Chattisgarh High Court
M/S Kripa Road Lines vs M/S Ntpc Limited on 5 May, 2026
Author: Rajani Dubey
Bench: Rajani Dubey
1
2026:CGHC:20802-DB
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07.04.2026 05.05.2026 -- 05.05.2026
AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
ARBA No. 13 of 2018
1 - M/s Kripa Road Lines, A Registered Partnership Firm Under
The Indian Partnership Act, Having Its Office At Near SBI
Sarkanda Branch, Sarkanda, Bilaspur, Through Its One of The
Partners Shri Shrawan Kumar Soni, S/o Shri Santosh Soni, Aged
38 Years, R/o Telipara, Bilaspur, District Bilaspur, Chhattisgarh.
... Appellant
versus
1 - M/s NTPC Limited/Sipat STPP, A Sipat Super Thermal Power
Project At Ujjwal Nagar, Sipat, District Bilaspur, Chhattisgarh
Having Its Registered Office At NTPC Bhawan, Through Its
Secretary, Scope Complex 7, Institutional Area, Lodhi Road, New
Delhi Through Its DGM (CS) Ujjwal Nagar, Sipat Bilaspur,
Chhattisgarh.
... Respondent
For Appellant : Mr. Y.C. Sharma, Sr. Advocate with Mr.
Assem Bhagat Gopal, Advocate.
For Respondent : Mr. Prafull N. Bharat, Sr. Advocate with Mr.
Anuroop Panda, Advocate.
2
D.B. : Hon'ble Smt. Justice Rajani Dubey &
Hon'ble Shri Justice Radhakishan Agrawal
(CAV Order)
Per Rajani Dubey, J
1. The respondent/Appellant herein has filed this arbitration appeal under Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act 2015 (for short 'the Commercial Act') against order dated 23.12.2017 passed by the learned Commercial Court (District Level), Naya Raipur (C.G.) in M.J.C. No.02/2017, whereby the application preferred by the respondent/appellant under Section 34 against the arbitral award dated 18.10.2016 passed by the learned Sole Arbitrator, was dismissed.
2. The appellant - M/s Kripa Road Lines herein was the respondent, and respondent -NTPC herein was the claimant before the learned Sole Arbitrator & the parties in this appeal shall be referred herein as per their description before the learned Sole Arbitrator.
3. Brief facts of the case, as projected by the respondent - M/s Kripa Road Lines, are that claimant - NTPC had issued a Tender vide Reference No. SIPAT/CS/2012- 2013/12650/1329011 for loading and transportation of coal 3 by road from Old Dipka Mines to Dipka wharf wall and thereafter reloading the same into MGR wagons. The respondent submitted its bid, which was opened on 29.03.2012, and being the lowest bidder, the claimant issued a Brief Award Letter dated 06.04.2013 accepting the respondent's offer for a total contract value of Rs.78,57,000/-. Under the contract, the date of commencement of work was deemed to be 13.04.2013 and the date of completion was fixed as 12.05.2013. During this period, the respondent was required to transport a total quantity of 1,00,000 MT of coal. Thereafter, on 18.04.2013, the claimant issued a Service Purchase Order to the respondent, annexing thereto the Bill of Quantity, Terms and Conditions, Break-up of Price, Scope of Work, Service Specifications, Special Conditions of Contract, and Proforma of Certificate. The terms and conditions contained a dispute resolution clause providing that all disputes arising out of the contract would be settled in accordance with Clauses 56.0.0 and 57.0.0 of the General Conditions of Contract (GCC), and that the provisions of the Arbitration and Conciliation Act, 1996 would govern the arbitration proceedings, with the Arbitrator being required to render a reasoned and speaking award. Clause 1.4 of the Special Conditions of Contract further provided that the General 4 Conditions of Contract for Civil Works would form part of the contract. Subsequently, on 06.05.2013, a formal agreement was executed between the parties, pursuant to which the respondent commenced loading, transporting, and reloading the coal into MGR wagons.
4. On 11.05.2013, the respondent discovered that the weighbridge used for recording the weight of the wagons was defective and was reflecting lesser weight of coal. The respondent immediately brought this defect to the notice of the claimant, whereupon a joint inspection was conducted on the same day at Dipka Area. The inspection confirmed discrepancy in weight and established that the weighbridge was defective. Despite this, the claimant continued issuing letters to the respondent only for expediting delivery of coal. Thereafter, by letter dated 14.05.2013, the claimant demanded Rs.27 lakhs from the respondent towards shortage of coal and directed payment within two days. On the same day, the respondent replied stating that the shortage was attributable to the defective weighbridge. Subsequently, on 29.06.2013, Claimant - NTPC Limited issued a letter regarding the shortage in delivery of coal and called upon the respondent to respond immediately. Thereafter, on 12.08.2013, Claimant - NTPC Limited invoked the arbitration clause and appointed Mr. Y.V. Rao as 5 Sole Arbitrator.
5. The learned Sole Arbitrator, Mr. Y.V. Rao, issued notices to the parties on 25.10.2013 and directed the claimant to submit its statement of claim, fixing 15.11.2013 for further proceedings. On that date, both parties filed their Vakalatnamas and statements recording no objection to the appointment of Mr. Y.V. Rao as Sole Arbitrator. At the claimant's request, two weeks' time was granted to file the detailed claim statement, and the matter was adjourned to 30.11.2013. On the same date, Mr. Rao issued a declaration confirming that neither he nor his relatives had any direct or indirect interest in the dispute. On 30.11.2013, the claimant filed its detailed claim along with supporting documents, claiming a total sum of Rs.3,38,28,189/- under various heads. The respondent sought one month's time to file its reply and counter-claim, and the matter was fixed for 04.01.2014. On that date, at the respondent's request, the matter was adjourned to 18.01.2014, when the respondent filed its reply and counterclaim. The claimant thereafter filed its rejoinder and reply to the counterclaim on 01.02.2014. Pleadings having been completed, both parties submitted their proposed issues, and the matter was thereafter fixed for recording of evidence.
6. Before evidence could commence, Mr. Y.V. Rao resigned as 6 Sole Arbitrator. Consequently, on 24.07.2015, Claimant - NTPC appointed Dr. Sutanu Behuria, resident of 602-A, Beverley Park-I, M.G. Road, DLF Phase-II, Gurgaon, Haryana, as the new Sole Arbitrator, with a direction that the proceedings would continue from the stage at which it had been left. On 29.07.2015, Claimant - NTPC also requested Mr. Rao to hand over all arbitration records to Dr. Behuria. Upon receiving intimation of the new appointment, the respondent - M/s Kripa Road Lines submitted objections dated 10.08.2015 to the Executive Director of the claimant, raising three objections: (1), that neither the resignation of the earlier Arbitrator nor the appointment of the new Arbitrator had been communicated to the respondent or its counsel; (2) that NTPC had failed to take action until the respondent issued a legal notice, suggesting suppression or misrepresentation of facts before the competent authority; and (3) that Dr. Behuria had been appointed without obtaining the respondent's consent and had proposed to hold proceedings at a distant place, namely New Delhi, which was inconvenient to the respondent. Notwithstanding these objections, the learned Sole Arbitrator issued notice dated 13.08.2015 fixing 03.09.2015 at New Delhi for hearing. On 03.09.2015, the claimant's - NTPC representatives and counsel appeared, whereas the 7 respondent remained absent, though it telephonically informed the Arbitrator that it had not been consulted regarding the appointment and that Delhi was not a convenient venue. The Arbitrator directed Claimant - NTPC to intimate the respondent regarding action taken on its objections and also informed the parties that his fee would be Rs.50,000/- per hearing, to be shared equally, fixing 25.09.2015 as the next date. Thereafter, on 18.09.2015, Claimant - NTPC rejected the respondent's - M/s Kripa Road Lines objections and informed it that all issues, including objections regarding the appointment of the Arbitrator, could be raised before the Sole Arbitrator in accordance with the Arbitration and Conciliation Act, 1996.
7. Thereafter, the proceedings continued before the learned Sole Arbitrator. On 12.12.2015, counsel for the respondent appeared and formally raised objections regarding the appointment of the Arbitrator, his fee schedule, and the venue of arbitration, & the objections were taken on record. However, without adjudicating those objections, the Arbitrator proceeded ex-parte against the respondent on 30.01.2016, recorded the claimant's evidence, heard the matter ex-parte on 30.08.2016, and ultimately passed an ex-parte award dated 18.10.2016. By the said award, the learned Sole Arbitrator partly allowed the claims and 8 counterclaims of the parties and directed the respondent - M/s Kripa Road Lines to pay a sum of Rs.2,05,82,961.84 together with interest at the rate of 10% per annum.
8. Aggrieved by the ex-parte award dated 18.10.2016, the respondent - M/s Kripa Road Lines filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Naya Raipur. However, the said application was dismissed by the Commercial Court. Hence, this arbitration appeal by respondent - M/s Kripa Road Lines.
9. Mr. Y.C. Sharma, learned Sr. Advocate appearing for the appellant - Kripa Road Lines submits that the impugned ex- parte arbitral award dated 18.10.2016 is wholly arbitrary, illegal and contrary to the settled principles of law governing arbitration. It is contended that the Commercial Court, Naya Raipur, has erred in affirming the said award without assigning any cogent reasons and without due consideration of the substantial grounds raised by the appellant, rendering its order perverse and unsustainable in the eye of law. The learned Senior Counsel further submits that the very appointment of the Sole Arbitrator stands vitiated on account of non-compliance with the mandatory requirement of disclosure as stipulated in the letter dated 24.07.2015, whereby the Arbitrator was obliged to disclose 9 any direct or indirect interest in the subject matter of dispute; such non-disclosure strikes at the root of jurisdiction and renders the award a nullity. It is also urged that the learned Arbitrator acted in gross violation of Section 20 of the Arbitration and Conciliation Act, 1996 by arbitrarily determining the place of arbitration without considering the convenience of the parties, thereby causing serious prejudice to the appellant who was effectively deprived of an opportunity to participate in the proceedings.
10. It is further submitted that despite specific objections raised by the appellant under Sections 16(2) and 16(3) of the Act with regard to the appointment of the Arbitrator, fixation of fees, and place of arbitration, the same were neither adjudicated nor decided, and the learned Arbitrator proceeded ex-parte in a mechanical manner, demonstrating clear bias and misuse of discretionary powers. Learned Senior Counsel emphasizes that the findings recorded by the learned Arbitrator regarding the defective weighbridge are inherently contradictory and perverse, inasmuch as the learned Arbitrator himself acknowledged the defect yet arbitrarily confined its impact to only five racks without any evidentiary basis, thereby shifting the burden improperly upon the appellant. It is also contended that the award is a non-speaking, as no reasons have been assigned for 10 material findings, particularly in respect of the period prior to 11.05.2013. Learned Sr. Advocate also submitted that the cumulative effect of procedural irregularities, violation of statutory provisions, non-consideration of objections, and absence of reasoned findings vitiates the entire arbitral process, and therefore, the impugned award as well as the order of the Commercial Court deserve to be set aside.
In support of his submission, learned senior counsel placed reliance on the decisions of Hon'ble Apex Court in the matter of State of Chhattisgarh & Anr. vs. Sal Udyog Private Limited reported in (2022) 2 SCC 275 : 2021 SC OnLine SC 1027, Envirad Projects Pvt. Ltd. vs. NTPC Ltd. reported in 2022 SCC OnLine Del 151, Pam Developments Private Limited vs. State of West Bengal and Anr. reported in (2024) 10 SCC 715 : 2024 SCC OnLine SC 2247 and Gayatri Balasamy vs. ISG Novasoft Technologies Ltd. reported in (2025) 7 SCC 1 : 2025 SCC OnLine SC 986.
11. Mr. Prafull N. Bharat, learned Sr. Advocate for respondent -
NTPC submits that the learned Sole Arbitration having examined all the aspects fo the matter has passed the impugned order which is a well reason and justified & the learned Commercial Court has rightly rejected the application filed under Section 34 of the Arbitration Act. 11 Learned Sr. Advocate further submits that the appellant of his own did not participated in the arbitration proceeding, as such, the same cannot be termed as ex-parte award. Learned Sr. Advocate also submits that the after appointment of CMD, NTPC as arbitrator in terms of clause 56 of the GCC, the appellant has not raised any kind of objection and the place of arbitration has been fixed by the learned Sole Arbitrator as per his sole discretion, as such, there is no illegality in the impugned arbitral award.
In support of his submission, learned senior counsel placed reliance on the decisions of Hon'ble Apex Court in the matter of State of Maharashtra vs. M/s. Hindustan Construction Company Ltd. reported in AIR 2010 SC 1299 : 2010 (3) AIR Bom R 506, Associate Builders vs. Delhi Development Authority reported in (2015) 3 SCC 49 and Ramesh Kumar Jain vs. Bharat Aluminium Company Limited (BALCO) reported in LiveLaw (SC) 1226.
12. In reply to the appeal, Mr. Y.C. Sharma, learned Sr. Advocate for the appellant - M/s Kripa Road Lines has filed his rejoinder stating therein that the significant issues which were linked to the core disputes were not property explained by the respondent which were necessary for proper adjudication of the matter. These facts pertains to amount 12 recoverable of Rs.81,36,857/- as on 31.12.2024 by the respondent from the appellant for shortage of coal quantity 10859.45MT @ Rs.1226.41 i.e. rate fixed by the SECL and not at the market rate, which has been wrongly claimed and erroneously awarded by the learned Arbitrator. It has been further contended that there exists series of similar balance confirmation letters attached with the cover letters/e-mails which were sent by the audit department of Claimant-NTPC to the appellant-M/s Kripa Road Lines and upon opening the link to the vendor's portal, the appellant found that the balance mentioned in the 'Balance Confirmation Letters' were also shown in the vendor's portal and relying upon the documents, learned Sr. counsel termed the arbitral award ex-parte.
13. Mr. Prafull N. Bharat, learned Senior Counsel for claimant-
NTPC submits that the appellant - M/s Kripa Road Lines, having raised a bill dated 07.05.2013 for transportation of coal, was duly called upon for stock verification vide letter dated 08.05.2013, and upon such verification, shortage of coal was detected and intimated to the appellant on 10.05.2013. The learned Senior Counsel submits that the contention of the appellant regarding defective weigh-bridge is misconceived and an afterthought, inasmuch as the alleged defect was identified only upon joint inspection 13 dated 11.05.2013, and there is no material on record to establish that such defect persisted from the inception of transportation. It is further submitted that the learned sole Arbitrator has already extended due benefit to the appellant
- M/s Kripa Road Lines by considering the alleged defect for a limited number of rakes based on available evidence, and the appellant's claim for extension of such benefit to all prior rakes is based on mere conjectures and not supported by any cogent proof. It is further urged that the respondent had duly issued communications, including letter dated 14.05.2013, regarding shortage of coal, and despite acknowledging the defect in the weigh-bridge at a later stage, the appellant cannot escape liability for the established shortage of coal, particularly in absence of any conclusive evidence to rebut the respondent's claim.
14. On the issue of recovery, it is submitted by Mr. Prafull N. Bharat, learned Sr. Advocate that the claim of the claimant- NTPC towards shortage of coal is justified and within the framework of the contractual obligations, and the learned Arbitrator has rightly awarded the amount considering the loss suffered by the claimant-NTPC. It is contended that merely because the contract provides a mechanism for calculation does not preclude the claimant - NTPC from claiming actual loss, and the award cannot be said to be 14 contrary to the terms of the contract. The allegation that the claim is based on market price without basis is denied, and it is submitted that the learned Arbitrator has exercised jurisdiction within permissible limits.
15. Mr. Prafull N. Bharat, learned Senior Counsel further submits that the appellant - M/s Kripa Road Lines has failed to produce any documentary evidence, including invoices or records, to substantiate its contention regarding absence of shortage or defect from inception, whereas the respondent has placed sufficient material to justify its claim. The allegation of manipulation of weigh-bridge or wrongful gain is strongly denied as baseless and unsubstantiated. On the question of interest, it was submitted that the learned Arbitrator is empowered to grant interest under the provisions of the Arbitration and Conciliation Act, 1996, and the same cannot be faulted merely on the ground that there is no specific clause in the agreement. It is further submitted that the grant of interest, including pendente lite and future interest, is within the discretion of the learned Arbitrator and does not violate any principle of law or public policy.
16. With respect to the counter-claims, learned Senior Counsel submits that the learned Arbitrator has duly considered the claims raised by the appellant and has rendered findings that there is no illegality in rejecting or not entertaining 15 claims which were not supported by evidence. It has been further submitted that the challenge to the jurisdiction of the Arbitrator and the plea regarding unilateral appointment are misconceived and have been raised belatedly. The appellant had participated in the proceedings and cannot now turn around and challenge the constitution of the Tribunal. The contention regarding change of venue and alleged violation of principles of natural justice was also denied, as sufficient opportunities were granted to the appellant - M/s Kripa Road Lines, and any non-participation was on account of its own conduct. Finally, learned Senior Counsel submits that the arbitral award is a reasoned award passed upon due consideration of pleadings, documents, and evidence on record, and does not suffer from perversity or violation of public policy. It is, therefore, prayed that the appeal be dismissed setting aside the impugned order dated 23.12.2017, as the appellant has failed to make out any ground warranting interference with the well-reasoned arbitral award dated 18.11.2016.
17. Appellant - M/s Kripa Road Lines herein has also filed an application under Order XLI Rule 27 of C.P.C. for taking additional evidence on record viz copy of some communications (Annexure D/1 and D/2) and submits that the said documents (D/1 and D/2) are subsequent in time to 16 the arbitration proceedings and came into existence only during the pendency of this appeal. The contents of letters directly contradicts the claim and reasoning of the arbitral award which relied upon market rates for determining the compensation amount for alleged shortage of coal caused grave prejudice to the appellant - M/s Kripa Road Lines and the production of these documents is essential for just decision of the case. Therefore, the application of the appellant - M/s Kripa Road Lines may be allowed.
18. Per contra, Mr. Prafull N. Bharat, learned Sr. counsel for respondent - NTPC strongly opposed the application of the appellant and submits that the said E-mails were generated and sent inadvertently by the automated system. The amount reflected therein does not represent the correct or finalized figure since the matter is already sub judice, the respondent - M/s Kripa Road Lines cannot give definite figure to the claimant-NTPC as the system maintained by the claimant-NTPC could not be fed with the relief as per the arbitral award as the data is system generated and cannot be modified and can be prone to errors. The said mails do not represent the outstanding liability as decided in the arbitral award, and under Section 34 or 37 of the Act, 1996 new evidence cannot be produced as they were not part of the arbitral tribunal's record. So, this application is 17 liable to be dismissed.
Reliance has been placed on the decision of Hon'ble Apex Court in the matter of State of Maharashtra vs. M/s Hindustan Construction Company Limited reported in AIR 2010 SC 1299.
19. We have heard learned counsel for the parties and perused the material available on record.
20. In the instant case, it is not disputed that both the parties entered into coal supply agreement and on 26.03.2013, S.E.C.L. issued a delivery order to the claimant - NTPC for lifting 1,00,000/- MT of G-11 grade of coal from Dipka Mines. Thereafter, a brief award letter was issues by the claimant - NTPC for transportation of coal from Dipka Coal Mines to the Wharf Wall and loading to MGR wagons in favour of the respondent - M/s Kripa Road Lines on 06.04.2013. The total contract value for transporting of 1 Lac MT of coal was Rs.78,57,000/-, and the date of commencement of work was 13.04.2013 and the contract stipulated the completion of above work (transportation of coal) by 12.05.2013.
21. It is also not disputed that the dispute arose between the parties as per Clause 56 of GCC, the claimant - NTPC invoked arbitration clause and the CMD of NTPC appointed Mr. Y.V. Rao as sole Arbitrator. On account of resignation of 18 Mr. Y.V. Rao as sole Arbitrator on 24.07.2015, Dr. Sutanu Behuria residing in Gurgaon, Haryana was appointed as the sole Arbitrator. The arbitration proceeding will start from the stage left by previous sole Arbitrator. The respondent - M/s Kripa Road Lines did not participate in arbitration proceedings. Therefore, the Arbitrator after hearing claimant
-NTPC and evidence presented by it passed the arbitral award dated 18.10.2016, again which the respondent - M/s Kripa Road Lines filed an application under Section 34 fo the Act, 1996 before the learned Commercial Court and the learned Commercial Court vide order dated 23.12.2017 dismissed the application of the respondent - M/s Kripa Road Lines.
22. Sections 34 and 37 of the Act, 1996 define the limited judicial intervention permissible against arbitral awards. Section 34 provides the exclusive remedy for setting aside an arbitral award on specific statutory grounds such as incapacity, invalid agreement, lack of proper notice, inability to present the case, excess of jurisdiction, procedural irregularity, or conflict with public policy. Section 37 further provides a restricted right of appeal only against specified orders, including an order setting aside or refusing to set aside an award under Section 34. Thus, the legislative scheme ensures minimal interference with arbitral 19 proceedings and finality of awards.
23. For ready reference, Sections 34 and 37 of the Act, 1996 is reproduced herein as under :-
"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 the Court only if--
(a) the party making the application 1[establishes on the basis of the record of the 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 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 20 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."
24. Section 37 of the Act, 1996 provides as under :-
"37. Appealable orders.--(1) 1[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:--
2[(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section 34.] (2) Appeal shall also lie to a court from an 21 order of the arbitral tribunal--
(a) accepting the plea referred to in sub- section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or takeaway any right to appeal to the Supreme Court."
25. The first and main objection of the respondent - M/s Kripa Road Lines is with regard to the change of Arbitrator and change of place.
26. Section 12 of the Act, 1996 safeguards the fairness and neutrality of arbitral proceedings by requiring an arbitrator to disclose any circumstances that may give rise to justifiable doubts regarding his independence or impartiality. Such disclosure is a continuing obligation from the time of appointment throughout the proceedings. An arbitrator may be challenged only on the statutory grounds specified therein, namely lack of independence or impartiality, or absence of agreed qualifications.
27. For ready reference, Section 12 (2) and (3) of the Act, 1996 is reproduced herein as under :-
"12. Grounds for challenge.-- 2[(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances,--22
(a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.
Explanation1.--The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.
Explanation 2.--The disclosure shall be made by such person in the form specified in the Sixth Schedule.] (2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub-section (1) unless they have already been informed of them by him.
(3) An arbitrator may be challenged only if--
(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or
(b) he does not possess the qualifications agreed to by the parties."
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28. It is clear from the impugned award that notices were issued to the respondent -M/s Kripa Road Lines, and M/s Kripa Road Lines intimated the sole Arbitrator by means of e-mail that they had approached High Court on the issue of appointment of Arbitrator and further sought adjournment, and on 12.12.2016, one person was present on behalf of the respondent - M/s Kripa Road Lines but without any vakalatnama and undertaking was given that he would present the same on the next date of hearing, however, on subsequent hearings/proceeding of the case, no one appeared on behalf of the respondent - M/s Kripa Road Lines to represent them.
29. Section 20 of the Act, 1996 deals with the place or seat of arbitration and recognizes party autonomy as the governing principle. The parties are free to mutually agree upon the place of arbitration, and in the absence of such agreement, the arbitral tribunal is empowered to determine the same having regard to the circumstances of the case and convenience of the parties. The provision further enables the tribunal to hold meetings or hearings at any appropriate place, unless otherwise agreed. Thus, change of venue by itself does not vitiate the arbitral proceedings when made in accordance with law.
30. For ready reference, Section 20 (1), (2) and (3) of the Act, 24 1996 is reproduced herein as under :-
"20. Place of arbitration. - (1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in sub-
section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding sub-section (1) or sub- section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property."
31. The learned Commercial Court rightly held in para 8 as under :-
"8. As per Section 20 (1) of the Act, 1996 r/w arbitration clause 56 of GCC it is manifestly clear that the parties have agreed that the venue of arbitration shall be such place as may be fixed by the Arbitrator in his sole discretion. Therefore, the learned Arbitrator Mr. Sutanu Behuria residing in Gurgaon, Haryana is contractually empowered to conduct the arbitration proceeding in venue fixed by him in his sole discretion."
32. With regard to other objection of respondent - M/s Kripa Road Lines, it is clear that respondent did not challenge the 25 constitution of arbitral tribunal within the stipulated time (within 15 days after becoming aware of the constitution of arbitral tribunal).
33. The learned Commercial Court, while dealing with the application filed under Section 34 of the Act, 1996 by the respondent - Kripa Road Lines, has minutely appreciated all the objections of the respondent and rightly dismissed the grounds of the application under Section 34 of the Act, 1996 regarding claim of the SECL.
34. The Hon'ble Apex Court in Ramesh (supra) held in paras 27 to 37 as under :-
"27. The Arbitration and Conciliation Act, 1996 avows to provide a speedy, cost-effective & efficacious mode of alternative dispute resolution with a policy of minimal judicial intervention. The same is apparent from the legislative intent explicitly mandated under section 5 of A&C Act which envisages an embargo upon the judiciary to interfere in arbitral proceedings save in circumstance expressly stipulated under Part I of the Act. Hence, it is clear that judicial interference is circumscribed with only exception being the statutorily mandated remedies which we find under section(s) 34 and 37 of the A&C Act.
28. The bare perusal of section 34 mandates a narrow lens of supervisory jurisdiction to set aside the arbitral award strictly on the grounds and parameters enumerated in sub-section (2) & 26 (3) thereof. The interference is permitted where the award is found to be in contravention to public policy of India: is contrary to the fundamental policy of Indian Law, or offends the most basic notions of morality or justice. Hence, a plain and purposive reading of the section 34 makes it abundantly clear that the scope of interference by a judicial body is extremely narrow. It is a settled proposition of law as has been constantly observed by this court and we reiterate, the courts exercising jurisdiction under section 34 do not sit in appeal over the arbitral award hence they are not expected to examine the legality, reasonableness or correctness of findings on facts or law unless they come under any of grounds mandated in the said provision. In ONGC Limited. v. Saw Pipes Limited14, this court held that an award can be set aside under Section 34 on the following grounds: "(a) contravention of 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."
29. When it comes to section 37 of the A&C Act it provides for a limited appellate remedy against an order either setting aside or refusing to set aside an arbitral award passed by civil court in exercise of its power under section 34. This court in MMTC Ltd. v. Vedanta Ltd.15, at Paragraph 14 observed that interference with an order made under section 37 cannot travel beyond the restrictions laid down in section 34. Further in Konkan Railway Corporation Limited v.
27Chenab Bridge Project Undertaking16 this court at Paragraph 18 observed that the scope of appellate scrutiny under section 37 is necessarily co-extensive with the parameters mandated under section 34 of the Act and hence the said provision does not enlarge the jurisdiction of the appellate court. Even this court has observed in M/s. Hindustan Construction Company Limited v. M/s. National Highways Authority of India17, wherein one of us (Justice Aravind Kumar) was part of the bench at Paragraph 26 that the standard of scrutiny of an arbitral award is very narrow and it is not the judicial review of an award. Further in Paragraph 27 it was observed that awards which contains reasons, especially when they interpret contractual terms, ought not to be interfered with lightly. This court has also observed in Larsen Air Conditioning and Refrigeration Company v. Union of India and Ors.18 at Paragraph 15 that the scope of interference in exercise of appellate power under section 37 is even narrower to review the findings of the awards, if it has been upheld or substantially upheld under section 34. Hence, it is very well settled that arbitral awards are not liable to be set aside merely on the ground of erroneous in law or alleged misappreciation of evidence and there is a threshold that the party seeking for the award to be set aside has to satisfy, before the judicial body could enter into the realm of exercising its power under section(s) 34 & 37. It is also apt and appropriate to note that 28 re-assessment or re-appreciation of evidence lies outside the contours of judicial review under section(s) 34 and 37. This court in Punjab State Civil Supplies Corporation Limited & Anr. v. M/s. Sanman Rice Mills & Ors. 19 at Paragraph 12 observed that even when the arbitral awards may appear to be unreasonable and non-
speaking that by itself would not warrant the courts to interfere with the award unless that unreasonableness has harmed the public policy or fundamental policy of Indian law. It might be a possibility that on re-appreciation of evidence, the courts may take another view which may be even more plausible but that also does not leave scope for the courts to reappraise the evidence and arrive at a different view. This court in Batliboi Environmental Engineers Limited v. Hindustan Petroleum Corporation Limited & Anr.20 held that the arbitrator is generally considered as ultimate master of quality and quantity of evidence. Even an award which is based on little or no evidence would not be held to be invalid on this score. At times, the decisions are taken by the arbitrator acting on equity and such decisions can be just and fair therefore award should not be overridden under section 34 and 37 of the A&C Act on the ground that the approach of the arbitrator was arbitrary or capricious.
30. Hence, in the light of the aforesaid discussion, we would deal with the submissions made by the learned senior counsels on behalf of 29 the parties. But there is yet another aspect that warrants our attention before delving into the analysis of submission and that is the setting aside of the impugned order by the High Court by placing reliance on the ground of "patent illegality" therefore, it becomes imperative to understand the true import of the said term before we move further.
31. Prior to 2015 amendment, the ground of "patent illegality" emerged as result of judicial interpretation in ONGC Ltd. (supra) while interpreting "public policy" mandated under section 34(2)(b)(ii) of A&C Act wherein this court for the first time read patent illegality as a sub- ground to set aside the award on the broader purport of "public policy". In Paragraph 22 of the decision this court observed: Therefore, in a case where the validity of award is challenged, there is no necessity of giving a narrower meaning to the term "public policy of India" On the contrary, wider meaning is required to be given so that the "patently illegal award" passed by the arbitral tribunal could be set aside. This court went on to illustrate what would constitute patent illegality at Paragraph 22 and we extract the same for easy reference:
"Take for illustration a case wherein there is a specific provision in the contract that for delayed payment of the amount due and payable, no interest would be payable, still however, if the arbitrator has passed an award granting interest, it would be against the terms of the contract 30 and thereby against the provision of Section 28(3) of the Act which specifically provides that "Arbitral Tribunal shall decide in accordance with the terms of the contract". Further, where there is a specific usage of the trade that if the payment is made beyond a period of one month, then the party would be required to pay the said amount with interest at the rate of 15 per cent. Despite the evidence being produced on record for such usage. if the arbitrator refuses to grant such interest on the ground of equity, such award would also be in violation of sub- sections (2) and (3) of Section 28, Section 28/2) specifically provides that the arbitrator shall decide ex aequo et bono (according to what is just and good) only if the parties have expressly authorised him to do so. Similarly, if the award is patently against the statutory provisions of substantive law which is in force in India or is passed without giving an opportunity of hearing to the parties as provided under Section 24 or without giving any reason in a case where parties have not agreed that no reasons are to be recorded, it would be against the statutory provisions. In all such cases, the award is required to he set aside on the ground of "patent illegality"."
32. In Associate Builders v. Delhi Development Authority21, this court attempted to filter out what contemplated patent illegality in paras 42.1 to 42.3 under the following three subheads: firstly, contravention of the substantive law of India: secondly, contravention of the Arbitration Act itself and thirdly, contravention of Section 28(3) of the Arbitration Act which 31 mandates the Arbitral Tribunal to decide the case in accordance with the terms of the contract, taking into account the usages of the trade applicable to the transaction. With regard to the third sub-head Justice R.F. Nariman, observed by stating that: if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of term of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do.
33. In 2015, by way of the Arbitration and Conciliation (Amendment) Act a new sub-section (2A) to section 34 of A&C Act was inserted which in addition to statutorily recognizing the 'patent illegality ground for setting aside a domestic arbitral award made it an independent and distinct ground from public policy under section
34. The proviso to the newly inserted clause further provided that an award "shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence". The legislative intent behind insertion of this proviso was to avoid excessive intervention to arbitral award by the courts under the ground of patent illegality. However, the Amendment clarified that "an erroneous application of the law" or "re-appreciation of evidence" does not fall under patent illegality. Hence, the courts are not to treat every factual 32 error or every divergent interpretation as an illegality. The illegality must be of a kind that strikes at the heart of the award's validity. For instance, if an arbitrator ignores a binding precedent or a clear prohibition in the contract, that may be patent illegality. Likewise, a finding based on no evidence at all can be said to be perverse and thus patently illegal. But where there is some evidence and a reasonably plausible inference has been drawn by the arbitrators, the courts should ordinarily refrain themselves from supplanting the views arrived by the arbitrator as that would be the true import of the legislative intent inherent in the Amendment Act.
34. Thereafter, this court elucidated the meaning of the expression patent illegality in Ssangyong Engg. & Construction Co. Ltd. v. NHAP 22 while taking into consideration the amendment act of 2015 and held it as a glaring. evident illegality that goes to the root of the award. This includes:
(a) an award deciding matters outside the scope of the arbitration (beyond the contract or submission); (b) an award contradicting the substantive law of India or the Arbitration Act itself; (c) an award against the terms of the contract; and (d) an award so unreasoned or irrational that it manifests an error on its face.
35. Considering the aforesaid precedents, in our considered view, the said terminology of 'patent illegality' indicates more than one scenario such 33 as the findings of the arbitrator must shock the judicial conscience or the arbitrator took into account matters he shouldn't have, or he must have failed to take into account vital matters, leading to an unjust result; or the decision is so irrational that no fair or sensible person would have arrived at it given the same facts. A classic example for the same is when an award is based on "no evidence" i.e.. arbitrators cannot conjure figures or facts out of thin air to arrive at his findings. If a crucial finding is unsupported by any evidence or is a result of ignoring vital evidence that was placed before the arbitrator, it may be a ground the warrants interference. However, the said parameter must be applied with caution by keeping in mind that "no evidence" means truly no relevant evidence, not scant or weak evidence. If there is some evidence, even a single witness's testimony or a set of documents, on which the arbitrator could rely upon or has relied upon to arrive at his conclusions, the court cannot regard the conclusion drawn by the arbitrator as patently illegal merely because that evidence has less probative value. This thin line is stood crossed only when the arbitral tribunal's conclusion cannot be reconciled with any permissible view of the evidence.
36. Having discussed the said law, we move ahead to another limb of the submission which was espoused by the respondent particularly with reference to obligations of the arbitrator to decide the dispute in accordance with the terms of the 34 contract. It is a fundamental principle that the arbitrator cannot award anything that is contrary to the contract. The arbitrator is bound by clear stipulations inter se the parties, and an award ignoring such stipulations would violate public policy by undermining freedom of contract. However, that does not mean that not every award which gives a benefit not expressly mentioned in the contract is in violation. The arbitral tribunal in exercise of their power can very well interpret the implied terms or fill gaps where the contract is silent, so long as doing so does not contradict any express term. For example, if a contract is silent on interest on delayed payments, an arbitrator awarding reasonable interest is not contradicting the contract rather it is a power exercised by the arbitrator to fulfill the gap on the basis of equity which also mandated under Section 31(7)(a) of the A&C Act. Similarly, if a contract does not say either way about compensating extra work done at request, the arbitrator can imply a term or use principles of restitution to award a reasonable sum, without violating the terms of contract. The thin line is whether an express prohibition or restrictions in the contract is breached by the award? If the answer is in affirmative, the award is liable to struck down. However, where the contract is simply silent on a legitimate claim which is inherently linked to the natural corollary of contractual obligation of the parties the arbitrator will be well within his powers to 35 interpret the contract in the light of principles of the contractual jurisprudence and apply the equity to that situation. A contrary interpretation would lead to opening a floodgate whereby a party who may have dominant position would intentionally not ink down the natural obligation flowing from the contract and subsequently; after obtaining the benefit the party would agitate absence of express terms to sway away from even discharging his alternative obligation of compensating the party at loss. Hence the question which arises in such situations is, can the party who bears the brunt and suffers the loss due to silence under the contract regarding the natural contractual obligation which arises in usual course of business be left in limbo? In our view, that is the very purpose why section 70 of the Contract Act, 1872, has been an intrinsic part of our Contract Act. The said provision creates a statutory right independent of contract, often termed quantum meruit or unjust enrichment remedy. For ready reference the said provision has been extracted hereinbelow:
"70. Obligation of person enjoying benefit of non-gratuitous act. Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
37. The close scrutiny of the aforesaid provision 36 reveals that it comes into play when one party confers a benefit on another in circumstances not governed by a contract, without intent to act gratuitously. Hence in such situation, the party taking the benefit is bound to pay compensation to the party who had gratuitously taken the benefits and the courts including arbitral tribunals, can award compensation under Section 70 if the conditions are met."
35. Mr. Y.C. Sharma, learned Sr. counsel for M/s Kripa Road Lines submits that heavy fine has been imposed by the learned Arbitrator on this ground that the M/s Kripa Road Lines is guilty of misappropriation.
36. The learned Arbitral Tribunal while holding the respondent -
M/s Kripa Road Lines guilty of misappropriation, held in its order, which reads thus :-
"Moreover, in order to discourage misappropriation, the Respondent will have to pay an amount calculated at market price for quantity of shortage. It is noted that the contract does not involve any third party. However, this is an unusual case wherein the Respondent ought to pay at the market price but the Claimant does not deserve the market price. Hence, an out of the box solution is proposed. Coal being a pollutant, the difference between the market value and nominated value will be paid by the Respondent (including interest calculated at 10% from 08.05.13, till the date of payment is made) 37 to Swatch Bharat Kosh. The amount will be deposited with the Claimant, who will transfer the money to the Swatch Bharat Kosh. This amount is amount of short supply x (difference between market price & NTPC price) + 10% interest on this amount till the amount is paid."
37. Further, the learned Arbitral Tribunal also directed the respondent - M/s Kripa Road Lines to deposit difference between the market price in Clause (v) of its arbitral award. For ready reference, Clause (v) of the arbitral award is reproduced herein as under :-
"v) The Respondent to deposit
Rs.2,05,82,961.84 with the Claimant being
difference between market price (Rs 3302/- per MT) and nominated value (Rs.1226.41 per MT) for the shortage quantity of coal of 9916.68 MT along with interest @10% PA transferred by the Claimant to the account of Swach Bharat Kosh."
38. It is an admitted position that the respondent - M/s Kripa Road Lines did not participate before the Arbitration Tribunal or Arbitral Proceeding and the learned Arbitral Tribunal imposed fine for misappropriation.
39. Section 403 of the IPC provides punishment for dishonest misappropriation of movable property, i.e., where a person dishonestly converts to his own use property belonging to another without lawful authority. The essence of 38 misappropriation lies in wrongful retention, use, or dealing with the property in a manner inconsistent with the rights of the true owner. Mere shortage, negligence, breach of contract, or failure to account does not by itself constitute misappropriation unless accompanied by dishonest intention. Explanation 2 to Section 403 further clarifies that a person who innocently comes into possession of another's property, but subsequently dishonestly appropriates or converts it to his own use, is also guilty of misappropriation from the time such dishonest intention is formed. Thus, dishonest mens rea is the indispensable ingredient of the offence of misappropriation.
40. It is well settled principle of law that for any criminal allegation, it has to prove beyond reasonable doubt but the learned Arbitral Tribunal held the respondent - M/s Kripa Road Lines guilty recording finding in its arbitral award. For ready reference, the relevant portion (paragraph No. not mentioned in the arbitral award) is reproduced herein as under :-
"it is a fact that the price at which NTPC was to receive the coal was significantly lower than the market price. At that time, there was a thriving black-market for coal, and there was incentives for transporters to indulge in misappropriation. The Respondent's tactics in avoiding/delaying the arbitration proceedings is indicative of the 39 fact that the benefits of misappropriation far outweigh the cost of the penalties. In order to discourage such practices, a levy of interest @ 10% from 8.5.2013 till the date that payment is made, is imposed on the claim value of Rs.68,44,569.00 (that is calculated at the price NTPC would have paid to SECL). The amount will be payable to NTPC, (as they wouldn't have paid market price to SECL) after adjusting the withheld amount of Rs.52,44,157.99 as per statement of claim plus the differential value on account of benefit of doubt for 5 rakes for Rs.73,206.00."
41. However, the learned Arbitral Tribunal itself found that the weighbridge was faulty and hence extended benefit of doubt for 5 rakes to the appellant - M/s Kripa Road Lines and held in its arbitral award as under (paragraph No. not mentioned in the award) :-
"However, it remains a fact that after the complaint was made, a verification of the weighbridge was done on 11.05.2013 and a defective earth wire was found as per his letter dated 21.06.2015 (Annexure A-21). This resulted in a mismatch of 188.55 MT between the reading taken and what should have been the reading per rake. Suffice it to say that the defect could have come about any time after the dispatch of 27 rakes. Therefore, I am inclined to give the respondent the benefit of doubt and fix the coal transported in the 5 rakes at (6006.97+5x188.55) 40 6949.74 MT."
42. Therefore, it is evident that the findings recorded by the learned Arbitral Tribunal is contradictory. It is not disputed that the respondent - M/s Kripa Road Lines made a complaint about weighbridge and verification of weighbridge was done on 11.05.2012 and some fault was found, however, in next para the learned Arbitral Tribunal held the respondent - M/s Kripa Road Lines guilty and also imposed heavy fine.
43. The Hon'ble Apex Court in the matter of Gayatri (supra) held in paras 32, 33, 34, 35, 49, 74, 75, 78, and 79 as under
:-
"32. In the present controversy, the proviso to Section 34(2)(a)(iv) is particularly relevant. It states that if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the arbitration can be separated from those not submitted, only that part of the arbitral award which contains decisions on matters non-submitted may be set aside. The proviso, therefore, permits courts to sever the non-arbitrable portions of an award from arbitrable ones. This serves a twofold purpose. First, it aligns with Section 16 of the 1996 Act, which affirms the principle of kompetenz-kompetenz, that is, the arbitrators' competence to determine their own jurisdiction.41
Secondly, it enables the Court to sever and preserve the "valid" part(s) of the award while setting aside the "invalid" ones.27 Indeed, before us, none of the parties have argued that the Court is not empowered to undertake such a segregation.
33. We hold that the power conferred under the proviso to Section 34(2)(a)(iv) is clarificatory in nature. The authority to sever the "invalid" portion of an arbitral award from the "valid" portion, while remaining within the narrow confines of Section 34, is inherent in the Court's jurisdiction when setting aside an award.
34. To this extent, the doctrine of omne majus continet in se minus - the greater power includes the lesser-applies squarely. The authority to set aside an arbitral award necessarily encompasses the power to set it aside in part, rather than in its entirety. This interpretation is practical and pragmatic. It would be incongruous to hold that power to set aside would only mean power to set aside the award in its entirety and non in part. A contrary interpretation would not only be inconsistent with the statutory framework but may also result in valid determinations being unnecessarily nullified.
35. However, we must add a caveat that no all awards can be severed or segregated into separate silos. Partial setting aside may not be feasible when the "valid" and "invalid" portions 42 are legally and practically inseparable. In simpler words, the "valid" and "invalid" portions must not be interdependent or intrinsically intertwined. If they are, the award cannot be set aside in part.
49. Notwithstanding Section 33, we affirm that a Court reviewing an award under Section 34 possesses the authority to rectify computational, clerical, or typographical errors, as well as other manifest errors, provided that such modification does not necessitate a merits-based evaluation. There are certain powers inherent to the Court, even when not explicitly granted by the legislature. The scope of these inherent powers depends on the nature of the provision, whether it pertains to appellate, reference, or limited jurisdiction as in the case of Section 34. The powers are intrinsically connected as they are part and parcel of the jurisdiction exercised by the Court.
74. There can be instances of violation of Section 31(7)(a), and the pendente lite interest awarded may be contrary to the contractual provision. We are of the opinion that, in such cases, the Court while examining objections under Section 34 of the 1996 Act will have two options. First is to set aside the rate of interest or second, recourse may be had to the powers of remand under Section 34(4).
75. For the post-award interest in terms of Section 31(7)(b), the courts will retain the power to modify the interest where the facts justify such 43 modification. This is why the standard rate stipulated in clause (b) applies when the award itself does not specify the applicable post-award interest. There can be a situation where the party to be paid money is at fault and is guilty of delay which may require a modification in the rate of interest. In the absence of grant of post-award interest in the award, the Court also possesses the power to grant post-award interest. Clearly, as per the legislative mandate, it is not the sole prerogative of the arbitrator.
78. Inherent in the discussion above, is the Court's power to both increase or decrease the post-award interest rate. It would be incorrect to state that the Court's power to interfere with this interest rate is limited solely to decreasing the interest rate. Situations may arise where the rate should be increased due to delays or obstructions in the execution of the award. Interest rates may also fluctuate over time.
79. However, the Court, while exercising this power, must be cautious and mindful not to overstep its role by altering the interest rate unless there are compelling and well-founded reasons to do so. In exercising this power, the Court is not acting in an appellate capacity, but rather under limited authority. For instance, the 1996 Act stipulates a standard post-award interest rate. When the statute itself benchmarks a standard, unless there are special and specific reasons, the rate of interest stipulated by the 44 statute should be applied."
44. In view of the above, it is evident that the learned Arbitral Tribunal erred in holding the respondent, M/s Kripa Road Lines, guilty of misappropriation and in imposing a heavy penalty. From the facts on record, including the admissions and findings of the Tribunal itself, it is apparent that the complaint regarding a faulty weighbridge was genuine. Despite this, the Tribunal extended the benefit of doubt to the appellant, M/s Kripa Road Lines, only in respect of five rakes, without properly examining or determining the period during which the weighbridge remained defective or the extent of the variation in weight.
45. Thus, In view of the aforesaid ambiguity regarding both the duration for which the weighbridge remained faulty and the extent of variation in weight, and in light of the settled principles laid down by the Hon'ble Supreme Court in Ramesh (supra) and Gayatri (supra), it is evident that the impugned order cannot be sustained. The failure to conclusively determine these crucial aspects vitiates the findings. Accordingly, the impugned order dated 23.12.2017 passed by the learned Commercial Court deserves to be set aside, and the arbitral award warrants appropriate modification.
46. The appellant - M/s Kripa Road Lines has filed an 45 application under Order XLI Rule 27 of CPC for taking additional documents on record, however, it is clear that these documents were not produced before the learned Arbitration Tribunal and as per respondent - NTPC, these documents were auto generated mails, as such, there is no need to take these additional documents on record.
47. Accordingly, the application filed under Order XLI Rule 27 is rejected.
48. It is clear from the impugned award that the learned Arbitration Tribunal, as per the terms of the contract, has rightly passed the arbitral award so far as it relates to clause (I) and (iii), however, the arbitral award with respect to clause (v), is against the principle of natural justice and the interest rate @ 10% is also on higher side, which need to be modified. Thus, the arbitral award is modified to the extend herein as under :-
(i) The claim petition filed by the claimant is allowed to the effect that respondent shall pay the claimant Rs.68,44,569.00 towards short supply of coal of 9916.68 MT @ Rs.1226.41 per MT which NTPC would have paid to SECL.
(ii) The Claimant is also entitled to get interest @ 6% PA on the said amount of Rs.68,44,569.00 w.e.f. 8.5.2013 till realization of the amount.
(iii) The NTPC is entitled to get Rs.3,50,000/- towards the fee of Arbitration which has been paid by the NTPC on behalf of the respondent.
46
(iv) The NTPC is also entitled to get Rs.1,00,000/- towards the cost of litigation which includes the legal expenses and stamp duty.
49. In the result, the arbitration appeal is partly allowed to the extend herein above.
Sd/- Sd/-
(Rajani Dubey) (Radhakishan Agrawal)
Judge Judge
Digitally signed by
pekde
VIJAY BHARATRAO
PEKDE
Date: 2026.05.05
15:24:47 +0530