Bangalore District Court
M/S. Refex Energy Limited vs Bharat Heavy Electrical Limited on 20 December, 2021
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH84]
:Present:
Ravindra Hegde,
M.A., LL.M.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this the 20th day of December 2021
COM.A.S.No.176/2018
Plaintiff M/s. Refex Energy Limited,
No.202, 2nd Floor,
Opp to Parel Post Office,
Jijibhoy Lane, Lalbaug,
Mumbai400012.
Represented by authorized signatory
Sri.G.Gautham Srinivas,
Business Development Executive.
(By Sri.V.P.D, Advocate)
// versus //
Defendant Bharat Heavy Electrical Limited,
Electronics Division,
P.B.No.2606, Mysore Road,
Bengaluru.
(By Sri.K.D.K, Advocate)
Date of Institution of the : 24/08/2018
suit
Nature of the suit : Arbitration Suit
Date of commencement of :
recording of the evidence
2
CT 1390_Com.A.S.1762018_Judgment .doc
Date on which the : 20/12/2021
Judgment was pronounced.
: Year Month/ Day/s
Total duration /s s
03 03 26
JUDGMENT
This Arbitration Suit under Section 34 of the Arbitration & Conciliation Act is filed by the plaintiff praying to set aside the award dated 23/5/2018 passed by the learned Arbitrator to the extent of disallowing the claim No.2,3,4,5,6,8 and 9 of the claimant and to the extent of allowing the counter claim of the respondent and praying to allow the claims made by the claimant before the learned Arbitrator.
2. The plaintiff was claimant before the learned Arbitrator and the defendant was the respondent. The parties are referred to by the respective ranks as appearing bfeore the learned Arbitral Tribunal.
3. The case of the claimant in brief is as under:
The National Thermal Power Corporation Limited (NTPC) has awarded a contract for construction of 10 Mwp Solar Photo Voltaic Plant at NTPC Unchahar in District Rai Bareilly, Utter Pradesh to the respondent. The respondent carried out parts of the work on their own and the balance work through sub contractor. The claimant was the sub contractor and was issued four separate purchase orders dated 21/6/2013 for different projects. The respondent 3 CT 1390_Com.A.S.1762018_Judgment .doc retained the work of constructing fence along boundary of the site for solar plant, removal of large number of trees at site and providing encumbrance free land, providing solar modules etc. The respondent has failed to perform its part of the work. The claimant though proceeded to place purchase order on various approved vendors as required under the Supply PO, there was a substantial delay on the part of the respondent in getting approval for Excise Duty exemption and the respondent during various project review meetings continued to ask for numerous engineering documents which were not required under the contract. The respondent had extended the commissioning date to 18 March 2014 in view of the delays on part of the respondent. The payments were also delayed by the respondent. Despite all these delays the claimant employing substantial measures at their own end were able to complete the supply, installation and commissioning of the plant by March 2014. From June 2014 full capacity of the plant could be utilized. This is evident from the certificate issued by the Central Electricity Authority to NTPC. After accepting the installed plant in March 2014, the respondent completely stopped making payments due to the claimant from July 2014 on wards. Due to non payment of the huge outstanding dues, the claimant was not able to complete the balance civil works particularly relating to road works, pathways and drainage and this non payment by the respondent is clearly a fundamental breach. The respondent instead of fulfilling their obligations under the contract and 4 CT 1390_Com.A.S.1762018_Judgment .doc making timely payments, proceeded to wrongfully terminate the contract. The termination for a few civil works which also could not be carried out due to fault on the part of the respondent was completely unsustainable and contrary to the terms of the contract and law. A party in breach cannot even terminate the contract. After termination of the contract illegally by the respondent the claimant tried to resolve the matter amicably. However the same has failed and then the claimant invoked arbitration clause 23 of the general terms and conditions of the PO by letter dated 23/2/2015 and the respondent has appointed Sri.B.P.Bheemanna as the sole Arbitrator. After Arbitral Tribunal being constituted the claimant still tried to resolve the matter amicably and therefore has not filed the claim petition and the learned Arbitrator on 31/8/2016 placed the claimant exparte and proceeded with the counter claim filed by the respondent. Thereafter, by filing application, claimant filed the claim application and thereafter issues were framed and evidence was recorded. Thereafter, learned Arbitrator has passed the impugned award and has held that the respondent have to pay Rs.7,01,33,671/ with interest @8% with some conditions and has also allowed the counter claim partly and held that the claimant and the respondent have to equally share the total cost of Rs.7,51,04,302/ and rejected other claims of the claimant as well as the respondent. The learned Arbitrator has held in issue No.7 that the respondent is not justified in termination of the work purchase orders.5
CT 1390_Com.A.S.1762018_Judgment .doc
4. Being aggrieved by this award to the extent of disallowing claim No.2,3,4,5,6,8 and 9 of the claimant and to the extent of allowing the counter claim of the respondent the claimant has filed the present arbitration suit on various grounds. It is contended that in passing portion of the award which is challenged, learned arbitrator has failed to consider and apply the laws of India and in particular the Arbitration and Conciliation Act and also Indian Contract Act. It is contended that the Arbitrator did not appreciate that this was not a case of breach by both the parties, but breach of the respondent as admitted by the witness of claimant and the learned Arbitrator has passed award by partly allowing the counter claim and denying compensation to the claimant, though there was no fault on the part of the claimant. It is also stated that the learned arbitrator, appears to have passed award under Section 28(2) of the Act, despite the parties not authorizing the learned Arbitrator to do so. It is also contended that the award goes into the payment to the sub contractor and other aspects which was not clearly the subject matter of the arbitration and was outside the scope of the contract and the learned Arbitrator has not decided the claims as enumerated. In the petition it is stated that the learned Arbitrator is bound to quantify the claim and could not have left it to the parties to quantify the same. It is also stated that the arbitrator failed to appreciate that the present arbitration was a domestic arbitration between two Indian parties and governed by substantive law of India and the 6 CT 1390_Com.A.S.1762018_Judgment .doc learned Arbitrator ought to have decided the dispute submitted to arbitration in accordance with the substantive law of India and in conformity with Section 28(1)(a) of the Act. It is stated that after observing wrongful termination, learned Arbitrator has allowed the counter claim and has not awarded damages to the claimant which is contrary to the well established principles of law. It is stated that a party wrongfully terminating the contract ought to compensate the innocent party and this principle is not followed. It is also contended that the learned Arbitrator has acted non judiciously and against the principles of natural justice by placing reliance on the documents filed by the respondent to grant counter claim without granting any opportunity to the claimant to submit on all those documents which is against the public policy. It is stated that the award is contrary to law laid down by the Hon'ble Supreme Court and this partial award under challenge suffers from patent illegality and is in contravention of Section 34(2A) of the Act. It is also contended that the award is contrary to public policy of India and is in contravention of Section 34(2)(b)(ii) of the Arbitration & Conciliation Act. It is stated that the learned Arbitrator has failed to appreciate that the claimant has not breached or defaulted any fundamental or substantial provision of the POs and that it is evident that it was the respondent who has breached the fundamental terms of the contract by not making payment of certified bills and wrongfully terminating the POs. It is contended that the award is passed contrary to 7 CT 1390_Com.A.S.1762018_Judgment .doc the principles of natural justice as the learned Arbitrator has failed to consider the submission and pleading made by the claimant. It is also contended that the award is perverse and contrary to law to the extent that it denies the claimant's claim for loss of profit suffered by the claimant due to wrongful termination of the POs. It is also stated that the learned Arbitrator ought to have allowed issue No.3 and awarded Rs.4,76,80,208/ with interest towards the loss on profit. It is also stated that the cost of ready stock material available at the site valued at Rs.1,21,01,000/ also ought to have been awarded. It is also stated that these materials which were at the spot were neither returned to the applicant nor respondent has made payment for the same. It is also stated that the learned Arbitrator has rejected the claimant's claim for cost of material which lying at the respondent side at the time of termination. It is also stated that the learned Arbitrator has traveled beyond the terms of the purchase order and term of reference. It is stated that the learned Arbitrator has exceeded its power and has incorrectly got over the express provisions of the PO by directing the respondent to make payment to the sub contractor. It is stated that instead of allowing claimant's claim for additional cost incurred due to the respondent's failure to provide plant periphery fencing, the learned Arbitrator has wrongly directed the parties to share the cost of the same. It is stated that though the claimant produced necessary documents and adduced evidence, the learned Arbitrator has not allowed the 8 CT 1390_Com.A.S.1762018_Judgment .doc claim for Rs.96,89,458/ towards additional work done. It is also contended that the learned Arbitrator has failed to exercise his discretion in deciding the rate of interest. On all these grounds the award of the learned Arbitrator is prayed to be set aside.
5. The respondent appeared and filed written statement stating that the petition is liable to be dismissed for non compliance and the learned Arbitrator has not been arrayed as party to the proceedings. It is stayed that respondent has also filed arbitration suit in AS No.180/2018 pertaining to the very same award seeking relief of setting aside the part of the award. The respondent also stated about termination of the contract after giving notice as provided in the contract. It is stated that before the learned Arbitrator, detail statement of defence was filed by the respondent and denied the liability to make payment of money claimed by the claimant and made claim for counter claim. It is stated that after contract work was completed, respondent filed memo in the arbitration proceedings by limiting the counter claim to Rs.19,43,52,354/. The respondent has denied that they have admitted that they were in default with respect to payment etc. It is stated that the evidence has proved that there is an inordinate delay by the claimant in executing the work and therefore, respondent terminated the contract got executed work through third party to complete the work. It is stated that the breach as held by the learned Arbitrator to the extent of fixing liability on the respondent is incorrect and is 9 CT 1390_Com.A.S.1762018_Judgment .doc liable to be set aside. It is stated that delay and failure to complete the contract work by claimant is proved and it is clear case of breach of contract and has been proved by oral and documentary evidence. It is stated that the learned Arbitrator has rightly allowed the counter claim of the defendant. However the learned Arbitrator erred in deciding the entire counter claim of the defendant. The contention of the claimant that the learned Arbitrator proceed under Section 28(2) is not admitted. It is denied that the learned Arbitrator has not decided the dispute in accordance with law of India. The challenge to the applicant on the ground of wrongful termination of the purchase order and related claims and the arbitration traveled beyond the terms of the purchase order and terms of reference and also not giving reasoning with respect to interest are all denied by the respondent. It is stated that the learned Arbitrator has rightly disallowed all the claims made by the plaintiff and the learned Arbitrator has erred in allowing part of the claim and award deserves to be set aside to that limited extent. It is stated that the claimant who had sought for arbitration did not participate in the arbitration for over a year from the date of entering into reference and the plaintiff cannot now contend that the learned Arbitrator has erred in awarding interest of 8% by considering the absence of the claim for long time. On all these grounds the petition is prayed to be dismissed.
10CT 1390_Com.A.S.1762018_Judgment .doc
6. Now the points that arise for consideration of this court are:
1) Whether the claimant/plaintiff has made out any grounds under Section 34 of the Arbitration & Conciliation Act to set aside the award passed by the learned Arbitrator on 23/5/2018?
2) What order?
7. Heard both the counsels. Perused records.
8. My answer to the above points are :
POINT No.1 : In the Affirmative.
POINT No.2 : As per final order for the following:
REASONS
9. POINT No.1 : Present arbitration suit is filed by the claimant praying to set aside the award dated 23/5/2018 passed by the learned Arbitrator to the extent of disallowing the claim No.2,3,4,5,6,8 and 9 of the claimant and to the extent of allowing the counter claim of the respondent and praying to allow the claims made by the claimant before the learned Arbitrator. Admitted facts of the case are that the respondent BHEL has undertaken the contract of 10 MW Solar Power Plant Project for NTPC. In connection with the said work, respondent issued four purchase orders to the claimant and claimant accepted the purchase order and commenced the work. According to claimant, respondent has not made payment due to the claimant and due to this, 11 CT 1390_Com.A.S.1762018_Judgment .doc progress of the work has suffered. Claimant stated that inspite of respondent not making payment, claimant has completed major work and only minor work had remained. Respondent, alleging that inspite of reminders, work is not completed and by stating that the time was essence of contract, after giving notice, respondent terminated the contract on 17/2/2015. Thereafter, claimant invoked arbitration clause making claim on several heads and contended that the termination is illegal. Respondent made counter claim initially for Rs.31,13,82,821/ and later at the concluding stage of arbitral proceedings, filed memo restricting counter claim to Rs.19,43,52,354/. Learned Arbitrator passed award and allowed claim partly and held the claimant entitle for Rs.7,01,33,671/. Other claims of claimant are rejected. Among the counter claim the learned Arbitrator has held that the claimant and the respondent have to equally share the total cost of Rs.7,51,04,302/ and other counter claims are rejected. Aggrieved by this award to the extent of rejection of several claims of claimant and allowing counter claim partly, present arbitration suit has been filed. Even the Respondent is not satisfied with the award and has filed petition under Section 34 of the Arbitration & Conciliation Act praying to set aside the award in AS No.180/2018. Therefore both the parties are not happy and not satisfied with the award passed by the learned Arbitrator.
12CT 1390_Com.A.S.1762018_Judgment .doc
10. Jurisdiction of the court to set aside an arbitral award is limited to the grounds set out in Section 34 of the Arbitration & Conciliation Act 1996. Even if a contrary view based on the facts before the Arbitral Tribunal is possible, in the absence of any compelling reasons, court cannot interfere with the view taken by the learned Arbitrator. Grounds on which the award of learned Arbitrator can be set aside by court is clearly mentioned in Section 34(2) and 34(2A)of the Arbitration & Conciliation Act. It is well established principle that the court sitting U/S.34 of the Act is not supposed to go for reappreciation of evidence or impose its view as against the view of learned Arbitrator and the power of the court is only to set aside the award, if it is coming under one of the grounds mentioned in the said section. In the presence of these basic principles, grounds urged by the claimant and the award of the learned Arbitrator are to be looked into.
11. On looking to the records of arbitration, it is clear that the claimant had made claim under several heads including loss of profits, claim for theft of the articles, pending RA bills etc. Similarly Respondent had also made several claims as counter claim. Claimant along with the claim petition has produced documents in 7 volumes in which upto volume 5 there are 1063 pages of documents and in volume No.7 there are 322 pages. Therefore, 1400 pages of documents were furnished by the claimant and similarly respondent has also produced the documents. Evidence affidavits were filed before the learned Arbitrator on both 13 CT 1390_Com.A.S.1762018_Judgment .doc sides. The parties had submitted voluminous documents and lead evidence. However the award of the learned Arbitrator is consisting of only 9 pages. Though number of pages of award is not of much consequence, even for making reference to these voluminous documents and evidence some space is necessary. It is to be seen whether this award is on appreciation of evidence and documents placed before the learned Arbitrator and whether the provision of Arbitration & Conciliation Act have been complied by the learned Arbitrator while passing the award.
12. As stated above, parties have produced voluminous documents and made claim under several heads. Both the parties have made allegation against each other. Claimant contended that the payment are not received in time from the plaintiff and due to non payment, claimant could not proceed with the uncompleted minor works and contended that major work was completed and was already operational. On the other hand, respondent contended that the time was essence of the contract and claimant has failed to show progress in the work. In the presence of these contentions the parties have made their claim and counter claim before the learned Arbitrator. The learned Arbitrator in page No.3 of the award has stated that the facts of the case, pleading, claim, counter claim, documents marked for evidence, cross examination proceedings and arguments putforwarded are not reproduced for the sake of brevity. By saying so, the learned Arbitrator has not discussed the pleading, document or 14 CT 1390_Com.A.S.1762018_Judgment .doc evidence and the cross examination. The learned Arbitrator has made some observation as seen in page 3 to 5 in para 1 to 6 and then took up the issue No.1 to 8 which are framed by him. Thereafter the learned Arbitrator has proceeded to give finding.
13. On looking to the entire award containing page No.1 to 9, it cannot be made out as to how the learned Arbitrator came to the conclusion which he has arrived. Reasons for arriving at a particular decision is prima facie wanting in the award. As stated above both the parties are not satisfied with the award passed by the learned Arbitrator. This award do not disclose as to on what basis and on what evidence, the finding is arrived. In the observations of the tribunal, as mentioned in the award, it is stated that there are defects in the purchase order and parties not entering into separate contract has been highlighted. It is mentioned that tribunal is of the opinion that for such major contract, consolidated major purchase order or binding contract agreement has to be entered into between the parties, apart from individual purchase order and it is mentioned that the respondent has not entered into such agreement and claimant has not demanded for such agreement. In the award, defects in the contract is high lighted rather than deciding the dispute between the parties. It is also observed that service purchase order is not interlinked with remaining purchase order. It is observed that the payment for the supply made by the claimant have been inordinately delayed 15 CT 1390_Com.A.S.1762018_Judgment .doc without any justification and this has affected progress of the contract, payment not released to the suppliers of the claimant etc, though without referring to any documents. Then the Learned Arbitrator holds that though such delay in payment would suffer and affect the operation and cash flow statement of the claimant, act of the claimant in not paying the sub supplier and leaving site establishment unattended is unacceptable in any contract. Regarding payment to the sub suppliers of the claimant, there is no clarity as to who are the sub suppliers and what are the documents produced by the parties regarding such dues of the sub suppliers. For these observations, no basis is found in the award.
14. After these observations, learned Arbitrator comes to the conclusion that there has been breach of contract by both the parties which has affected the total project. These lapses on the part of either the claimant or the Respondent are not crystallized and are not clearly explained. Appreciation of any evidence or documents to come to the conclusion that there is breach of contract by both the parties cannot be made on going through the award. Learned Arbitrator came to the conclusion that the termination of the purchase order should not have been resorted and thereby held that the termination is not valid. Case of the claimant in this arbitration suit is that even after holding that termination is not proper, claimant is not given consequential reliefs. After these observations, learned arbitrator proceeded to give answer on issues.
16CT 1390_Com.A.S.1762018_Judgment .doc
15. Claimant has contended that the finding of the learned Arbitrator holding that the claimant is entitle for Rs.7,01,33,671/ is just and proper and the finding of the learned Arbitrator on other issues is without reasons and is not proper. In the present arbitration suit, claimant has challenged the finding of the learned Arbitrator on claim No.2,3,4,5,6,8 and 9 and the award is also challenged to the extent of allowing the counter claim. Awarding of interest of 8% only is also disputed by the claimant. On looking to the award in issue No.1, after holding that claimant is entitle for Rs.7,01,33,671/, learned Arbitrator has held that the respondents have to make payment to the sub suppliers of the claimant and if the respondent had made payment to the sub suppliers, the same should be adjusted and for this purpose learned Arbitrator has directed both the parties to have a meeting with sub suppliers. This finding of the learned Arbitrator show that even after awarding amount to the claimant, award is subject to certain other aspects like joint meeting and claim of the sub suppliers who were not before the learned Arbitrator. Therefore even on this issue No.1 and the claim No.1 of the plaintiff, the finding given by the learned Arbitrator is prima facie not clear. Even to arrive at this conclusion there is no clear reasons given by the learned Arbitrator. Be that as it may.
16. With regard to other issues against which the present plaintiff is having grievance, learned Arbitrator after holding that termination of purchase order should not have 17 CT 1390_Com.A.S.1762018_Judgment .doc been resorted by the respondent, has not allowed the claim for the cost of ready stock of material available at the site on the date of termination amounting to Rs.1,21,01,000/. For this, learned Arbitrator has observed that any materials supplied to a major project like the present one cannot be taken back by the suppliers. Learned arbitrator has held that ultimate customer do not permit the same, unless it is proved to the ultimate customers satisfaction, with all documentary evidence that these materials are excess as compared to the actual requirements. It is held that claimant has not established such a fact with the documentary evidence and therefore he will not be entitled for this amount. The issue No.2 appears to have not even properly understood by the learned Arbitrator. In the claim for Rs.1,21,01,000/ the claimant had prayed for this amount towards cost of the ready stock material available at the spot as on the date of termination. However the learned Arbitrator while answering issue No.2 has stated about returning of those materials, but not about payment of value of the materials to the claimant. Therefore this finding is not with proper reasons and is against the issue raised. The next issue is claim of the claimant for loss of profit due to wrongful termination amounting to Rs.4,76,80,208/. Even on this, the learned Arbitrator after holding that the termination is not proper has held that, as there is no express condition exist in the contract towards consequential damages, such claim will not be valid. The entire claim of Rs.4,76,80,208/ is held to be 18 CT 1390_Com.A.S.1762018_Judgment .doc not valid by answering issue No.3 in one sentence. This finding on issue No.3 is also not with acceptable reasons and is cryptic.
17. The next claim is for cost incurred by the claimant due to theft due to respondent's failure to provide plant periphery fencing. On this, the learned Arbitrator has held that due to non availability of periphery fencing thefts have taken place. After holding so, learned Arbitrator instead of quantifying the amount to be paid to the claimant towards cost of the material which are lost due to the theft, if for the fault of the respondent, has directed both the parties to reconsile the theft material with proper documentation and to share the cost equally. After holding that respondent is responsible for not providing plant periphery fencing, learned Arbitrator has asked the parties to share equally after determining the cost by reconciling at a later date. Claim is neither rejected nor allowed and there is no clear finding of quantifying the amount to which the claimant is entitle. Even with regard to additional central sale tax paid by the claimant, learned Arbitrator in issue No.5 has given one sentence answer stating that relevant documents are not produced. However it is argued that all the documents showing the payment of CST were produced before the learned Arbitrator. The learned Arbitrator, any how not discussed about any of the documents.
18. Towards additional work done by the claimant, Rs.96,89,458/ is claimed and for this, learned Arbitrator on 19 CT 1390_Com.A.S.1762018_Judgment .doc issue No.6 has held that claimant have to absorb such additional incurred costs to the contract for gaining good will of the ultimate customer. This finding is strange and cannot be considered as acceptable reason for disallowing the claim. Similarly regarding other two claims the learned Arbitrator has not given any finding for not allowing. The learned Arbitrator in issue No.7 by referring to the observation made earlier has given a finding that the respondent should not have terminated the purchase order issued to the claimant. After holding so, consequential remedy by way of damages or loss of profit etc are not considered and awarded to the claimant.
19. In the petition, decision of the Hon'ble Supreme Court reported in (1999) 3 SCC 500 (Dwarka Das v. State of MP and another) is referred in which the Hon'ble Supreme Court has held that, as and when the breach of contract is held to have been proved, being contrary to law and terms of the agreement, erring party is legally bound to compensate the other party to the agreement. In another decision reported in (2011) 10 SCC 573 (MSK Projects (DV) Ltd., v. State of Rajastan and another) Hon'ble Supreme Court has held that reimbursement means and implies restoration of an equivalent for something paid or expended. The Hon'ble Supreme Court has also held that the damages can be claimed by a contractor where the government is proved to have committed breach by improperly rescinding the contract 20 CT 1390_Com.A.S.1762018_Judgment .doc and for estimating the amount of damages, the court should make a broad evaluation instead of going into minute details. In the present case even after holding that the termination of the purchase order is not proper, the learned Arbitrator has not awarded any consequential relief to the plaintiff.
20. With regard to counter claim there is one finding that claimant and respondent have to equally share Rs.7,51,04,302/. How this amount is arrived is also not clear. What is the cost and why the claimant have to bear the cost of the respondent equally is also not made clear. Other counter claims made by the respondent are rejected by the learned Arbitrator for which the claimant has no objection. However, respondent who has also challenged this arbitration award in Com.AS No.180/2018 is disputing the finding on counter claims.
21. On looking to the entire award, it is without reasons and it cannot be made out as to how the learned Arbitrator has arrived to the particular conclusion on any of the issues. Though the claimant by considering the finding which is favourable to the claimant contend that claimant challenges only portion of the award with regard to claim No.2 to 9 and the portion of the counter claim which is allowed, in fact, entire award and findings are not proper and is shocking the conscience of the court. On many of the findings, the view of the learned Arbitrator is not even a possible view. The learned Arbitrator was appointed to decide 21 CT 1390_Com.A.S.1762018_Judgment .doc the dispute between the parties. Instead of deciding as to what is the entitlement of the parties, he has directed the parties to hold joint meeting not only among themselves, but also with sub suppliers and even with main employer NTPC, to arrive at a final figure. Thereby, this arbitral award even if accepted is not deciding the dispute which are referred to the arbitration.
22. An award which is without reasons is perverse and patently illegal and is liable to be set aside. On looking to the entire award finding given by the learned Arbitrator is not supported by reasons. On reading the award one cannot make out that the finding is given by considering evidence and voluminous documents that were placed before the learned Arbitrator by the parties. Moreover, the award even do not finally decides the dispute between the parties, as it directs the parties to hold meetings among themselves and also with third parties to arrive at final figure. The learned Arbitrator by directing the parties to have further discussion and to conduct meeting with third parties, has even went beyond the scope of reference. Such an award is even against the fundamental principles of Indian law and is against the well established principles of justice and as such is against public policy of India and is liable to be set aside. When decision of the learned Arbitrator is found to be perverse or so irrational that no reasonable person would have arrived at the same and when view of the arbitrator is 22 CT 1390_Com.A.S.1762018_Judgment .doc not even a possible view the award is liable to be set aside. For all these reasons, award passed by the learned Arbitrator is liable to be set aside. Accordingly, point No.1 is answered.
23. POINT No.2 : For the discussion made on above point, following order is passed:
ORDER This Arbitration Suit filed by the plaintiff under Section 34 of the Arbitration & Conciliation Act, challenging the award dated 23/5/2018 is allowed.
Arbitral Award dated 23.05.2018
passed by the learned arbitrator is
setaside.
In the circumstances of the case,
there is no order as to costs.
[Dictated to the Judgment Writer; transcript thereof corrected, signed and then pronounced by me, in the Open Court on this the 20th day of December 2021] [Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.
***