Orissa High Court
Principal Secretary To The Govt vs M/S.Jagannath Choudhury on 20 May, 2024
Author: D.Dash
Bench: D.Dash
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.29 of 2019
In the matter of an Appeal under Section 37(1)(a) of the
Arbitration and Conciliation Act, 1996 assailing the judgment
dated 9th April, 2019 passed by the learned District Judge,
Mayurbhanj at Baripada in Arbitration Case No.01 of 2016.
----
Principal Secretary to the Govt. .... Appellants of Odisha & Others
-versus-
M/s.Jagannath Choudhury .... Respondent Appeared in this case by Hybrid Arrangement (Virtual/Physical Mode):
================================================ For Appellants - Mr. S.N. Das, (Additional Standing Counsel) For Respondent - Mr. Pratik Parija, Advocate CORAM:
MR. JUSTICE D.DASH Date of Hearing : 18.03.2024 : Date of Judgment: 20.05.2024 D.Dash, J. The Appellants, by filing this Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the A&C Act' 1996), have assailed the judgment dated 9th April, 2019 passed by the learned District Judge, Mayurbhanj at Baripada in ARB Case No.01 of 2016 in the matter of an application Page 1 of 44 ARBA No.29 of 2019 under section 34 of the Act, refusing thereby to set aside the award dated 05.11.2015 passed by the learned Arbitrator.
2. FACTUAL MATRIX OF THE CASE:-
(i) The Respondent-Claimant a Superclass Contractor was awarded to execute the work of construction of Jambhira Earth Dam from RD 4200 M to 4500 M Reach (V) a portion of the Jambhira Earth Dam under Subarnarekha Irrigation Project (SIP), Odisha. The Respondent-Claimant entered into an Agreement with the Appellant vide Agreement No.1 LCB of 1996-97 at a contract price of Rs.3,85,52572.21 with the date of commencement on 10.05.1996 and completion as on 09.05.1998. The contract contained execution of 11 Items of work as per the Schedule of quantity given in Chapter-VII of the Agreement.
The work awarded to be executed by the Respondent- Claimant was being carried out with the financial assistance of NABARD; the same was required to be completed by March, 1997. A review meeting being held in the Office of the Chief Engineer & Basin Manager, Baitarani-Subarnarekha and Budhabalanga Basin (BS & B) at Laxmiposi to review the progress and completion of Jambhira (Truncated Dam) by March, 1997, the Chief Engineer during then influenced upon everyone including the present Respondent-Claimant to complete the execution of truncated Dam by 31.03.1997. All Page 2 of 44 ARBA No.29 of 2019 the Contractors agreed to complete the work by March, 1997 except the Turfin. The Contractors also pointed out the various problems faced by them and the Chief Engineer gave his decision. The decision to reduce the period of completion of the project from two calendar year to one calendar year was taken in view of the time frame committed to the NABARD for creation of 3550 hectors of irrigation potential by June, 1997. In course of execution of work by the Respondent-Claimant, five extra items of work came up for execution and, therefore, with the approval and direction of the Authority, the Respondent-Claimant executed said extra item of works along with 11 items of work as stipulated in the agreement by 31.03.1997 by deploying additional man and machineries, tools and tackles. However, full payment was not made to the Respondent-Claimant in respect of 11 items of work as per the agreement as well as the five extra items.
It is stated that in respect of several items of work under the agreement, the amount was not paid as per the quantity of work done. It is also stated that out of five extra item of work, the Appellant has paid in respect of only two extra items, i.e., drilling of 300 mm dia hole and filling of sand of approved quality into the said drilled hole and in respect of three other extra items of work, no payment has Page 3 of 44 ARBA No.29 of 2019 been made. So, this is the First (1) item of claim made by the Respondent-Claimant.
The Second (2) item of claim is towards price escalation (price adjustment) as per the Clause-33 of the General Conditions of Contracts (GCC). The Third (3) item of claim is the compensation on account of completion of the work by end of March, 1997, which necessitated the Respondent- Claimant to deploy extra man and machineries.
The refund of security deposit, payment of interest and costs constitute the claim item no.4,5 and 6 respectively.
After completion of the work including the extra items of work, the Respondent-Claimant was not paid with the amount due and accordingly, after several written requests for payment of the dues, the Respondent-Claimant issued notice on 24.11.2007 expressing therein his intention to invoke the Arbitration clause contained in Clause-53 of the General Conditions of Contracts (GCC). As there was no response from the side of the Appellant, the Respondent- Claimant filed an application under section 11 of the A & C Act before the Hon'ble High Court. The High Court by order dated 30.07.2010 appointed Mr. Justice P.K. Misra, (Retd.) as the sole Arbitrator.
Page 4 of 44 ARBA No.29 of 2019
3. The Respondent-Claimant thus claimed as under:-
Claim No. Amount Claimed
Claim No.1 Rs.2,29,39,068.23
Claim No.2 Rs. 19,74,028.10
Claim No.3 Compensation for having
completed the work by
March,1997 instead of
09.05.1998.
Claim No.4 Rs.06,42,884.00
Claim No.5 Interest @ 18% from
01/04/1997
Claim No.6 Cost
4. The Appellant-State resisted the above claims by saying that the request made for completion of the work by 31.03.1997 was in order to meet the commitment with the NABARD since financial assistance was being availed from NABARD, but it was not mandatory nor an imposition as per the terms and conditions of the Contract. It is stated that the Respondent-Claimant did not take any corrective measure to complete the work by 31.03.1997 and he on the other hand completed the work by 09.05.1998 as per the contractual stipulation. The Respondent-Claimant had to accept the final measurement and accordingly, was to submit the final bill Page 5 of 44 ARBA No.29 of 2019 and final price escalation bill as per the contractual provision stipulated in Clause-34 of the GCC. The Respondent- Claimant, however, did not accept the final measurement nor submitted the final bill which paralyzed further course of action as to the settlement of the claim. Moreover, there being a Vigilance inquiry, the matter remained pending and, therefore, the amount could not be paid. The disputes have been raised relating to quantity of work claimed to have been executed by the Respondent-Claimant. It has been stated that the 30th Running Account Bill based on String Section Measurement have been paid to the Respondent-Claimant. Almost all the executed quantities are incorporated in the said Running Account Bill in String Section pending finalization of the accurate quantity on level section measurement. It is stated that the Respondent-Claimant had executed four extra items of work, out of which payment has been made for two extra items and balance payment was to be made in respect of the rest two extra items. It is further stated that excess payment has been made in respect of some of the agreement items and two of the extra items which are required to be adjusted.
5. On the above rival case, the learned Arbitrator framed the following issues:-
Page 6 of 44 ARBA No.29 of 2019
(1) Whether the present arbitration proceeding is maintainable?
(2) Whether the claims are barred by limitation?
(3) Whether the Claimant is entitled to any further amount in respect of execution of Agreement Item No.1?
(4) Whether the Claimant is entitled to any further amount in respect of execution of Agreement Item No.2?
(5) Whether the Claimant is justified in the contention that the excess amount paid in relation to execution of Agreement whether the Claimant Item No.3 is to be adjusted towards execution of extra Item in respect of "Borrower Area".
(6) Whether the Claimant is entitled to any further amount in respect of execution of Agreement Item No.4?
(7) Whether the Claimant is entitled to any further amount for execution of work relating to Agreement Item No.5?
(8) Whether the Claimant is entitled to any further amount of execution of work relating to Agreement Item No.6?
(9) Whether the Claimant is entitled to any further amount of execution of work relating to Agreement No.7?Page 7 of 44 ARBA No.29 of 2019
(10) Whether the Claimant is entitled to any further amount of execution of work relating to Agreement Item No.10?
(11) Whether the Claimant is entitled to any further amount of execution of work relating to Agreement Item No.11?
(12) Whether the Claimant is entitled to any amount of execution of Extra Item No.1 as per Para 15(A) of the Claim?
(13) Whether the Claimant is entitled to any further amount of Extra Item No.2 as per Para 15(B) of the Claim?
(14) Whether the Claimant is entitled to any further amount of for execution of Extra Item No.3 as per Para 15(C) of the claim?
(15) Whether Claimant is entitled to any further amount for price escalation (Price Adjustment) as per Para 17 of the Claim?
(16) Whether the Claimant is entitled to any compensation as claimed in Para 18 to 20 of the Claim?
(17) Whether the Claimant is entitled to refund of Security Deposit?
(18) Whether the Claimant is entitled to interest as claimed in Para 22 of the Claim?
(19) Whether the Claimant is entitled to cost?Page 8 of 44 ARBA No.29 of 2019
(20) Other relief, if any?
6. Considering the evidence, both oral and documentary, on record in the backdrop of the rival case projected and all other materials available, the learned Arbitrator proceeded to pass the award for Rs.91,86,172.86 under different head of claims in favour of the Respondent-Claimant. The summary of the Award runs as follows:-
Claim No. Amount Claimed Amount Awarded Claim No.1 Rs.2,29,39,068.23 Rs.77,03,135.60 Claim No.2 Rs. 19,74,028.10 Rs. 8,40,153.26 Claim No.3 NIL Claim No.4 Rs. 06,42,884.00 Rs. 6,42,884.00 Claim No.5 Interest @18% from 18% on the 01/04/1997 awarded amount of Rs.91,86,173/-
(rounded off) from
date of decree till
date of payment
Claim No.6 Cost Rs.5,00,000.00
7. Being aggrieved by the award passed by the learned Arbitrator, the Appellant filed an application under section Page 9 of 44 ARBA No.29 of 2019 34 of the A & C Act in the Court of the learned District Judge, Mayurbhanj at Baripada praying therein to set aside the said award passed by the learned Arbitrator. The said application having been rejected by the learned District Judge by judgment dated 09.04.2019. Hence, this Appeal under section 37 of the A & C Act has been filed.
8. Mr. S.N. Das, learned Additional Standing Counsel appearing for the Appellant submitted:-
(A) that the learned Arbitrator has committed manifest error of both fact and law in entertaining the claims long after the period of limitation. According to him, at no point of time, the Respondent-Claimant had raised his final bill as mandated under Clause-36 of the GCC, which contains that the Contractor had to raise his final bill soon after the closure of the work. But the record shows that the Claimant notified the claims on 24.11.2007 and applied for appointment of the Arbitrator on 19.02.2018. In that view of the matter, learned Arbitrator that no plea of limitation had been taken and since the Claimant was invited to attend the Office of the Executive Engineer for final measurement on 11.11.2008; the claims are not barred by limitation is totally flawed. Referring to the provisions contained in section 43(2) and section 21 of the A & C Act, he contended that the claims being barred by limitation, the learned Arbitrator's award in Page 10 of 44 ARBA No.29 of 2019 favour of the Respondent-Claimant is against the fundamental policy of Indian law.
(B) He further submitted that Clause-32 of the Agreement takes care of the extra item of the works and it is always at the rate as mutually agreed between the parties. In the case at hand, learned Arbitrator having relied upon the recommendation of the Project Level Committee and the deviation statement by allowing such claims has travelled beyond the bounds of the Agreement when the learned Arbitrator is ordained to adjudicate the claims confining within the four corners of the agreement only accepting plausible interpretation of a clause but not an irrational and unreasonable one. He thus submitted that the award is vitiated by patent illegality appearing on the face of the award. He in training the gun as above sought to derive support from the following decisions:-
(i) Kamlesh Babu & Others Vrs. Lajpat Sharma & Others, (2008) 12 SCC 577;
(ii) B and T AG Vrs. Ministry of Defence (2023) SCC Online SC 657 and
(iii) J.C. Budhraja Vrs. Chairman, Orissa Mining Corporation Ltd. & Another (2008) 2 SCC 444.Page 11 of 44 ARBA No.29 of 2019
9. Mr. P. Parija, learned counsel for the Respondent- Claimant having submitted that (A) the Arbitral award is not an ordinary adjudicatory order so as to be lightly interfered with by the Courts under section 34 and 37 of the A & C Act as if dealing with an appeal or revision against a decision of any subordinate court, relying upon the decision in case of Reliance Infrastructures Vrs. State of Goa; (2024) 1 SCC 479 contended that the present award is not liable to be interfered with on any of the grounds urged by the learned Additional Standing Counsel.
(B) the issue of limitation was very much before the learned Arbitrator and that has been decided in favour of the Respondent-Claimant holding his claim to be not barred by limitation. He submitted that when the Respondent-Claimant during all these period was running after the Authorities for payment of his dues as per the work done and that being not responded either in any positive or negative manner, the learned Arbitrator has rightly held that the cause of action for raising the claim in the facts and circumstances of the case has arisen on the day when the Respondent-Claimant filed the application under section 11(6) of the A & C Act, finding no other option in getting his unpaid dues from the Appellant without further wasting time in a fruitless manner. Page 12 of 44 ARBA No.29 of 2019
(C) It was submitted that the learned Arbitrator as can be seen from the relevant paragraphs of the award has gone for detail discussion of the materials before him and considered the same in the backdrop of the rival case projected by the parties including the extra items of work admitted by the Appellant to have been done by the Respondent-Claimant and when everything being taken into consideration in their proper prospective, the learned Arbitrator has arrived at a finding on each of the head of the claim without accepting the quantum claimed by the Respondent-Claimant on certain items of claim lodged by the Respondent-Claimant and, therefore, it cannot be said to be the findings are based on no evidence so as to term as perverse coming within the sweep of patent illegality warranting interference.
10. Issues for consideration: -
Having heard learned counsel for the parties at length and giving my anxious and thoughtful consideration over the same, the following points for determination had been identified for being answered.
(1) What is the scope of this Court's power under section 37 of the A & C Act and whether the arbitral award is in contravention of the fundamental policy of Indian law, as in the given Page 13 of 44 ARBA No.29 of 2019 case contrary to the provision laid down in the Indian Limitation Act, 1963?
(2) Whether the findings of the learned Arbitrator are based on no evidence and as such the same are perverse and thus the award suffers from the vice of patent illegality?
11. ISSUE A: WHAT IS THE SCOPE OF THIS COURTS POWER UNDER SECTION 37 OF THE A&C ACT
1. In the present case, we are only concerned with Section 37(1)(c) which states that an appeal lies under Section 37 from an order setting aside or refusing to set aside an arbitral award under Section 34 of the A& C Act.
2. We may note that the law laid down by the Supreme Court constricts the supervisory role of the courts while testing the validity of an Arbitration Award. In the case of Mcdermott International Inc. v. Burn Standard Co. Ltd. 1 , the Supreme Court has held as under:--
"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 Ld. Arbitral Tribunals, violation of natural justice, etc. The Page 14 of 44 ARBA No.29 of 2019 court cannot correct errors of the Ld. Arbitral Tribunals. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the 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."
3. It is now a settled position that while exercising a power under Section 34 of the A&C Act, the arbitral award can only be confirmed or set aside, but not modified. To buttress the said position of law, reliance is placed on the decision of the Supreme Court's recent judgment and order in NHAI v. M. Hakeem 2, wherein the Supreme Court held that:
"16. What is important to note is that, far from Section 34 being in the nature of an appellate provision, it provides only for setting aside awards on very limited grounds, such grounds being contained in sub-sections (2) and (3) of Section 34. Secondly, as the marginal note of Section 34 indicates, "recourse" to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-sections (2) and (3). "Recourse" is defined Page 15 of 44 ARBA No.29 of 2019 by P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn.) as the enforcement or method of enforcing a right. Where the right is itself truncated, enforcement of such truncated right can also be only limited in nature. What is clear from a reading of the said provisions is that, given the limited grounds of challenge under sub-sections (2) and (3), an application can only be made to set aside an award. This becomes even clearer when we see sub-section (4) under which, on receipt of an application under sub-section (1) of Section 34, the court may adjourn the Section 34 proceedings and give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or take such action as will eliminate the grounds for setting aside the arbitral award. Here again, it is important to note that it is the opinion of the Arbitral Tribunal which counts in order to eliminate the grounds for setting aside the award, which may be indicated by the court hearing the Section 34 application.
xxx
31. Thus, there can be no doubt that given the law laid down by this Court, Section 34 of the Arbitration Act, 1996 cannot be held to include within it a power to modify an award. The sheet anchor of the argument of the respondents is the judgment of the learned Single Judge in Gayatri Balaswamy [Gayatri Balaswamy v. ISG Novasoft Technologies Ltd., 2014 SCC OnLine Mad 6568 : (2015) 1 Mad LJ 5] . This matter arose out of a claim for damages by an employee on account of sexual harassment at the workplace. The learned Single Judge referred to the power to modify or Page 16 of 44 ARBA No.29 of 2019 correct an award under Section 15 of the Arbitration Act, 1940 in para 29 of the judgment. Thereafter, a number of judgments of this Court were referred to in which awards were modified by this Court, presumably under the powers of this Court under Article 142 of the Constitution of India. In para 34, the learned Single Judge referred to para 52 in McDermott case [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] and then concluded that since the observations made in the said para were not given in answer to a pointed question as to whether the court had the power under Section 34 to modify or vary an award, this judgment cannot be said to have settled the answer to the question raised finally.
xxx
42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , [Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106] , [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on Page 17 of 44 ARBA No.29 of 2019 International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the "limited remedy"
under Section 34 is coterminous with the "limited right", namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996.
xxx
48. Quite obviously if one were to include the power to modify an award in Section 34, one would be crossing the Lakshman Rekha and doing what, according to the justice of a case, ought to be done. In interpreting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. It is only for Parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over."
Further, the Supreme Court also re-iterated the above position in National Highway Authority of India vs. Sri P.Nagaraju @ Cheluvaiah & Anr as under:
"26. Under the scheme of the Act 1996 it would not be permissible to modify the award passed by the learned Arbitrator to enhance or reduce the compensation based on the material available on record in proceeding emanating from Section 34 of the Act, 1996..."Page 18 of 44 ARBA No.29 of 2019
12. Adverting to the case in hand, it is found that the learned Arbitrator has rejected the question of maintainability of the arbitral proceeding by order dated 16.03.2021. The Appellant-State had also challenged the order of the High Court appointed the Arbitrator by carrying SLP(C) No.11980 of 2011. That has been dismissed on 19.11.2013. So, the question of maintainability has been finally decided.
The learned Arbitrator had rejected the contention by referring to the affidavit filed by the Appellant-State in ARBP No.13 of 2008 that the plea raised in the present proceeding regarding date of completion of the work is a mere pretext and completely unacceptable. Then referring to the note of submission filed by the Appellant-State in the said arbitration application before the High Court, the learned Arbitrator has rejected the said contention.
13. The position of law is no more res integra that a finding recorded by the learned Arbitrator which is not based on any evidence so as to be substantiated the said finding is perverse and as such is liable to be set aside being under the sufferance of vice of patent illegality can only be gone into for reappraisal and appropriate finding based on that. It has been held in case of Associate Builders (supra) as under:- Page 19 of 44 ARBA No.29 of 2019
xxx xxx xxx xxx
31. The third juristic principle that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where:
(i) a finding is based on no evidence, or
(ii) an Arbitral Tribunal takes into account
something irrelevant to the decision which it arrives at: or
(iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.
32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer-cum- Assessing Authority v. Gopi Nath & Sons, it was held:
(SCC p. 317, para 7) "7. ... It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law."
In Kuldeep Singh v. Commr. of Police, it was held: (SCC p.14, para 10) Page 20 of 44 ARBA No.29 of 2019 "10. A broad distinction has, therefore, to be maintained between the decision which are perverse and those which are not. If a decision is arrived at on no evidence or evidence, which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious, it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."
33. It must clearly be understood that when a court is applying the 'Public policy' test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on fact has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. shah, shares & Stock Brokers (P) Ltd. v. B.H.H. Securities (P) Ltd., this Court held: (SCC pp. 601-02, para 21) Page 21 of 44 ARBA No.29 of 2019 "21. A Court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciation the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second respondent and the appellant are liable. The case as put forward by the first respondent has been accepted. Even the minority view was that the second respondent was liable as claimed by the first respondent, but the appellant was not liable only on the ground that the arbitrators appointed by the Stock Exchange under Bye-law 248, in a claim against a non-member, had no jurisdiction to decide a claim against another member. The finding of the majority is that the appellant did the transaction in the name of the second respondent and is therefore, liable along with the second respondent. Therefore, in the absence of any ground under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at."
34. It is with this very important caveat that the two fundamental principles which from part of the fundamental policy of Indian law (that the arbitrator must have a judicial approach and that he must not act perversely) are to be understood."
Page 22 of 44 ARBA No.29 of 2019
14. In a very recent case of Reliance Infrastructure Ltd. (supra) reiterating the principles laid down in case of SSANGYONG Engineering & Construction CO. LTD. (supra) and Delhi Airport Metro Express Private Ltd. Vrs. Delhi Metro Rail Corporation Ltd., (2022) 1 SCC 131, it has been held that -
"patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression "patent illegality". Likewise, erroneous application of law cannot be categorized as patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression "patent illegality". What is prohibited is for Courts to reapprecaition evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as Courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34(2- A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one, or interprets a clause in the contract in such a manner which no fair-minded or reasonable person should, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not allotted to them. An arbitral award stating no reasons for its findings would make itself susceptible to challenge on this account.Page 23 of 44 ARBA No.29 of 2019
The conclusions of the arbitrator which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set aside on the ground of patent illegality. Also, consideration of documents which are not supplied to the other party is a facet of perversity falling within the expression "patent illegality".
15. In the light of the of the parameters as laid down above vis-à-vis the scope of judicial intervention that the present Appeal in view of the judgment passed by the learned District Judge in Arbitration Case No.01 of 2016 arising out of the arbitration award dated 05.11.2015 passed by the learned Arbitrator has to be addressed.
(A) Limitation The issue as to the limitation has been decided by the learned Arbitrator as that had been raised from the very beginning. This Court addressing the rival submission advanced, feels that at first, it would be profitable to take note of the law laid down by the Hon'ble Apex Court in case of B and T AG (supra). The Court was dealing with a petition under section 11(6) of the A & C Act. It was vehemently opposed on twin points of limitation; (1) that the petition under section 11(6) of the A & C Act is time barred and (2) that the claims raised by the Petitioner were hopelessly barred by limitation. The Court, therefore, was called upon to Page 24 of 44 ARBA No.29 of 2019 rule whether time barred claim or claims which are barred by limitation can be said to be live claim so as to be referred to the Arbitrator. Having said that no time limit has been prescribed for filing the application under section 11(6) of the A & C Act for appointment of the Arbitrator, the Court, however, referring to section 43 of the A & C Act and the decision in case of Consolidated Engineering Enterprises Vrs. Principal Secretary, Irrigation Department, (2008) 7 SCC 169, which had addressed the contention that section 43 of the A & C Act makes the provision of Limitation Act, 1963 applicable only to arbitration and not to any proceeding relating to arbitration in a court had negated the same in saying that the provisions of Limitation Act, 1963 shall apply to all proceedings under the A & C Act, both in court and in arbitration, except to the extent expressly excluded by the provisions of A & C Act. It was then, however, observed that there is a fine distinction between the plea that the claims raised are barred by limitation and the pleas that the application for appointment of an Arbitrator is barred by limitation. Referring to the celebrated decision of the High Court of Calcutta in case of Dwijendra Narayan Roy Vrs. Jogesh Chandra Dey & Another, AIR 1924 (Cal) 600, deciding the cause of action the followings have been said:- Page 25 of 44 ARBA No.29 of 2019
Cause of action becomes important for the purposes of calculating the limitation period for bringing an action. It is imperative that a party realises when a cause of action arises. If a party simply delays sending a notice seeking reference under the Act 1996 because they are unclear of when the cause of action arose, the claim can become time-barred even before the party realises the same.
"Russell on Arbitration by Anthony Walton (19th Edn.) at pp. 4-5 states that the period of limitation for commencing an arbitration runs from the date on which the "cause of arbitration"
accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration take place upon the dispute concerned. The period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued:
"Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued."
In Law of Arbitration by Justice Bachawat at p. 549, commenting on Section 37, it is stated that subject to the Act 1963, every arbitration must be commenced within the prescribed period. Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date when the cause of action accrues, so in the case of arbitrations the claim is not to be put forward after the expiration of a specified number Page 26 of 44 ARBA No.29 of 2019 of years from the date when the claim accrues. For the purpose of Section 37(1) "action" and "cause of arbitration" should be construed as arbitration and cause of arbitration. The cause of arbitration arises when the claimant becomes entitled to raise the question, that is, when the claimant acquires the right to require arbitration. An application under Section 11 of the Act 1996 is governed by Article 137 of the Schedule to the Act 1963 and must be made within 3 years from the date when the right to apply first accrues. There is no right to apply until there is a clear and unequivocal denial of that right by the respondent. It must, therefore, be clear that the claim for arbitration must be raised as soon as the cause for arbitration arises as in the case of cause of action arisen in a civil action.
Whether any particular facts constitute a cause of action has to be determined with reference to the facts of each case and with reference to, the substance, rather than the form of the action. If an infringement of a right happens at a particular time, the whole cause of action will be said to have arisen then and there. In such a case, it is not open to a party to sit tight and not to file an application for settlement of dispute of his right, which had been infringed, within the time provided by the Limitation Act, and, allow his right to be extinguished by lapse of time, and thereafter, to wait for another cause of action and then file an application under Section 11 of the Act 1996 for establishment of his right which was not then alive, and, which had been long extinguished because, in such a case, such an application would mean an application for revival of a right, which had long been extinguished under the Act 1963 and is, therefore, dead for all purposes. Such proceedings Page 27 of 44 ARBA No.29 of 2019 would not be maintainable and would obviously be met by the plea of limitation under Article 137 of the Act 1963.
Negotiations may continue even for a period of ten years or twenty years after the cause of action had arisen. Mere negotiations will not postpone the "cause of action" for the purpose of limitation. The Legislature has prescribed a limit of three years for the enforcement of a claim and this statutory time period cannot be defeated on the ground that the parties were negotiating.
In Panchu Gopal Bose v. Board of Trustees for Port of Calcutta reported in (1993) 4 SCC 338, this Court had held that the provisions of the Act 1963 would apply to arbitrations and notwithstanding any term in the contract to the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party, in respect of any such matter at the time when it should have accrued but for the contract. Cause of arbitration shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator. The question was when the cause of arbitration arises in the absence of issuance of a notice or omission to issue notice for a long time after the contract was executed? Arbitration implies to charter out timeous commencement of arbitration availing of the arbitral agreement, as soon as difference or dispute has arisen. Delay defeats justice and equity aids promptitude and resultant consequences. Defaulting party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred. It was further held that where the arbitration agreement does not really Page 28 of 44 ARBA No.29 of 2019 exist or ceased to exist or where the dispute applies outside the scope of arbitration agreement allowing the claim, after a considerable lapse of time, would be a harassment to the opposite party. It was accordingly held in that case that since the petitioner slept over his rights for more than 10 years, by his conduct he allowed the arbitration to be barred by limitation and the Court would be justified in relieving the party from arbitration agreement under Sections 5 and 12(2)(b) of the Act. [See: State of Orissa v. Damodar Das, (1996) 2 SCC 216] The observations made by this Court in Panchu Gopal (supra) in paras 10, 11, 12, 13, 14 and 15 respectively, are also relevant. The observations read as under:
"10. In West Riding of Yorkshire County Council v. Huddersfield Corpn. [(1957) 1 All ER 669] the Queen's Bench Division, Lord Goddard, C.J. (as he then was) held that the Limitation Act applies to arbitrations as it applies to actions in the High Court and the making, after a claim has become statute-barred, of a submission of it to arbitration, does not prevent the statute of limitation being pleaded. Russel on Arbitration, 19th Edn., reiterates the above proposition. At page 4 it was further stated that the parties to an arbitration agreement may provide therein, if they wish, that an arbitration must be commenced within a shorter period than that allowed by statute; but the court then has power to enlarge the time so agreed. The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired Page 29 of 44 ARBA No.29 of 2019 either a right of action or a right to require that an arbitration takes place upon the dispute concerned.
The observations made by this Court in Panchu Gopal (supra) in paras 10, 11, 12, 13, 14 and 15 respectively, are also relevant. The observations read as under:
10. In West Riding of Yorkshire County Council v. Huddersfield Corpn. [(1957) 1 All ER 669] the Queen's Bench Division, Lord Goddard, C.J. (as he then was) held that the Limitation Act applies to arbitrations as it applies to actions in the High Court and the making, after a claim has become statute-barred, of a submission of it to arbitration, does not prevent the statute of limitation being pleaded. Russel on Arbitration, 19th Edn., reiterates the above proposition. At page 4 it was further stated that the parties to an arbitration agreement may provide therein, if they wish, that an arbitration must be commenced within a shorter period than that allowed by statute; but the court then has power to enlarge the time so agreed. The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned.
Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the Page 30 of 44 ARBA No.29 of 2019 specified number of years from the date when the claim accrued In Russell on Arbitration, at pages 72 and 73 it is stated thus:
"Disputes under a contract may also be removed, in effect, from the jurisdiction of the court, by including an arbitration clause in the contract, providing that any arbitration under it must be commenced within a certain time or not at all, and going on to provide that if an arbitration is not so commenced the claim concerned shall be barred. Such provisions are not necessarily found together. Thus the contract may limit the time for arbitration without barring the claim depriving a party who is out of time of his right to claim arbitration but leaving open a right of action in the courts. Or it may make compliance with a time- limit a condition of any claim without limiting the operation of the arbitration clause, leaving a party who is out of time with the right to claim arbitration but so that it is a defence in the arbitration that the claim is out of time and barred. Nor, since the provisions concerned are essentially separate, is there anything to prevent the party relying on the limitation clause waiving his objection to arbitration whilst still relying on the clause as barring the claim."
At page 80 it is stated thus:
"An extension of time is not automatic and it is only granted if 'undue hardship' would otherwise be caused. Not all hardship, however, is 'undue hardship'; it may be proper that hardship caused to a party by his own default should be borne by him, and not transferred to the other party by allowing a claim to be reopened after it Page 31 of 44 ARBA No.29 of 2019 has become barred. The mere fact that a claim was barred could not be held to be 'undue hardship'."
The Law of Arbitration by Justice Bachawat in Chapter 37 at p. 549 it is stated that just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date when the claim accrues, so also in the case of arbitrations, the claim is not to be put forward after the expiration of a specified number of years from the date when the claim accrues. For the purpose of Section 37(1) 'action' and 'cause of action' in the Limitation Act should be construed as arbitration and cause of arbitration. The cause of arbitration, therefore, arises when the claimant becomes entitled to raise the question, i.e. when the claimant acquires the right to require arbitration. The limitation would run from the date when cause of arbitration would have accrued, but for the agreement.
Arbitration implies to charter out timeous commencement of arbitration availing the arbitral agreement, as soon as difference or dispute has arisen. Delay defeats justice and equity aid the promptitude and resultant consequences. Defaulting party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred. The question, therefore, as posed earlier is whether the court would be justified to permit a contracting party to rescind the contract or the court can revoke the authority to refer the disputes or differences to arbitration. Justice Bachawat in his Law of Arbitration, at p. 552 stated that "in an appropriate case leave should be given to revoke the authority of the arbitrator". It was also stated that an ordinary Page 32 of 44 ARBA No.29 of 2019 submission without special stipulation limiting or conditioning the functions of the arbitrator carried with it the implication that the arbitrator should give effect to all legal defences such as that of limitation. Accordingly the arbitrator was entitled and bound to apply the law of limitation. Section 3 of the Limitation Act applied by way of analogy to arbitration proceedings, and like interpretation was given to Section 14 of the Limitation Act. The proceedings before the arbitration are like civil proceedings before the court within the meaning of Section 14 of the Limitation Act. By consent the parties have substituted the arbitrator for a court of law to arbiter their disputes or differences. It is, therefore, open to the parties to plead in the proceedings before him of limitation as a defence.
In Mustiu and Boyd's Commercial Arbitration (1982 Edn.) under the heading "Hopeless Claim" in Chapter 31 at page 436 it is stated thus:
"There is undoubtedly no jurisdiction to interfere by way of injunction to prevent the respondent from being harassed by a claim which can never lead to valid award for example in cases where claim is brought in respect of the alleged Arbitration agreement which does not really exist or which has ceased to exist. So also where the dispute lies outside the scope of arbitration agreement.""
(Emphasis Supplied) (B). Adverting to the case at hand, it is found that the learned Arbitrator has dealt this issue at paragraph 62 of the award, which read as follows:-
"This Issue relates to question whether the claims are barred by limitation. Admittedly, the Page 33 of 44 ARBA No.29 of 2019 State Government had never denied that the Claimant was entitled to certain amount towards execution of works including execution of some extra items in the Written Statement no plea whatsoever has been taken regarding limitation. On the other hand, it was stated that final settlement of the claims of the contractor has been delayed due to non-acceptance of final measurement of work. It was further pleaded that no decision was taken by the State Government regarding, the amount due on account of the fact that the Vigilance inquiry had been initiated and the matter had remained pending before the Vigilance Court. It is, also not disputed that the Respondents had called upon the claimant by letter dated 04/11/2008 (Annexure 17 of the rejoinder) to attend the office of the Executive Engineer on 11/11/2008 to accept the final level. In other words, till November, 2008 final measurement had not been made. Since final measurement has not been done in accordance with Clause-34 of the G.C.C. and the claim of the Claimant was never denied by the Respondents, it cannot be said that by the date of issuance of notice under section 21 of the Act, the claim was barred by limitation. Issue No.2 is accordingly decided in favour of the Claimant."
16. Admittedly, the Appellant had never denied the entitlement of the Respondent-Claimant to some amount towards execution of main items of the work as noted in the agreement as also execution of some extra item of work. The Respondent-Claimant from the very beginning has gone to assert that his claims were not finally settled Page 34 of 44 ARBA No.29 of 2019 and was being unreasonably withheld and delayed in disbursement and that there was non-acceptance of the final measurement of the work. The very case of the Appellant is that no decision had been taken by the State Government in the matter as a Vigilance Inquiry had been initiated and the matter remained pending therein as would be seen from the letter dated 04.11.2008 whereby the Respondent-Claimant had been asked to attend the Office of the Executive Engineer on 11.11.2008 to accept the final level which goes without saying that till November, 2008 final measurement had not been made. Therefore, in such factual settings the learned Arbitrator having taken the view that when as per the Clause-34 of the GCC, the final measurement had not been done and the Respondent-Claimant was not informed the fact that he has no claim in the matter, the claim by the date of issuance of notice was not barred by limitation, that view cannot be found fault with.
17. The position of law is no more res integra that a finding recorded by the learned Arbitrator which is not based on any evidence so as to be substantiated the said finding is perverse and as such is liable to be set aside being under the sufferance of vice of patent illegality can only be gone into for Page 35 of 44 ARBA No.29 of 2019 reappraisal and appropriate finding based on that. It has been held in case of Associate Builders (supra) as under:-
xxx xxx xxx xxx
31. The third juristic principle that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where:
(i) a finding is based on no evidence, or
(ii) an Arbitral Tribunal takes into account
something irrelevant to the decision which it arrives at: or
(iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.
32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer-cum- Assessing Authority v. Gopi Nath & Sons, it was held:
(SCC p. 317, para 7) "7. ... It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law."Page 36 of 44 ARBA No.29 of 2019
In Kuldeep Singh v. Commr. of Police, it was held: (SCC p.14, para 10) "10. A broad distinction has, therefore, to be maintained between the decision which are perverse and those which are not. If a decision is arrived at on no evidence or evidence, which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious, it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."
33. It must clearly be understood that when a court is applying the 'Public policy' test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on fact has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. shah, shares & Stock Page 37 of 44 ARBA No.29 of 2019 Brokers (P) Ltd. v. B.H.H. Securities (P) Ltd., this Court held: (SCC pp. 601-02, para 21) "21. A Court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciation the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second respondent and the appellant are liable. The case as put forward by the first respondent has been accepted. Even the minority view was that the second respondent was liable as claimed by the first respondent, but the appellant was not liable only on the ground that the arbitrators appointed by the Stock Exchange under Bye-law 248, in a claim against a non-member, had no jurisdiction to decide a claim against another member. The finding of the majority is that the appellant did the transaction in the name of the second respondent and is therefore, liable along with the second respondent. Therefore, in the absence of any ground under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at."
34. It is with this very important caveat that the two fundamental principles which from part of the fundamental policy of Indian law (that the arbitrator must have a judicial Page 38 of 44 ARBA No.29 of 2019 approach and that he must not act perversely) are to be understood."
18. In a very recent case of Reliance Infrastructure Ltd. (supra) reiterating the principles laid down in case of SSANGYONG ENGINEERING & CONSTRUCTION CO. LTD. (supra) and Delhi Airport Metro Express Private Ltd. Vrs. Delhi Metro Rail Corporation Ltd., (2022) 1 SCC 131, it has been held that -
"patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression "patent illegality". Likewise, erroneous application of law cannot be categorized as patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression "patent illegality". What is prohibited is for Courts to reapprecaition evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as Courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34(2- A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one, or interprets a clause in the contract in such a manner which no fair-minded or reasonable person should, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not Page 39 of 44 ARBA No.29 of 2019 allotted to them. An arbitral award stating no reasons for its findings would make itself susceptible to challenge on this account.
The conclusions of the arbitrator which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set aside on the ground of patent illegality. Also, consideration of documents which are not supplied to the other party is a facet of perversity falling within the expression "patent illegality".
19. In Ssangyong Engineering and Construction Company Ltd. (Supra) the position held is that although the decision which is perverse is no long a ground for challenge under public policy of India which certainly amount to a patent illegality appearing on the face of the award. Thus a finding based on no evidence at all and the award which ignores vital evidence in arriving at its decision which is perverse and liable to be set aside on the ground of patent illegality. In case of Dyena Technologies Pvt. Ltd. (Supra) whether the award was without any reason and the learned Arbitrator had merely restated the contentions of the parties without appropriate consideration of the complicity of the issues involved therein, the award was held to be unintelligible and thus liable to be set aside. In case of State of Rajasthan (Supra) where the Arbitrator had simply awarded the amount as claimed in the claim statement merely basing upon the same without anything more, it was held to be Page 40 of 44 ARBA No.29 of 2019 invalid being wholly illegal and beyond the jurisdiction of the learned Arbitrator.
It is now, therefore, the rival contentions as regards the award under challenge before us would stand for being addressed in the touchstone of the afore-stated legal principles.
20 (A) On perusal of the award, it is seen that the learned Arbitrator at Paragraph-20 onwards of the award has dealt all those six items of claim raised by the Respondent-Claimant, which are covered under Issue Nos.3 to 15.
The Respondent-Claimant has stated that, he as per the agreement, was expected to excavate by mechanical means 129700.00 CUM. But during course of execution, huge quantity of slushy soil being found those could not be removed by mechanical means as agreed in the agreement and, therefore, such slushy soil was required to be removed and dumped outside the work place manually to be drained and dried and thereafter those were removed by mechanical means. So, this became an extra item of work. The Appellant admitted that large quantity of slushy soil was encountered in course of execution of work, which could not be removed mechanically. So in that situation, the learned Arbitrator Page 41 of 44 ARBA No.29 of 2019 when has accepted the claim of the Respondent- Contractor on the said score as an extra item appears to have adopted the right approach. Then proceeding to adjudicate upon the dispute relating to the quantity of execution of the work under agreement and also in connection with the extra work relating to removal of slushy soil as well as the rate of payment of extra work, the materials on record having been discussed at length, the entitlement of the Respondent-Claimant has been finally decided.
(B) In similar way, the learned Arbitrator has dealt Issue No.4 relating to the execution of work in Agreement Item No.2 and Item No.3 and upon detail discussion of the said materials from every angle has decided the entitlement of the Respondent-Claimant. The same way on thorough examination of the materials on record mainly relying upon the documents admitted in the proceeding has answered all other issues (C) The learned Arbitrator, having decided the issues as aforesaid has very rightly denied the claim of the Respondent-Claimant as to compensation for execution of the work as per the direction of the Authority by March, 1997 as against the completion date fixed under the Agreement as 24.01.1998.
Page 42 of 44 ARBA No.29 of 2019 (D) The learned Arbitrator, as it appears, from the award has gone for detail examination of available evidence in the backdrop of rival statements and upon their evaluation has rendered the decision by answering the issues. A careful reading being given to the discussion of evidence made by the learned Arbitrator on the heads of the claim, this Court is not at all in a position to say that the same does not stand on the base of evidence. The basis on which those have been returned by the learned Arbitrator cannot be said to be wholly erroneous. Therefore, when reappreciation of evidence at this stage is not permissible so as to substitute another view with that of the view of the Arbitrator, the view taken by the learned Arbitrator as afore-stated have to be said to be possible views on the factual settings.
21. At this stage, it be stated that the Appellant having raised the question of maintainability of the arbitral proceeding by filing application under section 16 of the A & C Act, that was rejected by order dated 16.03.2011. The Appellant even had challenged the order of appointment of the learned Arbitrator as made by this Court in ARBP No.14 of 2018 by carrying SLP(Civil) C.C. No.11984 of 2011 before the Supreme Court and that had also been dismissed on contest by order dated 19.11.2013. Therefore, Page 43 of 44 ARBA No.29 of 2019 the contentions raised from the side of the Appellant that the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission of the arbitration and that the composition of Arbitral Tribunal was not in accordance with the Agreement of the parties are no more entertainable in the eye of law.
22. Now coming to the rate of interest as has been awarded by the learned Arbitrator, i.e., 18% per annum appears to be without any reason and in the facts and circumstances as disproportionate which thus is pegged at 9% per annum being so reasonable.
23. Accordingly, the Appeal stands disposed of with the modification of the rate of interest on the awarded amount from the date of award till payment to the extent as indicated above.
Sd/-
(D. Dash), Judge.
True Copy P.A. Himansu Signature Not Verified Digitally Signed Signed by: HIMANSU SEKHAR DASH Reason: Authentication Location: OHC Date: 22-May-2024 17:06:52 Page 44 of 44 ARBA No.29 of 2019