Bangalore District Court
Mysore Minerals Ltd vs ) M/S.Kalyani Ferrous on 4 January, 2017
IN THE COURT OF THE VI ADDL.CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY
CCCH. 11
Dated this the 4th day of January, 2017
PRESENT: Sri.K.M.Rajashekar, B.Sc., LL.B.,
VI Addl. City Civil & Sessions Judge,
Bengaluru City.
A.S.NO: 24/2009
APPLICANT/ : MYSORE MINERALS LTD.,
PLAINTIFF A Government of Karnataka Undertaking
Registered under the Companies Act, 1956
Having its registered office at
# 39, Mahatma Gandhi Road,
Bengaluru-560 001.
Reptd. by its Chairman & Managing Director.
(By Pleader Sri.A.K.Vasanth)
/Vs/
RESPONDENTS/ : 1) M/S.KALYANI FERROUS
DEFENDANT INDUSTRIES LTD.,
Now merged with M/s.Kalyani
Steel Ltd.,
A Company incorporated under the
Companies Act, 1956
Having its registered Office at
Corporate Building, 2nd Floor,
Mundhwa, Pune - 411 036.
(By Pleader Ms.S.R.Anuradha)
2 AS.24/2009
2) Shri Justice S.Venkataraman(Rtd.,)
# 161, 3rd Stage, 2nd Block,
West of Chord Road,
Basaveshwarnagar,
Bengaluru-560 079.
--
JUDGMENT
The Plaintiff has got filed this suit under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the arbitral award dated 27.01.2009 passed by the learned Arbitrator/2nd Defendant in the matter of dispute of M/s.Kalyani Steel Limited and M/s.Mysore Minerals Ltd., declaring the agreement dated 03.05.2003 between the parties stands extended for a further period of 7 years w.e.f. 03.05.2006 and as such the Defendant is liable to make supply of the materials as per the said agreement; and to declare that the period of raising agreement dated 03.05.2003 is only for a period of 3 years and the termination of the agreement by letter issued by the Plaintiff dated 20.04.2006 is valid.
3 AS.24/2009
2) In nutshell Plaintiff's case is that, Plaintiff is a Government of Karnataka undertaking and is involved in the business of mining and allied activities and is a holder of mining lease bearing register No. ML 1659 over an area of 51.71 Hectares (127.78 Acres) of Sy.No.115 B 'Part', of Jambunathanahalli Village, Hospet Taluk, Bellary District and the said lease is renewed from time to time. The Plaintiff and Defendant No.1 entered into a Marketing Agreement with regard to marketing of calibrated Iron Ore of 65% +/mineral extracted by the Plaintiff from the aforesaid mines on 03.05.2003. The Plaintiff is having a Raising Contract to raise the calibrated Iron Ore/minerals with M/s.Mukand Ltd. The Plaintiff entered into exclusive agreement with the Defendant No.1 for marketing of Calibrated Iron Ore 65% + ore Iron ore and BHQ/minerals on 03.05.2003 and it was agreed between the parties that the agreement shall be in force for a period of 3 years and extendable thereafter for a further period of 7 years. On the end of three years term of the agreement, the Plaintiff 4 AS.24/2009 issued a letter dated 20.4.2006 to the Defendant No.1 informing expiry of agreement w.e.f 30.05.2006 and similarly to the raising contractor M/s.Mukund Limited to stop the raising activity. The termination order was challenged by the 1st Defendant before the Civil Court in AA.No.35/2006, wherein, the court passed the order upholding the right of MML to terminate after the expiry of three years and effused the prayer for injunction and MML was ordered not to dispossess the Petitioners viz., M/s.Mukand Limited until disposal of all the disputes between the parties through Arbitration. Thereafter, M/s.Mukand Limited filed an appeal before the Hon'ble High Court of Karnataka in MFA.No.6989/2006 and MML also filed appeal in MFA.No.8659/2006, both the cases were heard by the Hon'ble High Court and by its order dated 04.08.2006 ordered to maintain status quo till disposal of the proceedings before the Hon'ble Arbitrator. In the claim statement the 1st Defendant contended that the State Government in 1996 had promised infrastructural 5 AS.24/2009 facility to the 1st Defendant for setting up a steel plant and accordingly, the 1st Defendant set up plant M/s.Kalyani Steel spending 1000 crores and needs nearly 630 lakhs tones of iron ore for its captive use. The period of supply was initially 3 + 7 years and further mutually extendable until mining lease was transferred with approval of the Government in favour of the 1st Defendant. The Plaintiff filed the counter and opposed the claim of the 1st Defendant. The learned Arbitrator after going through the claim and counter, framed the issues and adjudicated the matter and passed the award.
Aggrieved by the arbitration award, the Plaintiff herein has preferred this suit on the grounds that the learned Arbitrator has failed to appreciate the fact that the Marketing Agreement dated 03.05.2003 expires on 03.05.2006 and not extends for seven years and the fact that 1st Defendant never came forward seeking extension of the Marketing Agreement. The learned Arbitrator failed to appreciate the fact that the basis for entering into the 6 AS.24/2009 agreement is tender and that as the period of 3 years stipulated in the agreement is completed, the letter was issued for cancellation of the agreement. The learned Arbitrator has failed to note that the Plaintiff has not wrongly terminated the agreement and the agreement was formerly and legally cancelled as the term of three years was expired and failed to appreciate the fact that the agreement does not provide automatic extension and both the parties have to agree for renewal.
3) On service of notice, Defendant No.1 entered appearance through his counsel and filed statement of objections denying the plaint averments in general and para-wise. The Defendant has contended that this court cannot sit in appeal over the correctness and validity of the award on merits and that the Plaintiff is attempting to re-open the entire case on merits and is seeking indulgence of this court for re-appreciating the facts and evidences, hence, the suit deserves to be dismissed since 7 AS.24/2009 it is beyond the scope and jurisdiction of this court. He has contended that the award contain an error to the extent that while the learned Arbitrator has come to a conclusion that the Respondent has validly exercised its option to extend the said agreement for a further period, the learned Arbitrator has wrongfully concluded that the said agreement is extended from 2006, thus the learned Arbitrator has failed to consider that the Respondents could not carry out the mining activities from the site during the period 2006 i.e. date of termination of the said agreement till the date of the award and that in view thereof, they have suffered loss of three years. It is contended that the award does not suffer from any infirmity and much less an infirmity within Section 34 of the Act. The Plaintiff has intentionally suppressed certain facts which are material to the present suit and prayed for dismissal of the suit with costs.
4) Heard. Perused the records. 8 AS.24/2009 5) The points that arise for my consideration are :- (1) Whether Plaintiff has made out any of the grounds under Section 34 of the Arbitration and Conciliation Act, to set aside the Arbitration award? (2) What Order? 6) My answer to the above points are :- Point No.1 - In the Negative; Point No.2 - As per final order, for the following : REASONS 7) Point No.1 : Upon going through the materials
available on record, it is seen that the Plaintiff has come up with this suit for setting aside the arbitral award dated 27.01.2009 passed by the 2nd Defendant in the matter of dispute of M/s.Kalyani Steel Limited and M/s.Mysore Minerals Ltd., declaring the agreement dated 03.05.2003 between the parties stands extended for a further period of 7 years w.e.f. 03.05.2006 and as such the Respondent is 9 AS.24/2009 liable to make supply of the materials as per the said agreement and to declare that the period of raising agreement dated 03.05.2003 is only for a period of 3 years and the termination of the agreement by letter issued by the applicant dated 20.04.2006 is valid, claiming that Plaintiff being a holder of mining lease entered into a Marketing Agreement with the Defendant No.1 on 03.05.2003 with regard to marketing of calibrated Iron Ore of 65% +/mineral extracted by the Plaintiff from the aforesaid mines and it was agreed between the parties that the agreement shall be in force for a period of 3 years and extendable thereafter for a further period of 7 years. On the end of three years term of the agreement, the Plaintiff issued a letter dated 20.4.2006 to Defendant No.1 to stop the raising activity. The termination order was challenged by the 1st Defendant before the Civil Court and before the Hon'ble High Court of Karnataka in MFA.No.6989/2006 and MFA.No.8659/2006, wherein, the Hon'ble High Court vide its order dated 04.08.2006 ordered to maintain status quo 10 AS.24/2009 till disposal of the proceedings before the Hon'ble Arbitrator. The learned Arbitrator after going through the claim and counter, framed the issues and adjudicated the matter and passed the impugned award, wherein, learned arbitrator held that, " it is hereby declared that the agreement dt.3/5/2003 between the parties stands extended for a further period of 7 years w.e.f 3/5/2006 and as such the respondent is liable to make supply of the materials as per the said agreement. By way of specific performance, respondent is directed to resume the supply subject to the terms of the agreement and continue to make supply for a period of 7 years from 3/05/2006. ........."
8) Upon going through the materials available on record, it is seen that the grounds urged by the Plaintiff challenging the award is that, the learned Arbitrator has failed to appreciate the fact that the Marketing Agreement dated 03.05.2003 expires on 03.05.2006 and not extends for seven years and the fact that 1st Defendant never came 11 AS.24/2009 forward seeking extension of the Marketing Agreement. The learned Arbitrator failed to appreciate the fact that the basis for entering into the agreement is tender and that as the period of 3 years stipulated in the agreement is completed, the letter was issued for cancellation of the agreement. The learned Arbitrator has failed to note that the Plaintiff has not wrongly terminated the agreement and the agreement was formerly and legally cancelled as the term of three years was expired and failed to appreciate the fact that the agreement does not provide automatic extension unless both the parties have to agree for renewal etc.
9) At this stage, it is relevant to have a look at the provisions of Section 34 of the Arbitration and conciliation Act, 1996.
" 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 my be set aside by the Court only if -12 AS.24/2009
(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 a 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 provisions 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.- Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, 13 AS.24/2009 that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81."
The Arbitration and Conciliation (Amendment) Act, 2015 provides :
"18. In Section 34 of the Principal Act.-
(I) In sub-section (2), in clause (b), for the Explanation, the following Explanations shall be substituted, namely :-
(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.", (II) after sub-section (2), the following sub-section shall be inserted, namely :-
"2(A) 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:14 AS.24/2009
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."
10) To add to this, in a land mark judgment rendered by the Hon'ble Supreme Court of India in Civil Appeal No.10531/2014 reported in AIR 2015 SC 620 between Associate Builders Vs. Delhi Development Authority dated 25.11.2014 extends a wider scope to Section 34 of the Arbitration and Conciliation Act, 1996. Their Lordships have clearly mandated that :
"an extent of judicial intervention notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. (Section 5) It is important to note that, the 1996 Act was enacted to replace the 1940 Arbitration Act in order to provide for an arbitral procedure which is fair, efficient and capable of meeting the needs of Arbitration; also to provide that the tribunal gives reasons for an arbitral award; to ensure that the tribunal remains within the limits of its jurisdiction; and to minimize the supervisory roles of courts in the arbitral process.
Therefore, in our view, the phrase "public policy of India" used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of 15 AS.24/2009 statutory provisions cannot be said to be in public interest. Such award is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term "public policy" in Renusagar case is required to be held that the award could be set aside if it is patently illegal. The result would be, award could be set aside if it is contrary to :
(a) Fundamental policy of Indian law; or
(b) The interest of India; or
(c) Justice or morality, or
(d) In addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.
103. Such patent illegality, however, must go to the root of the matter. The public policy, indisputably, should be unfair and unreasonable so as to shock the conscience of the court. Where the Arbitrator, however, has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute would come within the purview of Section 34 of the Act.
35. Without meaning to exhaustively enumerate the purport of the expression "fundamental policy of Indian law", we may refer to three distinct and fundamental juristic principles that must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a court or other authority that affects the rights of a citizen or leads to any civil consequences, the court or authority concerned is bound to adopt what is in legal parlance called as "judicial approach" in the matter. The duty to adopt a judicial approach arises from the very nature of the power exercised by the court or the authority does not have to be separately or additionally enjoined upon the fora concerned. What must be remembered is that the importance of a judicial approach in judicial and quasi- judicial determination lies in the fact that so long as the court, tribunal or the authority exercising powers that affect the rights or obligations of the parties before them shows fidelity to judicial approach, they cannot act in an arbitrary, capricious or whimsical manner. Judicial approach ensures that the authority acts bona fide and 16 AS.24/2009 deals with the subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. Judicial approach in that sense acts as a check against flaws and faults that can render the decision of a court, tribunal or authority vulnerable to challenge.
The third juristic principle is 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-
1. a finding is based on no evidence, or
2. an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or
3. ignores vital evidence in arriving at its decision. such decision would necessarily be perverse.
A broad distinction has, therefore, to be maintained between the decisions 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.
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 facts 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.
A Court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or re-appreciating the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. 17 AS.24/2009
The third ground of public policy is, if an award is against justice or morality. These are two different concepts in law. An award can be said to be against justice only when it shocks the conscience of the court. An illustration of this can be given. A claimant is content with restricting his claim, let us say to Rs.30 lakhs in a statement of claim before the Arbitrator and at no point does he seek to claim anything more. The arbitral award ultimately awards him 45 lakhs without an acceptable reason or justification. Obviously, this would shock the conscience of the court and the arbitral award would be liable to be set aside on the ground that it is contrary to "justice".
If the Arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such a jurisdictional error needs to be proved by evidence extrinsic to the award.
The court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the Arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding."
11) Before taking the case on merits for discussion, it is pertinent to note that there are two more Arbitration suits arose out of the same award which is adjudicated in 18 AS.24/2009 AS.No.59/209 and AS.No.609/2009. However, during the course both the aforesaid Arbitration suits were withdrawn by the parties in the respective courts.
12) Upon going through the materials available on record, it is seen that even though the matter is pending since 2009, much water has flown under the bridge after institution of the suit. Series of litigation pertaining to very same subject matter was adjudicated by the Hon'ble High Court, that too, by green bench of the Hon'ble Supreme Court of India in particular. It is significant to note that the Honble Supreme Court of India had entertained the litigation in respect of the subject matter which is adjudicated by the learned Arbitrator in this litigation. Even though the learned counsel for the Plaintiff vehemently argued that there is a gross error committed by the learned Arbitrator which is opposed to fundamental principles and basic agreement etc., the learned counsel pointed out the fact that the Marketing Agreement dated 19 AS.24/2009 03.05.2033 expires on 03.05.2006 and not extends for seven years. The first Defendant has never come forward seeking extension of the Marketing Agreement; in spite of that, the learned Arbitrator has extended the agreement for a further period of seven years from 03.05.2006 which is opposed to law and the very contractual understanding, etc. On the other hand, the learned counsel appearing for the Defendant No.1 vehemently argued that this suit becomes infructuous as the Hon'ble Supreme Court of India has suspended all the mining contracts pertaining to Bellary Mines area in a Public Interest Litigation instituted by Samaja Parivarthan Sangha. The Hon'ble Supreme Court struck down all the contracts pertaining to mining activities, in which, the subject matter of this dispute is also directly involved; hence, the situation is totally topsi- torvi, hence, the question of implementing the Arbitration award does not survive for consideration as it becomes infructuous. The learned counsel relied upon the 20 AS.24/2009 judgments reported in SCC (2013) 8, page 154; (2011) 12 SCC 491 and order dated 06.08.2015 in A.S.No.59/2009.
13) Upon going through the materials available on record, the Arbitration award indicates that the learned Arbitrator formed point for determination as under :
" (1) Whether under Cl-2 of the agreement dt.3/5/2003 between claimant and respondent the period of the validity of the agreement stands extended automatically or at the option of the claimant for a further period of seven years after the expiry of the initial period of 3 years as contended by the claimant?
Or Whether the agreement expired on 3/5/2006 as contended by the Respondent. (2) If the agreement was extendable after the initial period of three years at the option of the claimant, whether the claimant has not exercised that option as contended by the respondent notwithstanding the request made by the claimant in their letter dt.13/2/2004 and 28/4/2006? "
14) The learned Arbitrator has exhaustively considered the oral arguments of the parties and the correspondence of the parties to contracts and at Para-15, Page-26 of the award, the learned Arbitrator has opined that :21 AS.24/2009
" 15. The next point to be considered is whether the agreement is to be in force for a period of 3 + 7 years i.e. 10 years in all. The claimant has contended that without further specification the period agreed is 10 years. The respondent on the other hand has contended that the period of is only 3 years and there is no automatic extension after 3 years. A reading of Cl.2 along with the preamble clearly shows that the period of the agreement is initially 3 years and that it is extendable for 7 years. If the parties intended that the period of the agreement was to be 10 years, there is no reason why the initial period was fixed as 3 years and it was made extendable by 7 years. It is clear that after the initial period of 3 years the agreement was extendable for a further period of 7 years. When the period is extendable a party has to exercise an option for extension of the initial period."
But the learned Arbitrator has passed the award as under :
" It is hereby declared that the agreement dt.3/5/2003 between the parties stands extended for a further period of 7 years w.e.f 3/5/2006 and as such the respondent is liable to make supply of the materials as per the said agreement."
15) The learned counsel for the Plaintiff vehemently argued that the learned Arbitrator has committed gross error in rendering the final order contradictory to the discussions made in the body of the order. Hence, the counsel argued that the award is patently illegal and not sustainable as it is opposed to law, etc. 22 AS.24/2009
16) At this stage, it is pertinent to note that, undisputedly, on 10.04.1990 register No. ML 1659 is granted to the Plaintiff for an area of 127.78 Acres in Sy.No.115 B, Jambunathanahalli, Bellary District. On 10.04.2000 the said lease is renewed for 20 years. In the year 1996, the Defendant set up a steel plant investing nearly 1000 Crores, the State Government promised infrastructure facility including supply of iron order for captive use. However, no lease was granted to the Defendant for captive use. On 07.07.1999 the Plaintiff called for tenders to give out contracts for carrying out mining operation and for marketing of minerals. On 03.05.2003, the Defendant's tender is accepted and after approval from the Government, Marketing Agreement is executed with the Defendant for purchase of all the iron ore mined by the Plaintiff through its Raising Contractors. As per the terms of the contract, the initial period was for 3 years and extendable thereafter for a further period of 7 years and thereafter for a further period mutually agreed 23 AS.24/2009 between the parties. On 20.04.2006 the Plaintiff wrote a letter to the Defendant stating that 3 years period having been completed as per Clause (2), further material will not be supplied. However, the Defendant filed a Writ Petition No.6461/2006 before the Hon'ble High Court and obtained stay. From 29.06.2006 to 06.07.2006 the Defendant wrote to the Plaintiff for supply of ore and compliance of the Hon'ble High Court order. However, on 21.02.2007, the matter was referred to Arbitrator and on 27.01.2009 the award is passed.
17) The learned counsel appearing for the Defendant placed a judgment rendered by the Hon'ble Supreme Court of India dealt between Samaj Parivartana Samudaya & Others Vs. State of Karnataka and Others, wherein, the Hon'ble Supreme Court of India has made recommendations to the effect that :
" Page 164 - (B) " A ceiling of 25 million metric tones (MMT) for total production of iron ore from all the mining leases in District Bellary may be prescribed. A ceiling of 5 MMT for production of iron ore from all the mining leases in Districts Chitradurga and Tumkur together may be prescribed:24 AS.24/2009
(E) The sale of the iron ore should continue to be through e-auction and the same should be conducted by the Monitoring Committee constituted by this Hon'ble Court. However, the quantity to be put up for e-auction, its grade, lot size, its base/floor price and the period of delivery will be decided/provided by the respective leaseholders. The Monitoring Committee may permit the leaseholders to put up for e-auction the quantities of the iron ore planned to be produced in subsequent months.
The system of sale through the Monitoring Committee may be reviewed after say two years."
18) Apart from that, in another judgment between Government of Andhra Pradesh Vs. Obulapuram Mining Co.(P) Ltd., reported in (2011) 12 SCC 491, the Hon'ble Supreme Court of India passed an order that 'in continuation of our earlier orders dated 29-4-2011 and 6-5-2011, we are of the view that mining operations and transportation in an area admeasuring approximately 10,868 ha in Bellary District be immediately suspended till further orders.'
19) It is to be noted that the subject matter of the above referred two judgments were the same subject matter involved in this case. Hence, as rightly argued by the learned counsel appearing for the Defendant, in view of the decision of the Hon'ble Supreme Court of India in the 25 AS.24/2009 above referred judgment, all the contractual obligations between the parties in this suit merges with the decisions of the Hon'ble Supreme Court of India. Since the Hon'ble Supreme Court was pleased to suspend all the commissioning activities relating to mining activities, the contract entered into between the parties herein becomes infructuous for the simple reasons that the mandate of Hon'ble Supreme Court is also applicable to an area of 51.71 Hectares (127.78 Acres) of Sy.No.115 B 'Part', of Jambunathanahalli Village, Hospet Taluk, Bellary District, which is subject matter of this dispute. Apart from that, even if the Defendant herein succeeds in this litigation, the impugned award passed by the learned Arbitrator cannot be executable as it is directly hit by the judgments of the Hon'ble Supreme Court of India referred supra. Under these circumstances, I am of the opinion that the impugned award becomes infructuous and un-executable one; hence, there is no point in setting aside the impugned award. Hence, I am of the opinion that absolutely there 26 AS.24/2009 are no reasons for allowing this suit, accordingly, I answer Point No.1 in the negative.
21) Point No.2: For the foregoing reasons and answer to Point No.1, the present arbitration suit fails and is liable to be dismissed. In the result, I proceed to pass the following :
ORDER (1) The suit filed by the Plaintiff under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the arbitral award dated 27.01.2009 passed by the learned Arbitrator/2nd Defendant in the matter of dispute of M/s.Kalyani Steel Limited and M/s.Mysore Minerals Ltd.; is hereby dismissed.
(2) Parties to bear their own costs.
(Dictated to the Judgment Writer, transcribed and computerized by her, transcript thereof corrected and then pronounced by me in open Court, dated this the 4th January, 2017.) (K.M.RAJASHEKAR) VI Addl.City Civil & Sessions Judge Bengaluru City.
27 AS.24/2009