Delhi District Court
Sh. Sanjay Kumar Sehgal vs Pnb Housing Finance Ltd on 16 February, 2023
IN THE COURT OF SH. SANJEEV AGGARWAL,
DISTRICT JUDGE (COMMERCIAL)-03, SOUTH,
SAKET COURTS, NEW DELHI
OMP (COMM) 25/2019
CNR NO. DLST010075552019
1. Sh. Sanjay Kumar Sehgal
SKA 115, Shipra Krishna Vista
Indrapuram, Ghaziabad
Uttar Pradesh - 201010
ALSO AT :
Sanjay Kumar Sehgal
Flat No. F-A/1205, 12th Floor
French Arcade, Sector-14
Kaushambi, Ghaziabad
U.P. - 2010001
2. Simmi Sehgal
SKA 115, Shipra Krishna Vista
Indrapuram, Ghaziabad
Uttar Pradesh - 201010
ALSO AT :
Sanjay Kumar Sehgal
Flat No. F-A/1205, 12th Floor
French Arcade, Sector-14
Kaushambi, Ghaziabad
U.P. - 2010001
...Petitioners
Versus
1. PNB Housing Finance Ltd.
Registered Office at 9th Floor
Antriksh Bhawan, 22 Kasturba Gandhi Marg
New Delhi - 110001
OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 1 of 21
2. Sh. Jaswant Singh
Sole Arbitrator
781, Saket Lawyers Chamber
Saket Courts, Delhi
...Respondents
Date of institution of petition : 15.11.2019
Date of reserving judgment : 08.02.2023
Date of pronouncement : 16.02.2023
JUDGMENT
1. Vide this judgment, I shall dispose off the present petition / objections filed u/S. 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as an Act) by the petitioners against the arbitration award dated 10.08.2019, passed by Ld. sole arbitrator Sh. Jaswant Singh.
2. Brief facts which can be taken out from the relevant para(s) of the award dated 10.08.2019 are as under :
1. The claimant, PNB Housing Finance Ltd, is a company incorporated under the Companies Acct, 1956 having its registered office at 9th Floor, Antriksh Bhawan, 22 Kasturba Gandhi Marg, New Delhi -110001. The PNB Housing Finance Ltd. is a listed public company and is registered under the National Housing Bank Act, 1987, and is also a notified Company under the Securitization OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 2 of 21 and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 by Ministry of Finance on 10/11/2003. The Claimant is also registered as a Non-
banking financial company with the Reserve Bank of India. The claimant is engaged, inter - alia in the business of rendering financial / credit facilities, in the form of various loans i.e. Lon Against Property, Mortgage Loans and Home Loans to the intending borrowers.
2. As per the claimant, the respondents approached the claimant for availing of a loan facility by way of creation of equitable mortgage of the property bearing "FLAT No. F-A/1205, 12th Floor, French Arcade, Sector - 14, Kaushambi, Ghaziabad, Uttar Pradesh - 2010001"
(herein after referred to as the "said property") and the claimant considered the request of the respondent mutual deliberations and consultation were held and there after parties agreed to go through the loan documents.
3. The respondents agreed to the terms and conditions of the loan. The respondents agreed to repay the loan with and interest and equated monthly installments of Rs. 25064/- (Twenty Five Thousand and Sixty Four Only) with interest and charges. The respondent also agreed to keep the said property as security with the claimant. The claimant agreed to finance a sum of Rs. 44,50,000/- (Rupees Forty Four Lakhs and Fifty Thousand only), OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 3 of 21 however as on date of filing of the claim petition, the claimant had disbursed the amount of Rs. 28,37,397/- (Rupees Twenty Eight Lakhs Thirty Seven Thousand Three Hundred and Ninety Seven Only). The respondents signed and executed the loan documents having understood completely the terms of conditions of the loan Agreement. The respondents consented to mortgage the property No. "FLAT No. F-A/1205, 12th Floor, French Arcade, Sector - 14, Kaushambi, Ghaziabad, Uttar Pradesh - 2010001" with the claimant. They also agreed not to assign, transfer pledge, charge or in any way encumber the property against the interest of the lender during the continuation of the liability of the loan.
4. That the loan amount was disbursed to the builder on the request of the respondents. After having availed of the said loan, respondent started making default in payments of the installments, and violated the schedule/terms and conditions of the loan agreement. The claimant company recalled the loan vide their notice dated 13/02/2017. The respondents were called upon to pay the entire outstanding amount of Rs. 30,35,375.52/- (Thirty Lakhs Thirty Five Thousand Three Hundred Seventy Five and Fifty Two Paise only) which was due and payable by the respondents as on 10/02/2017. The copy of the loan recall notice dated 13/02/2017 were sent to the respondents OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 4 of 21 through speed post.
5. The respondents did not respond to the recall notice dated 13/02.2017 and then the claimant issued the reference letter to this Tribunal and this Tribunal had issued the concurrence to the said appointment vide its order dated 03.03.2017.
6. The arbitrator having entered upon the reference on 03.03.2017 had also issued the notice of appearance dated 03.03.2017 to the respondents for their appearance on 31.03.2017 before the Tribunal at 12:30 P.M. at Chamber No. 781, Saket Lawyers Chamber, Saket Courts, Delhi. On 31.03.2017, Ld. Counsel for the claimant appeared and respondent No.1 in person also appeared on the said date and the matter was adjourned for supplying of the documents to the Ld. Counsel for the respondents on 29.04.2017.
7. On 29.04.2017, Copy of the statement of claim along with complete set of documents supplied to the Ld. Counsel for the respondents and the matter was adjourned for filing of reply on behalf of the respondents on 22.05.2017. On this date the Ld. Counsel for the respondents sought time for filing the reply and the matter was adjourned for 06.07.2017. On, 06.07.2017, Ld. Counsel for the respondents filed the reply to the statement of claim and the copy was also supplied to the OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 5 of 21 Ld. Counsel for the claimant and accordingly the matter was adjourned for filing of Replication/Rejoinder on behalf of the claimant on 08.08.2017 and after several adjournments, the rejoinder on behalf of the claimant was filed on 22.09.2017 and the Evidence by way of an affidavit on behalf of the claimant on 22.11.2017. Thereafter the Evidence by way of an affidavit on behalf of the respondents on 08.02.2018.
8. On 08.02.2018, on the joint request of the parties, the mandate for passing of arbitration award was extended for the period of six months calculated from 03.03.2017 and the matter was adjourned for arguments on 08.03.2018 and thereafter the matter was adjourned for Arguments on 20.04.2018, 07.05.2018, 10.07.2018, 02.08.2018, 31.08.2018. I have heard both the counsel for the parties. However as the mandate was about to be terminated on 03.09.2018, therefore the Ld. Counsel for the claimant has moved an application before the District Court, Saket Courts, Delhi and vide order dated 23.07.2019, the Hon'ble District Judge, Saket Courts has extended the mandate of the arbitrator for the period of 02 weeks for passing of award and the matter was taken on 29.07.2019 as directed by the Hon'ble Court.
9. On 29.07.2019, Ld. Counsel for the claimant appeared and arguments on the side of claimant heard. The OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 6 of 21 respondent no. 1 seeks adjournment on the ground that his counsel is not available and in the interest of justice, the matter was listed on 31.07.2019 for the arguments of the respondent.
10. On 31.07.2019. Ld. Counsel for the respondents appeared and has filed the additional affidavit in support of the evidence. Partial arguments heard on behalf of the respondents and the matter was again adjourned for the remaining arguments on 08.08.2019.
11. On 08.08.2019, I have heard the remaining arguments on behalf of the respondents and the case was reserved for passing of award on 10.08.2019.
CLAIM RECOVERY OF RS.30,35,375.52/- (RUPEES THIRTY LAKH THIRTY FIVE THOUSAND THREE HUNDRED SEVENTY FIVE AND FIFTY TWO PAISE ONLY).
12. I have perused the claim petition, the written statement and replication filed by the parties. I have also perused the Evidence filed by the parties by way of evidence. The claimant in support of their evidence has exhibited the copy of power of attorney as Ex.CW1/A, copy of Loan Agreements and other loan related documents exhibited collectively as Ex.CW1/B (colly). Copy of Loan recall notice dated 13.02.2017 alongwith dispatch proof exhibited as Ex. CW1/C, copy of statement OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 7 of 21 of account and foreclosure dated 10.02.2017 exhibited as Ex. CW1/D, copy of the reference letter dated 28.06.2017 alongwith dispatch proof exhibited as Ex.CW/E. The respondents have produced the copy of flat buyer agreement Ex.DW1/1. Tripartite Agreement Ex.DW1/2, Loan Statement account dated 03.10.2016 Ex.DW1/3, Complaint dated 05.02.2017 to SHO, PS Hauz Khas- Ex.DW1/4, Legal notice dated 22.05.2017 Ex.DW1/5, Reply notice dated 10.07.2017 to the legal notice alongwith postal receipts Ex.DW1/6 (colly), Complaint to Jt. Commissioner, EOW dated 22.11.2017, Ex.DW1/7, Photograph showing possession taken over the bank Ex.DW1/8, photocopy of possession Notice showing possession of the flat Ex.DW1/9, the copy of FIR bearing no. 0068/2019 Ex.DW1/10, the copy of FIR bearing no. 0609/2018 Ex.DW1/11 and I have also heard Ld. Counsel for the parties, and the record has been perused closely.
13. The claimant has filed the statement of claim on 31.03.2017. According to the statement of claim, Sh. Sandeep Kumar is the authorized signatory of the claimant and is authorized to act for and on behalf of the claimant. According to the statement of claim the respondent no. 1 being the borrower and respondent no. 2 being the co-borrower had availed the loan facility of total to Rs. 44,50,000/- from the claimant under Loan OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 8 of 21 Agreement for purchasing of the property being Flat no. F-A/1205, 12th floor, French Arcade, Sector-14, Kaushambi, Ghaziabad, Uttar Pradesh 2010001 and on the request of the respondents, the sum of Rs. 28,37,397/- was disbursed. The said housing loan was repayable in equitable installments of Rs. 25064/- each alongwith applicable interest. For securing the loan facility availed by the respondents, the said property Flat no. F-A/1205, 12th floor, French Arcade, Sector-14, Kaushambi, Ghaziabad, Uttar Pradesh 2010001 was mortaged with the claimant after disbursement of loan facility as per the terms of the loan agreement by way of depositing of original title documents of the property.
14. The claimant, in support of the claim, has placed on record the power of attorney in favour of Sh. Sandeep Kumar whereby he has been authorized to institute, sign and verify the statement of claim and to do all other acts, deeds and things necessary for the proper adjudication of the matter in dispute. Hence I observe that the claim petition has been filed against the Respondents correctly, according to rules and prescribed laws.
15. The claimant has placed on record the copy of the loan agreement along with other loan related documents executed between parties comprising of major terms of the loan facility availed by the respondents. According to OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 9 of 21 the said documents, the claimant sanctioned the said loan vide loan account No. 00166660004358 on 24.10.2013 and this loan agreements empower the claimant for the appointment of Sole Arbitrator for resolution of the disputes between the parties. The contents of the arbitration is reproduced as under:-
"Any and all disputes, claims, difference arising out of or in connection with this agreement and the schedule or the performance of this agreement shall be settled by arbitration to be referred to a sole arbitrator to be appointed by the PNBHFL and the award thereupon shall be binding upon the parties to this agreement. The place of the arbitration shall be in Delhi or any other place as arbitrator may decide, in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and any statutory amendments thereof. The proceeding of Arbitration Tribunal shall be conducted in English language. Each party has to bear cost of representing its case before the Arbitrator. Costs and charges of Arbitrator to be shared equally unless/ otherwise provided for the award".
"The borrower further agrees that all claims, difference and disputes, arising out of or in relation to dealing / transaction made in pursuant to this agreement including any question whether such dealing transaction have been entered into or not, shall be subject to the exclusive jurisdiction of the Courts at Delhi only"
16. The respondents in their written statement have OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 10 of 21 completely denied the liability as per the Loan agreement, the execution of the Loan documents, assurance made by the respondents for making regularly payments of the EMI etc. The respondents have also contended that the claimant is having no cause of action for filing the claim petition against the respondents. The Respondents has also alleged that the claimant has been working in collusion and connivance with the Builder namely VXL Realtors Pvt. Ltd. The respondents have stated in their written statement and evidence has also contended that this Tribunal has no jurisdiction to try and decide the present claim as this Tribunal has been appointed without taking any prior consent of the respondents and this Tribunal has been appointed prematurely without accruing the cause of action in favour of the claimant. It is also contented by the Respondents, that this Tribunal is working under the hands and gloves of the claimant.
3. The said arbitration award dated 10.08.2019 has been challenged on the following main grounds :
a) That the Ld. Arbitrator has committed legal misconduct and he has not decided the arbitration proceedings on merits, as also on the basis of the terms and conditions of the agreement between the parties and decided the arbitration without any legal jurisdiction.
OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 11 of 21
b) It is further stated that the Ld. Arbitrator has also ignored the substantial law on the interest contained in the Interest Act and also ignored the settled law, pronounced by the Hon'ble Supreme Court. It is further stated that the Ld. Arbitrator has also ignored the provisions of Interest Act, 1976, as no interest could be awarded to the respondent, since no notice of the interest was ever given by respondent no. 1.
c) The Ld. Arbitrator has also failed to appreciate that two loan agreements i.e. one signed between the petitioners and respondent no. 1 and the other tripartite agreement was also signed between the respondent no. 1, petitioners and the builder. However, the Ld. Arbitrator passed the award only on the basis of the loan agreement fully ignoring the tripartite agreement or the terms and conditions thereof, as per which the builder had the liability to compensate the respondent no. 1 in view of the non fulfillment given by the builder against the bank.
d) It is also stated that the Ld. Arbitrator has failed to appreciate that the loan agreement and tripartite agreement were to be appreciated simultaneously on the premise that the builder and respondent no. 1 were in collusion with each other, therefore, it is stated that the said award is liable to be set aside.
4. Reply has been filed by the respondent no. 1 to the said petition u/S. 34 of the The Arbitration and Conciliation Act, 1996, in which sum OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 12 of 21 and substance, it is stated by respondent no. 1 that the award passed by the Ld. Sole Arbitrator on 10.08.2019 was duly received by the petitioners and in order to avoid the payment of the legitimate dues of respondent no. 1 company, the present objections have been filed.
It is stated that arbitration award does not conflict with 'Public Policy of India' nor there is any illegality or jurisdictional error in the impugned award. Further no cause of action ever accrued for filing the present petition u/S. 34 of the Act.
The arbitration proceedings were well conducted by the Ld. Arbitrator in a fair and proper manner after giving full opportunities to both the parties and who has passed the award on the principle of natural justice and the material available on the record. Therefore, the present petition u/S. 34 of the Act is not maintainable. The petitioners have filed the present petition, as if it was an appeal against the arbitration agreement, which is not permissible as per Section 34 of the Act and the arbitration award can only be set aside on limited grounds provided u/S. 34(2)(b)(ii) of the Act and not on any other ground.
It is further stated that the copy of the reference notice was served upon the petitioners, who fully participated in the proceedings and on the basis of merits, the arbitration award was passed.
Regarding the tripartite agreement, it is stated that only one loan agreement was signed by the petitioners and respondent no. 1 bank, whereas other was tripartite agreement between the respondent no. 1, petitioners and builder, however, it is submitted that the loan facility was extended only on the basis of formal request made by the petitioners, who OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 13 of 21 was desirous of buying a property from the builder of their choice only. Therefore, the repayment of loan EMIs was the sole responsibility of the petitioners, which has not been adhered to by the petitioners. Therefore, it is stated that the present petition u/S. 34 of the Act has no merits and is liable to be dismissed.
5. Ld. Counsel for respondent no. 1 has relied upon the following judgment(s) in support of his contentions :
a) Bharat Lal Maurya Vs. Godrej & Boyce Mfg. Co. Ltd. ILR (2014) III DELHI 2188 OMP;
b) Swan Gold Mining Limited Vs. Hindustan Copper Limited (2015) 5 Supreme Court Cases 739;
c) MMTC Limited Vs. Vedanta Limited (2019) 4 Supreme Court Cases
163.
6. I have gone through the rival contentions.
7. It is settled law that the Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even by the Court as a Court of law could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are those mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 14 of 21 sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
8. The arbitration clause between the parties is not disputed, which is reproduced as under :
"Any and all disputes, claims, difference arising out of or in connection with this agreement and the schedule or the performance of this agreement shall be settled by arbitration to be referred to a sole arbitrator to be appointed by the PNBHFL and the award thereupon shall be binding upon the parties to this agreement. The place of the arbitration shall be in Delhi or any other place as arbitrator may decide, in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and any statutory amendments thereof. The proceeding of Arbitration Tribunal shall be conducted in English language. Each party has to bear cost of representing its case before the Arbitrator. Costs and charges of Arbitrator to be shared equally unless/ otherwise provided for the award".
"The borrower further agrees that all claims, difference and disputes, arising out of or in relation to dealing / transaction made in pursuant to this agreement including any OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 15 of 21 question whether such dealing transaction have been entered into or not, shall be subject to the exclusive jurisdiction of the Courts at Delhi only"
As per the said clause, the power to appoint the arbitrator was only available with the respondent no. 1 i.e. PNBHFL.
9. Regarding the said unilateral appointment of the arbitrator, it has been held in the judgment Perkins Eastman Architects DPC & Anr. Vs. HSCC (India) Ltd. (supra), in para 16 as under :
"16....But, in a case where only one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or charting the course for dispute resolution. Naturally, the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator. That has to be taken as the essence of the amendments brought in by the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016) and recognised by the decision of this Court in TRF Limited (2017) 8 SCC 377."
However, in the present case, the petitioners fully participated in the arbitration proceedings and had also filed written arguments before the Ld. Arbitrator.
10. Further, it has been held in the judgment Kanodia Infratech Limited Vs. Dalmia Cement (Bharat) Limited O.M.P. (COMM) 297/2021 & I.As.12902-12904/2021 decided on 08.11.2021, para 40 of which is reproduced as under :
40. In view of abovesaid narration, this Court is of the opinion that appointment of learned Arbitrator by the respondent was OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 16 of 21 never objected to by the petitioner, who had actively participated in the arbitration proceedings, which is evident from the fact that as many as 45 orders were passed by the learned Arbitrator during pendency of arbitral proceedings. Moreover, the learned Arbitrator himself is a retired Judge of Punjab and Haryana High Court and his integrity cannot be doubted. Accordingly, the case of petitioner challenging the mandate of Arbitral Tribunal is hereby rejected.
The said judgment is squarely applicable to the peculiar facts and circumstances of the present case. Since the petitioners had not objected to the said unilateral appointment of the arbitrator and actively participated in the arbitration proceedings, as is evident from the arbitration record and moreover, the Ld. Arbitrator himself was a Retired Judge of District Courts, therefore, his integrity cannot be doubted, therefore, the challenge to the said arbitration award on this ground is rejected.
11. Further, in the judgment Bharat Lal Maurya Vs. Godrej & Boyce Mfg. Co. Ltd. (supra), relied upon by Ld. Counsel for respondent no. 1, it has been held as under :
"22. The powers exercised by the Court while deciding objections under Section 34 of the Act are not appellate powers. The Court does not sit as a Court of appeal. If the Arbitral Tribunal has taken a plausible view, the Court while dealing with objections under Section 34 would not substitute its view for the view of the Arbitral Tribunal even in a case where the Court were to come to a conclusion that a different view is possible from the view taken by the Arbitral Tribunal, provided the view taken by the Arbitral Tribunal was a plausible view. The Court entertaining objections under Section 34 is not to appreciate or re-appreciate the evidence for the purposes of returning a finding of fact. The findings of fact returned by the Arbitral Tribunal are not to be interfered with unless they are perverse or erroneous on the face of the record . No such OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 17 of 21 perversity or error apparent has been pointed out in the present case. The finding s of the Arbitral Tribunal that the agreement being unregistered and insufficiently stamped and thus inadmissible in evidence and further that no clause of the said agreement can be enforced, are the finding s in accordance with the settled judicial principles.
23. The Supreme Court of India in the case of M C D ERMOTT IN TERNA TIONA L INC . VERSUS B URN S TANDARD CO. LTD. : 2006 (11) SCC 181 has laid down as under:
"35. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."
24. The Supreme Court of India in the case of ONGC LTD . VERSUS SAW PIPES LTD ., (2003) 5 SCC 705 has laid down as under:
"54. It is true that if the Arbitral Tribunal has committed mere error of fact or law in reaching its conclusion on the disputed question submitted to it for adjudication then the court would have no jurisdiction to interfere with the award. But this would depend upon reference made to the arbitrator:
(a) if there is a general reference for deciding the contractual dispute between the parties and if the award is based on erroneous legal proposition, the court could interfere; (b) it is also settled law that in a case of reasoned award, the court can set aside the same if it is, on the face of it, erroneous on the OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 18 of 21 proposition of law or its application; and (c) if a specific question of law is submitted to the arbitrator, erroneous decision in point of law does not make the award bad, so as to permit its being set aside, unless the court is satisfied that the arbitrator had proceeded illegally."
25. The Supreme Court of India in the case of M AHARASHTRA SEB V. S TERILITE INDUSTRIES (INDIA ) 2001 (8) SCC 482 has laid down as under:
"9. The position in law has been noticed by this Court in Union of India v. A.L. Rallia Ram [AIR 1963 SC 1685 : (1964) 3 SCR 164] and Madanlal Roshanlal Mahajan v. Hukumchand Mills Ltd. [AIR 1967 SC 1030 : (1967) 1 SCR 105] to the effect that the arbitrator's award both on facts and law is final; that there is no appeal from his verdict; that the court cannot review his award and correct any mistake in his adjudication, unless the objection to the legality of the award is apparent on the face of it. In understanding what would be an error of law on the face of the award, the following observations in Champsey Bhara & Co. v. Jivraj Balloo Spg. and Wvg. Co. Ltd. [(1922-23) 50 IA 324 : AIR 1923 PC 66] , a decision of the Privy Council, are relevant (IA p. 331) 'An error in law on the face of the award means, in Their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous.'
10. In Arosan Enterprises Ltd. v. Union of India [(1999) 9 SCC 449] this Court again examined this matter and stated that where the error of finding of fact having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible viewpoints, the interference in the award based on an erroneous finding of fact is OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 19 of 21 permissible and similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aside by holding that there has been a legal misconduct on the part of the arbitrator."
26. The Arbitral Tribunal has returned a finding and rightly so, that as the Lease Agreement was unregistered and insufficiently stamped, the clause stipulating a lock -in- period could not be enforced. The Petitioners were rightly held not entitled to seek any amount for the unexpired lock-in-period. As regards the finding by the Arbitral Tribunal that the premises were vacated w.e.f. 01.04.2009, the findings are factual and not an error apparent on the face of the record. The same are not perverse and cannot be interfered with."
12. Regarding the arbitration award in question dated 10.08.2019, it is settled law that while deciding the objections u/S. 34 of the Act, the Court does not sit as an Court of Appeal. Further, the Court while dealing with objections u/S. 34 of the Act would not substitute its view for the view of the arbitral tribunal, even if the Court comes to a conclusion that a different view was possible from the view taken by the arbitral tribunal.
13. The Court while deciding the objections u/S. 34 of the Act can also not appreciate or re-appreciate the fact return by the arbitral tribunal and further the findings returned by the arbitral tribunal are not to be intervened, unless they are perversive or erroneous on the face of the record. No such perversity or error has been pointed out during the course of the arguments by the Ld. Counsel for the petitioners nor there is any circumstance from which any of the ground stated in Section 34 of OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 20 of 21 the Act like fraud, bias, violation of natural justice etc. can be made out to set aside the arbitration award.
14. In these circumstances, the arbitration award dated 10.08.2019 has been rightly passed by the Ld. Arbitrator by giving cogent reasons in support of his decision after considering the entire material before him. As a consequence, the present petition u/S. 34 of The Arbitration and Conciliation Act, 1996 has not merits. Same is dismissed. No order as to cost(s).
File be consigned to record room.
Announced in the open court (Sanjeev Aggarwal) today on 16.02.2023. District Judge (Commercial)-03 South, Saket Courts, New Delhi OMP (Comm) 25/2019 (CNR No. DLST010075552019) Page No. 21 of 21