Bombay High Court
Trimbe Mobility Solutions India Pvt. ... vs Hindustan Petroleum Corporation Ltd on 25 September, 2018
Author: A.K. Menon
Bench: A.K. Menon
hcs
arbp1225.2012.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.1225 OF 2012
Trimble Mobility Solutions
India Pvt. Ltd.
501-505, Park Plaza,
775/1, Opp: Kamla Nehru Park,
Off. Bhandarkar Road,
Pune 411 004 .. Petitioner
Vs.
Hindustan Petroleum Corporation Ltd.
Hindustan Bhawan, through
Dy.General Manager O & D, SZ.
8, S.V. Marg,
Ballard Estate,
Mumbai 400 001 .. Respondent
Mr.Prateek Seksaria with Ms.Apoorva Gupta i/b AZB and Partners for the
petitioner.
Mr.Charles D'Souza with Ms.Sakshi Bhalla for the respondent.
CORAM : A.K. MENON, J.
RESERVED ON : 18TH JULY, 2018
PRONOUNCED ON : 25TH SEPTEMBER, 2018
JUDGMENT :
1. This petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 assails an award dated 30th December, 2011 passed by the sole arbitrator appointed in terms of arbitration proceedings contained the works contract.
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arbp1225.2012.odt
2. The facts in the case briefly stated are as follows : The claimant in arbitration was HPCL. the respondent in this petition. The petitioner was engaged in the business as a mobile data solutions provider (vehicle tracking solutions provider) delivering end-to-end solutions to various organisations. For the sake of convenience the petitioner herein is referred to as "TMT" and the respondent is referred to as "HPCL". HPCL was keen on checking adulteration, unauthorised opening of seals of tank trucks and pilferage of petroleum products inter alia by tracking/checking illegal diversion of dealer owned tank trucks (TTs) which carried petroleum products. The aim was to ensure the delivery of products of original quality and accurate quantity. HPCL was desirous of installing a Vehicle Management system and floated a tender for installation and commissioning of a vehicle management system. In respect of south zone, TMT was the successful bidder and was required to provide a Vehicle management and electrical seal monitoring system described as VMS and VSN for dealers owned trucks operating in the south zone.
3. A letter of intent came to be issued on 26th October, 2006 and a purchase order was thereafter issued on 26th November, 2006. TMT were required to supply 575 Vehicle Mounted Units at the price of Rs.12,750 per unit + Sales Tax, 575 Electrical Seal Monitoring System with sensors and valve enclosures @ Rs.6,910 + Sales Tax. TMT were to design, develop and test custom built software for Vehicle Management Systems at the price of 2/25 arbp1225.2012.odt Rs.4,00,926/- approximately per unit. The total value of the order was Rs.1,31,00,176.56 ps. The contract was subject to retention money - 75% of the invoice value was to be paid after installation and commissioning of the system, 25% was to be paid after stabilization period of one month during which successful operation of the system was to be ensured. The purchase order provided for TMT to supply software and hardware for VMS and ESMS and they were to conduct at least one training programme after installation at the head quarters and provide a user manual. In the course of performing the contract, disputes arose between the parties regarding efficacy of the system, delay in execution of the work and alleged deficiencies which resulted in HPCL terminating contract on or about 2nd July, 2008. Claims and counter claims were made and finally the dispute was referred to arbitration.
4. The arbitration agreement between the parties provided for appointment of the sole arbitrator who in the present case was an officer of the respondent corporation. After entering upon the reference, pleadings were completed and hearings were held on numerous dates from 6th November, 2009 and 3rd November, 2010 at Chennai. During the hearing, the respondent stated that they were intending to rely on documentary evidence and would not lead oral evidence. The claimants, however, examined two witnesses, who filed their affidavits of evidence and who were later cross examined by the Senior Manager (Legal) of the respondent. 3/25
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5. It was HPCL's case that TMT was not able to complete work by the scheduled date of completion. The installation of equipment was completed but the system was allegedly not stable and HPCL was unable to track trucks online. A sum of Rs.56,15,925/- was paid to TMT on completion of installation and on commission of 285 units but during the stabilisation period it was urged that the system could not be properly used and the readings were erratic. TMT meanwhile claimed payments for all 551 units installed but in view of the fact that of the installed units only 285 were commissioned, payment for remaining 266 units was not made. Further allegations are to the effect that since installation was completed the claimant arranged for Airtel mobile connections and mobile telephone charges were incurred by HPCL even without the system being used.
6. TMT could not rectify the system as a result HPCL terminated the contract for non-performance and sought refund of the amount of Rs.56,15,925/- with interest. HPCL claimed to have performed their part of the contract for 585 units which were installed. Thus, admittedly 285 units were functioning. Later in the course of arbitration, it was revealed that even the remaining units were installed but had not been properly commissioned. HPCL contended that the project was a key project and could be considered as completed only upon implementation and performance of all units. The job scope was not divisible and there was no scope for making payment on piece meal basis. Correspondence was exchanged between the 4/25 arbp1225.2012.odt parties, however, disputes were not resolved HPCL contended that they had given enough opportunities to TMT and six trials were allowed yet the results were not satisfactory. HPCL claimed refund of Rs.56,15,925/- being the amount paid to TMT and interest thereon at 18% from 20th November, 2007 to 20th November, 2008 and refund of Rs.29.41 lakhs allegedly paid to Airtel towards telephone charges and costs of arbitration.
7. TMT filed a counter claim of Rs.99,90,144.50/- towards outstanding price and Rs.35,96,452/- towards interest on the sum of Rs.3,00,000/- towards delay in placing the purchase order. A further sum of RS.3,00,000/- was claimed towards delay in providing vehicles for installation and a sum of Rs.28,70,000/- towards alleged loss due to change in design of the devices and other alleged defaults by HPCL.
8. After pleadings were complete, 12 issues were framed. Submissions were heard and the arbitrator by his award dated 30th December, 2011 held that HPCL was entitled for refund of Rs.56,15,925/- and the interest thereon at the rate of 12% from 24th April, 2009 till payment. The remaining claims of HPCL and all counter claims of TMT were rejected. Being aggrieved, TMT has approached this Court contending that the award is not sustainable.
9. Mr. Seksaria submitted that the award was liable to be set aside essentially for three reasons. Firstly, that the dispute was beyond scope of reference. Secondly, the procedure adopted was not in accordance with Part 5/25 arbp1225.2012.odt I of the Arbitration and Conciliation Act, 1996, and was in breach of natural justice. Thirdly, the award was against the public policy. As far as dispute itself was concerned, it was contended that there was no question of seeking any refund since part of the equipment had already been installed to the satisfaction of the respondent. He, therefore, submitted that the order for refund of payments made was completely unjustified and beyond the scope of reference. He submitted that the respondent had filed 62 documents of which only 15 were annexed to the statement of claim. The rest of documents were tendered after filing the statement of claim and were introduced in the course of submissions without following any formal process of admission and denial thereby causing immense prejudice to the petitioner. It was contended that the respondent did not lead oral evidence to establish veracity of the documents and its contents that email tendered were not proved in accordance with law and although the arbitrator had recorded that admissibility of the documents is under challenge. The documents were simply tendered as evidence by annexing them and no oral evidence was lead. The arbitrator having relied upon the documents had violated principles of natural justice and followed procedure under Section 19 and therefore the award was bad in law as contended in grounds (E) and (F).
10. To a query from the Court, Mr.Seksaria submitted that the challenge in present petition is restricted to grounds (E), (F), (G), (H) and (M). 6/25
arbp1225.2012.odt He submitted that the arbitrator has travelled beyond the terms of contract. He invited my attention to ground (M) and clause 7(c) of the terms and conditions of the contract. He submitted that in view of no claim for liquidated damages there was no occasion to order refund. In support of his case, he relied upon provisions of clause 7(c) and clause 12.3 and submitted that there was no challenge to termination of contract and in absence of contractual provisions for refund, the order could not have been passed.
11. Mr.Seksaria contended that the award was liable to be set aside since it was in violation of the agreement and HPCL was in breach and HPCL's claim was not sustainable under the contract. He submitted that no evidence was led by HPCL before the Tribunal and the impugned award is opposed to the public policy. The termination of contract being unlawful in the light of counter claim, it was contended inter alia that the arbitrator had exceeded its authority by awarding amounts that were more in the nature of damages since the contract did not provide for refund of any amount. He, therefore, submitted that the award was liable to be set aside.
12. Mr.Seksaria in the course of his submissions invited my attention to the fact that HPCL was not desirous of leading any evidence since it had relied only on the documents and in absence of evidence being led, the arbitrator could not have concluded that HPCL was entitled to refund of the amount paid. He submitted that the award itself acknowledged the fact that 285 units had been installed and commissioned and were 7/25 arbp1225.2012.odt performing properly. It is only the remaining 266 units that were not commissioned. He submitted that 285 units were used and were in possession of HPCL and were not returned and HPCL was utilising the same at all material time and there was no justification for order of refund. Mr.Seksaria alluded to the fact that HPCL had not adduced any evidence and merely filed the documents in support of its claim. The documents could not be treated as evidence as contemplated under the Evidence Act. HPCL had not examined any witness so that TMT could have cross examined such person. An opportunity of cross examination was not available to TMT.
13. Mr.Seksaria invited my attention to the statement of claim in which HPCL had stated that in response to demand for refund TMT had vide letter dated 17th November, 2008 accepted delay on their part and requested HPCL to provide them an opportunity to demonstrate the efficacy of system at any of depots with two tankers at their cost. However, HPCL had demanded refund and threatened to invoke the arbitration agreement. According to TMT they have successfully demonstrated working of the system and also called upon HPCL to give them an opportunity to replace all devices with new devices. That TMT had agreed to replace existing devices without any additional cost and within the contract terms but this proposal was rejected by HPCL. It is submitted that even though proposal had been rejected, there 8/25 arbp1225.2012.odt was no occasion for refund since HPCL were using 285 units in respect of which were satisfactorily installed and commissioned. He submitted that TMT had denied the claim and had instead made a counter claim in a sum of Rs.1,70,56,977/- which came to be incorrectly rejected. He submitted that in support of counter claim, TMT had led evidence of two Executive Engineers Mr.Sanjeev Telang and Mr.Milind Dalal. It is further submitted that testing carried in January 2009 were found acceptable and hence the claim for refund was unsustainable.
14. In support of his contention Mr.Seksaria relied upon following judgments :
(i) Bi-Water Penstocks Ltd. vs. Municipal Corporation of Greater Bombay 2011 (3) Mh.L.J. 706;
(ii) Arbitration Petition No.1283 of 2010 dated 28th March, 2011 Sahyadri Earthmovers vs. L & T Finance Ltd. & Anr.;
(iii) Hemendra Rasiklal Ghia vs. Subodh Mody 2008 (6) Mh.L.J. 886;
(iv) Anvar P.V. vs. P.K. Basheer and Ors. (2014) 10 SCC 473;
15. Mr.Seksaria submitted that the arbitrator had no jurisdiction to order refund as he has now done and the arbitrator was clearly in error in considering the documents without the same having being proved by evidence as held in the case of Bi-Water Penstocks Ltd. (supra). In the case 9/25 arbp1225.2012.odt of Wazir Chand Karan Chand vs. Union of India and Anr., AIR 1989 Delhi 175, Delhi High Court had held that the arbitrator is not bound by the technical rules of procedure but he cannot ignore rules of natural justice. Even if the award is a non-speaking order, it should be in accordance with law and in consonance with principles of natural justice. In that case, the documents were not proved were admitted in evidence despite serious objections raised by the respondent. The learned Single Judge in that case held that the award suffered from non application of mind and deserved to be set aside. Wazir Chand (supra) also holds that accepting evidence behind the back of a party was held to be legal misconduct on the part of the arbitrator. In paragraph 18 of Bi-Water Penstocks Ltd. (supra) the Division Bench held after considering the case law on the subject and facts and circumstances of the case, that reading documents in evidence without the same being proved is an act of legal misconduct and violation of principles of natural justice. By receiving such documents in face of the objections of other side amounts to a procedural error which is in breach of principles of natural justice.
16. In Hemendra Rasiklal Ghia (supra) the Full Bench dealt with classification of documentary evidence, adjudication thereon. The Full Bench considered the question whether it is necessary for the Court to decide admissibility of the document before it is tendered in evidence. There were diverse views on the subject with some views to the effect that admissibility must be decided prior to the documents being exhibited and a 10/25 arbp1225.2012.odt contrary view that the admissibility of proof of documents can be reserved till judgment. The Full Bench after analysing the statutory provisions, had observed that as far as deficiency in stamp duty is concerned, the objection should be taken at the time of tendering document and before the document is marked. The objection relating to proof of document of which admissibility is in dispute must be judicially determined when it is marked as an Exhibit. Objection to the document which in itself is inadmissible in evidence can be admitted at any stage of the suit reserving decision on question until till final judgment in the case. The court trying the suit or proceedings as far as possible is expected to decide admissibility or proof of document. The Court can exercise discretion judiciously for the advancement of the cause of justice. The Court could always work out n its own modalities depending upon the peculiar facts of each case without causing prejudice to the rights of the parties. The aim should be to prevent miscarriage of justice and expediting the trial.
17. On the second question it was held that the objection to the admissibility or relevancy of evidence contained in the affidavit of evidence can be admitted at any stage reserving its resolution until final judgment, as held in the case of Ameer Trading Corporation Ltd. vs. Shapoorji Data Processing Ltd. (2004) 1 SCC 702 . Mr.Seksaria therefore submitted that in the facts and circumstances of present case admissibility of the documents itself was called into question and has not been decided. Mr.Seksaria then 11/25 arbp1225.2012.odt placed reliance on the decision of the Supreme Court in Anvar P.V. (supra) and relied upon the observations of the Court in paragraph 17 and submitted that only if the electronic record is duly produced in terms of Section 65-B of the Evidence Act, would the question arise as to genuineness thereof and reference can be made to Section 45-A, opinion of Examiner of Electronic Evidence. The Evidence Act does not contemplate or permit proof of an electronic record by oral evidence, if the provisions under Section 65-B of the Evidence Act are not complied with. The Supreme Court further held that proof of electronic record is object to a special provision introduced by the Information Technology Act. Section 65-A read with Sections 59 and 65-B are sufficient to hold that the special provisions of evidence relating to the electronic record shall be governed by the procedure prescribed under Section 65-B of the Evidence Act. That is a complete code in itself. Being a special law, the general law under Section 63 and Section 65 would yield to the specific provision. Mr.Seksaria submitted that in the present case several items and documents were sought to be introduced into evidence such as electronic mails which had not been proved. He therefore submitted that standard of proof adopted by the arbitral tribunal was unacceptable.
18. Mr.D'Souza, learned counsel appearing for HPCL supported the award and contended that there was no merit in the challenge. He submitted that after the statement of claim was filed on 7th September, 2009 the arbitration proceedings were held on 6th November, 2009. The parties had 12/25 arbp1225.2012.odt meetings and while HPCL was represented by their Deputy General Manager and other officers including Senior Manager (Legal), TMT was represented by its CEO, Vice President and its Advocate. While setting out the schedule for hearing, the parties arrived at following a procedure which required TMT to file sur-rejoinder by email and courier. Both parties were directed to file draft issues by email and thereafter the arbitrator was to frame issues. After commencement of hearing, Mr.D'Souza submitted that HPCL were to make oral submissions on 27th November 2009 and TMT were to make oral submissions on 3rd December, 2009.
19. The agreed procedure therefore did not leave any room for the objections now sought to be raised. He therefore submitted that there was no irregularity as sought to be contended on behalf of TMT. At the subsequent meeting on 3rd December, 2009 after recording compliance, the submissions on behalf of HPCL were heard and in the course of submissions HPCL had opposed application filed by TMT to lead oral evidence. On that date the further course of action was agreed by both parties whereby HPCL was to file a written statement by email and the proceedings were adjourned to 28th December, 2009 for further hearing of oral evidence and a further course of action was agreed by both parties. On 28th December, 2009, the minutes to which my attention was drawn by Mr.D'Souza record that TMT would file their reply written submissions by email and inter alia agreed to the venue, sharing of fees/expenses and time fixed for filing evidence by way 13/25 arbp1225.2012.odt of proof affidavits of the two witnesses. Thus, it was submitted that the arbitrator permitted TMT to lead evidence and there was no objection as to the fact that HPCL did not lead oral evidence. The two proof affidavits were filed at a subsequent meeting held on 9th March, 2010, on behalf of TMT one sworn by Mr.Milind Dalal and the other one by Mr.Sanjeev Telang. The proceedings indicate that after hearing the parties it was noted HPCL were to file counter affidavits or proof affidavits in response to proof affidavits filed by the TMT. If HPCL were filing proof affidavit/s, TMT would be at liberty to file counter affidavits within time specified and the deponent of affidavits were liable to be cross examined. The proceedings were then adjourned for cross examination of the witnesses. These witnesses were then cross examined as seen from the minutes of meeting dated 12th April, 2010 and 4th May, 2010. The matter came to be adjourned to 3rd September, 2010 and that date was rescheduled to 13th September, 2010. Oral arguments remained incomplete and the proceedings were then continued on 11th October, 2010. The proceedings continued on further dates when oral submissions were advanced.
20. Mr.D'Souza further pointed out that on 30th March, 2011 the arbitrator stated at the outset that after hearing parties and after perusing the documents certain clarifications had been sought and the matter came to be adjourned on 5th August, 2011 since both sides were given time to resolve the issue. Both sides sought further time but no settlement could be reached. 14/25
arbp1225.2012.odt In these circumstances, it was contended that there was no dispute whatsoever about the documents that have been placed on record. All the documents were filed on record without any objection. In the circumstances there was no occasion for TMT to now contend that the documents in question, could not have been considered without HPCL leading evidence to prove these documents.
21. Mr.D'Souza submitted that there was no substance in contention of the petitioner inasmuch as emails referred to and in respect of which grievance is made, were in fact referred in the affidavit of evidence filed by Shri Telang. Even during cross examination, reference was made to email and no allegation of the fabrication had ever surfaced and the only ground sought to be urged was that no affidavit of evidence was filed by HPCL. The only defence sought to be taken is that the petitioner was not entitled to refund. The petition does not make out any ground that refund was beyond the scope of reference. None of the grounds in the petition have been taken earlier and these contentions are taken for first time by the counsel for the petitioner. Furthermore, the cross examination was sought as seen from the minutes of meeting dated 9th March, 2010. The judgment cited were not relevant since all emails were admitted and parties proceeded on that basis. He submitted that there is no question of procedural inconsistency or violation of principles of natural justice. He submitted that even the provisions for purchase and aspect of retention 15/25 arbp1225.2012.odt money was not relevant to the issue. The contract was terminated only because of inability of the petitioner to meet requirements. They claim to be experts in field yet faced with difficulties which were duly acknowledged by them that it would be appropriate to replace all units since it was not possible to utilise equipment at site.
22. In my view, it appears that the equipment has become very unsuitable for the respondent which the petitioner offered to replace all units. In view of offer to replace all units the respondent had called upon the petitioner to take away the units already installed and in that behalf correspondence indicates that the respondent called upon the petitioner to remove units failing which they would be removed by the respondent themselves at risk and cost of the petitioner. Neither party appears to have gone into this aspect of the matter. The award is also silent as to whether the equipment was removed by the respondent at the cost of the petitioner. In any event there is no claim in that regard.
23. In this background, I am inclined to accept the contentions canvassed by Mr.D'Souza that there was no objection to the documents filed by the respondent being taken into consideration. In fact the respondent's witness Shri Telang refers to document at Serial No.1, 3, 7, 9, 10, 12, 19, 21, 22 and 62. These documents were placed on record before the cross examination of Shri Telang. In the circumstances, Mr.D'Souza's submissions that there is no substance in challenge to the documents being taken on 16/25 arbp1225.2012.odt record, deserves to be accepted. The procedure, in my view, was agreed, pleadings were filed, documents filed, draft issues were exchanged , issues framed and arguments were heard. It is obvious that the respondent could not have been forced to examine a witness. The petitioner was permitted to lead oral evidence and the documents were marked in accordance with agreed procedure. The claim for refund was very much part of the respondent's claim. The petitioner's contention that the documents came on record on different dates therefore prejudice was caused to the petitioner has no substance. Mr.D'Souza has relied upon a list of dates from which it is clearly seen that all documents in question were on record prior to the witness being cross examined.
24. Mr.D'Souza distinguished the judgments relied upon by the petitioner and specifically in the case of Bi-Water (supra) the facts indicate that the documents were filed after admission of evidence unlike in the case in hand. In Bi-Water (supra), the admission of documents was not fair and proper, cross examination was also denied although repeated objections were on record.
25. In rejoinder, Mr.Seksaria submitted that the respondent's case ought not to be accepted in view of the fact that the judgment in case of Bi- Water (supra) clearly supports the petitioner's case of breach of principles 17/25 arbp1225.2012.odt of natural justice. There has been procedural error which has resulted in a completely illegal award. The objections were raised and were recorded yet there was no process of admission and denial. The question of admissibility of the document was also raised, making specific reference to counter affidavit filed by Mr.M.B.Karkera to the meeting dated 30th March, 2011 wherein the arbitrator recorded in paragraph 2 that after hearing the parties and after perusing the documents certain issues/areas for clarification have emerged such as marking of Letter of Intent dated 23rd October, 2006 as a document referred to in paragraph 47 of the affidavit of Shri Sanjeev Telang's Proof affidavit, termination clause and in the contract etc. and counsel for both sides were requested to clarify the issues which was satisfactorily done. The Tribunal also recorded that during the course of proceedings, the parties were attempting mutual settlement and the arbitrator had encouraged it and therefore with consent of the parties the matter was adjourned to 1st June, 2011. Talks of settlement continued even on the date of next meeting dated 5th August, 2011. Once again the proceedings were adjourned to 9th September, 2011. In view of above, the procedure of marking document was also followed by both parties. In this view of the matter, it is evident that there is no substance in challenge on the basis that the documents were marked in violation of principles of natural justice of that documents were marked unilaterally or that there was no attempt to prove the same. From the list of dates provided by Mr.D'Souza and which has not been 18/25 arbp1225.2012.odt controverted by the petitioner, it is evident that all documents were filed on 7th April, 2010. The only objection raised by the petitioner was to the counter affidavit filed by the respondent in the arbitration proceedings which commenced on 10th April, 2010 with the cross examination of Shri Telang. This continued till 7th September, 2010 when Shri Telang filed an affidavit praying for a declaration that HPCL did not lead any evidence and the statement of claim ought to be rejected. HPCL has filed its response to the same and though arbitration continued and the written statements were also filed. It is not case of the petitioner that the issue of refund and also lack of proof had been urged at the time of submissions made before the Tribunal and yet the Tribunal failed to consider such submissions.
26. The challenge to the award as canvassed by Mr.Seksaria is on the basis that the award is against public policy of India. The arbitrator had not followed proper procedure in permitting HPCL to rely upon documentary evidence without proof of its contents and that the procedure followed had led to miscarriage of justice. Secondly, it was contended that the award was bad in law since it was beyond terms of the agreement inasmuch as there was no provisions in the agreement for refund of the amount due and that awarding refund would amount to allowing the damages without any proof. He therefore submitted that in absence of proof of actual damages there was no occasion for refund of the amount. It is by now well settled that it is not open to the Court to re-appreciate the evidence 19/25 arbp1225.2012.odt and it is case of HPCL that it had in fact asked the petitioner to remove the equipment installed and refund the price. The statement of claim in paragraph 17 records the fact that by letter dated 8th October, 2008 HPCL called upon TMT to remove equipment installed and refund price as otherwise HPCL will be constrained to carry out removal of equipment at risk and costs of TMT and it is in response to this demand that TMT vide letter dated 17th November, 2008 had accepted delay and requested HPCL to provide an opportunity to demonstrate working of equipment.
27. In reply to the counter statement a copy of which is tendered by counsel, the petitioners contended in paragraph 55 that the contract has been repudiated unlawfully by HPCL and hence TMT suffered a huge loss. It was contended that the termination of contract was unlawful and the claim was devoid of merits. It is evident that the project undertaken by TMT was unsatisfactory as evident from TMT's response to HPCL's letter to remove all equipment and refund the amount. This, in my view, was considered by the arbitral tribunal in its award. In paragraph 3.2.1. of the award, the sole arbitrator has observed thus :
"3.2.1. According to the claimant (HPCL), the respondent started the work in December 2006 i.e. immediately on receipt of the Purchase Order, but was not able to complete the work as per PO terms within the target date. Even 20/25 arbp1225.2012.odt though installation was complete, the system was not stable and the claimant was not able to track the trucks. The core purpose of the contract itself was for providing the system for tracking the trucks on line. The claimant further contends that an amount of Rs.56,15,295/- was paid to the respondent on completion of the installation and commissioning of 285 units, based on the confirmation from the locations. However, during the stabilization period, the performance of the system was not consistent and the system installed by the respondent was giving erratic readings and thus the system could not be used by the claimant for the stated objectives. Even though the respondent had claimed payment for all the 551 units installed but since the units were not commissioned, payment for the balance 266 units were not made. Since the installation was completed, the claimant had arranged for M/s.Airtel connection and started paying the telephone charges to M/s.Airtel even without the system being in use, thereby incurring telephone expenses. In spite of various reminders, the respondent could not rectify the system and, left with no option, the claimant had to terminate the contract for non-performance/bad performance/poor 21/25 arbp1225.2012.odt workmanship and ask for refund of Rs.56,15,295/- with interest etc."
28. In analysing and recording his findings on the issues framed, the arbitrator has held that the claim was maintainable and the preliminary objection on maintainability was rejected. Furthermore, on the aspect of HPCL not examining any witness, the arbitrator observed that HPCL did not wish to lead evidence. TMT did not seek to summon any HPCL personnel. HPCL was permitted to rely upon the documentary evidence as contemplated under Sections 23 and 24 of the Act which provide for filing of the pleadings. As far as the hearing is concerned, the arbitral tribunal was empowered to decide whether to hold oral hearing for presentation of evidence or for oral arguments or whether the proceedings shall be conducted on the basis of the documents and other materials. Section 24(1) of the Act reads thus :
"24. Hearing and written proceedings :
(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents, and other materials.
Provided that the arbitral tribunal shall hold oral hearings, at an, appropriate stage of the proceedings, on a request by a 22/25 arbp1225.2012.odt party, unless the parties have agreed that no oral hearing shall be held:
[Provided further that the arbitral tribunal shall, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and may impose costs including exemplary costs on the party seeking adjournment without any sufficient cause,]"
29. Analysis of the provisions makes it clear that the tribunal is empowered to decide whether to hold oral hearings/arguments or not. That the proceedings in the case at hand were conducted on the basis of documents and other materials. Perusal of the various minutes of meetings makes itself evident as canvassed by Mr.D'Souza that at no stage did TMT object to the procedure the Tribunal followed. In the present case, the documents have not been disputed. TMT had not called into question the procedure being followed during the hearing. The minutes of meeting record various directions received by the Tribunal from time to time in presence of the parties and with their consent a procedure has been followed consistently by the parties. The claim for refund was made well within time. On the aspect of documentary evidence, in paragraph 3.5.2.5 the arbitrator has in his analysis concluded that the rules of procedure was agreed as 23/25 arbp1225.2012.odt contemplated in Section 19 of the Act. Furthermore, the arbitral tribunal is not bound by the Code of Civil Procedure or Indian Evidence Act. However, the Tribunal was bound by Sub-Section (2) of Section 19 and this has been done. The views of both sides were considered and directions were issued as to procedure to be followed and the parties agreed to follow and did follow such procedure. There was no occasion for any disagreement on this aspect and even otherwise under Sub-Section (3) of Section 19 the Tribunal was entitled to conduct proceedings in the manner it considered appropriate which included power of the Tribunal to determine material and weight of any evidence. This is specifically provided for sub-section (4) of Section 19. In the course of submission, Mr.Seksaria had invited my attention to paragraph 3.5.2.5. wherein the arbitrator recorded that HPCL had produced 62 documents covering entire transactions in dispute and TMT had not questioned the veracity of these documents but had only questioned authenticity which had been considered by the Tribunal in keeping with powers of the Tribunal under sub-section 9(4). In paragraph 3.5.3.3. the arbitrator has concluded that both parties were given an opportunity to adduce evidence. HPCL decided not to adduce oral evidence and relied on documentary evidence whereas TMT led oral evidence, in addition to documentary evidence. Both sides were given sufficient opportunity to put forth their case in accordance with law and the arbitrator had not compelled to any party to lead evidence on their behalf. Once the documents came on 24/25 arbp1225.2012.odt record without any reservations the question of assailing procedure in considering the weight of the evidence the 62 documents carried cannot be challenged on the ground of admissibility. The documents were taken on record pursuant to consensual procedure and some of these documents were also referred to by the petitioner's witness as seen from the reference made in the depositions.
30. In this view of the matter in the procedural context and as to public policy aspect of the challenge I am unable to accept the contentions canvassed by Mr.Seksaria. I do not find any justification in the contention of the petitioner that the award was against public policy of India or not in accordance with law as is sought to be made out by the petitioner. No other ground has been pressed into service to challenge the award. In the circumstances I find no merit in the challenge and accordingly I pass the following order :
(a) Petition is dismissed.
(b) No order as to costs.
(A.K. MENON,J.) Digitally signed Hemant by Hemant Chandersen Shiv Chandersen Date:
Shiv 2018.09.27
12:32:45 +0530
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