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Delhi District Court

Neymat Infrastructure Pvt. Ltd vs Mrs. Shakuntala Rani Jha (Deceased) on 26 August, 2021

                 Through Video Conferencing via Cisco Webex
             Link:https://districtcourtdelhi.webex.com/meet/ddc.vc.south12

                         IN THE COURT OF DISTRICT JUDGE
                        (COMMERCIAL-02) SOUTH DISTRICT,

                                   SAKET COURT, NEW DELHI

                                        OMP (Comm) 20/20

Neymat Infrastructure Pvt. Ltd.
28, Akash Neem Marg, DLF City Phase-II,
Gurgaon - 122002, Haryana
Through Shri Kunal Mehra, Director                                                      ..... Petitioner

                       Versus

1. Mrs. Shakuntala Rani Jha (deceased), through her LRs

a) Major General Umesh Kumar Jha
Plot No. B-1, Sector-36, Noida-201301, Uttar Pradesh
b) Mr. Rakesh Jha
Plot No. B-1, Sector-36, Noida-201301, Uttar Pradesh
c) Dr. Naresh Jha

2. Mr. Shashank Garg,
Ld. Sole Arbitrator,
268, Ground Floor, Business India Complex,
Masjid Moth, Near Uday Park,
South Extension-II, New Delhi-110049       ..... Respondents
                                                                     Date of Institution : 11.09.2020
                                                                     Date of arguments : 24.08.2021
                                                                     Date of Judgement : 26.08.2021

                                        JUDGEMENT

1. This is a petition U/s 34 of Arbitration & Conciliation Act, 1996 (hereinafter referred as "A&C Act") filed by the petitioner, Neymat Infrastructure Pvt. Ltd. on 11.09.2020 directed against the award dated 08.06.2020, passed by Shri Shashank Garg, Ld. Sole Arbitrator.

BACKGROUND FACTS

2. In brief, background facts leading to filing of this petition, are that respondent no. 1 approached the petitioner for the work of Construction of Residential Building at Plot No. B-1, located at Sector-36, Noida, Uttar Pradesh and for the said purpose, petitioner offered to undertake the project for the civil, electrical, mechanical, plumbing and complete finishing works.

3. It is submitted that the parties entered into a "Civil & Services Works Contract" dated 09.05.2015 at New Delhi whereby petitioner was to demolish the existing structure on the above-mentioned plot and construct a new building there at.

4. It is submitted that the stipulated date of commencement of the work was 09.05.2015, however, due to delay in obtaining necessary clearance certificates, the work had actually commenced on 01.10.2015, after handing over the approved site plan to the petitioner by the respondent. It is submitted that respondent terminated the contract vide letter dated 04.12.2017.

5. It is further the case of the petitioner that during the course of the execution of the work and upon termination of the work, dispute arose between the parties as a result of which, the matter was referred for arbitration and the respondent no. 2, Shri Shashank Garg was appointed as Sole Arbitrator to decide and adjudicate upon the claims/disputes between the parties.

6. Notice of the petition was issued to the respondents and on 06.11.2020, Shri Antony R. Julian, counsel for the respondent appeared and contested the petition.

7. On 23.08.2021, Ld. counsel for the petitioner filed an application for early hearing. He submitted that case was fixed on 20.08.2021 but due to declaration of holiday, case was adjourned to 09.10.2021.

SUBMISSIONS ADVANCED BY THE COUNSELS

8. Ld. counsel for the petitioner further submitted that an execution filed before the court of Ld. ADJ, Patiala House Courts, New Delhi was listed on 27.08.2021. In the circumstances, early hearing application filed on behalf of the petitioner was allowed and matter was listed for arguments on 24.08.2021.

9. This court has heard submissions advanced by Shri M.K. Ghosh, Ld. counsel for the petitioner as well as Shri Antony R. Julian, Ld. counsel for respondent and has perused the material on record.

10. The grounds taken by Shri M.K. Ghosh, Ld. counsel appearing for the petitioner submitted that the impugned arbitral award suffers from patent illegality appearing on the face of the award and is liable to be set aside under the provisions of Section 34 (2) of A & C Act, 1996. It is argued that arbitral award is in conflict with the public policy of India and is liable to be set aside under the provisions of Section 34 (2) (b) (ii) of A & C Act, 1996.

11. Ld. counsel for the petitioner submitted that the impugned arbitral award suffers from inherent inconsistencies, and contains inter se contradictory findings, as well as mutually destructive findings and therefore, is contrary to the public policy as it suffers from patent illegality and is unjust. In support, Ld. Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 3 of 26 counsel relied upon a case, titled, Union of India v. Sanghu Chakra Hotels P. Ltd., dated 08.08.2008, (2008) 152 DLT 651.

12. It is submitted that the present matter pertains to a dispute arising out of a civil construction contract and the most important point of determination/adjudication in these types of arbitrations are which party to the contract is responsible for the delay in execution of the work/prolongation of the contract. It is on the basis of this finding majority of the claims and counter claims are dependent on and adjudicated upon. It is further submitted that the Ld. Sole Arbitrator in the impugned award, with respect to the delay in execution of the work, has rendered inherently inconsistent, inter se contradictory and mutually destructive findings

13. Ld. counsel submitted that at one place, the Ld. Sole Arbitrator states that the delay in execution of the work cannot be attributed to the Claimants, i.e., the Petitioner herein, whereas, in the same award the Ld. Sole Arbitrator gives a shockingly contradictory finding that the Claimant, i.e., the Petitioner herein, is responsible for the same. The relevant portions of the findings in the award is reproduced :

"Commencement of Work 45; Finding on delay: For the foregoing reasons, it is not open to the Respondent to attribute the delay to the Claimant. Likewise, even the Claimant cannot blame the Respondent for the delay in execution of the work for the reasons mentioned hereinabove."

14. It is submitted that the contradictory finding to the above finding, has been recorded by the Ld. Sole Arbitrator in paragraph No. 56 of the impugned award, which is reproduced herein below:

"56 Findings: That as per Article 2.2 of the Contract, it was the duty of the Contractor to supply, fix and Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 4 of 26 maintain at his cost all the necessary functions. Moreover, since the Contract got prolonged due to the Claimant, it is not entitled to any payment on account of idling of tools & plants."

15. It is further submitted that a bare reading of the above two paragraphs, shows that there is contradictory as well as inconsistent finding recorded by the Ld. Sole Arbitrator on the most important point of adjudication, i.e., who is responsible for the delay in execution of the work/prolongation of the contract. Ld. counsel submitted that the Hon'ble High Court of Delhi in Union of India v. Sanghu Chakra Hotels P. Ltd., (2008) 152 DLT 651, has held that mutually contradictory award will be contrary to public policy of India and therefore, suffers from patent illegality and is therefore, unjust. The relevant portion is reproduced herein below:

"20. As mentioned earlier the Award of the learned Arbitrator suffers from inherent inconsistencies and self-contradictions and for that reason, I deem it appropriate to set aside the said Award."

16. It is argued that reliance for the said purpose can be placed upon the decision of the Supreme Court in the case of K.P. Poulose v. State of Kerala, (1975) 2 SCC 236, the said case the Court held as under :-

"6. Under Section 30(a) of the Arbitration Act an award can be set aside when an Arbitrator has misconducted himself or the proceedings. Misconduct under Section 30(a) has not a connotation of moral lapse. It comprises legal misconduct which is complete if the arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. It is in this sense that the Arbitrator has misconducted the proceedings in this case".

17. In the case of Union of India v. Pundarikakshudu and Sons, (2003) 8 SCC 168, the Supreme Court dealt with the question of award of damages by the Arbitrator and held that the decision to award damages against one party would suggest that the said party was guilty of breach of contract, any finding to the contrary would make the award bad in the face of it on account of inconsistent findings.

18. Shri Ghosh, Ld. counsel for petitioner has urged that since the impugned arbitral award suffers from inherent inconsistencies and self-contradictions and is contrary to the public policy of India as it suffers from patent illegality, is liable to be set aside on this ground itself. It is also argued that the impugned award has been arrived at by ignoring material and relevant documents on record, which throw abundant light on the controversy involved (i.e. the percentage of work completed), to arrive at a just and fair decision and therefore, the Ld. Sole arbitrator has misconducted himself.

19. It is submitted that the present arbitration/matter pertains to a dispute arising out of a civil construction contract and an important point of determination/adjudication in this dispute was the adjudication on the percentage of work that was completed/done by the Claimant. It is urged that it is on the basis of this finding that the claim of the Claimant with regard to "claim on account of work done as per final bill, security deposit, extra item statement" and the counter claim of the respondent with regard to "refund of excess payment" was required to be adjudicated upon. It is submitted that the Claimant had relied upon an email and a spread sheet, prepared and sent by the Respondent on 13.11.2017, i.e., C-20/1 of the arbitral record, Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 6 of 26 wherein, the Respondent had categorically admitted that 86% of the work completed. It is submitted that the document was an integral part of the arbitral record and was brought to the notice of the Ld. Sole Arbitrator during the course of hearing but the Ld. Sole Arbitrator has totally ignored this material and relevant document (i.e., C-20) and the admission contained therein, and has only on the basis of the submissions of the Respondents, has erroneously held that only 80% of the work has been completed.

20. It is argued that the Ld. Sole Arbitrator has failed to give any reason for not considering the contention of the Claimant and ignoring the material and relevant document and admission on the part of the respondents, that show that 86% of the work has been completed and the Ld. Sole Arbitrator has erroneously rejected the claimant's "claim on account of work done as per final bill, security deposit, extra item statement" and allowed the counter claim of the respondents with regard to "refund of excess payment", amounting to Rs.25,43,930/-.

21. Ld. counsel for petitioner has submitted that judgment of K.P. Poulose has been followed by the Hon'ble High Court of Delhi, in the judgment in Engineering Development Corporation v. Municipal Corporation of Delhi, OMP No. 414 of 2005.

22. Next it is submitted that the arbitral award suffers from lack of reasoning, much less intelligible reasoning and the Ld. Sole Arbitrator has straight away agreed with the contentions of the respondents, without any independent application of mind or recording any reasons. It is further submitted that the exact percentage of the work completed is one of the most important points of adjudication on which the Ld. Sole Arbitrator was Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 7 of 26 supposed to adjudicate and give a finding but he, without applying his independent mind in ascertaining the exact percentage of work done, has solely relied on the submissions of the respondents, at arriving at the percentage of work done, without stating any intelligible reasons and measurements on the basis of which, it arrived at such finding of percentage calculation.

23. Ld. counsel for the petitioner has contended that claimant had disputed before the Ld. Sole Arbitrator that the respondents' contention of 80% or 72.73% of work being completed is incorrect and contended that the 86% of the work was actually executed by the Claimant. It is further submitted that the Ld. Sole Arbitrator has shockingly and erroneously termed the respondents' contention of 80% work completed (in the termination letter), as admission and relied upon the same, without applying its independent mind and adjudicating the exact percentage per-centage of work completed (i.e., whether it is 86%, 80% or 72.73%). It is submitted that such a finding shows total non-application of mind by the Ld. Sole Arbitrator and is improper, inadequate and unintelligible and is a patent flaw in the decision-making process and the same falls under the ground provided under Section 34 of the Act, 1996.

24. Ld. counsel for the petitioner submitted that the Hon'ble Supreme Court of India in the case of Dyna has held as follows :-

"When we consider the requirement of a reasoned order, three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate. If the reasonings in the order are improper, they reveal a flaw in the decision-making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 8 of 26 grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue."

25. It is submitted that in light of the above judgment of the Hon'ble Supreme Court of India, having regard to the nature of issue before the Ld. Sole Arbitrator, the Ld. Sole Arbitrator had to give a definite finding on the percentage of work done, based on intelligible and adequate reasoning and calculation and not just on the basis of the erroneous submissions on the part of the respondent. It is thus, submitted that the impugned arbitral award, being unintelligible and perverse in reasoning and decision-making process, is therefore, is bad in law.

26. It is further submitted that the Ld. Sole Arbitrator has allowed the counter claim of the Respondents on excess payment made to the Claimant and awarded Rs.29,32,930/-, in total contradiction to the Clause 5.6 and Clause 11 of the contract between the parties. It is submitted that as per Clause 5.6 of the contract, the contractor on submission of copies of bills to the owner, all payments were to be made after due checking, verification and evaluation of the bill, in terms of Clause 11 by the owner/Respondents herein. It is submitted that when the contractual mechanism provided a manner in which, payment was to be made after all checks and balances, therefore, any claim of excess payment is vague and award is in total contradiction to such clause.

27. It is further contended that the Ld. Sole Arbitrator has disallowed the Claimant's claim on account of retention money (security deposit), and allowed the allowed the counter- claim of the respondent for the cost of remedial and defective work to the tune of Rs.9,30,250/-, solely on the basis of the submission of the respondents, without giving any detailed reasoning on quantification or pointing out the defective work and the cost involved and further, erroneously relying on the evidence of the Architect (RW2), who was the respondents' agent and an interested party, to whom the work was subsequently awarded. It is submitted that this itself shows that the Architect had ulterior motive and his evidence could not have been relied upon.

28. Ld. counsel submitted that it is evident that the Architect deposed against the Petitioner solely with the intention to usurp the work from the Claimant and the Ld. Sole Arbitrator has erroneously relied upon his evidence, without giving any independent reasoning or justification of such defects, if any, and quantification thereof.

29. On the other hand, Shri Antony R. Julian, Ld. Counsel for the respondent submitted that the petitioner has filed the present petition under section 34 of the Arbitration and Conciliation Act, 1996 with the intention to have a second bite at the cherry and that the petitioner has filed a full-fledged appeal on the merits, assailing every finding of the Arbitrator. Ld. counsel has submitted that it is well established through a catena of decisions of the Hon'ble Supreme Court of India as well as various High Courts that the power of the court to set aside an Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 10 of 26 award on merits is contrary to the very objective of arbitration i.e., minimisation of judicial intervention.

30. It is submitted that the policy of minimal curial intervention by respecting finality in the arbitral process acknowledges the primacy given to the dispute resolution mechanism that the parties have expressly chosen. It is further submitted that the amendments made to section 34 of the Act have brought about substantial change to the law related to intervention of courts - reiterating the principle of restrictive curial intervention. Even a perfunctory reading of section 34 would show that an appeal on merits is barred. An award may be set aside only on the exhaustive grounds pertaining to procedural infirmities enumerated in section 34 (2)(a), limited substantive grounds enumerated in section 34(2)(b), or on the ground of patent illegality under section 34(2A) and that these provisions expressly bar a review on the merits or re-appreciation of evidence.

31. Ld. counsel for the respondent has argued that in Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran, the Hon'ble Supreme Court held that where contractual provisions have two possible interpretations, the court cannot substitute its interpretation for the Arbitrator's interpretation of the contract. It is further submitted that in Delhi Development Authority v. M/s Bhardwaj Brothers, a division bench of the Hon'ble Delhi High Court (following Rashtriya Ispat Nigam) unequivocally held that an appeal on merits cannot be entertained under section 34 of the Act. M/s Bhardwaj Brothers was followed in a number of decisions such as MTNL v. Ralhan Construction to hold that a challenge on the ground that the Arbitrator has reached the wrong Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 11 of 26 conclusion is not maintainable under the exhaustive provisions of Section 34.

32. Shri Antony, Ld. counsel for the respondent has submitted that in the present case, the award has dealt with each claim and counterclaim separately, unambiguously, and with clearly stated reasoning and that the Ld. Arbitrator has considered all the pleadings, evidence, and the terms of the Contract to arrive at the conclusion with appropriate reasoning to its finding and thus, by no stretch of imagination can it be considered an unreasoned award as contended by the petitioner.

33. It is further argued that the findings of the Arbitrator are not only possible but also probable in light of the arbitral record and hence the present petition is liable to be dismissed in limine as it does not satisfy the conditions of section 34 of the Act and therefore there is no question of setting aside the arbitral award. It is submitted that without prejudice to the above, the respondents unequivocally state that the petitioner/claimant has not substantiated its claims on the merits and the contentions regarding the same are rejected and denied. It is argued that the respondents have appended the written submissions filed before the Ld. Sole Arbitrator and sought leave to rely on the same during oral submissions, if required.

34. Ld. counsel for the respondent has further argued that the object of filing counterclaim is to avoid multiplicity of proceedings and therefore it is now an established principle of law that unless specifically barred by the Arbitration agreement, the Arbitrator can hear and decide all disputes pertaining to the agreement in question. It is submitted that neither the Arbitration agreement in question nor the order of appointment of the Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 12 of 26 arbitrator contain any such bar. It is submitted that Section 23(2A)4 specifically mandates that the counterclaims 'shall be adjudicated upon by the arbitral tribunal'. It is urged that the use of mandatory language in the statute further buttresses the Respondent's submission that this ground of challenge is completely misconceived and not maintainable. Ld. counsel has further submitted that a counterclaim by its very nature is an independent claim raised by the respondent in the arbitral proceedings, hence - even where the claim by the petitioner is dismissed for non-prosecution, the proceedings must continue with respect to the counterclaims.

35. Ld. counsel for respondent has argued that Section 19(1) of the Act specifically states that the Arbitrator shall not be bound by the Code of Civil Procedure, 1908 (the "CPC") or the Indian Evidence Act, 1872 (the "Evidence Act) and empowers the arbitral tribunal to formulate its own procedure and this means that the arbitrator has power to determine the admissibility, relevance, materiality, and weight of the evidence produced. It is submitted that the petitioner has clearly not bothered to even read the applicable statute before filing this frivolous petition on various ill-conceived grounds of challenge. Notwithstanding Section 19, WhatsApp messages are widely accepted as evidence even in various civil proceedings which are governed by the CPC and the Evidence Act.

36. It is submitted that the judgment cited by the Petitioner's counsels regarding admissibility of electronic evidence under the Indian Evidence Act will not apply to arbitral proceedings. It is stated that especially in the present case where the admissibility and veracity of the WhatsApp messages were Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 13 of 26 not questioned before the Arbitrator. Ld. counsel for the respondent has submitted that it has been raised for the first time in the present petition and, therefore, a plea not taken before the arbitrator cannot be taken at this belated stage. It is submitted that the veracity of WhatsApp messages between the parties was not questioned or denied in the affidavits of admission and denial filed by the petitioner and thus, the petitioner is now estopped from raising the issue of admissibility or veracity in the stage of annulment proceedings under section 34.

37. Shri Antony R. Julian submitted that the grounds for challenging the arbitrator's appointment and the procedure to be followed are codified in Sections 12 to 15 and the Fifth Schedule of the Act. It is submitted that there is a statutory requirement on the Party claiming bias to act contemporaneously (i.e. within 15 days) and failing the conditions set out in these provisions, no claim of bias is entertainable unless it can be substantiated with evidence of actual bias. It is submitted that it is incumbent on counsel to raise well founded issues of potential bias immediately. It is submitted that the petitioner is claiming bias due to the (rightful) rejection of his frivolous claims and this is not a ground for claiming either the appearance of bias or actual bias (which has to be substantiated by evidence). It is submitted that the parties should not make attempts to find fault in every issue decided by the arbitrator, only because it is decided by the arbitrator against them.

38. Ld. counsel for the respondent submitted that the contention that the Petitioner was not given an opportunity to lead evidence is false and the petitioner should be prosecuted for perjury for making such fallacious claims. It is submitted that Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 14 of 26 the arbitral record will show that the various procedural orders passed by the Ld. Arbitrator on various dates namely Procedural Order 1 dated 18.02.2018, Procedural Order 2 dated 04.08.2018, and Procedural Order 6 dated 07.10.2019 clearly state that parties were given ample opportunities to lead evidence. On the hearing dated 04.08.2018, the Authorised Representatives of the Petitioner (Mr. A.C. Varshney and Mr. Kunal Mehra) specifically stated that they did not wish to file an affidavit of evidence. It is submitted that the Ld. Arbitrator, conscious of the fact that they were not lawyers, explained to them the importance of an affidavit of evidence and asked again if they wished to file it.

39. It is submitted that the ARs reiterated their decision not to do so. It is submitted that much after the final arguments had commenced, in the hearing on 07.10.2019 the petitioner's AR (Mr. Kunal Mehra) requested for an opportunity to file an Affidavit of Evidence. Despite the belated stage of the proceedings, this was allowed and this has been recorded in Procedural Order no. 6 dated 07.10.2019.

40. It is submitted that the parties also mutually agreed to refrain from adducing oral evidence and consequent to this order, the affidavit of evidence of Mr. Kunal Mehra (Managing Director of the Petitioner) was taken on record. It is submitted that the email dated 19.10.2019 from Mr. Mehra, filing the affidavit of evidence on behalf of the Petitioner/Claimant is appended with these written submissions. It is submitted that the arbitral records will clearly establish that the petitioner has perjured himself by brazenly lying to this Court. Ld. counsel submitted that the arbitrator is sole judge of quality as well as quantity of evidence and it will not be for the court to take upon Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 15 of 26 itself the task of being a judge of the evidence before the arbitrator.

41. Ld. counsel for respondent submitted that the present petition has been filed solely as a ploy to delay the execution of the award and unfortunately, the petitioner/claimant seems to have a record of scant respect for legal proceedings. Lackadaisical attitude to the arbitration proceeding Throughout the arbitral proceedings, the petitioner/claimant had an extremely lackadaisical approach to the Arbitration. It is submitted that mutually agreed on procedural timelines set by the Arbitrator were not adhered by the petitioner/claimant, last minute adjournments of hearings were sought on frivolous grounds and this conduct was deprecated by the Arbitrator on multiple occasions. It is submitted that even the Statement of claim was filed after an undue delay for which costs of Rs.25,000/- were levied on the petitioner/claimant on 28-03.2018 and this was subsequently reduced to Rs.20,000/- at the petitioner's request vide procedural order no. 2 dated 04.08.2018. It is submitted that in another instance, the Arbitrator specifically observed that the petitioner/claimant was taking the proceedings for granted.

42. Ld. counsel for respondent submitted that the fact that the Petitioner company had been struck off by the Registrar of Companies, Delhi (ROC) had been suppressed by the petitioner/claimant and that the respondents' counsels became aware of this fact only due to an inadvertent search on the Ministry of Corporate Affairs website when preparing for the final submissions. It is submitted that as soon as they became aware of this fact it was brought to the knowledge of the Arbitrator on the hearing dated 18.01.2019. It is submitted that Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 16 of 26 by that stage, the petitioner/claimant had already completed its final submissions. It is submitted that due to the doubtful legal status of the petitioner, the Arbitrator suspended the proceedings vide Procedural order no. 5 dated 10.03.2019 until the company was restored. It is further submitted that the petitioner company was finally restored only on 28.08.2019 vide order of the NCLT, Delhi in Appeal no. 258/252/ND/2019 and the proceedings re- commenced on 07.10.2019 (a date that was mutually agreed by both parties).

43. Ld. counsel for respondent has argued that the Petitioner/Claimant's objections to the award of interest are not sustainable in light of the express power granted to the Arbitrator to award pendente lite interest as well as post award interest at a higher rate of interest. It is submitted that only an agreement to the contrary between the parties can impose any fetter on this statutory power - which is not the case here. It is further submitted that the Arbitrators has awarded a very reasonable interest of 8% pendente lite interest and 12% post award interest on the Petitioner/Claimant. It is submitted that similarly, Section 31A of the Act empowers the Arbitrator to determine the costs to be imposed independent of the provisions of the CPC, the general rule being that the unsuccessful party shall bear the costs of the successful party.

44. Ld. counsel submitted that in the present case, the Petitioner's costs were not allowed and only a small part of the costs of the respondents was allowed and that the respondents had made a detailed submission of costs totalling Rs.11,52,757/-. However, only Rs.2,00,000/- was allowed as costs. It is submitted that the award specifies that the reason for the same is Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 17 of 26 that most of the claims and counterclaims were dismissed and that there can be no claim of bias or arbitrariness in this regard either.

LEGAL STANDARD AS REGARDS SCOPE OF INTERFERENCE BY THE COURT

45. Sub-sections (1) and (2) of Section 34, as amended by the Arbitration and Conciliation (Amendment) Act, 2019, reads thus :

"34. Application for setting aside arbitral award. - (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).

(2) An arbitral award may be set aside by a Court only if - (a) the party making the application establishes on the basis of the record of arbitral tribunal that -

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with the dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that - (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India. Explanation 1. - For the avoidance of Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 18 of 26 any doubt, it is clarified that what is in conflict with the public policy of India, only if, -

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian Law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2. - 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.

(2A) 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 vitiated 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 the law or by re-appreciation of evidence."

46. It is well settled that following are the basic principles while exercising jurisdiction U/s 34 of A&C Act :-

(i) The Arbitral tribunal is the final arbiter of the facts and the law. Ordinarily, conclusions of fact, or law, at which the arbitral tribunal arrives, are not amenable to interference under Section 34;

(ii) This principle is subject to the following exceptions :-

(a) Where the conclusion of the arbitral tribunal, whether on facts or on law is perverse, it merits interference. Perversity, in such a case must be of such a degree that no reasonable man, conversant with the facts and the law, would arrive at such a decision

(b) If the findings of the arbitral tribunal are contrary to the contract between the parties, the court is bound to interfere. This is, essentially, because the arbitral tribunal draws its jurisdiction from the contract, and is a creature thereof. The arbitral tribunal, cannot, therefore, arrive at a conclusion which militates against the terms of the contract between the parties, merely to do equity, or for any other reason

(c) Similarly, if the conclusion of the arbitral tribunal is contrary to the law laid down by the Supreme Court, or any other binding judicial precedent, the court can interfere. This is because any conclusion, by the arbitral tribunal, which is contrary to the Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 19 of 26 extant law, is treated as violative of public policy, which is a well settled ground for interference with the award;

(iii) In other cases, as already noted above, ordinarily, interference with the arbitral award is to be scrupulously eschewed. Having elected to resolve their disputes by arbitration, the parties are ordinarily expected to defer to the decision of the arbitrator. Awards of arbitral tribunals cannot be likened with judgments of courts, which are susceptible to appeal. Else, the very raison d'etre of the establishment of the arbitral institution would stand defeated;

(iv) The court is not, therefore, entitled to sit in appeal over the decision of the arbitral tribunal. Neither can the court re-

appreciate the evidence, which has been appreciated by the arbitral tribunal. If, however, the arbitral tribunal ignores material evidence, that would amount to "perversity", which would invite interference under Section34. If all the evidence has been examined by the arbitral tribunal, the court cannot interfere on the ground that the examination of the evidence, as undertaken by the arbitral tribunal, is not, to its mind, satisfactory or sufficient. Nor can the court substitute its own view for the view of the arbitral tribunal, on the ground that, in its perception, the view of the court is "better" or "more appropriate".

47. The aforenoted principles pertain to the scope of interference with arbitral awards, by courts, on merits. These are apart from the other well-established grounds on which the court may interfere, such as misconduct by the arbitrator, bias or prejudice or conducting of the arbitral proceedings in violation of the principles of natural justice, to refer to a few.

48. The legal position is well settled that a broad distinction has to be maintained between the decisions which are perverse and those which are not and interference by the Court under Section 34(2)(b)(ii) does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 20 of 26 not be interfered with if the view taken by the arbitrator is a possible view based on facts. An award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. (MMTC Ltd. vs. Vedanta Ltd., AIR 2019 SC 1168; Union of India vs. Chenab Construction Company (Regd.), 2019 SCC OnLine Del 10515 and Ssangyong Engineering & Construction Co. Ltd. Vs. National Highways Authority of India (NHAI) - (2019)15SC C 131), Parsa Kente Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan Nigam Limited, AIR2019 SC 2908; Patel Engineering Ltd. Vs. North Eastern Electric Power Corporation Ltd. (NEEPCO) 2020 SCC OnLine SC 466 and Anglo America Metallurgical Coal PTY Ltd. vs MMTC Ltd. 2020 SCC OnLine SC 1030).

49. On thoughtful consideration of the submissions advanced at bar by the Ld. counsels for the parties, in the light of aforenoted legal position, this Court finds no merits in the submissions advanced by the learned counsel for the petitioner.

50. This court finds that the present petition does not make out any grounds for interference with the arbitral award under Section 34 of A&C Act. This Court cannot sit in appeal over the award passed by Ld. Arbitrator by reassessing and re- appreciating the evidence which is wholly impressible as per settled tenets of law. The view taken by the Ld. Arbitrator after considering the material before him and after interpreting the provisions of agreement is a possible view and, therefore, the same does not warrants any interference.

51. Ld. Arbitrator had done a detailed analysis as regards the delay and prolongation of the contract. He referred to whatsapp communications exchanged between the parties. It was Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 21 of 26 held that on perusal of document and evidence the initial delay in commencement of work had not been explained by the claimant. When veracity of WhatsApp messages between the parties is not questioned or denied in the affidavits of admission and denial filed by one party, then the said party is estopped from raising the issue of admissibility or veracity in the stage of proceedings under section 34 of A&C Act.

52. As regards, delay during execution of work, Ld. Arbitrator discussed the factual position in para 40 to 45 of the Award and observed that in so far as delay during the execution of the work was concerned, it was clear that by their conduct, parties departed from the contractual mechanism and procedure for extension of time and thus, there was a mutual understanding whereby the Contractor was permitted to proceed with work beyond the completion date without duly extending time. It was further noted that respondent on 26.07.2017 sent a message to the claimant stating that "I will be invoking the delay in completion article." However, the same was never invoked and the said message was more like a threat than a notice in a series of communication.

53. It was further observed by the Ld. Arbitrator that for the foregoing reasons, it is not open to the respondent to attribute the delay to the claimant. Likewise, even the claimant cannot blame the respondent for the delay in execution of the work for the reasons mentioned in the award.

54. On perusal the award as a whole, this court finds no inconsistent or contradictory findings in the award. While referring to the claim on account of tools plant, in para 56, Ld. Arbitrator noted that the contract contains no provisions for Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 22 of 26 billing of tools and plants or increase in the prices due to extension of contracted completion schedule. It was noted that the said claim of the petitioner herein was premised and contingent on establishing that respondent was responsible for the delay in completion of work. As a consequence of the conclusion of the tribunal that extension of time was granted and accepted by the mutual consent without adhering to the contractual provisions, the said claim was unsustainable and was rejected. A party cannot read one line of the award out of context. Totality of the facts and the background discussion provides the context of the observations by the Tribunal or the Court.

55. As regards the adjudication on the percentage of work allegedly completed by the claimant, Ld. counsel appearing for the petitioner had referred the spread sheets prepared by the respondent on 13.11.2017 wherein 86% of the work completed was mentioned. In para 50, Ld. Arbitrator noted that Hon'ble High Court had appointed a Local Commissioner, who after detailed inspection of the construction site, recorded the work completed by the claimant in his report. It was noted that out of the 16 process stages, stage 1 to 6 was complete, stage 7 to 14 and 16 were incomplete and stage 15 was not done. It was observed that report did not specify about exact percentage of work completed by the claimant and was only indicative. According to claimant, it had completed 86% of total work, whereas according to respondent, only 72.73% of work was completed. It was observed that none of the parties had been able to prove the exact percentage of work done by the claimant and thus, after considering the Local commissioner's report as Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 23 of 26 well as admission of the respondent in the termination notice dated 04.12.2017, Ld. Arbitrator found that percentage of work done by the claimant was 80%. This court cannot sit in an appeal and re-appreciate the evidence. It is not necessary for the court or tribunal to refer to each and every document while drawing inference and what weight has to be attached to different pieces of evidence is the act of appreciation of evidence. This court is an agreement with the submission of Ld. counsel for respondent that this court cannot substitute its own opinion if the view taken by Ld. Arbitrator is a possible view. Admittedly, the local commissioner was appointed at the instance of petitioner himself. Too much importance cannot be given by this court on the percentage mentioned as 81% work completed in the chart containing details of the payment made by the respondent or a spreadsheet prepared by respondent's representative on 13.11.2017. The finding regarding percentage of work cannot be said to be improper, inadequate or unintelligible. Perusal of award clearly shows that Ld. Arbitrator has elaborately discussed all the contentions raised by the parties and referred to relevant clauses of the agreement. The award is not based on any conjectures or surmises but is based on the interpretation of the material placed on record as a whole. None of the finding is contrary to the terms of the agreement or the relevant clauses governing the agreement of the parties. This Court finds that award is well reasoned and each and every contention has been taken into consideration. No bias can be attributed to Ld. Arbitrator.

56. As regards retention money, in para 63, Ld. Arbitrator in its findings has noted that it is clear that the Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 24 of 26 termination of contract was justified and valid and the claimant itself had expressed its inability to perform the contract and requested the remaining work to be completed by another agency and since the claimant had failed to complete the balance work and respondent had no opportunity to point out defects which was to be done only after completion of the work, the claimant will not be entitled to the fund of retention money. Apart from this, it was noted that architect/RW-2 had given a list of defective work who also stated that quality of work was poor and there was also evidence to the effect that respondent incurred additional expenses.

57. As regards the counter claim pertaining to the refund of excess payment made to the claimant, Ld. Arbitrator has discussed at length the respective claims in para 49 and 50 after taking into account in percentage of work done and the total work done which included cost of work, extra work out of which the market rate reduction were also taken into account, it was noted that total work done was Rs.2,39,14,438/- and the amount already paid was Rs.2,64,47,368/- and thus, excess payment made to the claimant was Rs.25,29,930/- and then in para 71, Ld. Arbitrator noted in its findings that the work had not been completed by the claimant and claim of Rs.9,30,250/- in remedifying the defective work had been duly substantiated by the respondent and after adjustment of the retention money of Rs.5,30,000/- with the respondent, remaining amount payable by the claimant was found to be Rs.4,00,250/-. The view taken by the Ld. Arbitrator is a reasonable and a possible view and this court cannot substitute its own opinion. It is pertinent to note that the Ld. Arbitral Tribunal had rejected the counter claim on Neymat Infrastructure Pvt. Ltd. Vs. Shakuntala Rani Jha (Deceased) Through LRs & Anr. Page 25 of 26 account of liquidated damages of the respondent since extension of time were granted by conduct and accepted by mutual consent without adhering to the contractual provisions, the said claim of the respondent was found unsustainable and was rejected. Ld. Arbitrator also rejected the counter claim regarding additional costs incurred due to delay, counter claim for loss of rental income and for incidental income raised by the respondent.

58. The award of the Arbitrator can be set aside only on the limited grounds and the award cannot be interfered with simply because another view is possible on the available materials. The Arbitrator is a Judge of choice of parties and this Court cannot set aside award even if the Court can come to different conclusion on the same facts. The Ld. Counsel for the petitioner has not pointed out any satisfactory ground covered strictly with the purview of Section 34 of A&C Act. It cannot also be said that the Award is against the fundamental policy of Indian law or perverse or has patent illegality which goes to the root of the matter. Therefore, the Award passed by the Ld. Arbitrator is not illegal or invalid and cannot be set aside.

59. In the result, this court finds no merits in the petition and no ground for interference is called in the award. Accordingly, this petition U/s 34 of A&C Act deserves to be dismissed. Order accordingly. No order as to costs. File be consigned to record room.

(Dictated and announced today i.e. on 26.08.2021) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Disttt., Saket, New Delhi.