Such a shift Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.26 from the arbitral model, in which decision makers are free to focus solely on the case before them rather than on the case as it might appear to an Appellate Court, to the administrative model, in which decision makers are often concerned primarily with building a record for review, in our opinion would substantially undercut the ability of arbitrators to successfully resolve disputes. The Courts therefore have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the Court will deem meritorious. The Courts if start undertaking to determine the merits of the grievance, would be usurping the function which under that Arbitration Act, 1996 is entrusted to the Arbitration Tribunal. This plenary review by the Courts of the merits would make meaningless the provisions that the arbitral award is final, for in reality it would almost never be final. We though may admit that sieving out the genuine challenges from those which are effectively appeals on merits is not easy.
14. Arbitration will not survive, much less flourish, if this core precept is not followed through by the Courts. The integrity and efficacy of arbitration as a parallel dispute resolution system will be subverted if the Courts appear unable or unwilling to restrain themselves from entering into the merits of every arbitral decision that comes before it. The power to intervene must and should only be exercised charily, within the framework of the Arbitration Act. Minimal curial intervention is underpinned by need to recognise the autonomy of the arbitral process by encouraging finality, so that its advantage as an efficient alternative dispute resolution process is not undermined. The parties having opted for arbitration, must be taken to have acknowledged and accepted the attendant risks of having only a very limited right of recourse to the Courts. It would be neither appropriate nor consonant for the Court to lend assistance to a dissatisfied party by exercising appellate function over arbitral awards, save to the extent statutorily permitted.
15. As it would be obvious from the above, the contention aforesaid of the counsel for the appellant does not constitute a challenge to the arbitral award on the grounds permitted and as discussed Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.27 hereinabove. It is not the case of the appellant that the arbitral award is vitiated, for us to go into the merits of the challenge." (Emphasis supplied by me)
12. The challenge raised to the award in the present petition is in essence a challenge on the merits of the award which would not be permissible under the limited scope of section 34 of the Arbitration and Conciliation Act. I have perused the impugned award as well as the arbitral record. I do not find that there is any infirmity in the decision-making process of the learned arbitrator which could lead to perversity or patent illegality in the award.
13. In the result, I see no reason to interfere with the impugned arbitral award. The petition under section 34 of the A&C Act is accordingly dismissed. Parties to bear own costs.
File be consigned to record room.
Judgement pronounced in open court.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/01.02.2023 Arbtn no.20011/16 Modi Agri Genetics P ltd. Vs. National Sees Corp. ltd. & ors. page no.28