Delhi District Court
M/S Vardhman Infradevelopers Pvt. Ltd vs Gurmeet Singh Huf on 31 May, 2022
IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (Comm.) No. 83/2021
M/s Vardhman Infradevelopers Pvt. Ltd.
(Through its Authorized Representative)
401-414, 4th Floor,
Shahpuri, Tirath Singh Tower,
C-58, Janakpuri,
New Delhi-110058 ..Petitioner
versus
Gurmeet Singh HUF
(Through Karta)
D-341, Narmada Apartments,
Alaknanda,
New Delhi-110019 ..Respondent
Date of Institution : 27/08/2021
Arguments concluded on : 18/05/2022
Decided on : 31/05/2022
Appearances : Sh. Prashant Katara, Ld. Counsel for petitioner.
Sh. Kamal Mehta, Ld. Counsel for respondent.
JUDGMENT
1. Petition under Sections 34 (2)(b)(ii) & 34 (2A) of The Arbitration and Conciliation Act, 1996 (herein after referred as The Act) was filed by petitioner seeking setting aside of the impugned arbitral award dated 30/03/2021 of Ld. Sole Arbitrator Ms. Beenashaw N. Soni in case ARB.P 908/2018 titled 'Gurmeet Singh HUF And M/s Vardhman Infradevelopers Pvt Ltd.' Following is the operative portion of the award:-
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 1 of 33"Award Findings on the Issues Issue no 1---decided in favour of claimant. The respondent is directed to refund the amount of Rs. 30,16,650/- (Rs. Thirty Lakhs Sixteen Thousand Six Hundred and fifty only) to the claimant.
Issue no. 2 --- Allowed. The respondent is directed to pay a sum of Rs. 15,72,736(Rs. Fiften Lakhs Seventy Two Thousand Seven Hundred and thirty Six) as arrears of assured returns to the claimant for the period September 2015 to April 2019 and thereafter to pay a sum of Rs. 8,22,112/-(Rs. Eight Lakhs Twenty Two Thousand One Hundred and Twelve) @ Rs. 35,744/- per month from May 2019 till the date of award on 30.03.2021.
Issue no 3 --- Allowed. The respondent is directed to pay interest @ 9% on the total amount awarded in issue no 2 above. The claimant is further awarded an interest @ 18% on the total awarded amount of issue No.1, 2 & 3 from the date of award till its actual realization in terms of section 31(7)(b) of the Act.
Issue no 4 --- Rejected Issue no 5 --- Rejected In view of the aforesaid discussion the claims of the claimant are allowed in terms of the finding on the issues mentioned above.
The claimant is also awarded a lump sum cost of Rs. 55,000/- towards the cost of proceedings."
2. I have heard Sh. Prashant Katara, Ld. Counsel for petitioner and Sh. Kamal Mehta, Ld. Counsel for respondent and perused the record of the case including reply, the arbitral proceedings record, filed brief written arguments, relied upon precedents on behalf of parties and given my thoughtful consideration to the rival contentions put forth.
3. Adumbrated in brief following are the relevant facts of case of parties. Respondent/claimant had booked an office space ad- measuring 423 sq ft. super area in a project by name of OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 2 of 33 "Vardhman Alfa Square" being developed by petitioner for total sale consideration of Rs. 35,98,275/- out of which a sum of Rs. 30,16,650/- was paid by cheque at the time of execution of the builder buyer agreement and the balance amount was to be paid at the time of offer of possession of the office space to respondent/claimant. As per clause 1.6 of the agreement, petitioner was also under an obligation to pay a sum of Rs. 35,744/- per month to the respondent/claimant as assured return till the date of offer of possession but petitioner stopped paying the same after July, 2015. In terms of aforesaid agreement, the possession was to be delivered on or before 31/03/2015 but the offer of possession was not made on due date or till any date thereafter. Respondent/claimant made various follow-ups but it did not yield any result. Respondent/claimant invoked arbitration vide notice dated 06/10/2017 in terms of the arbitration clause in the agreement. As per respondent/claimant, above said notice dated 06/10/2017 was duly served on the petitioner but petitioner did not respond to said legal notice. As per petitioner, no notice dated 06/10/2017 invoking arbitration by the respondent/claimant was duly served upon the petitioner. Respondent/claimant filed petition under Section 11 of the Act before Delhi High Court for appointment of an Arbitrator. Notice was issued by Delhi High Court to petitioner in the above said petition filed under Section 11 of the Act by respondent/claimant. Petitioner did not appear in the proceedings under Section 11 of the Act before Delhi High Court. Vide order dated 13/03/2019 Ld. Sole Arbitrator was appointed by Delhi High Court. Arbitral proceedings culminated into impugned arbitral award.
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 3 of 334. Petitioner has impugned the arbitral award mainly on the following grounds. Ld. Sole Arbitrator arbitrarily passed the award in favour of respondent/claimant which is squarely covered in the patent illegality as the finding given was that the objections of petitioner with regard to claim of respondent/ claimant were not filed properly and raised for first time in arguments; which was completely against the public policy and does not hold ground for rejecting these objections/submissions of petitioner. Objections against a settled law if pointed out at the stage of arguments, or at any stage thereof need to be taken into consideration, as any judgment or award passed either by Ld. Sole Arbitrator or any other authority shall act within the bounds of law. Non consideration of legal grounds amounts to patent illegality. While appointing Ld. Sole Arbitrator, Hon'ble High Court was only to see existence of arbitration agreement and not to look into the facet of invocation of arbitration and accordingly the adjudication of Ld. Sole Arbitrator that the issue with regard to the invocation of arbitration could have been even effectively raised before Delhi High Court when it was deciding the application filed under Section 11 of the Act was contrary to law. Non invocation of the arbitration agreement, will not be covered under the term waiver as per Section 4 of the Act and the objections qua the same can be taken at any stage of the matter including in the application under Section 34 of the Act. Section 4 of the Act only applies to non mandatory provisions of the Act; however, non invocation is not covered under either of the provisions of Section 4 of the Act. Under any circumstances due to non invocation, the entire arbitral proceedings become a OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 4 of 33 nullity and hence the said objection can be taken up at any stage. Ld. Sole Arbitrator has moved beyond the scope of law and adjudicated the arbitral proceedings under the garb of patent illegality, as merely sending of the notice/documents to an address which may have been used by the petitioner at a given point of time will by no stretch of imagination be construed as service. Service of documents on a company stands described in Section 20 of The Companies Act, 2013 as well as Order XXIX Rule 2 of The Code of Civil Procedure, 1908 (hereinafter referred as CPC). Invocation of the arbitral proceedings were conducted without the receipt of any notice for invocation of said arbitral proceedings to the petitioner under Section 21 of the Act and hence the arbitration process is a nullity. Notice dated 06/10/2017 and its postal receipts and tracking record were denied by petitioner during the trial and said documents cannot amount to invocation. Said documents filed were only copies obtained from the Internet, however, except for the computer generated Form 26AS filed, no affidavit under Section 65-B of The Indian Evidence Act was filed by the respondent/claimant and thus the printout especially the postal tracking reports cannot be considered as legally enforceable documents. No witness was summoned by respondent/claimant to testify in said regard to assert the authenticity of said documents. Since petitioner has challenged the notice for invocation of arbitration dated 06/10/2017, the claim of respondent/claimant does not fall within the limitation period and the award for the payment of refund and assured return needs to be set aside. Arbitral award also deserves to be set aside on the ground of acquiescence, wherein OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 5 of 33 the date of possession became due on 31/03/2015, the cause of action stands triggered on 01/04/2015; hence the prayer for refund of the amount as claimed by respondent/claimant is hopelessly time barred as the time span to claim the said refund stood lapsed on 01/04/2018. Petitioner stopped paying the assured return in the month of September, 2015 and no promises of assured returns were made in the agreement dated 01/08/2012, however, the same is also barred by limitation and the right of the respondent/claimant to assert these claims also lapsed; so Ld. Sole Arbitrator was estopped by its own accord to adjudicate the time barred claims. Respondent/claimant was well aware of the delay in delivery of the possession and the non payment of assured returns thereto and thus cannot take advantage of their own wrongs at a belated stage. Impugned award is unsustainable on the touch stone of rationality and reasonableness also. Ld. Sole Arbitrator failed to appreciate that respondent/claimant before Arbitral Tribunal was a Hindu Undivided Family which had no individual right to institute the arbitration unless specifically mentioned in the agreement. Hindu Undivided Family is not considered as a separate entity, therefore, the same does not has the power to sue any other separate entity in the eyes of law. Ld. Sole Arbitrator passed the impugned award in erroneous fashion awarding the respondent and against the petitioner high and arbitrary rate of interest @ 18% per annum which was per contra to law laid and unreasonable as well as arbitrary. It was prayed to set aside the impugned award being patently illegal and vitiating the mandate of law and is in contravention to the fundamental policy of Indian law.
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 6 of 335. It was averred by respondent in the filed reply and argued by Ld. Counsel for respondent that objections raised by petitioner with regard to invocation not being proper; limitation and claimant therein being an HUF cannot sue in its name without making other coparceners a party to the proceedings; were dealt with by Ld. Sole Arbitrator in the reasoned award which needs no interference. Ld. Sole Arbitrator recorded the finding that the certified copies of postal receipts; invocation notice, tracking reports obtained from the Registry of High Court of Delhi were filed on record by moving an application and the same was never opposed by the petitioner therein. Once those documents were taken on record and not opposed by the petitioner; respondent/ claimant was not required to prove the same. Still further, the issue of invocation being allegedly not proper was never taken up in the reply to the statement of claim filed by the petitioner in the arbitration proceedings. It was also argued that Ld. Sole Arbitrator had held that the relevant date for the limitation period was the date of invocation since the invocation was done by notice dated 06/10/2017, the claim for seeking refund was within period of limitation. Also was argued by Ld. Counsel for respondent that Ld. Sole Arbitrator took notice of the fact that petitioner had itself stated that it offered to adjust the assured return in additional area to be given at the time of offering possession and no fresh date for offering possession was given and it was a case of continuing cause of action. Also was argued by Ld. Counsel for respondent that it was further observed by Ld. Sole Arbitrator in the impugned award that petitioner had not taken any objection qua limitation in the filed reply to the claim OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 7 of 33 petition and in its affidavit in evidence in arbitral proceedings. Also was argued by Ld. Counsel for respondent that Ld. Sole Arbitrator further relied upon Section 22 of The Limitation Act and observed that in case of a continuing breach of the contract a fresh period of limitation bigins to run at every moment of time during which the breach continues and therefore, the limitation would continue to run till the time possession was offered to claimant. Ld. Sole Arbitrator further observed that rights under the contract had not been given up and petitioner was under
constant obligation to offer the possession and deliver the unit to respondent/claimant. It was also argued by Ld. Counsel for respondent that contention of the petitioner that the claim of respondent was time barred was frivolous and liable for rejection. Ld. Counsel for respondent also argued that in terms of law laid by Delhi High Court in the case of A. Khandelwal & Sons, (HUF) vs Sardar Mall Alok Kumar (HUF), 2009 (158) DLT 102; relied upon by Ld. Sole Arbitrator; it was held that an HUF can be sued and can sue in its name. It was argued by Ld. Counsel for respondent that there was no infirmity in the impugned award. Also was argued by Ld. Counsel for respondent that Ld. Sole Arbitrator had taken into consideration the provisions of Order XXX Rule 10 CPC to that effect which stipulates that an HUF can sue and can be sued in its name. Ld. Counsel for respondent also argued that Ld. Sole Arbitrator had given sound reasons for awarding the interest at the appropriate rates in the impugned arbitral award since there was mention that petitioner failed to place on record or lead any evidence on the facet of delay and as such awarded an interest of 9% on the OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 8 of 33 amount due to the claimant. It was also argued by Ld. Counsel for respondent that with regards to the rate of interest of 18% per annum awarded by Ld. Sole Arbitrator; it has to be considered on the equity; since in clause (e) of the Application Form it was clearly stated that in case of delay in payment, petitioner herein shall charge interest @ 18% per annum. It was also argued by Ld. Counsel for respondent that thus, if the petitioner is entitled to charge interest @ 18% per annum, the petitioner may also be made liable to payment of interest at the same rate. Ld. Counsel for respondent/claimant relied upon the following precedents and prayed for dismissal of the present petition terming it to be devoid of merits:-
1. Bharat Sanchar Nigam Ltd. & Anr. vs Motorola India Pvt. Ltd., 2008 (4) R.A.J. 326 (SC);
2. Chief General Manager (IPC) M.P. Power Trading Co.
Ltd. & Anr. vs Narmada Equipments Pvt. Ltd., 2021 (2) R.A.J. 380 (SC);
3. Jaswant Singh vs Gurdev Singh, 2011 (12) SCALE 182;
4. Wonderland Properties Pvt. Ltd. vs Moonlight Continental Pvt Ltd. & Ors., 2015 (2) R.A.J. 306 (Del);
5. C. Doddanarayana Reddy (Dead) by LRs & Ors. vs C. Jayarama Reddy (Dead) by LRs. & Ors., 2020 (4) SCALE 251;
6. Vishwanath Khanna & Sons vs Bank of Baroda, 1998 (2) AD (Delhi) 715;
7. Mrs. Moona Abousher vs M/s Cholamandalam DBS Finance Ltd. & Ors., 2019 (5) R.A.J. 494 (Mad.);
8. Bhairab Karmakar & Construction Company vs Sarbari Biswas, 2009 (4) R.A.J. 369 (Cal).
6. Ld. Counsel for the petitioner argued in terms of the grounds impugning the arbitral award. It was also argued by Ld. Counsel for petitioner that objections with regard to legal point can be raised at any stage of a proceedings and Ld. Sole Arbitrator was bound to take them into consideration at the time of passing of the award. Ld. Counsel for the petitioner relied OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 9 of 33 upon the cases of Industrial Credit & Investment Corporation of India Ltd. vs Karnataka Ball Bearings Corpn. Ltd. & Ors., MANU/ SC/1029/1999 and Dewan & Sone Investment Pvt. Ltd. vs New Delhi Municipal Committee, MANU/DE/0882/1996. It was also argued by Ld. Counsel for petitioner that respondent/ claimant did not serve any notice for invocation of arbitration in terms of Section 21 of the Act upon the petitioner and thus the arbitration process was nullity. Ld. Counsel for petitioner relied upon the cases of Alupro Building System Pvt. Ltd. vs Ozone Overseas Pvt. Ltd, MANU/DE/0495/2017 and M/s Uttarakhand Purv Sainik Kalyan Nigam Limited vs Northern Coal Field Limited, SLP (C) No. 11476 of 2018 decided on 27/11/2019 by Supreme Court.
It was also argued that:-
"B. The claimant "allegedly" invoked the arbitration clause vide a notice dated 06/10/2017 (page 178 of the petition), and further at page 182 the postal slips stood annexed and page 183-187 depicts the tracking reports. C. That the said document stands denied by the petitioner during trial, and further the said document cannot amount to invocation for the reasons as mentioned below:-
(i) The documents filed are only copies and further no witness was ever (despite time specifically granted by this tribunal for the purpose) summoned to testify in the said regard or assert the authenticity of the said copies.
(ii) The said documents including but not limited to the tracking report stands obtained from the internet, and falls within the definition of "computer output", however no affidavit under Section 65-B of the Indian Evidence Act stands filed and hence the said print outs will not be considered as a "document", thereby not readable as evidence.
(iii) That no averments stand mentioned in the statement of claim, in relation to the addresses used, in as much as if anyone of the said addresses was the "registered address of the company for the relevant tenure". The service of documents on a company stand described at Section 20 of the OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 10 of 33 Companies Act (amended) as well as Order 29, Rule 2 of the CPC. Merely sending the documents to an address which may have been used by the petitioner at a given point of time will by no stretch of imagination be construed as service.
(iv) That the said tracking report also upon perusal depict that the letters returned unserved, however no envelopes stand filed depicting the reasoning.
(v) Section 21 of the Arbitration Act 1996 uses the words "is received by the respondent", hence proving service upon the petitioner of a notice for invocation is imperative in the absence of which the arbitration process will be a mere nullity and nothing more.
The Ld. Arbitrator is completely silent in this regard and has completely ignored the said objection raised by the petitioner."
It was also argued by Ld. Counsel for petitioner that there were no averment of respondent with regards to Janakpuri address being registered office address of petitioner and under any circumstances the alleged service of notice dated 06/10/2017 upon petitioner cannot be deemed to be a proper service for want of proving the documents qua said service and in absence of affidavit under Section 65-B of The Indian Evidence Act. It was also argued by Ld. Counsel for petitioner that claim of the respondent/claimant had no averment with regard to the cause of action to be a recurring one or the extension of limitation as per Section 18 of The Limitation Act and hence the claim of the respondent/claimant was hopelessly barred by limitation, as the time span for 3 years to be calculated from the time span stood lapsed partially on 31/03/2018 and further on 31/09/2019. Ld. Counsel for petitioner also argued that HUF cannot sue or be sued in its own name, as it holds no separate legal entity. Ld. Counsel for the petitioner relied upon the cases of India Red Lead Factories Co. vs Pursottamdas Narsingdas, MANU/WB/0086/1960 and Jai Jai Ram Manohar Lal vs OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 11 of 33 National Building Material Supply Gurgaon, MANU/SC/0016/1969. Ld. Counsel for petitioner prayed for setting aside of the impugned arbitral award.
7. An arbitral award can be set aside on the grounds set out in Section 34 (2) (a), Section 34 (2) (b) and Section 34 (2A) of the Act in view of Section 5 of the Act and if an application for setting aside such award is made by party not later than 3 months from the date from which the party making such application had received the signed copy of the arbitral award or if a request had been made under Section 33 of the Act, from the date on which that request had been disposed of by the Arbitral Tribunal. If the Court is satisfied that the applicant was prevented by sufficient cause from the making the application within the said period of three months it may entertain the application within further period of 30 days, but not thereafter.
8. Supreme Court in Suo Moto Writ Petition (Civil) no. 3 of 2020, In Re: Cognizance For Extension Of Limitation vide order dated 10/01/2022 has excluded the period from 15/03/2020 till 28/02/2022 for computing the period of limitation for any suit, appeal, application or proceedings and the petition under Section 34 of The Act is also eligible for the same. Accordingly, present petition filed on 27/08/2021 is also within the period of limitation.
9. Section 34 (1) (2), (2A) and (3) of The Arbitration and Conciliation Act, 1996 read as under:-
"34. Application for setting aside arbitral award- (1) OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 12 of 33 Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 13 of 33 induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter."
10. Supreme Court in case of Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 14 of 33 the matter and cannot be of trivial nature.
Also was held therein that:
"33. "...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 fact cannot be corrected. A possible view by the arbitrator on facts has necessarily 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....
Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts.."
11. Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 has held that under Section 34 (2A) of the Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore would also have to be characterized as perverse. It is held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
12. Section 21 of The Act provides that unless and otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which the request for that dispute to be referred to the arbitration is received by the respondent. Limitation in respect of which a request is made by one party to other party to refer such dispute to the arbitration OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 15 of 33 stops when such notice is received by other party.
13. Delhi High Court in the case of Alupro Building Systems Pvt Ltd vs Ozone Overseas Pvt Ltd, O.M.P 3/2015 decided on 28/02/2017 inter alia held that where a notice under Section 21 of the Act invoking arbitration clause is not served upon the other party by the party invoking the said clause and the arbitration proceedings are held then in absence of any agreement by the petitioner for waiving of requirement of notice under Section 21 of the Act, the impugned arbitral award would be opposed to the fundamental policy of Indian law since the mandatory requirement of the Act stands not complied and ground under Section 34 (2)(b) (ii) of the Act is attracted and such impugned award could be set aside on this ground.
14. Delhi High Court in the case of Dewan & Sone Investment Pvt. Ltd. vs New Delhi Municipal Committee (supra) inter alia held that any act which is required to be done under law either should be done in accordance with law or not at all. Reliance was placed upon the decision of Privy Council in case of Nazir Ahmad vs King-Emperor, MANU/PR/0020/1936.
15. In the reply of petitioner to claim petition of respondent/ claimant before the Arbitral Tribunal no objection was raised by the petitioner with respect to non-invocation of arbitration clause due to non-receipt of notice under Section 21 of the Act from respondent/claimant.
16. Section 21 of The Act is in Chapter V of Part I of the Act.
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 16 of 3317. Section 4 of The Act provides that a party who knows that any provision of Part-I of the Act from which parties may derogate or any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.
18. Under Section 16 of the Act, the arbitral tribunal is empowered to rule on its own jurisdiction including ruling on any objection with respect to the existence or validity of arbitration agreement. Such plea shall be raised not later than the submission of the statement of defence inter alia in terms of challenge procedure laid in Section 13 of the Act. Petitioner on appearance before Arbitral Tribunal and/or before or in the submission of the statement of defence never laid any objection with respect of non-invocation of arbitration clause due to non- receipt of notice under Section 21 of the Act from respondent/ claimant; which objection was only later on taken by petitioner at the stage of final arguments before Arbitral Tribunal. Elicited facts borne out of record of arbitral proceedings indicate of waiver of right to so object by the petitioner with respect of non- invocation of arbitration clause due to non-receipt of notice under Section 21 of the Act from respondent/claimant. Arguments of Ld. Counsel for petitioner appear to be fallacious on this facet. Sections 4, 12, 13, 16 and 21 of The Act are all part of Part I of The Act and the mandate of legislature embodied in Section 4 of The Act by no figment of imagination can be construed to OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 17 of 33 exclude the mandate of Section 21 of The Act from the ambit of Section 4 of The Act. Reliance placed upon the law laid by Supreme Court in case of Bharat Sanchar Nigam Ltd. & Anr. vs Motorola India Pvt. Ltd (supra).
However, Ld. Sole Arbitrator had thoroughly appreciated the material, the evidences placed before the Arbitral Tribunal with respect to the notice dated 06/10/2017 of respondent/ claimant sent to petitioner invoking arbitration clause and certified copies of speed post receipts, service tracking reports and on the gamut of facts put before him and had applied the law laid by Supreme Court in the case C.C. Alavi Haji vs Palapetty Muhammed, (2007) 6 SCC 555 for reaching the finding that notice dated 06/10/2017 for invocation of arbitration clause by respondent/claimant was duly served upon the present petitioner and thus the invocation of arbitration proceedings was proper.
19. Section 19 of The Act inter alia embodies that the Arbitral Tribunal shall not be bound by The Code of Civil Procedure, 1908 or The Indian Evidence Act, 1872 whereas parties were free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings but when no such agreement is so arrived between the parties to arbitration; then the Arbitral Tribunal, subject to Part I of the Act, may conduct the proceedings in the manner it considers appropriate. In such event the power of the Arbitral Tribunal in such matter includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 18 of 3320. Before Ld. Sole Arbitrator were the certified copies of the receipts of speed post and service tracking reports of aforesaid notice dated 06/10/2017 of respondent/claimant sent to petitioner invoking arbitration clause; since the originals of these documents were filed by respondent/claimant with the petition under Section 11 of the Act before Delhi High Court for appointment of Ld. Sole Arbitrator. Even the concerned record of original documents of above said certified copies of these receipts of speed post and service tracking reports was requisitioned before Arbitral Tribunal from the Registry of Delhi High Court as is borne out from impugned award itself. It is also the fact of the matter that it is the finding of Ld. Sole Arbitrator that at Janakpuri address of present petitioner, aforesaid notice dated 06/10/2017 was duly served. The Janakpuri address of petitioner mentioned in the said notice dated 06/10/2017 is the same address which is mentioned by present petitioner in the Memo of Parties in present petition. Section 3 of The Act also inter alia embodies that any written communication is deemed to be received if it is delivered inter alia at place of business or mailing address of addressee. It also embodies that if none of the places referred to in clause (a) of Section 3 of The Act can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.
21. Petition is bereft of the fact of registered office address of OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 19 of 33 the petitioner, on which premise endeavor was made by Ld. Counsel for petitioner to lay foundation for setting aside of the impugned arbitral award for non service of notice dated 06/10/2017 on such registered address of the petitioner.
22. Ld. Sole Arbitrator had also taken note of the fact that on all addresses given in the notice dated 06/10/2017, the notice was dispatched by speed post and in the facts and circumstances of the case the presumption arises inter alia under Section 27 of The General Clauses Act and there was sufficient material on record to establish that attempts were made to deliver the said notice dated 06/10/2017 on various addresses of petitioner whereas said notice dated 06/10/2017 was served on two addresses of present petitioner including the abovesaid Janakpuri address of petitioner and it remained unclaimed at the other given addresses. Ld. Sole Arbitrator also opined that "unclaimed" means that it is due service as it was duty of the present petitioner to make arrangement for receipt of post when the postman visited whereas respondent/claimant had done its best by sending the notice by registered post to various business addresses of the present petitioner. It is also the observation of Ld. Sole Arbitrator that he was not bound by strict rules of Evidence Act with respect to proof of documents. It is worthwhile to mention that parties to arbitration did not agree in arbitral proceedings before the Arbitral Tribunal for any specific procedure to be followed by the Arbitral Tribunal in conducting its proceedings. Accordingly, in terms of Section 19 of The Act, elicited above, failing such agreement inter se parties to the arbitration agreement, the OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 20 of 33 Arbitral Tribunal had to conduct the proceeding in a manner it considered appropriate, subject to Part I of the Act; whereas Arbitral Tribunal was neither bound by The Code of Civil Procedure, 1908 nor by The Indian Evidence Act, 1872. Accordingly, objection/contention of Ld. Counsel for the petitioner that for want of requisite certificate/affidavit under Section 65-B of The Indian Evidence Act, 1872 (as amended) the tracking reports for articles sent by speed post were inadmissible in evidence before Ld. Sole Arbitrator; does not hold water.
23. Agreement inter se parties to arbitration embodied that possession of the immovable property in question was to be given by petitioner on or before 31/03/2015 to respondent/ claimant; which however was never given till the date of arbitral award. Respondent/claimant invoked arbitration vide notice dated 06/10/2017 in terms of arbitration clause in the agreement. Limitation in respect of an arbitrable dispute, for which a request is made by one party to other party to refer such dispute to arbitration stops when such notice is received by other party. The claim for seeking refund by respondent/claimant from present petitioner vide notice dated 06/10/2017 is accordingly within the limitation period of three years. It is also the finding of Ld. Sole Arbitrator that admittedly the possession of the flat in question was not offered by the present petitioner to respondent till date; whereas no fresh date of possession was provided by the present petitioner to the respondent and instead petitioner kept delaying the same on one pretext or other. It was also taken note of by Ld. OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 21 of 33 Sole Arbitrator that the assurances of petitioner to respondent/ claimant with respect to possession of the immovable property in question novates the date as stated in the agreement. Ld. Sole Arbitrator relied upon the case of Timar D'lima vs Fortune Infrastructure, 2017 (3) CPR 290 and held that on account of those assurances, the cause of action was continuing till such time the builder offers possession or refuses to deliver possession to respondent/claimant; in terms of Section 22 of The Limitation Act, since in case of a continuing breach of contract a fresh period of limitation begins to run at every moment of time during which the breach continues.
24. Ld. Counsel for respondent/claimant relied upon the following explanation to following Rule 1 of Order XXX CPC:-
"ORDER XXX SUITS BY OR AGAINST FIRMS AND PERSONS CARRYING ON BUSINESS IN NAMES OTHER THAN THEIR OWN
1. Suing of partners in name of firm.- (1) Any two or more persons claiming or being liable as partners and carrying on business in, India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct.
..........................................................................................................
HIGH COURT AMENDMENTS Delhi.-Same as in Punjab.
Haryana.-Same as in Punjab.
Himachal Pradesh.-Same as in Punjab.
Punjab.-In Order XXX, in rule 1, at the end, insert the following "Explanation", namely:-
"Explanation.-This rule applied to a joint Hindu family trading partnership."
[Vide Notification No. 2212-G, dated 12th May, 1909.]"
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 22 of 3325. Delhi High Court in the case of A. Khandelwal & Sons, (HUF) vs Sardar Mall Alok Kumar (HUF) (supra) inter alia held that Order XXX Rule 10 of CPC also permits a HUF carrying on business under any name to sue and be sued in such name or style as if it were a firm name.
26. Delhi High Court in the case of Vishwanath Khanna & Sons vs Bank of Baroda (supra) inter alia held that under Order XXX Rule 1 of the CPC a suit by partners can be instituted in the name of the firm and said rule applies also to a HUF trading firm in Delhi and Punjab by virtue of the explanation added in the Rule by the Lahore High Court with effect 12/05/1909.
27. Precedents relied upon by Ld. Counsel for petitioner are not applicable in the present case as they embody facts and circumstances entirely different and distinguishable to the facts and circumstances of case in hand.
28. Accordingly, objection/contention of Ld. Counsel for the petitioner that respondent Hindu Undivided Family (HUF) is not a separate entity, therefore, the same does not has the power to sue any other separate entity in the eyes of law; has no merits, in view of above elicited explanation to Rule 1 of Order XXX CPC as well as above elicited law laid by Delhi High Court in the cases of A. Khandelwal & Sons, (HUF) vs Sardar Mall Alok Kumar (HUF) (supra) and Vishwanath Khanna & Sons vs Bank of Baroda (supra).
29. Section 31 (7) and (8) of the Act read as under:-
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 23 of 33"31. Form and contents of arbitral award.--. ........................................................................ (7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.
Explanation.- The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of 1978).
(8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A"
30. In the case of Ashi Limited vs Union of India, O.M.P. 200/2015 decided by Delhi High Court on 19/05/2020, Hon'ble Ms. Justice Jyoti Singh had also appreciated law laid by Supreme Court in the case of Sree Kamatchi Amman Constructions vs The Divisional Railway Manager (Works) Palghat & Ors. MANU/SC/0625/2010 and inter alia held as follows:
"54. In so far as the grant of interest by an Arbitrator is concerned, the law is no longer res integra, Section 31(7)(a) of the Act clearly stipulates that unless otherwise agreed by the parties, where the Award is for payment of money, the Tribunal may grant such rate as it deems reasonable, on the whole or any part of the money and for the whole or any part of the period between the date of cause of action and the date of the Award. In the case of Jaiprakash Associates Ltd. (Jal) v. Tehri Hydro Development Corporation India Ltd., MANU/SC/0157/2019, the Supreme Court after noticing the provisions of the 1996 Act and various judgments on the issue of interest, more particularly, the recent judgment in the case of Reliance Cellulose Products Ltd. v. ONGC Ltd., MANU/SC/0777/2018: (2018) 9 SCC 266, summed up the law on interest as under:
"13. Insofar as power of the arbitral tribunal in granting pre- preference and/or pendente lite interest is concerned, the principles which can be deducted from the various judgments are summed up below:OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 24 of 33
(a) A Constitution Bench judgment of this Court in the case of Secretary, Irrigation Department, Government of Orissa vs G.C. Roy exhaustively dealt with this very issue, namely, power of the arbitral tribunal to grant pre-
reference and pendente lite interest. The Constitution Bench, of course, construed the provision of the 1940 Act which Act was in vogue at that time. At the same time, the Constitution Bench also considered the principle for grant of interest applying the common law principles. It held that under the general law, the arbitrator is empowered to award interest for the pre- reference, pendente lite or post award period. This proposition was culled out with the following reasoning:
"43 The question still remains whether arbitrator has the power to award interest pendente lite, and if so on what principle. We must reiterate that we are dealing with the situation where the agreement does not provide for grant of such interest nor does it prohibit such grant. In other words, we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following principles emerge:
(i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator.
(ii) An arbitrator is an alternative form (sic forum) for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator has no power to award interest pendente lite, the party claiming it would have to approach the court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings.
(iii) An arbitrator is the creature of an OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 25 of 33 agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law. (The proviso to Section 41 and Section 3 of Arbitration Act illustrate this point).
All the same, the agreement must be in conformity with law. The arbitrator must also act and make his award in accordance with the general law of the land and the agreement.
(iv) Over the years, the English and Indian courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite. Thawardas [Seth Thawardas Pherumal v.
Union of India, MANU/SC/0070/1955 : (1955) 2 SCR 48: AIR 1955 SC 468] has not been followed in the later decisions of this Court. It has been explained and distinguished on the basis that in that case there was no claim for interest but only a claim for unliquidated damages. It has been said repeatedly that observations in the said judgment were not intended to lay down any such absolute or universal rule as they appear to, on first impression. Until Jena case [MANU/SC/ 0004/ 1987: (1988) 1 SCC 418: (1988) 1 SCR 253] almost all the courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law.
(v) Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (pre-reference period). For doing complete justice between the parties, such power has always been inferred."
It is clear from the above that the Court decided to fall back on general principle that a person who is deprived of the use of money to which he is legitimately entitled to, has a right to be compensated for the deprivation and, therefore, such compensation may be called interest compensation or damages.
(b) As a sequitur, the arbitrator would be within his jurisdiction to award pre-reference or pendente lite interest even if agreement between the parties was silent as to whether interest is to be awarded or not.
OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 26 of 33(c) Conversely, if the agreement between the parties specifically prohibits grant of interest, the arbitrator cannot award pendente lite interest in such cases. This proposition is predicated on the principles that an arbitrator is the creature of an agreement and he is supposed to act and make his award in accordance with the general law of the land and the agreement. This position was made amply clear in G.C Roy case in the discussion thereafter:
"44. Having regard to the above consideration, we think that the following is the correct principle which should be followed in this behalf:
Where the agreement between the parties does not prohibit grant of interest and where a party claims interest and that dispute (along with the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes or refer the dispute as to interest as such to the arbitrator, he shall have the power to award interest. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view."
(d) Insofar as 1940 Act is concerned, it was silent about the jurisdiction of the arbitrator in awarding pendente lite interest. However, there is a significant departure on this aspect insofar as 1996 Act is concerned. This distinction has been spelt out in Sayeed Ahmed case in the following manner:
"Re: Interest from the date of cause of action to date of award
7. The issue regarding interest as noticed above revolves around Clause G1.09 of the Technical Provisions forming part of the contract extracted below:
"G. 1.09. No claim for interest or damages will be entertained by the Government with OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 27 of 33 respect to any money or balance which may be lying with the Government or any become due owing to any dispute, difference or misunderstanding between the Engineer-in- Charge on the one hand and the contractor on the other hand or with respect to any delay on the part of the Engineer-in-Charge in making periodical or final payment or any other respect whatsoever."
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14. The decisions of this Court with reference to the awards under the old Arbitration Act making a distinction between the pre-reference period and pendente lite period and the observation therein that the arbitrator has the discretion to award interest during pendente lite period in spite of any bar against interest contained in the contract between the parties are not applicable to arbitrations governed by the Arbitration and Conciliation Act, 1996."
............................................................................
56. In the case of Union of India v. Bright Power Projects (India) (P) Ltd., MANU/SC/0712/2015 : (2015) 9 SCC 695, Supreme Court held that when agreement between the parties bars interest on the amounts from cause of action to the date of the Award, the Arbitrator is bound by it and cannot award interest as Section 31 (7)(a) clearly begins with the words 'unless otherwise agreed by parties'.
57. In State of Haryana v. S.L Arora & Co., MANU/SC/ 0131/2010 : (2010) 3 SCC 690, Supreme Court has held that it is not open to the courts to interfere in the discretion exercised by an Arbitrator in granting the rate of interest. This is purely the domain, power and prerogative of the Arbitrator. Relevant part of the judgment reads as under:-
"23. The difference between clauses (a) and (b) of Section 31(7) of the Act may conveniently be noted at this stage. They are:
(i) Clause (a) relates to pre-award period and clause
(b) relates to post-award period. The contract binds and prevails in regard to interest during the pre-award period. The contract has no application in regard to interest during the post-award period.
(ii) Clause (a) gives discretion to the Arbitral Tribunal in regard to the rate, the period, the quantum OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 28 of 33 (principal which is to be subjected to interest) when awarding interest. But such discretion is always subject to the contract between the parties. Clause (b) also gives discretion to the Arbitral Tribunal to award interest for the post-award period but that discretion is not subject to any contract; and if that discretion is not exercised by the Arbitral Tribunal, then the statute steps in and mandates payment of interest, at the specified rate of 18% per annum for the post-award period.
(iii) While clause (a) gives the parties an option to contract out of interest, no such option is available in regard to the post-award period.
In a nutshell, in regard to pre-award period, interest has to be awarded as specified in the contract and in the absence of contract, as per discretion of the Arbitral Tribunal. On the other hand, in regard to the post-award period, interest is payable as per the discretion of the Arbitral Tribunal and in the absence of exercise of such discretion, at a mandatory statutory rate of 18% per annum."
31. With respect of the award of pre-reference period and pendentelite interest @ 9%, the finding of Ld. Sole Arbitrator is in consonance with Section 31 (7) of the Act and in fact keeping in mind the banking interest rate. Ld. Sole Arbitrator had given sound reasons for awarding the interest at the appropriate rates in the impugned arbitral award since there was mention that petitioner failed to place on record or lead any evidence on the facet of delay. The award of future interest @ 18%, also cannot be said to be exorbitant since per se the finding of Ld. Sole Arbitrator is based on the equity; as in clause (e) of the Application Form it was clearly stated that in case of delay in payment, petitioner herein shall charge interest @ 18% per annum. Thus, if the petitioner is entitled to charge interest @ 18% per annum, the petitioner may also be made liable to payment of interest at the same rate. In terms of Section 31(7) of OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 29 of 33 the Act, unless otherwise agreed by parties, an award for payment of money is to include interest for period between the date on which cause of action arose and the date of award as well as post award period interest. It is not the case in hand that the parties to arbitration had expressly agreed for non grant of any interest for the payments of money for which the respondent claimant is entitled. Accordingly, the award of future interest @ 18% per annum on the award sum is in accordance with above elicited law laid in the case of Ashi Limited vs Union of India (supra) which in turn relies upon various authoritative pronouncements of Supreme Court, elicited above.
32. The proceedings under Section 34 of the Act are summary in nature and the scope of enquiry in the proceedings under Section 34 of the Act is restricted to specified grounds for setting aside only, as was held in the case of Canara Nidhi Limited vs M. Shashikala & Ors., 2019 SCC Online SC 1244. The Court would not construe the nature of claim by adopting too technical an approach or by indulging into hair-splitting, otherwise the whole purpose behind holding the arbitration proceedings as an alternative to Civil Court's forum would stand defeated, as was held in the case of Sangamner Bhag Sahakari Karkhana Ltd. vs Krupp Industries Ltd., AIR 2002 SC 2221. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts, but if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 30 of 33 will interfere with the award; as was held by Supreme Court in the case of Oil & Natural Gas Corporation vs M/s Wig Brothers Builders & Engineers Pvt. Ltd., (2010)13 SCC 377. Reappraisal of evidence by the court is not permissible and as a matter of fact, exercise of power to reappraise the evidence is unknown to a proceeding under the Arbitration Act; as was held by Supreme Court in the case of Ispat Engineering & Foundry Works vs Steel Authority of India Ltd., (2001) 6 SCC 347. In order to provide a balance and to avoid excessive intervention, the award is not to be set aside merely on the ground of an erroneous application of the law or by re-appreciating evidence; as was held by Supreme Court in the case of P.R Shah, Shares & Stock Brokers Pvt. Ltd vs B.H.H. Securities Pvt.Ltd. & Ors., (2012) 1 SCC 594. At global level the doctrine of 'Contra Proferentem' is generally applied by the Judges/Arbitrator in the cases where a contract appears ambiguous to them; the Judges/Arbitrator in India have appreciated and adopted similar line of reasoning in the cases involving ambiguous contract wherein it is believed that 'an ambiguity is needed to be resolved' in order to find the correct intention of the contract. If the conclusion of the arbitrator is based on a possible view of the matter, the court is not expected to interfere with the award and if the Arbitrator relies on a plausible interpretation out of the two possible views, then it would not render the award perverse; as was held by Supreme Court in the case of M/s Sumitomo Heavy Industries Ltd. vs Oil & Natural Gas Commission of India, 2010 (11) SCC 296. Award is not open to challenge on the ground that the Arbitral Tribunal had reached a wrong conclusion or had failed to OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 31 of 33 appreciate the facts; the appreciation of evidence by the arbitrator is never a matter which the Court considers in the proceeding under Section 34 of the Act, as the Court is not sitting in appeal over the adjudication of the arbitrator.; as was held by Delhi High Court in the case of NTPC Ltd vs Marathon Electric Motors India Ltd., 2012 SCC OnLine Del 3995. Supreme Court in the case of Associate Builders vs Delhi Development Authority, (2015) 3 SCC 449 has restricted the scope of public policy, so the Court does not act as a Court of appeal and consequently errors of fact cannot be corrected. An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award; as was held by Supreme Court in the case of Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd., (2009) 10 SCC
63.
33. The impugned award was passed by an experienced Advocate, Ld. Sole Arbitrator whereas the findings were given, based on appreciation of facts, evidences and law after giving all reasonable opportunities to the parties to present their case. Not only the reasonings of Ld. Sole Arbitrator are logical but all the material and evidences were taken note of by the Ld. Sole Arbitrator. The Court cannot substitute own evaluation of conclusion of law or fact to come to the conclusion other than that of the Ld. Sole Arbitrator, as per the law laid in the precedents, elicited herein above. Cogent grounds, sufficient reasons have been assigned by the Ld. Sole Arbitrator in reaching the just conclusion and no error of law or misconduct is apparent OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 32 of 33 on the face of the record. This Court cannot re-appraise the evidence and it is not open to this Court to sit in the appeal over the conclusion/findings of facts arrived at by Ld. Sole Arbitrator. The impugned award does not suffer from vice of irrationality and perversity. No error is apparent in respect of the impugned award. I do not find any contradiction in the observations and findings given by Ld. Sole Arbitrator. The conclusion of the Ld. Sole Arbitrator is based on a possible view of the matter, so the Court is not expected to interfere with the award. Even impugned award passed by Ld. Sole Arbitrator cannot be set aside on the ground that it was erroneous. The award is not against any public policy nor against the terms of contract of the parties. No ground for interference is made out. None of the grounds raised by the petitioner attract Section 34 of the Act.
34. For the foregoing reasons, the petition is hereby dismissed.
35. The parties are left to bear their own costs.
36. File be consigned to record room.
Digitally signed by GURVINDER GURVINDER PAL
SINGH
PAL SINGH Date: 2022.05.31
12:39:47 +0530
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
On 31st May, 2022. Patiala House Court, New Delhi.
(DK) OMP (Comm.) No. 83/2021 M/s Vardhman Infradevelopers Pvt. Ltd. vs Gurmeet Singh HUF Page 33 of 33