Delhi District Court
M/S Fiitjee Ltd vs Abhishek Sapra on 10 January, 2025
IN THE COURT OF MS SAVITA RAO, DISTRICT JUDGE
COMMERCIAL COURT-01, SOUTH,
SAKET COURTS, DELHI
DLST010047282019
ARBTN No. : 31/2019
In the matter of:-
M/s Fiitjee Ltd.
29A, Kalu Sarai,
Sarvpriya Vihar, New Delhi - 110016
Through its Authorized Representative
Sh. Ashish Kumar Aggarwal
..... Petitioner
Vs.
Abhishek Sapra
S/o Mr. Ram Saran Sapra
R/o 85T, Sector - 8, Jasola Vihar
New Delhi - 110025
Also At :
1834A/10
Govindpuri Extension, New Delhi
..... Respondent
Date of institution of the case : 20.07.2019
Date of Transfer to Commercial Court : 21.01.2020
Date of final arguments : 12.12.2024 & 07.1.2025
Date of judgment : 10.01.2025
ORDER
1. This is petition u/s 34 of Arbitration and Conciliation Act filed by petitioner impugning the arbitral award dated 18.04.2019. Respondent was appointed as Financial Controller ARBTN No. : 31/2019 1/18 with the petitioner company and his employment was to be governed by service rules and the code of conduct including non- disclosure agreement. Petitioner alleged that during the course of employment of respondent, he diverted to himself the vital information and vital data of the information in violation of the non-disclosure agreement. Further, respondent failed to perform his duties diligently and towards the best interest of the petitioner company. Respondent also sent emails to the petitioner which were derogatory and showed his negligent attitude and intentions towards duties, tantamounting to dereliction of duties. Respondent, thereupon was put to notice of his conduct but he left the petitioner company, followed by issuance of show cause notice upon the respondent.
2. Respondent sent reply to the show cause notice. Petitioner thereafter initiated the arbitration proceedings and filed claim before Ld. Arbitrator for damages for violation of the service contract. Respondent also filed counter claim. After completion of proceedings, Ld. Arbitrator passed the impugned award, partly allowing the claim of petitioner company and also partly allowing the counter claim of respondent. Present petition has been filed by petitioner company challenging the impugned award whereby claim of petitioner on account of damages for violation of NDA was rejected and counter claim of respondent was partly allowed.
3. It was submitted by Ld. counsel for petitioner that respondent was appointed as Financial Controller after various rounds of selection process. By virtue of his post, respondent was bound to receive vital and crucial information and data of the company. Therefore, prior to joining of the services, respondent ARBTN No. : 31/2019 2/18 was made aware of the rules and regulations including non- disclosure agreement. However, respondent during the course of his employment, diverted to himself vital information and vital data of the petitioner which was completely in violation of Non- Disclosure Agreement one way or the other.
4. It was further submitted that act of the respondent was perpetual, however, the same was noticed by petitioner while diversion of one official email trail dated 04.11.2015 between the Chairman, CFO and other officials of the company to his personal email ID, which was in contravention of the terms of confidentiality and agreed terms of non-disclosure agreement.
5. Ld. counsel for petitioner further made following submissions:
(a) That, Ld. Arbitrator committed grave patent illegality while noting that " in the present case, the allegation itself is only of diversion of the email from his official email ID to his personal email ID and that also only a singular case of the email, mentioned above". Ld. Arbitrator failed to define as to how many number of breaches of NDA would be considered, as breach of NDA. Secondly, Ld. Arbitrator failed to appreciate that it was not the only single instance but the instance where petitioner could notice such diversion.
(b) That, email dated 4.11.2015, was primarily a conversation with no data. Ld. counsel for petitioner with reference to reply cum counter claim filed by respondent submitted that respondent has enlisted the information beyond something mentioned in the email dated 4.11.2015 which was filed beyond the date of leaving of the job by respondent, thereby ARBTN No. : 31/2019 3/18 it stood established beyond doubt that respondent diverted the vital information pertaining to the respondent.
(c) That, having directed the vital data and custody of it, it is always open for the respondent to make use of the same as and when so desired by him. Ld. Arbitrator failed to appreciate that petitioner has established the diversion of information and vital data of the petitioner by the respondent. Thus, NDA stood breached by diversion of data itself and it was not at all necessary for the petitioner to establish the use of the same by the respondent to claim breach.
(d) That , NDA provides for liquidated damages which are predetermined and quantified, which had been agreed upon between the parties considering that such damages are beyond the calculation and even the potential breach and its prevention cannot be controlled. Ld. Arbitrator committed grave error of law while observing that terms of non disclosure by an employee is with respect to the trade secrets and other vital information of the employer and not with respect to any such fact which has a colour of illegality. Ld. Arbitrator has no locus standi to reach such an inference unilaterally on the basis of pleading of one party. Such allegations were not subject to the proceedings before the Ld. Arbitrator. Thus, Ld. Arbitrator has accepted the allegations as gospel truth and returned the finding which are perverse and patently illegal. Thus, the inference that the said information has a colour of illegality, that too on the basis of unilateral submission of the respondent, is outside the scope of the present arbitration matter.
(e) That, Ld. Arbitrator committed a grave error of law while observing that no evidence is produced to prove the ARBTN No. : 31/2019 4/18 misuse. Petitioner proved diversion of information by the respondent but is not available with any means to prove the misuse. Keeping in view all these probabilities, the damages were quantified and preconceived. Ld. Arbitrator committed grave error of law while granting the respondent an amount of Rs. 2,29,935/- whereas respondent had abandoned the services without notice and failed to discharge his duties as Finance Controller.
6. Ld. counsel for respondent, per contra, referred to the provisions of section 34 which provides recourse to law against the arbitral award based upon the conditions as provided in the act. It was submitted that Ld. Arbitrator has discussed all the contentions raised by the petitioner at great length and after considering the evidence on record and hearing parties held that there was no evidence to show that trade secrets of the petitioner company were disclosed by the respondent to any third party.
7. Ld. counsel for respondent placed reliance upon following authorities:
(a) Vivek Rai Vs. Akash Institute OMP 561/14 dated 04.03.2015 :
" Clauses like liability of the employee to pay a minimum pre- estimated and pre-determined damages in case of leaving the employment to be wholly unconscionable and opposed to public policy and that the award based on such clauses which promise to recover an unconscionable sum would be clearly opposed to the Public Policy of India. The terms of employment of the Respondent are unconscionable and opposed to public policy" .
(b) Union of India (UOI) Vs. Rampur Distillery and Chemical Co. AIR 1973 SC 1098, wherein it was observed that:
" 4. It is important that the breach of contract caused no loss to the appellants. The stipulated quantity of sum was subsequently supplied to the appellants by the respondents themselves at the same rate. The appellants, in ARBTN No. : 31/2019 5/18 fact, made no attempt to establish that they had suffered any loss or damage on account of the breach committed by the respondents".
(c) Bhai Panna Singh and Others Vs. Bhai Arjun Singh and Others Pricy Council Appeal no. 27 of 1928 D/d 14.5.1929, wherein it was observed that :
" 4. The effect of Section 74 Contract Act of 1872, is to disentitle the plaintiffs to recover simpliciter the sum of Rs. 10,000 whether penalty or liquidated damages. The plaintiffs must prove the damages they have suffered. The only evidence of loss is that of the loss on resale by Rs. 1,000. There seems to be no ground for displacing the trial Judge's finding that this was a genuine contract. The vendors remained in possession of the rents and profits of the property until resale, amounting, according to the evidence, to Rs. 450 to 500 per mensem. There is no ground for awarding them interest. On the other hand, they have received earnest money Rs. 500 : so that their actual damage is Rs. 500. The vendors have also received for the value of the stamp paper realised after deducting commission charged in respect of the purchasers' contribution, Rs. 689-1-0. This sum, when the contract went off they held to the use of the purchasers, and from the documents it is plain they have always admitted their liability for it, and been prepared to account for it against damages".
8. Emphasis of the Ld. Counsel for petitioner with regard to diversion of the information by respondent was based upon the diversion of the official email communication to the personal email ID of the respondent which, as stated, was in contravention to the terms of confidentiality and agreed terms of non disclosure agreement. Ld. counsel for petitioner also emphasized that the said act of the respondent came to the notice of the petitioner only during conversation between the Chairman and other officers of the company with the respondent, whereby it was not the 'only' single instance but the instance when the petitioner could notice such diversion.
9. Ld. Arbitrator though specifically noted that there was no email put on record by the petitioner company to show that respondent had diverted /forwarded any of the emails received by him on his official email ID to his personal email ID nor ARBTN No. : 31/2019 6/18 petitioner had placed on record any material to show any trade secrets of the petitioner company which were disclosed by the respondent to any third party or put to any use by the respondent. Ld. counsel for petitioner though had also emphasized with regard to its inability to prove mis-use while submitting that the petitioner had proved on record diversion of information by the respondent but was not in capacity to prove misuse of the same. As submitted, considering all these probabilities only, damages were quantified and preconceived.
10. Apparently in terms of own submission of Ld. counsel for petitioner, petitioner noticed the diversion of the official email upon diversion of one of the official email trail to the personal ID of the respondent which was made basis to assert the diversion of information by the respondent seeking liquidation of the quantified damages in the agreement between the parties. Ld. Arbitrator, nevertheless took note of the submission of respondent that he had received almost 500 official emails while working for the petitioner company which were marked on his personal email ID, some of which were also placed on record. Clarification furnished by respondent was also noted that the official internet did not work properly at home and hence to send the replies, it was necessary by respondent to use the personal email ID. Even earlier, emails had been sent on his personal email ID. Ld. Arbitrator while noting that there was communication to the personal email ID of the respondent on many occasions, also took note of the fact that merely using his personal email ID for official purpose could not be said to be breach of clauses of the non disclosure agreement when nothing was placed on record to show that petitioner was put to any ARBTN No. : 31/2019 7/18 disadvantage or injury by this act of the respondent by using his personal email ID for official communications. Mere submission of counsel for petitioner that petitioner was not in capacity to put on record misuse by the respondent, itself cannot be considered sufficient to jeopardise the respondent in absence of any substantiation or evidence to prove the misuse or breach of clauses of non disclosure agreement by the respondent.
11. Contention of Ld. counsel for petitioner does not find favour with this court that Ld. Arbitrator had no locus standi to derive the inference unilaterally on the basis of pleading of one party that "vow of non disclosure by an employee is with respect to trade secrets and other vital information of the employer and not with respect to any such fact which has colour of illegality" . Ld. Arbitrator noted the submission of counsel for petitioner that respondent has himself pointed out many alleged financial irregularities and legal flaws committed by petitioner company which had been detailed by him in the Statement of Defence cum Counter Claim. Ld. Arbitrator also took note of the submission of counsel for petitioner that said diversion was itself violation of the non disclosure clause whereby respondent was misusing the information pertaining to the company. Nevertheless, Ld. Arbitrator in this context noted that the non-disclosure stipulation upon an employee can be with respect to the trade secrets and other vital information of the employer and not with respect to any such fact which has colour of illegality. It was also noted that merely pointing out the same in legal proceedings did not tantamount to making use of the information to cause injury to the employer.
ARBTN No. : 31/2019 8/1812. Since the abovesaid was merely the passing reference by Ld. Arbitrator in the particular context upon contention of Ld. counsel for petitioner himself with regard to assertion of the respondent made in statement of defence, it cannot be said that Ld. Arbitrator thereby returned any finding with regard to said information having colour of illegality on the basis of unilateral submission of the respondent. The resulting findings were with regard to disclosure of the information pertaining to the petitioner in the legal proceedings which did not qualify to be the violation of the non disclosure clause. Petitioner cannot be said to be entitled merely on the basis of pre-quantification of damages in the agreement till the time it is able to prove the breach of the terms of agreement. The prerequisite for the claim of the damages itself was not established by the petitioner before the Ld. Arbitrator.
13. With regard to the submission of Ld. counsel for petitioner that it was the respondent who had abandoned the service without notice and failed to discharge his duties as Finance Controller, Ld. Arbitrator as per the evidence brought on record by both the parties, did not find any dereliction of duties on the part of the respondent during the course of his employment with petitioner. Ld. Arbitrator rather also noted with regard to the contents of email dated 04.11.2015 which attracted the ire of the Chairman of the company and thereafter respondent in that context called himself the record keeper. Ld. Arbitrator noted that:
" A bare reading of the contents of these emails show that the Chairman of the company was enraged by the tenor of the mail of the respondent in which, according to claimant, the respondent washed off his hands from all the responsibilities of decision making in the finance department and says that he was only a record keeper".ARBTN No. : 31/2019 9/18
14. No perversity or patent illegality is found in observation of Ld. Arbitrator that " merely by calling him as Record Keeper in the given context and circumstances, it cannot be said that respondent had failed to perform his duties as Financial Controller and committed any lapses ".
15. Petitioner company had also made claim on the ground that the respondent had failed to discharge his duties and had left the company without any intimation and without serving the notice period. Respondent, per contra, had claimed salary for the period he had worked with the petitioner company.
16. Ld. Arbitrator concluded that " the salary of the respondent had not been reduced till the day he stopped coming to the office of the petitioner company. Petitioner company had initiated lawful procedure by serving a show cause notice dated 07.11.2015 upon respondent, thereby asking him to give in writing why his salary should not be fixed as record keeper and why legal action be not taken for recovery of excess money paid to him over and above the salary of the record keeper and why his services should not be terminated on account of gross misconduct, indiscipline and negligence of duties". Ld. Arbitrator further concluded that "the petitioner company was within its rights and had adopted a legal procedure for initiating action against the respondent in the given circumstances and had not reduced the salary arbitrarily nor asked the respondent to stop attending his duties. Whereas respondent had admitted having stopped attending the office of the petitioner company".
17. Since the respondent had not served one month notice upon the petitioner company, therefore, respondent was held ARBTN No. : 31/2019 10/18 liable to deposit one month salary in lieu of the notice period and at the same time, respondent was also held entitled for payment of his salary dues till the time he worked with the petitioner company.
18. Ld. Counsel for petitioner submitted that respondent left the services of petitioner without handing over the charge and also took away the laptop entrusted to him at the time of his joining. Even the said laptop was containing the vital information and data pertaining to the petitioner. Respondent retained the custody of the laptop and had been using the same. Ld. Arbitrator ordered for return of the laptop after more than 3 years whereas it totally escaped the fact that laptop was in possession of respondent for last more than three years and he never returned the same.
19. Ld. Arbitrator took note of the fact that the petitioner company never asked the respondent to return the laptop at any point of time i.e. neither in the show cause notice dated 07.11.2015 nor in the rejoinder dated 27.11.2017 (to the reply to show cause notice). Even vide demand notice, petitioner company had only demanded the claim amount and did not make any demand for return of the laptop. Ld. Arbitrator though also opined that the laptop was admittedly the property of the petitioner company and had been given to the respondent during the course of employment, therefore, same was required to be returned to the petitioner company. Nevertheless, it also noted that petitioner company could and should demand its return and could seek the cost of the laptop only if the respondent failed to return the laptop and accordingly directed the respondent to return the laptop to the petitioner within 10 days, failing which ARBTN No. : 31/2019 11/18 the petitioner company would be entitled to the cost of Rs. 59,000/- from respondent for the same. In view of the observation of Ld. Arbitrator with regard to direction to the respondent for return of the laptop in absence of any demand made for the same prior thereto, irrespective of the fact that as on date of passing of the award many years had lapsed, no patent illegality or perversity is found in the direction of Ld. Arbitrator.
20. As brought on record, the respondent repeatedly called the representative of petitioner for return of laptop. Counsel for petitioner informed him that he was not authorized to take any decision on laptop return, which was followed by writing of various emails by the respondent to the petitioner and also visit to the office of the petitioner for return of the laptop. However, petitioner company refused to accept the laptop and directed the respondent to another office of the petitioner for return of laptop to IT Department of petitioner company. As submitted by counsel for respondent, even the IT department of the petitioner company refused to accept the laptop citing frivolous reasons. Respondent has placed on record the email communications and copies from visitor's register on record. Perusal of the same refers to the efforts made by respondent for return of the laptop to the petitioner as directed by Ld. Arbitrator.
21. Further, perusal of record also reveals the request made by respondent in the reply to the show cause notice dated 14.11.2015 for arrangements for collection of company laptop, data card and phone sim card. Rejoined to the show cause notice upon receipt of reply dated 14.11.2015 also did not contain any mention on behalf of petitioner company for collection of the laptop etc. from the respondent despite his request. Vide email ARBTN No. : 31/2019 12/18 communication dated 27.11.2015, respondent informed plaintiff that :
" I had requested you to designate a person who could collect the laptop and other official belongings from me. I have not received any response from you since then. Once again, I request you to depute a person within 2 working days from the date of receipt of this letter failing I shall not have any responsibility/liability of the hardware and data of the company".
22. Subsequent letter dated 28.12.2015 sent by respondent also refers to the failure of the petitioner to "designate any person nor showing of interest in taking hand over of laptop and other official belongings".
23. Apparently, it was the petitioner who had not made any efforts to take hand over of laptop prior to initiation of arbitration proceedings nor subsequent to the directions of Ld. Arbitrator. In these circumstances, though it is the petitioner who looses the right to take back the laptop or any amount in lieu thereof, yet petitioner is permitted liberty to seek collection of the laptop from the respondent within a week, failing which it shall not be the responsibility of the respondent either to return the laptop or to make any payment in lieu thereof.
24. Ld. counsel for petitioner submitted that Hon'ble Apex Court provided wider meaning to public policy of India used in section 34 and included the patently illegal awards . Reliance was placed upon following:
(a) Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. AIR 2003 Supreme Court 2629, wherein it was observed that :
" 31. Therefore, in our view, the phrase 'Public Policy of India' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, ARBTN No. : 31/2019 13/18 on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term 'public policy' in Renusagar's case (supra), it is required to be held that the award could be set aside if it is patently illegal. Result would be - award could be set aside if it is contrary to: -
(a) fundamental policy of Indian law; or
(b) the interest of India; or
(c) justice or morality, or
(d) in addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void".
(b) Delhi Development Authority Vs. M/s R.S. Sharma & Co. , New Delhi, Civil Appeal No. 2424 of 2002:
" 12) From the above decisions, the following principles emerge:
(a) An Award, which is:
(i)contrary to substantive provisions of law ; or
(ii)the provisions of the Arbitration and Conciliation Act, 1996 ; or
(iii)against the terms of the respective contract ; or
(iv)patently illegal, or
(iv)prejudicial to the rights of the parties, is open to interference by the Court under Section 34(2) of the Act.
(b) Award could be set aside if it is contrary to :
(a) fundamental policy of Indian Law; or
(b) the interest of India; or
(c) justice or morality;
(c) The Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court.
(d) It is open to the Court to consider whether the Award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India".ARBTN No. : 31/2019 14/18
25. Ld. counsel for respondent submitted that the courts are not supposed to sit in appeal and re-appreciate the evidence as an appellate court. Reliance was placed upon following:
(a) Associate Builders Vs. Delhi Development Authority (2015) 3 SCC 49, wherein it was observed that:
" When a court is applying the ' Public Policy' test to an arbitration award, it does not act as a court of appeal and consequently errors of facts cannot be corrected. A possible view by the arbitrator on the facts has necessary to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus, an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this scope. Once it is found that the arbitrator's approach is not arbitrary or capricious, then he is the last word on facts" .
" An arbitral tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a terms of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do".
" The expression ' justice' when it comes to setting aside an award under the public policy ground can only mean that an award shocks the conscience of the court" .
(b) Kwality Manufacturing Corporation Vs. Central Warehousing Corporation (2009) 5 SCC 142, wherein it was observed that:
" The scope of interference by courts in regard to arbitral awards is limited. A court considering an application under section 30 or 33 of the Act, does not sit in appeal over the findings and decision of the arbitrator. Nor can it re-assess or re-appreciate evidence or examine the sufficiency or otherwise of the evidence. The award of the arbitrator is final and the only grounds on which it can be challenged are those mentioned in sections 30 and 33 of the Act. Therefore, on the contentions urged, the only question that arose for consideration before the High Court was, whether there was any error apparent on the face of the award and whether the arbitrator misconducted himself or the proceedings".
26. Scope of jurisdiction under section 34 of the Arbitration Act is limited and is not open for appellate analysis. The court cannot sit in appeal while adjudicating a challenge to an Award. In terms of well settled law, the arbitral awards should not be ARBTN No. : 31/2019 15/18 interfered with, in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. The courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.
27. Reliance is placed upon following:
1. Ssangyong Engineering & Construction Co. Ltd. Vs. National Highways Authority of India, Judgement dated 08.05.2019, SLP (C) no. 19033 of 2017 :
" it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law and secondly, that such award is against the basic notions of justice or morality. Explanation 2 to Section 34 (2) (b) (ii) and Explanation 2 to section 48 (2) (b)
(ii) was added by the Amendment Act only so that Western Geco (Supra), as understood in Associate Builders (supra), and paragrpahs 28 and 29 in particular, is now done away with. In so far as domestic awards made in India are concerned, an additional ground is now available under sub-section (2A), added by the Amendment Act, 2015, to section 34. Here, there must be patent illegality appearing on the fact of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within " the fundamental policy of India Law" ,namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality.
Secondly, it is also made clear that re-appreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
To elucidate, para 42.1 of Associate Builders (supra), namely a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain that if an arbitrator gives no reasons for an award and contravenes section 31 (3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.
The change made in section 28 (3) by the Amendment Act really follows what is stated in paragraphs 42.3 in Associate Builders (supra), namely, ARBTN No. : 31/2019 16/18 that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitratror construes the contract in a manner that no fair minded or reasonable person would; in short take or the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted him, he commits an error of jurisidiction . This ground of challenge will now fall within the new ground added under section 34 (2A)" .
2. National Highway Authority of India Vs. IRB Goa Tollway Pvt. Ltd. 2022 (288) DLT 533:
" 77. The position in law, as regards the scope of interference by a count, exercising jurisdiction under section 34 of the 1996 Act, with an arbitral award is, by now, fossilised through a number of judicial authorities, of which one may take due stock of the judgments in Sangyong Engineering & Construction Co. Ltd. Vs. NHAI (2019) 15 SCC 131: 2019 LAWPACK (SC)62532:2019 (3) R.A.J. 323 and Delhi Airport Metro Express Pvt. Ltd. Vs. DMRC (2022) 1 SCC 131 : 2021 LAWPACK (SC)65432: 2021 (5) R.A.J. 54. These decisions clearly hold that the court, exercising jurisdiction under section 34, is to interfere only in cases of "
patent illegality" or perversity in the Award under challenge. Mistakes of fact or law, or the predilection of the section 34 court to incline to a view contrary to that expressed by the Arbitral Tribunal, cannot consitute a basis for interference. Section 34 Court does not substitute its subjective view in place of the view of the arbitral tribunal".
3. Technofab Engineering Ltd. Vs. Tesla Transformers Ltd. 2021 LAWPACK (DEL) 84751:
" 14. .......
Construction and interpretation of the terms of the contract is primarily for the Arbitrator to decide and the legal position with respect to the exercise of jurisdiction under section 34 of the act, is now well established. This court cannot merely on an erroneous application of law, re-appreciate the evidence as it would be an encroachment upon the domain of the learned Arbitrator. The Supreme Court has also repeatedly observed that the scope of interference under section 34 of the Act is extremely narrow, and the court must be circumspect whilst dealing with cases".
28. Petitioner has apparently sought to reagitate the issues already raised before Ld. Arbitrator which were partly answered in favour of the Respondent and partly in favour of petitioner. It is not open for this court to review the dispute on merits nor set aside the award by re-appreciation of evidence which does not suffer from any patent illegality, perversity, neither is against the ARBTN No. : 31/2019 17/18 public policy nor is ignoring the vital evidence, calling for any interference from this court in objection petition u/s 34 of Arbitration and Conciliation Act. Accordingly, instant petition stands dismissed. File be consigned to record room after completion of necessary formalities.
savita Digitally signed
by savita rao
Date: 2025.01.10
rao 14:55:32 +0530
Announced in the open (SAVITA RAO)
court on this Day DISTRICT JUDGE
of 10th January 2025 (COMMERCIAL COURT)-01
SOUTH, SAKET COURTS, DELHI
ARBTN No. : 31/2019 18/18