Bangalore District Court
Vaishnavi Water Proofing And ... vs Union Of India(Government)Rep By ... on 17 February, 2025
KABC0A0033602020
IN THE COURT OF THE LXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE, MAYOHALL UNIT, BENGALURU.
(CCH-75)
Dated this 17th Day of February 2025
PRESENT:
Sri.PRAKASH CHANNAPPA KURABETT, B.Sc., LL.B.,(Spl.),
74th Addl. City Civil and Sessions Judge, Bengaluru.
A.S. No.25002/2020
PLAINTIFF: M/s.VAISHNAVI WATER PROOFING AND
CONSTRUCTION COMPANY,
Rep.by: Prop SATISH BHATIA,
F No.204, Panchawati Apts, 18th Main,
HAL II Stage, Bengaluru-08.
REP BY: Sri.R.LAKSHMIKANTHA RAO, Advocate.
V/S
DEFENDANT: UNION OF INDIA (Government),
Commander Works Engineer (AF) North
Military Engineer Services, Bellary Road,
J C Nagar Post, Bengaluru-06.
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A.S. No.25002/2020
Rep.by: Garrison Engineer.
REP BY: Sri.SATHISH.B., Advocate.
Date of Institution of the suit 28.11.2020
Nature of the Suit (Suit on pro-note, suit
for declaration and possession, suit for Suit u/S 34 of Arbitration and Conciliation Act
injunction, etc.)
Date of the commencement of recording
-
of the Evidence
Date of pronouncement of Judgment 17.02.2025
Total duration Year/s Month/s Day/s
04 02 19
JUDGMENT
This is a Petition filed by the Petitioner under Section 34 of the Arbitration & Conciliation Act, 1996 for setting aside the Arbitral Award dated 11.05.2020, 09.06.2020 & 10.06.2020 passed by the learned Sole Arbitrator.
2. The plaintiff M/s.Vaishnavi Water Proofing and Construction Company had invoked the Arbitration Agreement and preferred certain Claims against "Union of India" the defendant.
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3. The Brief facts leading to the case are as follows:-
The plaintiff was a registered contractor with the defendant. The plaintiff had entered into a lump sum contract bearing No.CWE(AF)/S/BAN/ASTE/08/2010-11 with defendant for construction of overhead tank at IAM under GE(AF) SDI & ASTE Bengaluru after regular tender on 27.07.2010.
a CA No. & Year CWE(AF)/S/BAN/ASTE/08/2010-2011 b Name of Work Construction of Overhead tank at IAM under GE(AF)SDI & ASTE Bengaluru c Amount of Contract Rs.23,36,050.00 d Date of acceptance 27 July 2010 of Tender e Date of commencement of work as per work 14 Aug 2010 order No.1 f Date of completion 13 Apr 2011 as per work order g Extended date of 25 July 2011 completion of work 4 A.S. No.25002/2020 h Actual date of Contract canceled w.e.f 09 Jan 2012 completion i Type of Contract Lump Sum Form IAFW-2159 The above contract includes the terms and conditions laydown in the General conditions of Contracts I.A.F.W- 2249. The defendant either issued any prior notice of dispute or intention to appoint Arbitrator. The defendant sent letter demanding amount without MRO on 14.06.2013 and sent a copy of letter dated 15.6.2013 of appointment of Sole Arbitrator Sri.S.K.Singh. Though there was no consent from the plaintiff the defendant filed their claim statement dated 25.7.2013 and objection filed on 10.08.2013. The Arbitrator had resigned from proceeding. Further Sri.Jain was appointed as Arbitrator and he also could not complete the proceedings hence he was terminated by the plaintiff. At last on 8.12.2018 Sri.R.P.Maurya is appointed as Sole Arbitrator. After enquiry and scrutiny of documents available on records and holding of the hearing posted for 5 A.S. No.25002/2020 order. The award dated 11.5.2020 which was communicated to plaintiff by regd post on 29.5.2020 received by plaintiff on 6.6.2020. Before plaintiff could go through the said award application dated 6.6.2020 u/S 33 of A & C Act sent on 17.6.2020 by post received on 20.6.2020. Thereafter without fixing date of hearing the defendant sent demand letter dated 9.7.2020 by post on 20.8.2020 to deposit Rs.18,29,852.28 towards award. In the meantime Arbitrator sent a copy of an additional amended awards dated 9.6.2020 and 10.6.2020 by post 14.7.2020 which is received by plaintiff on 23.7.2020 and the plaintiff has prayed for the reliefs as mentioned in this suit.
4. Being aggrieved by the said Arbitral Award, the Petitioner has challenged the same on several grounds, which will be discussed later in the body of the Judgment. 6
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5. The defendant has filed a detailed Statement of Objections/Written Statement on 25.10.2023 and he prayed to dismiss the said application.
6. I have heard the arguments of the Advocate for the plaintiff Sri.R.Lakshmikantha Rao, and the arguments of the Advocate for the defendant Sri.Sathish.B. The Advocate for the defendant has filed written arguments on 18.01.2025.
7. The learned counsel for the plaintiff has filed a memo with citation in Civil Appeal Nos.9486-9487/2019 between Central Organisation for Railway Electrification v/s M/s.ECI SPIC SMO MCML (JV) a joint venture company.
8. The learned counsel for the defendant has filed a memo along with the following citations:-
1) (2015) 5 SCC 698 between Navodaya Mass Entertainment Limited v/s J.M.Combines
2) Spl.L.A. No.13117/2019, dated 18.10.2019 between The State of Jharkhand & others v/s M/s.HSS Integrated SDN & another.7
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9. Based on the above contentions of both parties, following Points arise for my consideration:-
1. Whether there are grounds to set aside the Impugned Award under Section 34 of the Arbitration & Conciliation Act?
2. What order?
10. My findings on the above points are as follows:-
Point No.1:- In the Negative, Point No.2:- As per the final Order, for the following:-
REASONS
11. Point No.1: Perusal of the Arbitration Award, it clearly goes to show that, the defendant failed to commence the work on the ground. The defendant stated that after cancellation of contract under condition 54 of IAFW 2249 by the Accepting Officer, a board of officer was convened by CWE (AF) South Bengaluru to assess the 8 A.S. No.25002/2020 complete/incomplete items of work including assessement of material lying at site. The defendant intimated that the percentage accepted for balance works, under Risk and cost workout to 58% above their quoted rates which also includes element of their project, hence consider very lavish cost.
12. Perusal of the Arbitration Award, it clearly goes to show that the defendant failed to attend the GE Office for signed the work order. The grant of extension to the contractor by the Accepting Officer and communicated by GE under final & binding power as per General Condition 11 of IAFW-2249 after signing the extension of time DO by the contractor, the contractor later on cannot dispute with respect to quantum of extension. GE under letter No.8549/60/E8 dated 20.10.2010 intimated that demolition of tank was completed on 24.08.2011 and site handed over on 25.08.2011, but even after lapse of 50 days no substantial progress has been made by the defendant. It can be seen from the record that there has been 9 A.S. No.25002/2020 correspondence going on between defendant and SAIL for steel. Even though it has never been categorically admitted or agreed by GE in previous correspondence but fact remains that unless steel is received the work cannot progress further beyond lean PCC. Considering this 63 days extension sought by the defendant has been considered for approval. However this is known fact during the period lab ours are generally not available and accordingly planning to be done. No extension was considered on this ground.
13. Perusal of the Arbitration Award, it clearly goes to show that the defendant also stated that steel which was lying at site has been made as Sch 'B' issue at recovery rate to ascertain the exact amount of steel belongings to defendant and to deduct the same from defendant dues. Further the defendant stated that after cancellation of contract CWE (AF) South Bengaluru letter No.82301/129/E8 dated 01.06.2013 notified defendant under condition 67 of IAFW-2249 to deposit the amount of Rs.10,25,265.36 in 10 A.S. No.25002/2020 Govt. Treasury by 14.06.2013. There was delay in procurement of steel and steel was procured by Nov 2010, thereafter due to cyclone in Tamil Nadu during Nov/Dec 2010 epoxy coating was done by end of Dec 2010, therefore steel work was started after that. Finally, steel was brought to site by the defendant only on 10.12.2010. The commutation delay caused till Mar 2011 covering a period of seven months was absolutely not in respondent control, as without required steel and approved design mix, the work could not be even started. However approval has been conveyed immediately on 7.1.2011. Hence, there was no question of delay on account of this. Finally revised M-30 design mix report was submitted by the defendant only on 14.3.2011 for which necessary approval was accorded on 18.3.2011. CWE's letter No.82301/71/E8 dated 18.2.2011 is submitted as, which will be clear to indicate their approval of design was not prior to 18.2.2011.
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14. Perusal of the Arbitration Award, it clearly goes to show that apart from the delay in the design mix, even getting RMC was a problem since the requirements were less than one load and the RMC suppliers were reluctant to supply lesser quantity. There were therefore force to wait for supplier's convenience to get the requirements. This has also caused adequate delay, which the claimants were aware of. The defendant stated that Contractor requested an extension of time up to and including 31 Oct 2011 through his letter dated 17.6.2011 and accepting officer considering the reasons put up by the contractor has been granted an extension of time up to and including 25 Jul 2011, in terms of Condition 11 (a) (vii) of IAFW-2249 General Conditions of Contracts forming part of contract. The grant of an extension to the contractor by the Accepting Officer and communicated by GE comes under final and binding powers as per condition 11 of the IAFW-2249. After signing the extension of time DO by the contractor, the contractor later on cannot dispute with respect to quantum of extension. The 12 A.S. No.25002/2020 defendant was not called for any discussion since the deciding authority was to take the decision, assuming quasis judicial appointment being final and binding. Since his being ill is beyond his/contractors control. Normally they do not resort to correspondence with the department for obvious reasons and hence the correspondence is restricted to barest minimum. Hence, when all concerned were well aware of the contractor's sickness, it was not officially reported in good faith. Having taken up the work, non- executing of work services no purpose when 'time' is money to any contractor unless circumstances force such a situation. The defendant stated that he demand of claim for Rs.10,25,265.36 was already notified to the respondent through CWE (AF) (south) Bengaluru letter No.82301/129/E8 dated 1.6.2013.
15. Perusal of the Arbitration Award, it clearly goes to show that the defendant stated that the alleged notice dated 1.6.2013 has not been received by the respondent and 13 A.S. No.25002/2020 therefore totally denied. The alleged notice clearly appears a clear after thoughts be the defendant, after the submission were made by them explaining its importance statutorily. The contract was canceled rightly by the Accepting Officer as lot of opportunities were given to defendant to execute the work. The reasons mentioned by defendant in the documents referred were not found genuine. The contention of defendant regarding delay in work order and delay in handing over the site is also not seems to be correct as defendant himself has signed the works diary from 10.8.2010; i.e., date of start of work as per the work order issued by GE. It is seen from the documents that defendant was not progressing the main work; i.e., Sch 'A' Part-I appropriately, omission/and add back could have done during the currency of work even some Provisional schedules can only be completed after completion of main part; i.e., Overhead tank. Therefore, it is not correct that Provisional Schedules were not part of the contract. However, it is seen that value of material lying at site was to 14 A.S. No.25002/2020 the amount of Rs.1,38,544.80 as per the amount taken by Board of Officer. As per the contract condition the value of steel to be fixed by SSR Rates plus CP or market rate which even is less and in this case market rate of steel was less and was Rs.1,38,544.08 as per the vouchers. Therefore the amount of steel of Rs.1,38,544.08 was rightly considered by the defendant. In the letters defendant also admitted that certain disputes have arises in the referred contract and the both the parties are desirous for appointment of Arbitrator to adjudicate upon the disputes. Therefore, it is clear that certain disputes were arises with the contract and Arbitrator was appointed rightly. The demand submitted by defendant under their letter No.82030/129/E8 dated 1.6.2013 was after thought process. No MRO sent thus making it impossible to deposit. However it is seen from the documents ref under Para 14 that notice was given to defendant under HQ CWE (AF) South letter No.82301/129/ E8 dated 1.6.2013 and notice dispatched through central dak and proof to this effect has also send to defendant. 15
A.S. No.25002/2020 CWE in the interest of recovery on behalf of President of India has issued notice. Therefore, defendant will pay Rs.10,03,145.51 to defendant against claim No.1, with simple interest at 10% per annum till actual payment.
16. Perusal of the Arbitration Award, it clearly goes to show that the Arbitrator found that the defendant forced to entered into Arbitration by the defendant therefore, the Arbitrator allowed this claim of Rs.75,000/-. The defendant will pay Rs.75,000/- to the defendant on this account against claim No.3 with interest at 10% per annum till the payment. All this could have been avoided if timely and accurately submission of Design Mix were done by the defendant. The value of work done is Rs.4,43,575.77. The cost of steel taken as Rs.2,19,111.86 by the defendant is not correct as defendant worked out his by adding his profit; i.e., 125% on SSR cost value. The simple interest at 10% has been considered in due of defendant under claim No.1; i.e., 16 A.S. No.25002/2020 Rs.22,119.85 and the same has been adjusted under claim No.1 of defendant.
17. The plaintiff has challenged the said Impugned Award in this proceeding. The Hon'ble High Court in the Judgment dated 17.04.2021 in Com. A.P.No.25/2021 (Union of India vs. M/s Warsaw Engineers), has laid down certain guidelines/principles about the writing of Judgments in a Petition filed under Section 34 of the Arbitration & Conciliation Act. Keeping in my mind the said guidelines, I now propose to examine each and every ground urged by the Petitioner specifically with reference to the submissions made by both Advocates.
18. The First ground is that the impugned award lacs basic legality and it is not done either in accordance with terms of contract I.A.F.W-2249 or under the Arbitration and Conciliation Act 1996.
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18.a. This is also general ground and same will be discussed along with other grounds urged by the petitioner.
19. The Second ground is that the sole Arbitrator who handled the case is not having qualification and experience to sit as Arbitrator as provided u/S 43J THE EIGHTH SCHEDULE (vii) of General Norms applicable to Arbitrator THE ARBITRATION AND CONCILIATION (AMENDMENT) Act, 2019. Not followed natural justice to give notice before passing amended award. Otherwise he would not have passed two amended awards with in a day unilaterally keeping the plaintiff totally in dark.
19.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside. 18
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19.b. I have perused award passed by the Sole Arbitrator. Perusal of the records, it clearly goes to show that the contention of petitioner that the Sole Arbitrator who handled the case is not having the qualification and experience to sit as Arbitrator as provided u/S43J the Eighth schedule is incorrect and an afterthought since this point was never raised either immediately after appointment of Arbitrator or during arbitration hearing or before publication of Award.
19.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
19.d. The Sole Arbitrator appointed by appointing authority is a serving officer having degree in Engineering & Experience as specified under sec 43J the Right schedule
(vii) of General norms of Arbitration & Conciliation Act, (ACA) 1996 and as specified in the contract agreement. The 19 A.S. No.25002/2020 petitioner also given consent for appointed Sole Arbitrator Shri.RP Maurya, SE, vide letter No.VWCC/NEW/ARB/@/2019 dated 24.01.2019 from which it is clear that applicability of the Sub Section 5 of Section 112 of ACA 1996 had been waived by both parties by signing clear agreement in writing.
19.e. Although interest @ 10% per annum was awarded the date from which the interest is to be calculated is not fund mentioned in the award dated 01.05.2020. Noticing this, UOI vide letter No.82301/ARB/242/E8 dated 06.06.2020, under intimation to the petitioner, requested Ld. Arbitrator to clarify the same in accordance with the provisions u/S 33 of ACA 1996. Accordingly, Ld Arbitrator has given the clarification vide letter No.49132/ARB/CWE/ SOUTH/ ASTE/2010-2011/42/E2 (Plg) dated 09.06.2020 and No.49132/ARB/CWE/SOUTH/ASTE/2010-2011/ 43/E2 (Plg) dated 10.06.2020 as under:
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A.S. No.25002/2020 The respondent is allowed to make payment within a period of three months from the date of award. Accordingly, if payment is not made by respondent on or before three months from the date of award, I award simple interest at the rate of 10% (Ten Percent) on the amount awarded by me on the claim No.1 & 3.
19.f. Since Ld Arbitrators clarification is in response to submission made by the UOI under claim No.1 & 3 there is neither any unilateral action by Ld Arbitrator nor injustice to petitioner as contended by them. It may be seen that Ld Arbitrator has given correction/interpretation only in response to claimants letter No.82301/ARB/242/E8 dated 06.06.2020 evident from para 1 of Ld Arbitrators letter No. 439132/ARB/CWE9(AF)/South/ASTE/2010-11/42/E2 (Plg) dated 09.06.2020 therefore it is reiterated that Ld Arbitrator acted only in response to claimants request in terms of Section 33 of ACA.21
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19.g. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning for allowing or disallowing the claim. Hence, as per the ratio of the above decisions, the said contentions of the Petitioner cannot be accepted. The award cannot be set aside on the said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected. 22
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20. The third ground is that the Arbitrator passed amended awards without giving opportunity and before receipt of application u/S 33 filed by defendant. It is clear violation of law of natural justice.
20.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside.
20.b. I have perused award passed by the Sole Arbitrator. Perusal of records, it clearly goes to show that the further contention of petitioner that, the Arbitrator passed amended awards without giving opportunity and before receipt of application undersigned 33 of ACA 1996 filed by claimant is not correct and hereby denied as false and strict proof of the same. It may be seen that Ld Arbitrator has given correction/interpretation only in 23 A.S. No.25002/2020 response to claimants letter No.82301/ARB/242/E8 dated 06.06.2020 evident from para 1 of Ld Arbitrator's letter No. 439132/ARB/CWE9(AF)/South/ASTE/2010-11/42/E2 (Plg) dated 09.06.2020. Therefore, it is reiterated that Ld Arbitrator acted only in response to claimant's request in terms of Section 33 of ACA 1996.
20.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
20.d. In terms of Sub section (3) of Section 33 of ACA 1996 arbitral tribunal may correct any error of the type referred to in clause (a) of sub section (1) on its own initiative within thirty days from the date of the arbitral award clause
(a) of sub section 1 of Sec 33:- A party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award'. 24
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20.e. Clause (b) of Sub Section 1 of Sec.33:- If so agreed by the parties, a party, with notice to the other party may request the Arbitral tribunal to give an interpretation of a specific point or part of the award.
20.f. In view of the foregoing, Sole Arbitral has followed the provisions of section 33 of ACA 1996 in issuing the interpretation/corrections as requested by UOI.
20.g. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning 25 A.S. No.25002/2020 for allowing or disallowing the claim. Hence, as per the ratio of the above decisions, the said contentions of the Petitioner cannot be accepted. The award cannot be set aside on the said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
21. The fourth ground is that the proof of service of such notice was not established. Though the plaintiff raised this objection the sole Arbitrator failed to consider the same.
21.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside. 26
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21.b. I have perused award passed by the Sole Arbitrator. Perusal of the records, it clearly goes to show that the condition 69 of General conditions of contracts (IAFW-2249) is applicable with respect to issue of various notices pertaining to the execution of contract. However, in the instant case, the matter pertains to the recovery of amount which fails under condition 67 of IAFW-2249. In the instant case, CWE being Accepting Officer issued notice on behalf of the President of India. Issue of notice by CWE will not vitiate the sanctity of the notice since the Accepting Officer has decided the quantum of recovery to be effected based on risk & cost contract concluded and over all control with contract rests with the Accepting Officer. Further notice was dispatched correctly through central dark diary by ordinary post mentioned at Serial No.11 and Serial No.5 of post office receipt. This was as per the proof sent vide CWE (AF) (South) Bengaluru letter No.80035/13/E8 dated 30.01.2017.
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21.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
21.d. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning for allowing or disallowing the claim. Hence, as per the ratio of the above decisions, the said contentions of the Petitioner cannot be accepted. The award cannot be set aside on the 28 A.S. No.25002/2020 said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
22. The fifth ground is that Clause 70 of General conditions of contracts I.A.F.W-2249 reads: All disputes, between the parties to the contract other than those for which the decision of the C.W.E. or any other person is by the Contract expressed to be final and binding shall, after written notice by either party to the contract to the other of them, be referred to the sole arbitration of an Engineer officer to be appointed by the authority mentioned in the tender documents.
22.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected 29 A.S. No.25002/2020 without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside.
22.b. I have perused award passed by the Sole Arbitrator. As per the contract, condition 70 of IAFW-2249 provides that all disputes between the parties to the contract shall after written notice by either or party to the contract to the other of them be referred to the Sole Arbitrator. Perusal of the records, it clearly goes to show that after cancellation of contract CWE (AF) South Bengaluru letter No.82301/129/ E8 dated 01.06.2013 notified appellant under condition 67 of IAFW-2249 to deposit the amount of Rs.10,25,265.36 in Govt. Treasury by 14.06.2013. The petitioner has not deposited the amount hence the said amount shall become due from petitioner. The said amount therefore, shall be realized/removed by invoking condition 70 of IAFW-2249 by the Accepting Officer. Accordingly, correct course of action was taken by the respondent. Since the amount was not deposited by the petitioner in Govt. Treasury, the dispute 30 A.S. No.25002/2020 arose and to settle the dispute condition 70 of IAFW-2249 has been invoked by respondent in terms of arbitration clause contained in the CA.
22.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
22.d. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning 31 A.S. No.25002/2020 for allowing or disallowing the claim. Hence, as per the ratio of the above decisions, the said contentions of the Petitioner cannot be accepted. The award cannot be set aside on the said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
23. The Sixth ground is that the sole Arbitrator failed to consider that the notice of dispute ought to have signed by G E as provided in clause 69 of General conditions of contracts I.A.F.W-2249 admittedly it was not and sent by ordinary post without even producing certificate of post.
23.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected 32 A.S. No.25002/2020 without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside.
23.b. I have perused award passed by the Sole Arbitrator. Perusal of the records, it clearly goes to show that Shri.SK Singh, SE, sole Arbitrator was appointed by appointing authority. The petitioner submitted their statement of claims vide letter No.VWC/ARB/3/2013 dated 10.08.2013 accepting the fact that disputes had arisen and respondent submitted their statement of claims vide letter No.82301/134/E8 dated 13.07.2013. The arbitrator retired from the service on 31.12.2015 and Shri.RK Jain, SE (QS & C) was appointed as Sole Arbitrator for adjudication of disputes. Since the disputes were still persisting, petitioner vide their letter No.VWCC/ARB/4/2016 dated 21.12.2016 submitted their consent for appointment of Arbitrator by signing clear agreement dated 21.12.2016 stating that 'Certain disputes have arisen in the contract and both the parties are desirous for appointment of Arbitrator to 33 A.S. No.25002/2020 adjudicate upon the disputes'. Having given consent that the dispute had arisen, appellant cannot deny the same at a later date. Shri RK Jain could not complete the proceedings due to posting and transfer and tendered resignation. Shri RP Maurya, SE was appointed as Sole Arbitrator by appointing authority on 08.12.2018. The appellant vide their letter No.VWCC/NEW/ARB/2/2019 dated 24.01.2019 submitted their consent for appointment of Arbitrator again for the second time by signing clear agreement dated 16.01.2019 stating that 'Certain disputes have arisen in the contract and both the parties are desirous for appointment of Arbitrator to adjudicate upon the disputes'. In the hearing held on 03.10.2019 the petitioner requested that they be allowed to submit revised calculation details of their claims and their request was allowed by Sole Arbitrator. Both the parties submitted their statement of claims, pleading in defence and rejoinder and agreed that they had given fair opportunity to present, argue, and make submissions and have nothing to add further in the proceedings. Both the 34 A.S. No.25002/2020 parties had given consent to give extra 06 months time for publication of Arbitration award by Ld Arbitrator.
23.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
23.d. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning for allowing or disallowing the claim. Hence, as per the ratio 35 A.S. No.25002/2020 of the above decisions, the said contentions of the Petitioner cannot be accepted. The award cannot be set aside on the said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
24. The Seventh ground is that the Arbitrator has failed to consider in awarding interest for amount from the date of reference to Arbitrator, the delay in deciding the case is due to defendant choosing incapable Arbitrators. Interest was not awarded in the first award only in amended awards. For additional awards provisions in Sec 33 of Arbitration and Conciliation Act not followed. Hence the interest if at all it shall be calculated from date of periodical progress of proceeding; i.e., from third Arbitrator appointment. Further the interest awarded is exorbitant. 36
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24.a. The learned advocate for the petitioner has argued that impugned award is contrary to Section 34 of the Arbitration and Conciliation Act. Since, most of the contentions put forth by the petitioner have been rejected without any reason. This is the violative of public policy on this delay point alone award is liable to be set aside.
24.b. I have perused award passed by the Sole Arbitrator. Perusal of the records, it clearly goes to show that the contention of petitioner that the Sole Arbitrator who handled the case is not having the qualification and experience to sit as Arbitrator as provided u/S43J the Eighth schedule is incorrect and an afterthought since this point was never raised either immediately after appointment of Arbitrator or during arbitration hearing or before publication of Award.
24.c. This ground is in the nature of a ground to be urged in an appeal. In order to answer this ground, I have 37 A.S. No.25002/2020 to reappreciate the documents & other documents and evidence on both sides, which is not permissible under law.
24.d. The Sole Arbitrator appointed by appointing authority is a serving officer having degree in Engineering & Experience as specified under sec 43J the Right schedule
(vii) of General norms of Arbitration & Conciliation Act, (ACA) 1996 and as specified in the contract agreement. The petitioner also given consent for appointed Sole Arbitrator Shri.RP Maurya, SE, vide letter No.VWCC/NEW/ARB/@/2019 dated 24.01.2019 from which it is clear that applicability of the Sub Section 5 of Section 112 of ACA 1996 had been waived by both parties by signing clear agreement in writing.
24.e. Although interest @ 10% per annum was awarded the date from which the interest is to be calculated is not fund mentioned in the award dated 01.05.2020. Noticing this, UOI vide letter No.82301/ARB/242/E8 dated 06.06.2020, under intimation to the petitioner, requested Ld. 38 A.S. No.25002/2020 Arbitrator to clarify the same in accordance with the provisions u/S 33 of ACA 1996. Accordingly, Ld Arbitrator has given the clarification vide letter No.49132/ARB/CWE/ SOUTH/ ASTE/2010-2011/42/E2 (Plg) dated 09.06.2020 and No.49132/ARB/CWE/SOUTH/ASTE/2010-2011/ 43/E2 (Plg) dated 10.06.2020 as under:
The respondent is allowed to make payment within a period of three months from the date of award. Accordingly, if payment is not made by respondent on or before three months from the date of award, I award simple interest at the rate of 10% (Ten Percent) on the amount awarded by me on the claim No.1 & 3.
24.f. Since Ld Arbitrators clarification is in response to submission made by the UOI under claim No.1 & 3 there is neither any unilateral action by Ld Arbitrator nor injustice to petitioner as contended by them. It may be seen that Ld Arbitrator has given correction/interpretation only in response to claimants letter No.82301/ARB/242/E8 dated 39 A.S. No.25002/2020 06.06.2020 evident from para 1 of Ld Arbitrators letter No. 439132/ARB/CWE9(AF)/South/ASTE/2010-11/42/E2 (Plg) dated 09.06.2020 therefore it is reiterated that Ld Arbitrator acted only in response to claimants request in terms of Section 33 of ACA.
24.g. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 -
S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). By considering the ratio of the above-mentioned decisions, in the present case, the learned Arbitrator has given cogent reasons and made detailed discussions in the Impugned Award. Therefore, in view of the ratio of the aforesaid decisions, it has to be examined by perusing of the Impugned Award wherein the learned Arbitrator dealt with each and every claim separately and recorded the reasoning for allowing or disallowing the claim. Hence, as per the ratio of the above decisions, the said contentions of the Petitioner 40 A.S. No.25002/2020 cannot be accepted. The award cannot be set aside on the said ground. Hence, this ground is not available for the Petitioner under Subsection (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
25. The Eighth ground is that as per Sec.34 (5) of Arbitration and Conciliation Act (Amendment 2015) the notice of intention of appeal is served to the respondent and affidavit is filed.
25.a. This is also general ground and same will be discussed along with other grounds urged by the petitioner.
26. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re- evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly 41 A.S. No.25002/2020 held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. In fact, this ground is in the nature and tenor of appeal. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 ( Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge by the Petitioner calling for the setting aside of arbitral award on this ground is rejected.
27. The scope of this court is limited with regard to Section 34 of the Act. The position of law stands crystallized today, that findings, of fact as well as of law, of the arbitrator/Arbitral Tribunal are ordinarily not amenable to interference under Section 34 of the Act. The scope of interference is only where the finding of the Tribunal is 42 A.S. No.25002/2020 either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by this court, is absolutely necessary. The arbitrator is the final arbiter on facts as well as in law, and even errors, factual or legal, which stop short of perversity, do not merit interference under Section 34 of the Act. The Hon'ble High Court of Delhi in the decision reported in 2015 - S.C.C. OnLine - Del - 13192 (P.C.L. Suncon (JV) vs. NHAI), in Paragraph No. 24 has held as follows :-
"24. As a postscript, this Court believes that it is imperative to sound a word of caution. Notwithstanding the considerable jurisprudence advising the Courts to remain circumspect in denying the enforcement of arbitral awards, interference with the awards challenged in the petitions before them has become a matter of routine, imperceptibly but surely erasing the distinction between arbitral tribunals and courts. Section 34 jurisdiction calls for judicial restraint and an awareness that the process is removed from 43 A.S. No.25002/2020 appellate review. Arbitration as a form of alternate dispute resolution, running parallel to the judicial system, attempts to avoid the prolix and lengthy process of the courts and presupposes parties consciously agreeing to submit a potential dispute to arbitration with the object of actively avoiding a confrontation in the precincts of the judicial system. If a court is allowed to review the decision of the arbitral tribunal on the law or on the merits, the speed and, above all, the efficacy of the arbitral process is lost."
28. The Hon'ble Supreme Court in the decision reported in (2006) 11 - S.C.C. - 181 ( McDermott International Inc. vs. Burn Standard Co. Ltd. and Ors .), has held as follows :-
"52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot 44 A.S. No.25002/2020 correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."
29. Thus, it is observed and held that the arbitral award is not marred by any patent illegality, as there is no contravention of the substantive law of India, which would result in the death knell of an arbitral award. It is also observed that there is no patent illegality in the arbitral award, which must go to the root of the matter. The arbitral award is also a well reasoned and a speaking award. The arbitral award is also held to not be in contravention of Section 28(3) of the Act, which pertains to the terms of the 45 A.S. No.25002/2020 contract, trade usages applicable to the nature of contract and substance of dispute.
30. The Arbitration and Conciliation (Amendment) Act, 2015 made major changes to Section 34. The changes were suggested by the 246th Report of the Law Commission of India on Amendments to the Arbitration and Conciliation Act, 1996 of August 2014 and the Supplementary to the 246th Report of the Law Commission of India on Amendments to the Arbitration and Conciliation Act, 1996 of February 2015. These changes were aimed at restricting Courts from interfering with arbitral awards on the ground of "public policy." Accordingly, the amendment added "Explanation 2"
to Section 34(2) as well as Section 2A.
Explanation 2 of Section 34(2) states - "For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian Law shall not entail a review on the merits of the dispute." 46
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31. Because of this amendment, Courts would no longer be able to interfere with the award passed by the arbitrator. The explanation makes it especially clear that in no way would a Court be entailed to review the award on merits of the dispute. However, after amendment to Arbitration and Conciliation Act, Section 2A also curtails the scope of interpretation of "patently illegal" as propounded in the said decision reported in 2003 (5) - S.C.C. - 705 (ONGC vs. Saw Pipes Limited). Section 2A states :-
"An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiate by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of law or by reappreciation of evidence."47
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32. Thus, Courts can no longer reappraise evidence or set aside awards merely because the Arbitral Tribunal has made errors when dealing with the same.
33. Hence, the scope of interference is only where the finding of the Tribunal is either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by this court, is absolutely necessary. The Arbitrator is the final arbiter on facts as well as in law, and even errors, factual or legal, which stops short of perversity, does not merit interference under Section 34 of the Arbitration & Conciliation Act, 1996. Courts can no longer reappraise evidence or set aside awards merely because the Arbitral Tribunal has made errors when dealing with the same.
34. In the decision reported in ( 2017) 13 - SCALE - 91 (SC) (Venture Global Engineering LLC and Ors vs. Tech Mahindra Ltd. and Ors), the Hon'ble Supreme court has held as follows:-
48
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35. A similar view is also taken in the decision reported in (2017) 14 - SCALE - 240 (SC) ( Sutlej Construction vs. The Union Territory of Chandigarh).
36. The learned Advocate for the respondent has relied on a decision reported in 2019 (15) - S.C.C. - 131 (Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India Ltd.), wherein the Hon'ble Supreme Court has once again reiterated the law related to the examination by a Court of an Award under Section 34 of the Arbitration & Conciliation Act, 1996 and has held as under:-49
A.S. No.25002/2020 "34. What is clear, therefore, is that the expression public policy of India, whether contained in Section 34 or in Section 48, would now mean the fundamental policy of Indian law as explained in paragraphs 18 and 27 of Associate Builders (supra), i.e., the fundamental policy of Indian law would be relegated to the "Renusagar" understanding of this expression. This would necessarily mean that the Western Geco (supra) expansion has been done away with. In short, Western Geco (supra), as explained in paragraphs 28 and 29 of Associate Builders (supra), would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, in so far as principles of natural justice are concerned, as contained in Sections 18 and 34(2) (a) (iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in paragraph 30 of Associate Builders (supra). 50
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37. It is important to notice that the ground for interference in so far as it concerns "interest of India" has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basic notions of morality or justice". This again would be in line with paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
38. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders (supra), or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders (supra). Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) 51 A.S. No.25002/2020 was added by the Amendment Act only so that Western Geco (supra), as understood in Associate Builders (supra), and paragraphs 28 and 29 in particular, is now done away with.
39. Insofar as domestic awards made in India are concerned, an additional ground is now available under subsection (2A), added by the Amendment Act, 2015, to Section 34.Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within the fundamental policy of Indian law, namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the back door when it comes to setting aside an award on the ground of patent illegality.
40. Secondly, it is also made clear that reappreciation of evidence, which is what an appellate court is permitted to 52 A.S. No.25002/2020 do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
41. To elucidate, paragraph 42.1 of Associate Builders (supra), namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.
42. The change made in Section 28(3) by the Amendment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (supra), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders 53 A.S. No.25002/2020 outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2A).
43. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (supra), while no longer being aground for challenge under public policy of India, would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterized as perverse."
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44. In the decision reported in 2019 (16) - SCALE - 823 (Hindustan Construction Company Limited & Anr. vs. Union of India & Ors.) , the Hon'ble Apex Court has held as under:-
"49. Further, this Court has repeatedly held that an application under Section 34 of the Arbitration Act, 1996 is a summary proceeding not in the nature of a regular suit - see Canara Nidhi Ltd. v. M. Shashikala 2019 SCC Online SC 1244 at paragraph 20. As a result, a court reviewing an arbitral award under Section 34 does not sit in appeal over the award, and if the view taken by the arbitrator is possible, no interference is called for - see Associated Construction v. Pawanhans Helicopters Limited. (2008)16 SCC 128 at paragraph 17.
45. Also, as has been held in the recent decision Ssangyong Engineering & Construction Co. Ltd. vs. NHAI 2019 SCC Online SC 677, after the 2015 Amendment Act, 55 A.S. No.25002/2020 this Court cannot interfere with an arbitral award on merits."
46. The Hon'ble Supreme Court in the decision reported in 2020 - SCC Online - S.C. - 466 ( Patel Engineering Ltd. vs. North Eastern Power Corporation Ltd) has once again exposited the 'patent illegality' ground, appearing in Section 34 (2A) of the Arbitration and Conciliation Act, 1996. The most significant part of this judgment is the recognition and reaffirmation given to the test of patent illegality, as set out in Paragraph (42.3) of the above-mentioned decision reported in 2015 (3) - S.C.C. - 49 (Associate Builders vs. DDA) and which was reiterated in Paragraph (40) of the decision reported in 2019 (15) - S.C.C.
- 131 (Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India Ltd.). The aforementioned test of 'patent illegality' lays down that any contravention of Section 28 (3) of the Arbitration & Conciliation Act, 1996 is deemed to be a sub-head of patent 56 A.S. No.25002/2020 illegality. According to it, an Arbitral Tribunal must decide in accordance with the terms of the contract, but if an Arbitrator construes a term of the contract in such a way that it could be said to be something that no fair minded or reasonable person could do, the same will render the award 'patently illegal'.
47. By keeping in mind about the said legal aspects, I am of the opinion that the Arbitral Award is not marred by any patent illegality, as there is no contravention of the substantive law of India, which would result in the death knell of an Arbitral Award. It is also observed that there is no patent illegality in the Arbitral Award, which must go to the root of the matter. The Arbitral Award is also a well reasoned and a speaking award. The Arbitral Award is also held to not be in contravention of Section 28(3) of the Arbitration & Conciliation Act, which pertains to the terms of the contract, trade usages applicable to the nature of contract and substance of dispute.
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48. On a parting note, I would like to add, that the challenge to the various clauses of contract by the Petitioner under the present petition is not tenable. It is accordingly, held that the Arbitral Award is neither against the fundamental policy of India nor in contravention of law. Therefore, I find no perversity in the Arbitral Award and the same is upheld.
49. Having given my careful consideration to the submissions urged and the complete case record in the preceding paragraphs of this judgment, I am of the view that is not a fit and proper case for exercise the jurisdiction of this court under Section 34 of the Arbitration & Conciliation Act and interfere with the Arbitral Award and the same is upheld.
50. In my humble opinion, it cannot be said, in the present matter, that finding recorded by the Learned Arbitrator is based on no evidence or it has ignored vital evidence before arriving at the decision. A bare perusal of 58 A.S. No.25002/2020 the award passed by the Learned Arbitrator shows that evidence of both the parties have been considered in detail and the Learned Arbitrator has taken into account each and every submissions advanced by the parties before him, including appreciation of evidence in proper manner before arriving at the decision to pass the impugned award and as such, the judgment cited by the Learned Counsel for the Petitioner, is of little assistance to him.
51. For the said aspect, I wish to refer a recent decision of the Hon'ble Apex Court reported in (2021) 3 - S.C.C. - 308 (Anglo American Metallurgical Coal Pty. Ltd. vs. MMTC Limited), wherein it has laid down the parameters of judicial review and Courts have been permitted to interfere only if there is a ground of patent illegality or violation of fundamental policy of Indian law and if a possible view is based on oral and documentary evidence led in the case, which cannot be characterized as being either perverse or being based on no evidence and as such, no interference is 59 A.S. No.25002/2020 permissible. The relevant portion of the judgment is reproduced hereunder:-
"48. Given the parameters of judicial review laid down in Associate Builders, it is obvious that neither the ground of fundamental policy of Indian law, nor the ground of patent illegality, have been made out in the facts of this case, given the fact that the majority award is certainly a possible view based on the oral and documentary evidence led in the case, which cannot be characterized as being either perverse or being based on no evidence."
52. The learned Advocate for the Petitioner has relied on a recent Judgment of the Hon'ble Supreme Court in Delhi Airport Metro Express Private Limited vs. Delhi Metro Rai l Corporation Limited in Civi l Appea l No . 5627 / 2021 ( arising out of SLP (C) No . 4115 / 2019 ) decided on 09.09.2021. In the said judgment, the Arbitral Award which was challenged before the Hon'ble High Court under Section 34 was dismissed and in appeal under Section 37. The 60 A.S. No.25002/2020 Division Bench of Hon'ble High Court has allowed the appeal and set aside the award. In this judgment, the Hon'ble Supreme Court has set aside the order of the Division Bench. In the said Judgment, the Hon'ble Supreme Court in Para 24 has held as under:-
"24. This court has in several other judgments interpreted Section 34 of the 1996 Act to stress on the restraint to be shown by courts while examining the validity of the arbitral awards. The limited grounds available to courts for annulment of arbitral awards are well known to legally trained minds. However, the difficulty arises in applying the well-established principles for interference to the facts of each case that come up before the courts. There is a disturbing tendency of courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases to come to a conclusion that the award needs intervention and thereafter, dubbing the award to be vitiated by either perversity or patent illegality, apart from the other grounds 61 A.S. No.25002/2020 available for annulment of the award. This approach would lead to corrosion of the objection of the 1996 Act and the endeavours made to preserve this court, which is minimal judicial interference with arbitral awards. That apart, several judicial pronouncements of this court would become a dead letter if arbitral awards are set aside by categorizing them as perverse or patently illegal without appreciating the contours of the said expressions."
53. The Hon'ble Supreme Court at Para 35 of the said Judgment has held that as the arbitrator is the sole judge of the quality as well as the quantity of the evidence, the task of being a judge on the evidence before the Tribunal does not fall upon the court in exercise of its jurisdiction under Section
34. The Hon'ble Supreme Court has also held in Para 39 of the said Judgment that construction of the contract is within the jurisdiction of the Tribunal and merely because another view is possible, the court cannot interfere with such construction and substitute its own view. 62
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54. On going through these Judgments, it makes further clear that Arbitrator is sole judge of the quality and quantity of the evidence and construction of contract is within the jurisdiction of the Tribunal and the court cannot lightly interfere with the award passed by the learned Arbitrator. On considering the facts of the present case, as held in this Judgment there are no grounds to set aside the award of the learned Arbitrator under Section 34 of the Act. The Hon'ble Supreme Court in this Judgment has even held that patent illegality which do not go to the root of the matter and every error of law committed by the Arbitral Tribunal could not fall within the expression patent illegality.
55. Relying upon the law laid in the decision reported in 2015 (5) - S.C.C. - 698 (Navodaya Mass Entertainment Limited vs. J.M. Combines), it can be said that not only the reasoning of Arbitral Tribunal are logical, but all the material and evidence were taken note of by Arbitral Tribunal and this Court cannot substitute own evaluation of conclusion of 63 A.S. No.25002/2020 law or fact to come to the conclusion other than that of Arbitral Tribunal. Cogent grounds, sufficient reasons have been assigned by Arbitral Tribunal in reaching the just conclusion and no error of law or misconduct is apparent on the face of the record. This Court cannot re-appraise the evidence and it is not open to this Court to sit in the appeal over the conclusion/findings of facts arrived at by Arbitral Tribunal. Re-appraisal of the matter cannot be done by this Court. No error is apparent in respect of the Impugned Award. I do not find any contradiction in the observations and findings given by Arbitral Tribunal. The Impugned Award does not suffer from vice of irrationality and perversity. The conclusion of the Arbitral Tribunal is based on a possible view of the matter, so the Court is not expected to interfere with the award. Even impugned award passed by Arbitral Tribunal cannot be set aside on the ground that it was erroneous. The award is not against any public policy nor against the terms of contract of the parties. No ground for interference is made out. None of the grounds raised by 64 A.S. No.25002/2020 the petitioner attract Section 34 of the Arbitration and Conciliation Act. Therefore, I answer this Point in Negative.
56. Point No. 2: Therefore, I proceed to pass the following:-
ORDER The Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, is dismissed with costs.
(Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 17th day of February, 2025).
(PRAKASH CHANNAPPA KURABETT) LXXIV Addl. City Civil & Sessions Judge, Mayohall Unit, City Civil Court, Bengaluru. (CCH - 75) 65 A.S. No.25002/2020 66 A.S. No.25002/2020