Karnataka High Court
National Institute Of Technology vs U B Shetty on 7 February, 2025
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MFA No.8761 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF FEBRUARY, 2025
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE S RACHAIAH
MFA NO. 8761 OF 2015
BETWEEN:
NATIONAL INSTITUTE OF TECHNOLOGY,
KARNATAKA, SRINIVASANAGAR,
SURATHKAL-575 025.
REPRESENTED BY ITS REGISTRAR.
...APPELLANT
(BY SRI. P.S.RAJAGOPAL, SENIOR COUNSEL FOR
SRI. JAYANTH DEV KUMAR, ADVOCATE)
AND:
1. U B SHETTY,
NOW AGED ABOUT 55 YEARS,
S/O MADAIAH SHETTY,
PWD CONTRACTOR,
NEAR SAPTAPUR BHAVI,
SAPTAPUR, DHARWAD - 580 001.
2. UMESH SHETTY,
NOW AGED ABOUT 85 YEARS,
DISTRICT & SESSIONS JUDGE (RETD.),
IBROSE APARTMENTS, KODIALBAIL,
MANGALORE-575 003
...RESPONDENTS
(BY SRI. YASHODHAR HEGDE, ADVOCATE FOR R1;
NOTICE TO R2 IS DISPENSED WITH)
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MFA No.8761 of 2015
THIS MFA IS FILED U/S 37(1)(b) OF THE ARBITRATION
AND CONCILIATION ACT, 1996 AGAINST THE JUDGMENT AND
DECREE DATED 29.8.2015 PASSED IN ARBITRATION SUIT
NO.1/2010 ON THE FILE OF THE 1ST ADDITIONAL DISTRICT &
SESSIONS JUDGE, D.K., MANGALORE, DISMISSING THE
ARBITRATION SUIT FILED U/SEC 34 OF ARBITRATION AND
CONCILIATION ACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 23.01.2025, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT' THIS DAY, V KAMESWAR
RAO J., DELIVERED THE FOLLOWING:
CORAM: THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE S RACHAIAH
CAV JUDGMENT
(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO) The challenge in this appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 ('Act of 1996' in short) is to an order dated 29.08.2015 passed by the I Addl. District and Sessions Judge, D.K., Mangaluru ('District Judge' for short) in Arbitration Suit No.1/2010, whereby the learned District Judge has dismissed the suit filed by the appellant herein under Section 34 of the Act of 1996.
2. The challenge in the suit under Section 34 of the Act of 1996 was to an award passed by the learned -3- MFA No.8761 of 2015 Arbitrator in Arbitration Case No.1/2005 dated 31.03.2010.
3. The facts that need to be noted for the purpose of this order are, the appellant, which is a deemed University, called for tender for construction of a new ladies hostel building in its campus and the 1st respondent being the successful bidder, was awarded with the said contract through the work order issued on 02.03.2001.
As per the contract, the 1st respondent was to complete the construction work of the said building within 21 months excluding the rainy season from the date of taking over the possession of the site for construction. The case of the respondent was, the possession of the site was given on 15.05.2001 and the work, as such was to be completed on 15.11.2003.
4. It was the case of the appellant that, the work by the 1st respondent was very slow and hence, a penalty of Rs.1,000/- per day was imposed on the 1st respondent with effect from 01.04.2003 as per the order dated 13.05.2003. A show-cause notice dated 04.08.2003 was -4- MFA No.8761 of 2015 issued for termination of the agreement. It is a fact that, the work, which was to be completed on or before 15.11.2003, was extended till 31.03.2004. Whereas, it is a matter of fact that, the contract was terminated on 30/31.12.2003.
5. The case of the 1st respondent was, when the work was extended till 31.03.2004, the contract could not have been terminated on 30/31.12.2003, when according to the appellant, the 1st respondent had completed 49.80% of the work.
6. It was the case of the appellant that, the balance work was awarded to another contractor, who completed the remaining work of 50.20% within a record time of 4 months, which shows that if the contractor is willing to execute, he can do the same within the time allowed.
7. As a dispute arose between the parties, the matter was referred to arbitration and the learned Arbitrator, vide his award dated 31.03.2010, decided the claims and counter-claims of the parties. Insofar as the claim of the 1st respondent is concerned, the learned -5- MFA No.8761 of 2015 Arbitrator directed the appellant to pay a sum of Rs.14,71,171/- with interest at 18% p.a. Insofar as the counter-claims of the appellant is concerned, the same were also for an amount of Rs.8,61,693/- for completion of the balance work through a third-party. A counter-
claim with regard to cement and steel was also raised for an amount of Rs.5,31,942/-. The appellant had also claimed damages for the delay in execution of the work of Rs.2,74,000/-.
8. The learned Arbitrator has framed the following points for his consideration:
"a) Whether the respondent has unilaterally changed the construction site?
b) Whether the petitioner was directed by the respondent to construct a basement floor as an addition to the original work without giving additional time for the same?
c) Whether withholding of last bill amount by the respondent was illegal?
d) Whether termination of contract by the respondent was illegal?
e) Whether revocation of Bank Guarantee and Deposit amount, by the respondent was illegal?-6- MFA No.8761 of 2015
f) Whether retention of plant and machinery by the respondent was not proper?
g) Whether the claim for damages by the respondent is valid?
h) Whether excess steel and cement were drawn by the petitioner?
i) What order?"
9. The final order of the learned Arbitrator reads as under:
"O R D E R The Respondent shall deliver possession of the plant and machinery described in the Mahazar in good and working condition. In case they are already sold, the sale proceeds of the same with interest at 18% p.a. from the date of sale till this day and future interest at 12% p.a., shall be paid to the claimant.
The Respondent also shall pay Rs.14,71,171/- to the Claimant with interest at 18% p.a. from 30.12.2003 till this day and future interest at 12% from today till the day of payment.
Both parties to bear their costs."
10. On the aspect of termination of the contract, the learned Arbitrator held that, the termination of contract by the appellant before the extended period was improper -7- MFA No.8761 of 2015 and unjustified, holding that, as the 1st respondent was not allowed to continue the work till 30.04.2004, the appellant is not liable to be paid Rs.8,61,693/-, which is the difference of the price which the appellant had to pay to the new contractor for getting the work done. On the counter-claim for Rs.5,31,942/- being double recovery of excess steel and cement charges drawn and not returned, the same was rejected by the learned Arbitrator by holding that, the appellant has failed to prove the quantity of cement and steel released and the theoretical quantity of steel and cement used for construction till 30/31.12.2003 - the date of termination of the contract.
Insofar as the counter-claim for Rs.2,74,000/- as penalty for the delay in completion of work from 01.04.2003 till 30/31.12.2003 is concerned, the learned Arbitrator allowed the same in favour of the appellant, which was liable to be paid from out of Rs.16,67,635/- (which the appellant was liable to pay). We have already reproduced the total amount of claims of the respondent allowed by the learned Arbitrator. It is on account of the counter-
claim for Rs.2,74,000/- allowed in favour of the appellant -8- MFA No.8761 of 2015 that, the total amount payable by the appellant was made as is clear from paragraph No.98 of the award dated 31.03.2010, wherein the following has been stated by the learned Arbitrator:
"98. xx xx xx xx
1. E.M.D. Rs.1,82,000/-
2. Security Deposits Rs.4,44,465/-
3. Lorry Hire Charges Rs.51,000/-
4. Pending amount of the 7th Rs.5,54,203/-
R.A. Bill
5. Value of jelly and sand left Rs.5,13,503/-
at the work site as on
30.12.2003 by the
Claimant
TOTAL Rs.17,45,171/-
Amount payable to the Respondent by the claimant towards penalty levied is Rs.2,74,000/-. After deduction of this amount, the Respondent is still liable to pay Rs.14,71,171/- to the claimant."
11. The learned District Judge has rejected the challenge to the award by referring to various judgments of the Supreme Court on the scope of judicial review in a suit filed under Section 34 of the Act of 1996. On the merits of the challenge, which include termination of contract, grant of claims and denial of counter-claims in the manner sought by them, the learned District Judge has, in paragraphs No.33 to 45, stated as under:
-9- MFA No.8761 of 2015"33. The first and foremost contention of the plaintiff is that the finding of the Arbitrator that the termination of the contract is illegal, is a perverse finding. In the award while discussing the point No.4, the Tribunal deals with the termination of the agreement by the plaintiff and holds it is illegal and unjustified. The reasons for such a decision are that in the work order dated 2.3.2001 the defendant No.1 requested to commence construction work within 7 days, but the site was handed over only on 15.5.2001. Therefore the work should have been completed by defendant No.1 before 15.11.2003. It is pertinent to note that the claimant defendant No.1 disputed the same since an additional basement floor consisting of 15 rooms were entrusted as an additional work. Para 27 of the award discussed about the evidence of RW.1 in this regard. It was noted by the learned Arbitrator that the additional work was construction of basement floor with 15 rooms and it was admitted by the RW1 in the cross examination. But in none of the cross examination contended by the plaintiff, this additional work has any mention. Thus it is clear that apart from the contractual obligations the plaintiff entrusted some additional work to the defendant No.1 which was outside the purview of the agreement. In other words the plaintiff had entrusted some additional work to the claimant. The learned Arbitrator has discussed the cross examination of RW.1 in detail. I have also gone through the cross examination of
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RW.1. I do not find any reason to disagree with the learned Arbitrator in this regard. Surprisingly none of the parties to the litigation have produced the drawings pertaining to the construction and the site plan before the Arbitrator. The Arbitrator has also observed this fact. What can be gathered from the evidence of RW.1 and the observations made by the learned Arbitrator in his award is that the original site of the construction was changed and a new site was ear marked. In the said new site, the building was to be constructed by the claimant. The said site was having some tree growth etc., and in some of the documents it may be found that it is a sloped area. The claimant was asked to construct additional 15 rooms in the basement. The learned counsel appearing for the plaintiff contended that claimant was to construct the building and he was asked to construct the rooms in the basement instead of keeping it open. I am afraid the plaintiff is downplaying the reality. It is not known whether the basement was part of the contract or not. Because there was a slope it appears that the claimant was asked to go for construction of 15 rooms with retaining wall etc. and additional sum of Rs. 20,00,000/- contended by the claimant. There is no whisper about this in any of the correspondence by the plaintiff.
34. The 2nd aspect in this regard observed by the learned Arbitrator is that the was a meeting on 13.8.2003 at the Institution of the plaintiff and a
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request was made on behalf of the claimant for additional four months in view of the additional basement construction and it was conceded by the respondent. Ex.P4 the letter dated 16.8.2003 by the claimant shows that target dates were agreed upon to complete the remaining works. This letter refers to the minutes of the discussions, but unfortunately none of the parties have produced the minutes. It is very surprising that the plaintiff issues a notice to the contractor claimant and summoned him for the discussion and it was well known to the plaintiff by that time that there was delay in completion of the work. The delay in completion of the work is not in dispute as argued by the learned counsel for the plaintiff. Despite such a dispute being there, no minutes of the meeting are drawn. It is contended that bar chart was submitted by the claimant and the date of completion was fixed to be 30.3.2004. The letter at Ex.P5 dated 29.89.2003 clearly shows the outcome of the meeting. Thus it is clear that both the parties had given go bye to the terms and conditions of the contract and they voluntarily agreed for a revised date. Therefore the contention of the plaintiff that he had not given any consent for the revised date, but he had only permitted the contactor to complete the work cannot be accepted. There was ad-idem for the revised date and therefore the Arbitrator was perfectly well within the limits to hold that the revised dates were agreed by both the parties.
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35. The learned Arbitrator discussed these aspects in para-28 to 32. It is pertinent to note at this juncture that the discussions made by the learned Arbitrator show that there was no unanimity between the Dean of the plaintiff, the RW.1 and the Contractor of the plaintiff Institutions. They were sitting on different terms with the claimant. There are some other instances which depict this, which will be discussed later. The cross examination of RW.1 is dealt by the learned Arbitrator at para-33, 34 and 35 of the award. In para-33 it is noted that the claimant was asked to prove 15 rooms in the basement floor to be newly constructed and the claimant and the claimant constructed basement floor with which four floors were constructed. Even then the plaintiff who had filed objection statement before the Arbitrator had denied that the said additional work was entrusted to the claimant. Thus it is clear that the question of additional basement floor and rooms thereof were totally downplayed by the plaintiff Institution. Earlier the construction was only Ground 2 floors and then basement floor was added after shifting the site. It may be noted that if there is a slope, then the basement requires stilted pillar design and it involves the clearing of excavated portion also. These aspects were never referred in the pleadings of the plaintiff either before this court or before the Arbitrator. In other words there was no such basement floor earlier and it was to be filled if there is a slope and later the basement floor was
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added with a construction to prepare 15 rooms in the same. Therefore it is evident that the terms of the contract which were only for the Ground 2 floors were given a go bye and there were changes in respect of the location as well as the number of floors. This aspect has been considered by the Arbitrator while discussing the point No.4. It is further mentioned in the award that Ex.P4 showed the additional work and therefore it cannot be said that the extended period was essence of the agreement. I find considerable force in the observation made by the learned Arbitrator. The entrustment of the site was delayed and then additional works were entrusted in the form of basement floor and then there was meeting on 31.1.2003 wherein revised time lines were agreed. Therefore there cannot be any doubt that the time was not the essence of the contract between the parties.
36. The next question would be whether the plaintiff was well within his limits when he invoked the termination of clause on the ground that there was anticipatory breach of contract. It maybe noted that the revised time lines were agreed on 13.8.2003 and the contract was terminated by letter dated 30.12.2003, nearly about 3-1/2 months later to the revised time lines the contract was terminated. It is pertinent to note at this juncture that four floors including the basement floor were to be constructed by the claimant, there were no letters issued by the
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plaintiff Institution. It is only in the cross examination of RW.1, that such additional work was admitted. This shows the conduct of the plaintiff in insisting upon the additional works being entrusted to the contractor. For some reason RW.1 or the plaintiff Institution was not inclined to bring it on record that the additional 15 rooms are to be construed in the basement floor.
37. Under these circumstances whether the question of invoking Section 39 of Contract Act is justifiable. There cannot be any doubt that Section 39 of the Contract Act, empowers the termination of the contract in anticipation of its breach. It reads as follows:
"When party to the contract has refuse to perform or disabled himself form performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance."
The word in its entirety has some significance in the said section. It is not the case of the plaintiff that the defendant No. 1 contractor had refused to perform the promise in its entirety. Nearly 50% of the work had been completed by him and therefore it cannot be said that it was a refusal in entirety. Though the plaintiff is justified in saying that he did not acquiesce to the same, it cannot be said that there was refusal in entirety. The plaintiff had changed the rules of the game by entrusting the additional work in the form of basement floor and
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MFA No.8761 of 2015then he keeps on mounting pressure without bringing such additional work on record. Then on 13.8.2003 there is a meeting between the parties when revised time lines are fixed and said time lines are acknowledged by the plaintiff and thereafter, before the time lines are reached, there is termination of the contract. It was incumbent upon the plaintiff either to agree or not to agree for the revised time lines. Therefore when there is an acknowledgment by the plaintiff, it has to be held that the plaintiff had acquiesced to the revised time lines. Hence I do not find any reasons to hold that the finding of the Arbitrator that the termination of the contract is not justifiable, is based on the sound and proper reasoning and available evidence. The cross examination of RW.1 reveal the nature in which the matter was dealt by the plaintiff institution. The contract was for Ground + 2 floors and additional work was informed that 15 rooms to be constructed in the basement. Therefore it cannot be said that the finding of the arbitrator on point No.4 regarding termination of the contract is illegal and perverse.
38. The 2nd aspect contended by the plaintiff is regarding the excess quantity of steel and cement utilized by the claimant contactor. No-doubt there is a clause in the agreement at page- 10 that provides for collection of requirement of steel and cement for work on theoretical basis as per the approved formulas. The burden of proving such additional quantity being utilized by the contractor is on the
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MFA No.8761 of 2015plaintiff. Such a contention raised by the plaintiff in the counter claim. Therefore the basic principle of burden of proof is that the party who contends a fact should prove it. The plaintiff contended that the defendant No.1 had drawn additional quantity of cement and steel and such additional quantity or double its amount have to be reimbursed by defendant No.1. In support of this contention, nothing was placed on record before the Arbitrator. The measurement book was the main source of the evidence in this regard. In the written arguments of the learned counsel for the plaintiff, it is mentioned at para-17 that the observation of the Arbitrator that the respondent did not produce the documentary proof is erroneous and the measurement book at Ex.R30 and R39(a) showed the same. It is contended that the Arbitrator has drawn adverse inference against the respondent plaintiff. Let us examine the observation of the learned Arbitrator in this regard. Point No.8 on page 19 of the award deals with this aspect. The learned Arbitrator has observed in para- 16 that plaintiff in his written statement before the Arbitrator had stated that at the time of final bill, it was noted that by misguiding the claimant had drawn excess quantity of steel and cement. It is not known whether the additional work of basement was also included in it or not. Further the evidence of the RW.1 did not allege any such misguiding which was mentioned in the written statement. It may be noted that the running account deals (R.A.Bills) were also
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MFA No.8761 of 2015considered by the leaned Arbitrator and in para-53 it was found that some of the pages of the final bill found at Ex.R30 and R31 were missing and were unnumbered. Therefore the learned Arbitrator has made efforts to find out what was the said excess steel and cement drawn by the claimant. I have also gone through the Ex.R29 and R30 and R31 in this regard and it is clear that the burden of proving the excess quantity of steel and cement having drawn by the claimant is on the plaintiff. None of these documents show as to how the excess steel and cement drawn by the claimant is assessed. The formula adopted by the plaintiff in this regard is not available on record. Therefore the basis for calculation of the excess steel and cement is not established by the plaintiff. Thus the observations by the learned Arbitrator in para-47 to 55 cannot be said that it was arbitrary and perverse. It may be noted that the onus of the proof shifts on the defendant only after the plaintiff proves such fact. No doubt the defendant No.1 claimant may also have records to show what the quantity of the cement and steel drawn was. When the plaintiff has not produced records to show such excess quantity of steel and cement specifying the quantity, it cannot be said that the defendant No.1 was to produce such evidence on record. The primary burden of proving the point was on the plaintiff. The learned counsel for the plaintiff has placed reliance on the decision in the case of City Bank N.A. Vs. Standard Chartered Bank and others
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MFA No.8761 of 2015[(2004)1 SCC 12] wherein a passage from the decision of Gopal Krishnaji Ketkar Vs. Mohd.Haji Latif [AIR.1968.SC.1413] quoted ass below:
"Even if the burden of proof does not lie on the party the court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts and issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain state of facts to withhold from the court the best evidence which is in their possession which could thrown light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof."
It is pertinent to note that the plaintiff should have made certain calculation to arrive at the amount claimed by him of Rs. 5,31,942/-. The basis for such calculation, not having stated by him, he cannot rely upon the fact that defendant No. 1 did not produce the best evidence. The claim was in the form of a counter claim and therefore the primary burden was on the plaintiff. It cannot be said that simply because the plaintiff had asked the said amount it has to be granted to him. Therefore this decision cannot be made applicable to the facts of the case. Therefore I do not find any perversity in the observation made by the learned Arbitrator.
39. The learned counsel for the plaintiff contends that the additional cost incurred for getting the balance work down to the tune of Rs. 8,61,693/ has been wrongly calculated by the Arbitrator. The
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MFA No.8761 of 2015perusal of the award shows that in para-98 the Arbitrator calculates payables of the plaintiff to the claimant and arrives at a figure of Rs. 17,45,171/- and thereafter he deducts sum of Rs. 2,74,000/- which was imposed by way of penalty. In para-64 of the award the learned Arbitrator observes that the termination of the contract before the extended period of contract was arbitrary and unjustified and therefore he cannot be made liable to pay sum of Rs. 8,61,693/- which was to be paid to the new contractor in excess of sum which would have been paid to the claimant if he was allowed to continue the construction work. The learned counsel, Sri KS Bhat, contends that when the Arbitrator upholds the levy of the penal charges of Rs. 1000/- per day for delay, he cannot justify in saying that the said sum of Rs. 8,61,693/- which is difference for entrusting the remaining work to another agency is a perverse finding. The same analogy also applies to the forfeiture of the EMD and Security Deposit also. It may be noted that the arbitrator has held that the termination of the contract unilaterally before the stipulated time is illegal and unwarranted. This finding flows from the fact that the additional works were given to the contractor, there was delay in handing over the site, etc., and therefore the Arbitrator has concluded that the termination cannot be justified. When the termination is invalid, naturally the forfeiture of EMD and Security deposit and also the entrustment of work to another agency
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MFA No.8761 of 2015become invalid. But the question is whether the delay and the penalty imposed thereof can also become invalid and it is a perverse finding. The imposition of penalty is dealt by learned Arbitrator in para-78. He refers to the point No.5 and holds that the said penalty is payable by the claimant to the plaintiff. While dealing with the point No.5, in para- 65, the Arbitrator has observed as below:
"Accordingly to the counter claims, the clamant is liable to pay Rs. 2,74,000/- as penalty for delay committed in the work from 1.4.2003 till 30.12.2003, the date of termination of contact, at Rs. 1000/- per day."
After observing so, the arbitrator further says that the extended period commences from the meeting held on 13.8.2003. Since the claim made by the plaintiff was prior to the said extension of time, the defendant No.1 had not denied the same. It is observed that Ex.R15 dated 13.5.2003 imposed the fine and the said letter was denied by the claimant. On the other hand he allows the levy of sum of Rs. 2,74,000/-. It is pertinent to note that the said levy of Rs. 2,74,000/- is nothing to do with the extension of time and at the time of extending the contract period, there was no discussions about the said penalty amount. Therefore the learned Arbitrator observes that the extension of time do not absolve the claimant from paying the said penalty invoked by the plaintiff by letter dated 13.5.2003 at Ex.R15. The conclusions reached by the Arbitrator in para-66 are
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MFA No.8761 of 2015quite understandable and they cannot be said to be perverse.
40. It is for this reason that the additional cost incurred for getting the balance work done amounting to Rs. 8,61,693/- was disallowed by the Arbitrator. It is pertinent to note at this juncture that towards claim of Rs. 8,61,693/- there is no positive evidence led by the plaintiff before the Arbitrator. The learned counsel appearing for the defendant No.1, Sri Udayanand, has drawn my attention to the fact that the RW.1 never produced any document to show that the matter was entrusted to Subashchandra Shetty and such contractor performed the balance work at higher work than the tendered amount and such of the amount is Rs. 8,61,693/-. Therefore I find considerable justification in the finding of the Arbitrator that the plaintiff herein had not placed on record the said additional expenditure of Rs. 8,61,693/-.
41. The learned counsel for the plaintiff contends that Ex.R27 is the agreement with the said Subashchandra Shetty and the calculations are also found in Ex. R30. Ex.R30 happens 50 A.S.1/2010 to be the measurement book and it is not known how Ex.R30. would help the plaintiff in this regard. The perusal of Ex. R27 though show that the matter was entrusted to Subashchandra Shetty to complete the works, it is not known as to what was the balance work done by him. The learned Arbitrator, did not chose to examine these documents, since he
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MFA No.8761 of 2015concluded that the termination of the contract of the defendant No.1 and the entrustment of the remaining work to the Subashchadnra Shetty itself is illegal and cannot be justified. The Arbitrator has given sufficient reason to hold that the termination was unjustifiable. Therefore the denial to grant the said additional costs for getting the balance work done appears to be reasonable and it has the backing of the reasons. It cannot be said to be arbitrary or shocks the conscience of the court.
42. Coming to the question of value of the plant and machinery, the learned counsel for the plaintiff contends that the Arbitrator has held that the plaintiff should return the plant and machinery in good working condition. It is contended that it is old one mixing machine and concrete elevator, one not working, vide R-25 and if they are sold the amount to be paid to the claimant. He contends that the plaintiff had lien over the materials of contractor till he settles the claim. It is pertinent to note at this juncture that the plaintiff himself had issued a letter to the contractor to lift all his materials and when the contractor came to lift the materials in July 2004, then the RW.1 gave him a letter that further action would be intimated. Instead of returning those materials of the contactor on the basis of his own promise, the plaintiff has declined to do so. When the plaintiff had with-held the equipments, he is liable to its up-keep also. Therefore it cannot be said that the finding of the Arbitrator is unjustifiable. The said
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MFA No.8761 of 2015finding of the arbitrator emanates from the conduct of the plaintiff himself. Though the Dean of the Institute had written a letter to lift all belongings of the contractor after the alleged termination of the contract, the question arose as to why the RW.1 denied lifting the plant and machinery. The alleged letter of termination itself directs the contractor to lift the plant and machinery belonging to him. Therefore the plaintiff was estopped from issuing a letter in the form of Ex.P8 dated 10.8.2004. Therefore the finding of the Arbitrator regarding the plant and machinery cannot be found fault with.
43. The next aspect is regarding the value of jelly and sand at the site amounting to Rs. 5,13,503/- awarded by the Arbitrator under the point No.7. It is general head of damages claimed by the claimant and the award from para 79 to 96 deals with the various damages claimed by the claimant. So far as the jelly and sand is concerned, the award in para-96 states that in the letter of termination of agreement i.e. Ex.R24 dated 30.12.2003 the Director had requested the claimant to lift all the material including the residuary, jelly, sand etc. from the work site. It is stated that thereafter the mahazar was drawn as per Ex.R25 on 16.1.2004. The said mahazar did not depict the residuary, jelly and the sand. The Arbitrator finds that it is not known what happed to the same during 30.12.2003 and 16.1.2004 since the Ex.R24 did mention about jelly and sand, but the mahazar did not mention the
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MFA No.8761 of 2015same. Therefore he comes to the conclusion that the jelly and sand were also present at the site and therefore Ex.R24 directed the claimant to lift the remaining residuary, jelly and sand and on this count, it has to be presumed that the value claimed by the claimant has to be awarded. He comes to the conclusion that the of the jelly and sand was removed by the plaintiff Institution and therefore it is liable to pay the said amount. The Arbitrator also notes that the other construction materials mentioned in the claim statement did not find any mention in the mahazar or no other evidence was led and therefore the claim of Rs. 3,79,483/- was disallowed. Thus it is clear that the Arbitrator has applied his mind and has perused the records while allowing the claim for jelly and sand. Under these circumstances, it is quite clear that the Arbitrator had applied his analytical mind to all the documents produced before him. However the quantum of sum of Rs. 5,13,503/- was to be established by way of proof by the claimant. Obviously the custody and possession of the jelly and sand was with the plaintiff Institution and this has been considered by the Arbitrator. Therefore the said finding cannot be termed as arbitrary or perverse. It cannot be said as shocking finding and it suffers from any unreasonableness. It is pertinent to note that any of the tests laid down in the case of Associate Builders Vs. Delhi Development Authority can be applied to the above circumstances to hold that it is perverse or
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MFA No.8761 of 2015it is against the justice or morality or there is any patent illegality.
44. The next aspect is regarding the hire charges of the lorry which was brought by the defendant No.1 to lift the materials. This again goes to the Ex. P8. It may be noted that the claimant made correspondence with the Institution and he was specifically asked to collect the material from the site. It may be noted that the plaintiff had informed the claimant to lift the material by letter dated 21.7.2004 as per Ex.P6 in pursuance of the said letter, the claimant sent the vehicle and even then the RW.1 did not allow the lifting of the plant and machinery. Therefore he has claimed a sum of Rs. 51,000/-. The learned Arbitrator by observing the same in para-94 of the award has allowed the said sum of Rs. 51,000/- claimed by the claimant. I do not find any perversity in the same. He has also discussed the oral evidence of RW.1 in that regard. While coming the conclusion that the action of R.1 was unjustifiable he has considered the Ex.P6, P8 and the evidence of RW.1 and therefore such damages are liable to be fastened upon the plaintiff. Under these circumstances the award cannot be said to be perverse or arbitrary.
45. The judgment of Hon'ble Supreme Court in the case of Associate Builders Vs. Delhi Development Authority lays down what is the Public Policy of India. The fundamental policies of Indian law, interest of India, justice or morality patent illegality are all held
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MFA No.8761 of 2015to be the public policy of India. The fundamental policy of Indian Law includes compliance with statute, judicial precedents, need for judicial approach, nature justice compliance and Wednesbury reasonableness (is nothing but perversity or irrationality of decision tested on the touch stones of reasonableness). In other words whether the findings are reasonable or not. The reasonableness is nothing but what is just and fair and according to equity and good conscience. It is pertinent to note that this again has conflict with Section 28(3) of the Arbitration and Conciliation Act. It is wroth to note that even though Section 28(3) of the Arbitration and Conciliation Act imposes that the Tribunal shall decide in accordance with terms of the contract unless the equity and good conscience are to be considered by Arbitrator expressly authorized by the parties gets diluted. In other words the question would be whether Section 28(3) of the Arbitration and Conciliation Act would be hit by Wednesbury principles, which is again the public policy of India. Be that as it may, the award passed by the learned Arbitrator is based on good conscience and equity. I do not find any reasons to hold that it is against the public policy of India. The learned counsel appearing for the plaintiff in his elaborate notes of arguments has pointed out several observations to be perverse. Simply because those observations are against the plaintiff, they cannot be termed to be perverse. The Arbitrator is the ultimate master of the quantity and
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MFA No.8761 of 2015quality of evidence while drawing the arbitral award, award based on little evidence or of evidence which does not major up in quality to a trained legal mind cannot be held invalid. Thus the threshold of terming an award to be perverse has been raised by the judgment of the Supreme Court in the case of Associate Builders Vs. Delhi Development Authority. The trivial perversities cannot be a ground to set aside the award. Therefore the contention of the learned counsel for the plaintiff, by which he has pointed out several alleged perversities, cannot be relevant at all. In other words the perversity should be of such standard that it shocks the conscience of the court. Having not found such shocking perversities in the award, the points raised above by this court are answered in the negative."
Submissions:
12. Sri. P.S.Rajagopal, learned Senior Counsel appearing for the appellant would contest the order passed by the learned District Judge by stating that, the District Judge has not properly considered and appreciated the fact that the 1st respondent was negligent and behind schedule on all material points of time and stopped the work completely in March 2003 and thereafter even undertaking to complete the work by
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31.03.2004, the normal work was not resumed even till the date of termination of contract and hence, the finding of the learned Arbitrator that the termination of contract was illegal is wholly unjustified. According to him, the learned Arbitrator and the learned District Judge have failed to appreciate the well settled principles of anticipatory breach of contract enunciated by Section 39 of the Indian Contract Act, 1872 ('Contract Act' for short) and the consequences thereof. That apart, it is his submission that, the learned District Judge has upheld the arbitral award which is vague and non-executable, based on no evidence, thus acted with material irregularity and patent illegality. That apart, he stated that, the learned District Judge has failed to appreciate that termination of the contract was strictly in terms of the contract and after giving more than adequate opportunity to the 1st respondent to make amends and therefore, was fully justified. He also stated, once the termination was justified, there was no reason for the learned Arbitrator to grant the claims of the 1st respondent and deny the counter-claims of the appellant herein. He also contested
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the grant of interest at the rate of 18% p.a. by the learned Arbitrator in favour of the 1st respondent.
13. On the other hand, Sri. Yashodhar Hegde, learned counsel for the 1st respondent has justified the arbitral award, so also the order passed by the learned District Judge to state that, the learned Arbitrator has rendered the award after considering all the documents and necessary facts which includes, as the contract has been extended till 30.04.2004, there was no reason for the appellant to terminate the contract on 30/31.12.2003, moreso when it is the case of the appellant that the new contractor has completed the work within 4 months, which was the period available to the 1st respondent to complete the work. He stated, if that being the case, the grant of claims of the 1st respondent and denial of counter-claims (except one regarding penalty for delay) of the appellant by the learned Arbitrator is justified.
According to him, in the facts of this case and the reason given by the learned Arbitrator for his conclusion, the learned District Judge has rightly dismissed the challenge to the award under Section 34 of the Act of 1996 as the
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MFA No.8761 of 2015scope under Section 34, unlike an appeal, is very limited and it is not the case of the appellant that the award rendered by the learned Arbitrator falls within the ground as stipulated under Section 34 of the Act. He stated, this Court while exercising its power under Section 37 of the Act of 1996, would still be narrower and would not like to interfere with the same.
Analysis:
14. Having heard the learned counsel for the parties and perused the record, the issue which arises for consideration is, whether the learned Arbitrator was justified in holding the termination of contract on 30/31.12.2003 by the appellant is justified?
15. In this regard, we may reproduce the finding of the learned Arbitrator in paragraphs No.36 to 44 as under:
"36] Admittedly, apart from imposing penalty of Rs.1,000/- per day as per Ex. R15 dated 13.05.2003 on for the Claimant, under clause 3 (d) of the Agreement the alleged delay in the construction work, with effect from 01.04.2003, no action was taken to rescind the contract. Instead, a
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show-cause notice dated 04.08.2003 at Ex.P3, was issued to show-cause why the contract should not be terminated. The Claimant was also requested by this notice to meet the Director between 11.08.2003 and 13.08.2003. was of He also directed by this letter to give programme work to complete the building within the scheduled time. This indicates that the Director was not keen to rescind the contract. Instead, he was prepared to wait till the scheduled time. The Director was not examined in this case to know why he was prepared to wait till the scheduled time to take action completed. view if This was due to the construction work was not conduct already constructed of the Director, in my the fact that the Claimant had an additional basement floor, for which no extra time was granted.
37] Ex.P4, the letter dated 16.08.2003 of the Claimant discloses, that after discussions in the meeting held on 13.08.2003, the Claimant was granted four months extra time, for having provided additional 14 rooms and also some other additional works. It is not the case of the Respondent that this extended period up to 30.03.2004 was the essence of the agreement.
38] Materials on record disclose that extension of the period by four months is not a concession show, as contended on behalf of the Respondent, to the Claimant by the Respondent. Though plan and design of the Ladies Hostel Building construction entrusted to the Claimant have not been produced
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by either of the parties, Ex. R29, the copy of agreement discloses that the proposed hostel building consists ground plus period for construction months, i.e., about of 7 two floors. The this building was 21 months period for construction of each floor. It cannot be disputed that the built-up area of the additional basement floor in which not less than any of these three floors, case; the Claimant was also entitled to be granted 7 months additional period. But the Claimant in Ex.P5 has stated as "further, the extra time required for the additional works like change of flooring from red-oxide to Mosaic and additional 14 rooms and its retaining wall, excess quantity of EWE an amounting to Rs.20,00,000.00 will be four months, ie, up to 30.03.2004".
39] Having thus extended the period for completing the construction work till 30.03.2004, the Respondent by the letter at Ex.R24 dated 30.12.2003, has terminated the contract alleging slow progress. This action according to the Claimant was illegal.
40] Ex.P4 is dated 16.08.2003. In this the Claimant has given the "Bar Chart" disclosing different target dates to complete different items of pending works. In Ex.P5 dated 25.08.2003, the Respondent has stated that Sri B.Rangadhamaiah, representative of Claimant had assured that the work would be carried out in full swing from 01.09.2003 onwards. Therefore no importance need be given to
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MFA No.8761 of 2015the letter of Sri Yadiyal dated 21.08.2003 wherein he has alleged that the progress of work was very slow.
41] Sri Yadiyal RW1, the Resident Engineer, who was supervising this ladies hostel construction work has not reported in writing to the authorities concerned that the progress of the construction was slow from 01.09.2003 In the letter at Ex.R22 dated 10.10.2003, the Dean has stated that the Claimant had agreed that the progress of the work was below the schedule and hence the Claimant was instructed to complete the work by 2nd week of March 2004. This suggests that the Dean had по reason entertain any doubt about the assurance of to the Claimant to the effect that the construction would be completed by 30.03.2004. There is no material on record to show that after 10.10.2003, there was any allegation of slow progress of the work. Still surprisingly, by the letter at Ex. R24 dated 30.12.2003, the Director even the terminated contract, though the Claimant had time till 30.03.2004 to complete the construction work.
42] As per the decision taken in the joint meeting held on 17.08.2003, the Claimant was granted four months additional time till 30.03.2004, the construction work. to complete This decision appears have been taken as the Claimant, to on the direction of Resident Engineer had put-up an additional floor (basement floor). Thereafter no serious complaint was made by Sri Yadiyal that the progress of work was slow completed Even that the
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MFA No.8761 of 2015Claimant could not construction work by have 30.03.2004. as the Sri Yadiyal in his evidence has admitted "There is not right to terminate the contract prematurely before the contract period.
43] Since the facts of the two decision, in State of Maharashtra -Vs- Digambar, AIR 1979 SC 1339 and N.V. Chowdhury -Vs- Hindusthan Steel Works Construction Ltd., AIR 1984, Andhra Pradesh 110, are quite different from the facts of the present case, the principles laid down in these decisions are not applicable to the present case.
44] For the aforesaid reasons, I hold that the termination before the of the agreement by extended period, the Respondent besides being unjustified was also illegal. Accordingly this point is answered in the affirmative."
16. From the above, it is also noted that, there is some reasoning given by the learned Arbitrator to hold the termination to be bad. It is true that, there has been a slow progress of the work by the 1st respondent initially and for which, penalty of Rs.1,000/- per day was also imposed. But the fact remains, the contract having been extended till 30.04.2004, to terminate the same 4 months before that date, by which period the new contractor has also completed the work, we are of the view that given
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MFA No.8761 of 2015the position of law, more particularly under Section 34 of the Act, the finding of the learned Arbitrator is a factual finding and there being some basis to come to such a conclusion, the same cannot be interfered with.
17. Having said that, the question now would be, whether the claims which have been allowed by the learned Arbitrator, which primarily relates to EMD/security deposit/lorry hire charges/pending amount of 7th R.A. bill/value of jelly and sand left at the work site by the 1st respondent, are the necessary consequences which must flow to the entitlement of the 1st respondent? In other words, it is not the case of the appellant that the EMD/security deposits are not recoverable. The other amounts of Rs.51,000/-,Rs.5,54,203/- and Rs.5,13,203/-
are those charges which the 1st respondent has actually incurred for doing the work/actually incurred during the performance of the contract till 30/31.12.2003. Hence, the 1st respondent was entitled to the said amount.
18. The necessary corollary of our above finding is that, the counter-claim of the appellant for the difference
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MFA No.8761 of 2015of the amount i.e., Rs.8,61,693/- alleged to have been incurred by the appellant for getting the balance work done is concerned, the finding of the learned Arbitrator in paragraph No.64 is as under, with which we agree:
"64] I have held already that the termination of the contract before the extended period of contract was improper and unjustified. Since he was not allowed to continue the construction work from 31.12.2003 till 30.04.2004, he cannot be made liable to pay Rs.8,61,693/= which was to be paid to the New Contractor, in excess of the sum which would have been paid to the Claimant if he was allowed to continue the construction work. Hence, the Claimant is not liable to pay this amount also to the Respondent."
That apart, it is the submission of learned counsel for the 1st respondent in that regard, the appellant has, in support of his claim, relied upon the extract of the amount without actually filing the contract which it had executed with the third-party (another contractor). This submission of learned counsel for the 1st respondent has not been contested by Sri. Rajagopal. If that be so, in the absence of the contract being on record, the factum that the appellant had actually awarded the work to the third-party
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MFA No.8761 of 2015resulting in incurring expenses of Rs.8,61,693/- cannot be said to have been proved. So, the rejection of the counter-claim to that extent is justified.
19. Insofar as the counter-claim of Rs.5,31,942/- is concerned, the learned Arbitrator has already rejected the same under point No.8, which he have already reproduced. The aforesaid would also justify the award of the learned Arbitrator for denying the counter-claims of the appellant under two heads.
20. Having said that, we find that, the learned District Judge has, on the plea of termination, on the well settled principle of anticipatory breach of contract under Section 39 of the Contract Act is concerned, has referred to the judgment of the Supreme Court in the case of State of Maharashtra and Another -Vs.- Digamar Balwanth Kulkarni [(1979) 2 SCC 217] as relied upon by the counsel for the appellant and has given the reasoning in paragraphs No.22, 23 and 37 of the impugned judgment, which we reproduce as under:
"22. The learned counsel for the plaintiff also places reliance on the decision in the case of State of
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Maharashtra and another Vs. Digamar Balwanth Kulkarni [(1979) 2 SCC 217] to contend that the termination of the contract U/s. 39 of the Indian Contract Act is justifiable. In this judgment it is held that Section 39 provided for rescinding the contract when it is found that the contract cannot be executed within the stipulated time. The learned counsel for the plaintiff has also placed reliance on the commentary in this regard and has argued that the doctrine of anticipatory breach of contract is an accepted principle. It is contended that Section 39 of the Indian Contract Act embodies the doctrine of anticipatory breach and the rule indicated by this doctrine is that on the repudiation of the contract by one party even before the time for performance has arrived. The other party may at his option treat the repudiation as an immediate breach putting an end to the contract for the future and once bring his action for recovery of the damages. There cannot be any doubt that the law provides for anticipatory breach of contract. Now the question is whether there was such anticipatory breach on the part of the plaintiff or he exercise the termination of the contract.
23. The learned counsel for the plaintiff relies upon the decision in the case of Krishnabaghya Vs. V.Harischandra Reddy [2007 (2) SCC 720] wherein it was held that the award granted 18% interest for the pre-arbitration period and for pendente-lite period and future interest also the same rate of interest was
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applied. Hon'ble Supreme Court held and reduced the interest to 9% in view of the substantial reduction of interest rates after economic reforms in the country.
xx xx xx xx xx
37. Under these circumstances whether the question of invoking Section 39 of Contract Act is justifiable. There cannot be any doubt that Section 39 of the Contract Act, empowers the termination of the contract in anticipation of its breach. It reads as follows:
"When party to the contract has refuse to perform or disabled himself form performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance."
The word in its entirety has some significance in the said section. It is not the case of the plaintiff that the defendant No.1 contractor had refused to perform the promise in its entirety. Nearly 50% of the work had been completed by him and therefore it cannot be said that it was a refusal in entirety. Though the plaintiff is justified in saying that he did not acquiesce to the same, it cannot be said that there was refusal in entirety. The plaintiff had changed the rules of the game by entrusting the additional work in the form of basement floor and then he keeps on mounting pressure without bringing such additional work on record. Then on 13.8.2003 there is a meeting between the parties when revised time lines
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MFA No.8761 of 2015are fixed and said time lines are acknowledged by the plaintiff and thereafter, before the time lines are reached, there is termination of the contract. It was incumbent upon the plaintiff either to agree or not to agree for the revised time lines. Therefore when there is an acknowledgment by the plaintiff, it has to be held that the plaintiff had acquiesced to the revised time lines. Hence I do not find any reasons to hold that the finding of the Arbitrator that the termination of the contract is not justifiable, is based on the sound and proper reasoning and available evidence. The cross examination of RW.1 reveal the nature in which the matter was dealt by the plaintiff institution. The contract was for Ground + 2 floors and additional work was informed that 15 rooms to be constructed in the basement. Therefore it cannot be said that the finding of the arbitrator on point No.4 regarding termination of the contract is illegal and perverse."
So, there is justification for the learned District Judge to hold that, the finding of the learned Arbitrator regarding termination of the contract was illegal and perverse.
21. On the scope of interference with the award under Section 34 of the Act of 1996, the learned District Judge has, in paragraphs No.31, 32 and 45, held as under:
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"31. At the outset it is necessary to note that the law regarding the scope of the challenge U/s 34 of the Arbitration and Conciliation Act has been considered by the Apex Court in several of its decisions. The Hon'ble Apex Court in the case of ONGC Ltd. Vs. Saw Pipes Ltd. held that an Arbitral award suffering from patent illegality would be contrary to the public policy of India. This had enlarged the scope of the court interference in arbitral award as previously in the Renu Sagar Power Company Ltd. Vs. General Electric Co.Ltd. [1994.SUPP.1 SCC.644] the Supreme Court had held albeit in the context of the Foreign Awards (recognizant and enforcement Act 1961) that an award would be contrary to the public policy of India only if it was contrary to fundamental policy of Indian law and interests of India or justice or morality. Then the judgment in the case of ONGC Ltd. Vs. Western Geo Intl.Ltd. [2014(9)SCC.263] the Supreme Court held and interpreted the phrase Fundamental policy of Indian Law. In fact the said judgment in the case of ONGC Ltd. Vs. Western Geo Intl.Ltd. equated the Arbitration Act 1940 with that of 1996 Act and the scope for challenge was almost similar. It is worth to note at this juncture that there have been several decisions by the Hon'ble Apex Court on the question of Scope of the Public Policy of India. The recent decision in the case of Associate Builders Vs. Delhi Development Authority it has been held that the award would not be contrary to justice
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and contrary to public policy of India unless such award shocks the conscience of the court. This judgment arguably sets the higher thresholds for set-asiding the award of the Arbitrator on the question of opposed to Public policy of India. Therefore it is to be noted that the latest decision in the matter being the Associate Builders Vs. Delhi Development Authority, it is not a simple perversity or a simple non-observation of the fact but a fact which goes to the root of the case. The perversity should be such that it shocks the conscience of the court. It is with this view that the point No.1 has been framed by this court. Hence the award has to be looked into in the light of the observations of the Hon'ble Apex Court in the case of Associate Builders Vs. Delhi Development Authority.
32. Let us examine the various perversities alleged by the learned counsel for the plaintiff which according to him have led to an award which is opposed to a Public Policy of India. It is pertinent at this juncture that such perversity should be to shock the conscience of the court and satisfies the perversities which squarely fall in the tests laid down in the case of Associate Builders Vs. Delhi Development Authority cited supra. It is in the light of the principles laid down in the case of Associate Builders, the award passed by the learned Arbitrator need to be looked into.
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MFA No.8761 of 2015
45. The judgment of Hon'ble Supreme Court in the case of Associate Builders Vs. Delhi Development Authority lays down what is the Public Policy of India. The fundamental policies of Indian law, interest of India, justice or morality patent illegality are all held to be the public policy of India. The fundamental policy of Indian Law includes compliance with statute, judicial precedents, need for judicial approach, nature justice compliance and Wednesbury reasonableness (is nothing but perversity or irrationality of decision tested on the touch stones of reasonableness). In other words whether the findings are reasonable or not. The reasonableness is nothing but what is just and fair and according to equity and good conscience. It is pertinent to note that this again has conflict with Section 28(3) of the Arbitration and Conciliation Act. It is wroth to note that even though Section 28(3) of the Arbitration and Conciliation Act imposes that the Tribunal shall decide in accordance with terms of the contract unless the equity and good conscience are to be considered by Arbitrator expressly authorized by the parties gets diluted. In other words the question would be whether Section 28(3) of the Arbitration and Conciliation Act would be hit by Wednesbury principles, which is again the public policy of India. Be that as it may, the award passed by the learned Arbitrator is based on good conscience and equity. I do not find any reasons to hold that it is against the public policy of India. The learned counsel appearing
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for the plaintiff in his elaborate notes of arguments has pointed out several observations to be perverse. Simply because those observations are against the plaintiff, they cannot be termed to be perverse. The Arbitrator is the ultimate master of the quantity and quality of evidence while drawing the arbitral award, award based on little evidence or of evidence which does not major up in quality to a trained legal mind cannot be held invalid. Thus the threshold of terming an award to be perverse has been raised by the judgment of the Supreme Court in the case of Associate Builders Vs. Delhi Development Authority. The trivial perversities cannot be a ground to set aside the award. Therefore the contention of the learned counsel for the plaintiff, by which he has pointed out several alleged perversities, cannot be relevant at all. In other words the perversity should be of such standard that it shocks the conscience of the court. Having not found such shocking perversities in the award, the points raised above by this court are answered in the negative."
(Emphasis supplied)
22. Further, we may also refer to the judgment of the Supreme Court in the case of Punjab State Civil Supplies Corporation Limited and Another -Vs.-
Sanman Rice Mills and Others [2024 SCC OnLine SC
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MFA No.8761 of 20152632] highlighting the scope of Section 37 of the Act of 1996, wherein the following has been stated:
"20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only
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for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court.
21. It must also be remembered that proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit. Therefore, the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement."
23. We hold that, the impugned judgment of the learned District Judge cannot be faulted. The appeal being without merit, is dismissed.
24. In view of dismissal of the appeal, pending IA No.1/2015 is disposed of as infructuous.
Sd/-
(V KAMESWAR RAO) JUDGE Sd/-
(S RACHAIAH) JUDGE PA