Bangalore District Court
M/S Dolomite Berhad Als Ltd. (Jv) vs M/S Associated Constructions on 14 September, 2021
1 Com.A.S.No.46/2016
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl. City Civil & Sessions Judge
Bengaluru City.
Dated this the 14th day of September 2021
Com.A.S.No.46/2016
Petitioner: M/s Dolomite Berhad ALS Ltd. (JV),
Having its Office at 7-3-719,
Rashtrapathi Road,
Secundeerabad - 500 003,
Represented by its Authorised
Signatory Mr. Lo Sze Min.
(By Sri.B.V.N., Advocate)
-vs-
Defendant: M/s Associated Constructions,
Registered Partnership Firm,
Having its place of business at
82-3/9/3, Vidyut Nagar,
A.V. Appa Rao Road,
Rajamundry - 533 106,
Andhra Pradesh,
Represented by its Managing
Parner Mr. G. Madhusudhan.
(By Sri.G.M.., Advocate)
JUDGMENT
This is a suit filed by the plaintiff against the defendant under Sec.34 of Arbitration and Conciliation Act r/w Rule 4 of the 2 Com.A.S.No.46/2016 High Court of Karnataka, Arbitration (proceedings before the courts) Rules 2001 and sought for to set aside the award dated 19.12.2005 passed by the learned arbitrator rejecting its claim as per the claim statement filed with the tribunal and to set aside the award dated 19.12.2015 passed in favour of the defendant by awarding a sum of Rs.1,34,00,000/- along with interest @ 12% from 05.11.2015 till its realization and to award the interest @ 18% on the claims from the date of termination of contract till date of payment.
2. The nutshell of the plaintiff/claimant case are as under:
The plaintiff being the claimant and the defendant being the respondent before the arbitral tribunal has alleged that the contract has been awarded by the National Highways Authority of India in respect of the project western transport corridor, Tumkur-
Haveri Section NH-4 rehabilitation and upgrading of Chitradurga Section (Kilometer 189 to Kilometer 207) package 3 - vide agreement dated January 5, 2002, in pursuance thereof executed several bank guarantees and several other bank guarantees through Dolomite Berhad and A.L. Sudarshan Construction Company Limited which are its parents in favour of the National Highway Authority of India and successfully completed part of the works in connection therewith and for the purpose of 3 Com.A.S.No.46/2016 implementing the project purchased several machinery and equipments worth crores of rupees pursuant thereto, the defendant has approached and expressing its ability and competency to carry out the balance work to be completed in connection with the project as well as to infuse funds towards the same, accordingly a sub contract agreement was taken place in between them on 30.11.2004 as the defendant company being its sub-contractor to complete the balance works as defined therein and the defendant has executed the said agreement as a assurance that the works would have duly carried out and completed its satisfaction, accordingly agreed to the terms thereof and the value of fixed assets including machinery and equipment has been valued at Rs.14,40,81,255/- as per the agreement which taken place in between them and the progress under the agreement has been highly unsatisfactory both in terms of financial progress and the actual/ physical progress at the site. The figures depicting the progress from January 2005 to December 2005 disclosed an Abysmal progress of 6.94% and it was found that out of the agreed targets of Rs.55.63 crores. The defendant had merely achieved progress of Rs.3.86 crores and the physical progress was exceedingly low and the deficiency of the progress were brought to the notice of the defendant time to 4 Com.A.S.No.46/2016 time by repeated correspondence and there was no noticeable improvement in the rate of progress instead the defendant altogether stopped the work on the project since October 15, 2005 on the false pretext of over due payments despite intimation and the payments due to the defendant will be made upon satisfactory completion of the works and the agreement which taken place in between them, the payment only after completion of the work, but the defendant had consistently failed to carry out work.
3. The plaintiff in its plaint has further alleged that has found that certain machinery which belongs to its company including two numbers caterpillar, guardar and one number of caterpillar excavator were illegally removed by the defendant from the site in violation of the agreement for which already filed a complaint with rural police station, Chitradurga on Febraury 7 and March 15 2006 and subsequently filed PCR No.416/2006 and got issued legal notice dated 17.02.2006 calling upon the defendant company inter-alia to infuse necessary resources and funds to restart the work in terms of said contract agreement on or before February 28, 2006 and to complete the same to its satisfaction within one month thereof and forthwith restore the machinery to the site without its prejudice right to claim damages and 5 Com.A.S.No.46/2016 terminate the contract, but the defendant instead of restarting the work in terms of sub contract agreement did not do the same as per the contract. The machinery which belongs to its namely Transit mixture 3 no's Hindustan Wheel Loader and Bomag Earth Compactor had also been illegally removed from the site on 15.03.2006 in gross violation of the agreement and the defendant having removed the machinery belongs to its company which admitted by the defendant in a suit in O.S.No.119/2006 on the file of Civil Judge, Jr. Dn., Chitradurga against National Highways Authority of India and another and who has suppressed the facts in the suit intentionally not made its company as party and admitted the equipment plant and machinery are still in its possession, custody and control. As per clause 16 of the agreement, the defendant was to purchase the fixed assets @ 65% of the purchase invoice value only when the said assets were to be formally transferred, since the defendant has already removed the machinery is entitled to the 65% of the value of the fixed assets, due to sustained failure on the part of the defendant to adhere to the terms of the agreement by failing to infuse necessary funds failing carry out the contractual obligations failing to achieve targets and physical progress under the agreement illegally taking away the machinery belonging its, the 6 Com.A.S.No.46/2016 National Highways Authority of India terminated the principal agreement which taken place on 10.03.2006 and NHAI encashed all the bank guarantees after termination.
4. The plaintiff in its plaint has further alleged that he was left with no alternative but terminate the agreement with the defendant company and invoked the arbitration agreement to enforce its rights vide its notice dated 10.05.2006 subsequently has filed CMP No.88/2006 and the Hon'ble High Court of Karnataka by its order dated 21.12.2006 was pleased to appoint Hon'ble Justice K.S. Shivashankar Bhat, as sole arbitrator and he has filed its statement of claim and the defendant filed its statement of defence and also counter claim, for which filed its rejoinder and statement of defence and the arbitral tribunal framed the issues on 12.01.2008 as per the pleading of the parties and both parties were led the evidence, after hearing the arguments the tribunal passed the award on 19.12.2015 answering the issue No.1 to 11, its against and issue No.12 to 18 in favour of the defendant awarding the counter claim of the defendant to the extent of Rs.1,34,00,000/- along with interest @ 12% from 05.11.2005 till the date of realization and rejected the entire its claim thereby has filed the instant suit for the following; 7 Com.A.S.No.46/2016
-:GROUNDS:-
a. The impugned award is contrary to the letter and spirit of the Arbitration and Conciliation Act and the award is in derogation of the applicable provisions of the Contract Act.
b. The award which passed by the arbitral tribunal is not supported by any cogent reasons and on the contrary is against the terms of contract and violate Sec.28(3) of the Act which is wholly illegal, arbitrary and is unjust.
c. The award is patently illegal, unjust and in conflict with the public policy, where the tribunal has failed to consider not only the pleadings but also the evidence and relied on the materials produced by the defendant.
d. The arbitrator has gone on to rely on documents produced by the defendant which were not permitted to be brought on record in the proceedings at the specific its objections. Ex.R.4 to 18 sought to be marked by the defendant on 08.10.2013 were strongly objected and the tribunal marked its only for the purpose of identification and it has no evidentiary value despite of the tribunal own noting on 08.10.2013 and the documents have been marked only for the purpose of identification, but the tribunal relied the said documents and passed the impugned award which is deserved for set aside.8 Com.A.S.No.46/2016
e. The arbitrator has proceeded very summarily not considered the proper prospective of nature of dispute without considering its contention through any process of valid reasoning and the award is suffering from being in excess of authority which is invalid and the conclusions which recorded are totally erroneous without substantiating the materials.
f. The procedure which adopted by the arbitrator is totally irregular in conduct of arbitration proceedings resulting in violation of principles of natural justice and erred in not noticing that it could not have traveled behind the terms of contractual agreements entered into between the parties on 30.11.2004 and the award has been rendered in violation of Sec.28(3) of the Act which is liable for set aside.
g. The finding of the arbitral tribunal on issue No.1 is erroneous and misapplication to the facts of the matter instead of giving a finding on the fact and he had completed part of the work before the subcontract was given to the defendant and the tribunal has come to the extraneous and unsupported finding and the tribunal reliance on the deposition of C.W.1.
h. The arbitral tribunal failed to appreciate the deposition of C.W.1 who is in the cross-examination has stated that the progress of the work though may have been slow was in any case head of the targets set by NHAI and erred in holding that not completed 9 Com.A.S.No.46/2016 part of the works as the contract entered in between them itself was clearly for execution of balance work and balance work worth of approximate Rs.56,31,73,952/- and the defendant was fully aware of the extent of work that was completed already before it entered into the contract and aware of the extent of work to be carried out by itself, but the arbitrator has failed to consider the oblique motive of escaping its performance required under the contract attempted to raise the plea of misrepresentation on its part.
i. The tribunal has failed to rely on the admissions which made by the defendant and witnesses and failed to note the sub contract for the balance works were awarded to the defendant on the single premises, that the defendant would be in a position to complete the balance work and terms of the contract clear and there was no misrepresentation whatsoever on its part and defendant was fully aware of the situation prevalent as on the date of execution of contract and the contract stipulates the extent of work required to be carried out by the defendant and the defendant has full of knowledge to execute and complete all the balance works with all its risks and liabilities.
j. The arbitral tribunal has grossly erred in holding that though progress of work by the defendant was not satisfactory and the defendant had not prior experience of undertaking project of 10 Com.A.S.No.46/2016 such magnitude of over Rs.50 crores and lacked a manpower, resources, finances and experience accept the contention of the defendant.
k. The impugned award is silent about the admission of the defendant that the delay was result on the part of the defendant in progress of the work nor considered slow down and stopped the work without any reasons despite the tribunal holding that the delay was caused on its part.
l. The tribunal has exceeded his jurisdiction in arriving the finding without considering the materials which placed and erroneously gave reasons which are not in accordance with law and held the issues in favour of the defendant without considering the materials which placed and ignored the complaint which filed against the defendant as the defendant unauthorizedly removed the equipments plant and machinery from the project site.
m. The tribunal entirely disregarded the admitted facts as the defendant was aware that the certain machinery and equipments were hypothecated to finance companies as per clause 15 of the agreement entered in between them.
n. The tribunal has ignored the fact that the defendant witness had admitted that the equipment plant and machinery was the sole property of the JB and that such machinery belonging to the JB was still in possession of custody and control of the defendant as on 12.06.2006 and the tribunal has not taken into 11 Com.A.S.No.46/2016 consideration that the defendant is lonely responsible for the machinery and equipments which are missing.
o. The tribunal has misapplied itself that he had hypothecated equipment and machinery to the defendant and erroneously has arrived the findings without looked into the materials which placed and gravely erred in holding the issues holding that not caused any loss because of the act of the defendant and itself failure the contractual obligation than consider the non-discharging of the obligation by the defendant.
p. The tribunal erred in answering the issue in favour of the defendant nor taken into consideration about the admitted facts which admitted by the defendant during the evidence.
q. The impugned award which passed by the arbitrator is violative of Sec.34 of the Arbitration and Conciliation Act which suffers form other legal infirmities and not taken into consideration about the cause of action which arose and prays for allow the suit.
5. In response to the notice, the defendant has been appeared through its counsel and filed the objection in which has alleged the suit which filed is not maintainable in law or on facts and the grounds which urged would not attracts any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act. On this ground alone the suit which filed by the 12 Com.A.S.No.46/2016 plaintiff is deserved for dismissal and the arbitral tribunal has considered the materials which placed by both the parties. So question of interference of this court does not arise. Since the plaintiff has not made out any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act for interference of this court and the arbitrator has proceeded summarily by considering the dispute of the parties and evaluate the materials on record and passed the award and there is no procedural irregularity in conducting of arbitral proceedings and granted full opportunity to both the parties and the learned arbitrator has at no point of time traversed behind the terms of the sub-contract agreement which taken place in between the plaintiff and the defendant and he has not at all violated Sec.28(3) of the Arbitration and Conciliation Act.
6. The respondent in its objection has further alleged that the contention which raised in the suit are not in accordance with law which are raised only to file the instant suit and there is no grounds to entertain the petition under Sec.34 of the Arbitration and Conciliation Act and the plaintiff has not made out any cogent case for the award being unreasonable or suffering from patent illegality and failed to demonstrate the award which passed is oppose to public policy and the plaintiff has not made 13 Com.A.S.No.46/2016 out any of the grounds that the award which passes is against to the principles of natural justice nor patent illegality to interfere this court nor made out any grounds under the explanation of Sec.34(2)(b) of the Arbitration and Conciliation Act and to show that the award is to be in conflict with the public policy of India and the grounds which urged in the plaint are not comes within the purview of Sec.34 of the Arbitration and Conciliation Act and prays for reject the suit.
7. Both the counsels were filed their written arguments. Heard the arguments on both sides.
8. The points that arise for consideration of this court are as under:
1) Whether the plaintiff has made out any of the grounds as enumerated under Sec.34 of the Arbitration and Conciliation Act, 1996 to set aside the impugned award dated 19.12.2015 passed by the sole arbitrator?
2) What order?
9. My answer to the above points are as under:
Point No.1: In the Negative;
Point No.2: As per final order, on the following;14 Com.A.S.No.46/2016
REASONS
10. POINT NO.1: The plaintiff being the claimant and the defendant being the respondent before the arbitral dispute. Feeling aggrieved by the award which passed by the sole arbitrator, the claimant being the plaintiff has filed the instant suit on the ground the agreement was taken place with NHAI on 05.01.2002 in respect of the project Western Transport Corridor, Tumkur-Haveri Section, NH-4 Rehabilitation and upgrading of Chitradurga Section (Km 189 to Km 107) package 3 and who has finished the work to some extent, thereafter the defendant has come forward to complete the balance work as per the agreement which taken place on 05.01.2002, thereby the defendant being the sub-contractor entered into agreement on 30.11.2004, but the defendant did not discharge its obligation in pursuance of sub-contract agreement dated 30.11.2004 in spite of repeated request and demand and payments, thereby NHAI terminated the contract which taken place, thereby sustained loss and NHAI drawn the bank guarantees of Rs.28,54,86,593/- and the defendant has taken away the assets which purchased worth of Rs.14,40,81,255/- thereby the plaintiff has filed the instant suit. 15 Com.A.S.No.46/2016
11. The learned counsel for the plaintiff apart from written arguments in her arguments has submitted the agreement was taken place in between the plaintiff and the NHAI in respect of the project Western Transport Corridor, Tumkur-Haveri Section, NH-4 Rehabilitation and upgrading of Chitradurga Section (Km 189 to Km 107) package 3 vide agreement dated 05.01.2002 for which the plaintiff has executed several bank guarantees and several other bank guarantees through its partners Dolomite Berhad and A.L. Sudarshan Construction Company Ltd. In favour of NHAI. The plaintiff has purchased several machinery and equipments worth crores of rupees for the purpose of implementing the project and successfully completed part of the work pursuant thereto.
12. The defendant after making enquiries regarding availability of any sub contract work approached the plaintiff and expressing its ability and competency to carried out the balance work to be completed in connection with the project as per the agreement dated 05.01.2002, thereby the sub contract agreement was taken place in between the plaintiff and the defendant on 30.11.2004 and the defendant did not discharge its obligation in pursuance of sub contract agreement in spite of written letters and request made by the plaintiff, instead illegally removed the equipments which purchased by the plaintiff from 16 Com.A.S.No.46/2016 the site, thereby the plaintiff got filed not only complaint before Rural Police Station, Chitradurga, but also private complaint against the very defendant on the ground the defendant has illegally removed the equipment of the plaintiff from the site by violating the sub contract agreement which taken place on 30.11.2004, though the defendant has agreed in terms of the agreement which taken place on 30.11.2004, but he did not discharge its obligation thereby the plaintiff was left with no alternative to terminate the agreement with the defendant company invoked the arbitration agreement to enforce its right and filed CMP No.88/2006 before the Hon'ble High Court of Karnataka and the said petition was came to be allowed for which the plaintiff has filed the statement of claim before the arbitral tribunal and the defendant has been appeared and filed its defence with counter claim for which the plaintiff has filed the rejoinder to the counter claim which filed by the defendant and after full-fledged trial, the sole arbitrator passed the award dismissing the claim of the plaintiff and directing the plaintiff to pay sum of Rs.1,34,00,000/- with interest @ 12% p.a. from 05.11.2005 till its realization which is against to the principles of natural justice as well as capricious, perverse and patently illegal as the plaintiff being the principal contractor which taken place in 17 Com.A.S.No.46/2016 between the plaintiff and NHAI and the defendant being the sub contractor as per the sub contract agreement which taken place in between the plaintiff and the defendant on 30.11.2004 and the plaintiff has requested NHAI to pay the amount directly to the defendant, accordingly amount has been paid to the defendant to carry out the work which entrusted in pursuance of sub contract agreement dated 30.11.2004, but the defendant instead of complete the work which entrusted has stopped the work, thereby the plaintiff has sustained loss and NHAI encashed the bank guarantees which furnished by the plaintiff, but the tribunal without considering the materials which placed by the plaintiff dismissed the claim petition and the arbitrator passed the award which amount to behind the agreement which taken place in between the plaintiff and the defendant in view of Sec.28(3) of the Arbitration and Conciliation Act and Sec.18 of the Indian Contract Act and also violation of natural justice. Therefore this court interference is necessary to set aside the award which passed by the sole arbitrator, otherwise the plaintiff will be put to irreparable loss and injustice and prays for set aside the award which passed by the sole arbitrator and drawn the court attention on the following judgments.
1. 2019(15) SCC 131 in between Ssangyong Engineering and Construction Company 18 Com.A.S.No.46/2016 Limited Vs National Highways Authority of India,
2. 2021 SCC Online SC 508 in between PSA Sical Terminals Pvt. Ltd. Vs Board of Trustees of V.O. Chidambranar Port Trust Tuticorin.
3. (2015) 3 SCC 49 in between Associate Builders Vs Delhi Development Authority.
4. (AIR 2003 SC 2629) in between ONGC Ltd.
Vs. Saw Pipes Ltd.
5. (AIR 1992 SC 232) in between Associated Engineering Company Vs Government of Andhra Pradesh and Ors.
6. (AIR 2005 SC 4430) in between State of Rajasthan Vs Nav Bharat Construction Company.
7. (ILR 1999 Karnataka 4634) in between K. Amarnath Vs Puttamma.
8. 96 (2002) DLT 131) in between Shail Kumari Vs Saraswati Devi., and
9. (AIR 20125 SC 363) in between Oil & Natural Gas Corporation Ltd., Vs Western Geco International Ltd.
13. Per contra, learned counsel for the defendant apart from written arguments has submitted the agreement which taken place in between the plaintiff and the NHAI on 05.01.2002 for the project work for Rs.87,24,47,960/- for which the plaintiff has 19 Com.A.S.No.46/2016 furnished bank guarantees and completed part of the work which entrusted. Later on the defendant has approached the plaintiff and undertaken to complete the balance work, thereby the sub contract agreement was taken place in between the plaintiff and the defendant on 30.11.2004, but the plaintiff prior to agreement dated 30.11.2004 has received excess amount and not paid its liabilities which are the statutory obligations, but without disclosing the true facts suppressed the materials and entered into sub contract agreement with the defendant and the plaintiff has not made the payments as per the work which done by the defendant in spite of repeated request and demand and the NHAI has withheld the amount in respect of the work which done by the defendant on the ground the excess amount has been paid to the plaintiff and deducted the liability of the plaintiff prior to the sub contract agreement which taken place in between the plaintiff and the defendant on 30.11.2004, since the plaintiff was liable to pay the sales tax and other statutory liabilities which he was due prior to sub contract agreement which was deducted by the NHAI for non payment of sales tax by the plaintiff and when the defendant raised second bill on 11.03.2005 against payment withheld, when the defendant has enquired came to know that the authorities were withheld the bill on account of excess 20 Com.A.S.No.46/2016 payment has been made by the NHAI prior to the agreement to an extent of Rs.1,90,00,000/- but the plaintiff prior to sub contract agreement dated 30.11.2004 has not disclosed its liability and the plaintiff and the NHAI colluded with the same have withheld the bill amount for the work which done by the defendant and again withheld the bill and came to know the authority has withheld the another bill on the ground the excess payment of Rs.1,12,00,000/- has been paid to the plaintiff prior to the sub contract agreement. Because of attitude of the plaintiff, the defendant has lost sum of Rs.3,81,00,000/- and raised the claim of Rs.5,50,00,000/- against the plaintiff for which admitted liability in a sum of Rs.1,34,00,000/- and requested the plaintiff for settlement but he did not do so, thereby got issued legal notice for payment of the due amount. So, the tribunal after considering the materials which placed held the plaintiff is liable to pay Rs.1,34,00,000/- with interest @ 12% from 05.11.2005 till its realization, though the plaintiff in the petition has raised the grounds which are not comes within the purview of Sec.34 of the Arbitration and Conciliation Act and the plaintiff has not made out any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act and prays for dismiss the suit and the drawn the court attention on the following judgments; 21 Com.A.S.No.46/2016
1. (2019) 15 SCC 131 in between Ssangyong Engineering and Construction Company Limited Vs National Highways Authority of India (NHAI)
2. (2015) 3 SCC 49 in between Associate Builders Vs Delhi Development Authority.
3. 1994 Supp (1) SCC 644 in between Renu Sagar Power Company Ltd., Vs General Electric,
4. (2014) 9 SCC 263 in between Oil and Natural Gas Corporation Limited Vs Western Geco.
14. The learned counsel for the plaintiff while canvassing her arguments as much argued that the arbitral tribunal has erred while passing the award in favour of the defendant. So before considering the materials and the arguments which canvassed by both the parties, it is just and necessary to consider the legal aspects first for the proper appreciation of the arguments which advanced and the materials on record which stated below;
1. What is arbitration?
2. When court can interfere with arbitral award?
3. What is the scope of Court's power to interfere with the arbitral award?
4. What are the grounds are required to set aside the award?
5. Setting aside of arbitral award when permissible?
Let me decide one by one for proper appreciation of the materials on record. Thus this court drawn its attention on Sec.2(1)(a) of the Arbitration and Conciliation Act, 1996 which reads like this: 22 Com.A.S.No.46/2016
2(1)(a). The definition arbitration means any arbitration whether or not administered by permanent arbitral institution.
Arbitration is a private dispute resolution mechanism agreed upon by the parties. Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties.
Arbitration is a process of settlement extra curses curiae and the parties are at liberty to choose their judge. "The esse visa nce of arbitration without assistance or intervention of the court is settlement of dispute by a tribunal of the own choosing of the parties." Law of arbitration aids in implementation of arbitration agreement contract between the parties which remains a private adjudication by a forum consequently chosen by the parties and made on consequential reference.
The above provision is very much clear the Arbitration is a binding voluntary alternative dispute resolution process by a private forum chosen by the parties. Now let me know when court can interfere with the arbitral award. Thus this court drawn its attention on Sec.34(43) of the Arbitration and Conciliation Act, 1996 which reads like this:
43. Principles of interference with arbitral award:-
The principles of interference with an arbitral award under Sec.34(2) of the Act are as follows:
(1) An award, which is -23 Com.A.S.No.46/2016
(i) contrary to substantive provisions of law; or
(ii) The provisions of Arbitration and Conciliation Act, 1996, or
(ii) against the terms of the respective contract; or
(iv) Patently illegal or
(v) Prejudicial to the rights of the parties; is open to interference by the court under Sec.34(2) of the Act.
(2) The award could be set aside if it is contrary to:
(a) fundamental policy of Indian Law; or
(b) the interest of India; or
(c) justice or morality.
(3) The award could also be set aside, if it is so unfair and unreasonable that it shocks the conscience of the court.
(4) It is open to the court to consider whether the award is against the speci visa fic terms of the contract and if so interfere with it on the ground that it is patently illegal and opposed to the public policy of India.
So, by virtue of the provision which stated above, the court can interfere with the arbitral award in the grounds which mentioned above.
Now let me know what is the scope of Court's power to interfere with the arbitral award? Thus this court drawn its attention on Sec.34(34) of the Arbitration and Conciliation Act which reads like this;
24 Com.A.S.No.46/2016
Scope of Court's power to interfere with the arbitral award:
The scope of the interference by the court's in regard to arbitral award is limited. Courts do not sit in appeal over the findings and decision of the arbitrator, nor can it reassess or re- appreciate evidence or examine the sufficiency or otherwise of the evidence.
So, by virtue of the provision which stated supra, the scope of interference by the court in regard to the arbitral award is limited scope. The scope of interference under Sec.34 of the Act is limited in view of the judgment of the Hon'ble Supreme Court of India which reported in AIR 2003 SC 2629 in between Oil and Natural Gas Corporation Ltd., V/s Shah Pipes Ltd. In the said judgment, their Lordship held that;
'an award can be set aside if it is contrary to fundamental policy of Indian Law, the interest of India, justice or morality, if it is patently illegal and unfair and unreasonable it shocks the conscience of the court'.
Now let me know what are the grounds are required to set aside the award which passed. Thus this court drawn its attention on Sec.34(18) of the Arbitration and Conciliation Act which reads like this:
18. Grounds to set aside award:- Under the new Act, 1996 misconduct of arbitrator is no ground to set aside an award but court may set aside an award in the following grounds:25 Com.A.S.No.46/2016
(1) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties.
(2) falling such agreement, the composition of arbitral tribunal was not in accordance with the part I of the Act.
(3) if the arbitral proceeding was not in
accordance with -
(a) the agreement of the parties.
(b) failing such agreement - the arbitral procedure was not in accordance with part I of the Act. However exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of part I of the Act from which parties cannot derogate;
(c) if the award passed by the arbitral tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.
An award can be set aside, if it is against the public policy of India that is to so it is contrary to:
(1) fundamental policy of Indian law, (2) the interest of India, or (3) justice or morality , or (4) if it is patently illegal.
It could be challenged -
(a) as provided under Sec.13(5); and 26 Com.A.S.No.46/2016
(b) Sec. 16(6) of the Arbitration and conciliation Act. So the court can set aside the award, if the grounds found which stated supra.
So, if the petitioner is made out the grounds which stated supra, court can set aside the award which passed by the arbitral tribunal. Now let me know about the setting aside of arbitral award when permissible. Thus this court drawn its attention on Sec.34(4) of the Arbitration and Conciliation Act, 1996
4. Setting aside of arbitral award when permissible:-
That the court can set aside the arbitral award under Sec.34(2) of the Arbitration and Conciliation Act if the party making the application furnishes the proof that:
(i) a party was under some incapacity
(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 time being in force.
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or otherwise unable to present his case.
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitrator or it contains visa decisions on matters behind the scope of the submission to arbitration.27 Com.A.S.No.46/2016
(2) The court may set aside the award: (I) (a) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties.
(b) falling such agreement, the composition of the arbitral tribunal was not in accordance with part-1 of the Act.
(ii) if the arbitral procedure was not in accordance with:
(a) the agreement of the parties, or
(b) failing such agreement, the arbitral procedure was not in accordance with part-1 of the Act.
However exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict within the provisions of part-1 of the Act from which the parties cannot derogate.
(c) If the award passed by the arbitral tribunal is in contravention of provisions of the Act or any other substantive law governing the parties or is against the terms of the contract. (3) The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to:
(a) fundamental policy of Indian Law;
(b) the interest of India; or
(c) justice or morality; or
(d) if it is patently illegal.
(4) It could be challenged-
(a) as provided under Sec.13(5); and
(b) Section 16(6) of the Act."28 Com.A.S.No.46/2016
"B. Further held as follows in this case: (1) The impugned award requires to be set aside mainly on the grounds:
(I) There is specific stipulation in the agreement that the time and date of delivery of the goods was the essence of the contract;
(ii) in case of failure to deliver the goods within the period fixed for such delivery in the schedule, ONGC was entitled to recover from the contractor liquidated damages as agreed;
(iii) it was also explicitly understood that the agreed liquidated damages were genuine pre- estimate of damages;
(iv) on the request of the respondent to extend the time limit for supply of goods, ONGC informed specifically that time was extended but stipulated liquidated damages as agreed would be recovered;
(v) liquidated damages for delay in supply of goods were to be recovered by paying authorities from the bills for payment of cost of material supplied by the contractor;
(vii) there is nothing on record to suggest that stipulation for recovering liquidated damages was by way of penalty or that the said sum was in any way unreasonable.
(viii) in certain contracts, it is impossible to asses the damages or prove the same. Such situation is taken care by section 73 and 74 of the Contract Act and in the present case by specific terms of the contract" - Oil and Natural Gas Corporation V Shah Pipes Ltd. (2003)5 SCC 705 : AIR 2003 SC 2629; see also Moona Abousher V M/s. Cholamandalam DBS Finance Ltd. AIR 2019 Mad 233.29 Com.A.S.No.46/2016
The above provisions which referred above are very much clear that if the petitioner made out the grounds which stated supra, court can interfere with the arbitral award.
15. The learned counsel for the plaintiff while canvassing her arguments has submitted though the plaintiff being the claimant before the arbitral proceedings has filed the statement of claim which was not taken into consideration by the sole arbitrator and considered the counter claim which made by the defendant. So, for the proper appreciation of the relief which claimed by the plaintiff and the counter claim which sought by the defendant before the arbitral tribunal is necessary for reproduction which reads like this;
PRAYER OF THE PLAINTIFF
A) Directing the respondent to pay the
claimant a sum of Rs.28,54,86,593/- which is the total value of the bank guarantees encashed by the National Highways Authority of India.
B) Directing the respondent to pay the claimant a sum of Rs.14,40,81,255/- which is the value at which the fixed assets were to be purchased by the respondent, as per the agreement, or in the alternative, directing the 30 Com.A.S.No.46/2016 respondent restore the said machineries in working condition to the claimant;
C) Granting interest @ 18% on all amounts payable form date of termination of the agreement till date of payment to the claimant;
D) Declaring that the respondent is liable to fully indemnify the claimant against all/ any claims made by the National Highway Authority of India against the claimant towards the project;
E) Directing the respondent to pay the claimant a sum of Rs.10,00,00,000/- towards damages and losses due to breach of the agreement.
F) Directing the respondent to pay such exemplary damages as may be deemed fit and proper by this Hon'ble Tribunal in view of the loss of opportunity, reputation and mental agony caused to the claimant.
G) Awarding costs of these proceedings and other legal costs incurred by the claimant incurred due to the acts of omission and commission by the respondent quantified at Rs.25,00,000/-
H) Granting such other and further reliefs, including interest at 18% on the award amount, as are just.
31 Com.A.S.No.46/2016
COUNTER CLAIM OF THE DEFENDANT
a) Reject the claim of the claimant made in the claim petition;
b) Direct the claimant to pay the respondent a sum of Rs.5,50,67,582/- on account of payments due to the respondent and interest and costs thereon, which have not been paid;
c) Direct the claimant to pay to the respondent a sum of Rs.25 crores on account of business loss and loss of future profits suffered by the respondent;
d) Direct the claimant to pay the respondent a sum of Rs.35 lakes towards time and money spent on litigation arising out of and consequent to the conduct of the actions of the claimant;
e) Direct the claimant to pay to the respondent a sum of Rs.80 lakes given by the respondent and which have been encashed consequent to the conduct and actions of the claimant;
f) Award cost of proceedings
g) Grant such other reliefs as deemed fit to grant in the circumstances of the case.
32 Com.A.S.No.46/2016So, the above claim and counter claim which referred above are very much clear that the plaintiff and the defendant were put forth their claim before the arbitrators as stated above.
16. Now let me know the arguments and the materials which placed on record, as the learned counsel counsel for the plaintiff while canvassing her arguments has submitted that the agreement was taken place in between the plaintiff with NHAI on 05.01.2002 and the sub contract agreement was taken place in between the plaintiff and the defendant on 30.11.2004. It is an admitted fact either the plaintiff nor the defendant were not disputed about the agreement dated 05.01.2002 which was taken place in between the plaintiff and the NHAI in respect of the project Western Transport Corridor, Tumkur-Haveri Section, NH-4 Rehabilitation and upgrading of Chitradurga Section (Km 189 to Km 107) package 3 as the agreement dated 05.01.2002 which on record reflects the agreement was taken place in between the plaintiff and NHAI on 05.01.2002 for the execution of the project work for Rs.87,24,47,960/- and sub contract agreement was taken place in between the plaintiff and the defendant on 30.11.2004. So, one thing is clear either the plaintiff nor the 33 Com.A.S.No.46/2016 defendant were not disputed the agreement nor the sub contract agreement dated 05.01.2002 and 30.11.2004.
17. The learned counsel for the plaintiff while canvassing her arguments has submitted that there is a violation of natural justice while passing the award. Now let met know what is natural justice?. It is an admitted fact, natural justice is a universal justice, social justice, to elucidate natural justice in laymen- natural justice is nothing but a fair play in action, it means making fairness as the creed of life and being impartial. The decision of the court/ arbitrator/ tribunal should be independent, free from bias. It is an essence of fair adjudication deeply rooted in tradition and conscience, and the Hon'ble Apex Court defined natural justice means, existence of moral principles of self evident and unarguable truth, in the course of times, judges nurtured in the tradition of British jurisdiction often invoked it in conjunction with a reference of equity and good conscience, rules of natural justice are not embodied rules being a means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue such rules. The principles of natural justice derive from English common law and are clearly captures in to Latin maxims:
34 Com.A.S.No.46/2016
1. Audi Alteram Partem
2. Nemo judex in causa sua
-:Audi Alteram Partem:-
The Audi Alteram Partem rule means no one should be condemned unheard. It means the person against whom any sort of legal action is to be taken or the person whose rights or interest is being effected must be given a reasonable opportunity to take their stand. The parties shall be treated with equality and each party shall be given a full opportunity to present the case.
-:Nemo judex in causa sua:-
The Nemo judex in causa sua also known as rule against bias, means no man shall be judge in his own cause or the authorities must be impartial and free from bias. The arbitrator appointed must act impartial, independent and neutral, even a small amount of interest leads to disqualifying an arbitrator, creating a reasonable suspicion of bias. As per the new amendments in the Act, under Sec.12(5) of Arbitration and Conciliation Act and 7th and 5th schedule of the Act states any relation with the parties or outcome of the disputes leads to the justifiable doubts to the impartially and independence of an arbitrator. The party atonomy cannot override the independence and impartially of an arbitrator.
18. Now the burden on the plaintiff to establish the grounds for violation of natural justice which alleged in the petition and to establish the following grounds to show the violation of natural justice;
35 Com.A.S.No.46/2016
a. Which rule of natural justice was breached. b. How it was breached.
c. In what way the breach was connected to the making of the award.
d. How the breach prejudice its rights.
19. In the instant suit, the plaintiff has not made out that the arbitral tribunal has curtailed his right either to led the evidence or address the arguments, as the award which passed by the sole arbitrator itself clear that after framing of points for determination, the plaintiff had examined one Tulasi Reddy as C.W.1 and got marked the documents as Ex.C.1 to C.16 and Ex.R.1 to R.3 through his cross-examination. If at all no opportunity was granted in view of the grounds which referred above, then the matter would have different. When the opportunity has been granted by the sole arbitrator, question of violation of natural justice which stated in the plaint does not arise, as the parties have right to be heard effectively on every issue that may be relevant to the resolution of the dispute and the arbitrator has treated the parties equally and allow them the opportunity to present their case and to respond and pass the award based on the materials and the evidence on record. So, mere taking of the defence as a ground for challenging the award in the plaint is not sufficient to held that the sole arbitrator has violated the principles of natural justice without affording the 36 Com.A.S.No.46/2016 opportunity to the plaintiff either to led the evidence nor to address the arguments or to place the materials. Therefore, the arguments which advanced by the learned counsel for the plaintiff on this aspect holds no water.
20. The learned counsel for the plaintiff while canvassing her arguments has much argued that the arbitral tribunal while passing the award has violated the public policy of India and natural justice and drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2019(15) SCC 131 in between Ssangyong Engineering and Construction Company Limited Vs Natioanl Highways Authority of India, 2015 (3) SCC 131 in between Associate Builders Vs Delhi Development Authority and 1994 Supp (1) SCC 644 in between Renu Sagar Power Company Ltd. Vs General Electric On careful perusal of the above decisions, in the said decision their lordship held that equal treatment of parties shall be given an full opportunity to present the case. If not, it is the ground to set aside the arbitral award, but in the instant case, the plaintiff has not made out any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act to show that the full 37 Com.A.S.No.46/2016 opportunity has not been granted by the arbitral tribunal to put forth its case. If that so the matter would have different and the decisions which cited are aptly applicable to the case on hand, but in the award which referred above is taken into consideration, full opportunity has been granted to the plaintiff to put forth its case. So, the question of violation of natural justice which advanced by the learned counsel for the plaintiff does not arise. Therefore, I do respect to the judgments which relied but the facts and circumstances of the present case and the decisions are different.
21. The learned counsel for the plaintiff while canvassing her arguments has submitted that the sole arbitrator has violated Sec.28(3) of the Arbitration and Conciliation Act. So, for the proper appreciation of the arguments which advanced by the learned counsel for the plaintiff is necessary for reproduction of Sec.28(3) of the Arbitration and Conciliation Act which reads like this:
(iii) failing any designation of the law under sub-clause (ii) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.38 Com.A.S.No.46/2016
The above provision is very much clear while deciding and taking an award, the arbitral tribunal shall in all cases take into account the terms of the contract and trade usages applicable to the transaction.
22. In the instant case, admittedly initially agreement was taken place in between the plaintiff and NHAI. Later on sub contract agreement dated 30.11.2004 was taken place in between the plaintiff and the defendant for completion of work which entrusted to the plaintiff by the NHAI, though the learned counsel for the plaintiff while canvassing her arguments has submitted that the defendant has violated the terms and conditions of the agreement and not discharged its obligation, but where as, the learned counsel for the defendant while canvassing his arguments has submitted that the defendant has discharged its obligation, but where as the plaintiff has not discharged its obligation. That is the reason why the work has been stopped since October 15, 2005. So, the obligation is on the plaintiff to establish that the arbitral tribunal has not taken into consideration of the sub contract agreement which taken place in between the plaintiff and the defendant. Admittedly, the plaintiff has been examined one Tulasi Reddy. During the cross- examination got confronted Ex.R.1 to R.3. As per Ex.R.3 dated 39 Com.A.S.No.46/2016 05.11.2005 the very plaintiff has admitted the actual amount the plaintiff owe to the defendant of Rs.1,34,00,000/-. So as per the admission, the plaintiff was due a sum of Rs.1.34 crores to the defendant as on 05.11.2005. So admitted facts need not be proved in view of Sec.58 of the Indian Evidence Act. Therefore, the arguments which advanced by the learned counsel for the plaintiff on this aspect holds no water. So, one thing is clear the plaintiff has not made out any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act that the sole arbitrator while passing the award is not taken into consideration of the terms and conditions of the agreement which taken place in between the plaintiff and the defendant on 30.11.2004.
23. The learned counsel for the plaintiff while canvassing her arguments has submitted that because of non completion of the work which entrusted to the defendant, NHAI encashed the bank guarantees which furnished by the plaintiff. Therefore, the defendant is liable to pay the said amount, since the defendant has violated the terms and conditions and not discharged its obligation, thereby the defendant is liable to pay an amount of Rs.28,54,86,593/- but the plaintiff has not placed any materials to show that the sole arbitrator has not taken into consideration the guarantees encashed by the NHAI because of non discharging of 40 Com.A.S.No.46/2016 the obligation by the defendant, for which the award passed by the sole arbitrator is taken into consideration, in which nowhere appears that the NHAI has encashed the guarantee due to the fault of the defendant. If that is so, the matter would have different. So one thing is clear the plaintiff has not made out any of the grounds to show that because of non discharging of the obligation by the defendant its bank guarantees have been encashed by the NHAI. Therefore, the arguments which advanced by the learned counsel for the plaintiff on this aspect holds no water.
24. The learned counsel for the plaintiff while canvassing her arguments has submitted that the equipments of the transaction which belongs to the plaintiff has been removed by the defendant without its consent, though the plaintiff in the grounds of suit has stated the sole arbitrator has not taken into consideration of the private complaint which filed by the plaintiff. It is an admitted fact the plaintiff has not placed any materials on record the arbitral tribunal has not taken into consideration of the complaint which filed by the plaintiff. So, merely on the ground that the defendant is liable a sum of Rs.14,40,81,255/- in respect of the assets of the plaintiff, it does not mean that the defendant is in possession of the assets which belongs to the plaintiff. So, 41 Com.A.S.No.46/2016 the burden on the plaintiff to establish the fixed assets which are purchased by the respondent are belongs to the plaintiff as per the agreement and the defendant has violated the said conditions. It is an admitted fact as per the sub contract agreement dated 30.11.2004 all fixed assets have been transferred by the contractor to the sub contractor from time to time at 65% of the fixed assets purchase value in proportion to the actual amount owning to the sub contractor for the purpose of executing the balance works for which the award reflects the fixed assets are not belongs to the plaintiff which were purchased in the name of A.L. Sudarshan Construction Pvt. Ltd., and the plaintiff had no title to the plant and machinery as well as equipments for which the claimant has misled and misrepresented to the defendant and when NHAI terminated the main contract with the claimants and recovered possession of all the equipment and machinery. So, the arbitral award reflects NHAI terminated the main contract which taken place in between the plaintiff and the NHAI recovered the possession of all the equipments and machinery. Thus, question of directing the defendant to pay the sum of Rs.14,40,81,255/- nor restoration of machinery in the working condition as sought for does not arise and the plaintiff has not made out any of the grounds which 42 Com.A.S.No.46/2016 enumerated under Sec.34 of the Arbitration and Conciliation Act to set aside the award on this ground.
25. The learned counsel for the plaintiff while canvassing her arguments has submitted that the arbitral tribunal has not taken into consideration of the materials which placed on record. It is an admitted fact the arbitral award which passed by the sole arbitrator reflects the sole arbitrator has not violated either Sec.28(3) of the Arbitration and Conciliation Act nor violated the principles of natural justice or violated any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act.
26. The learned counsel for the plaintiff while canvassing her arguments has much argued on Se.c18 of the Indian Contract Act. Thus this court drawn its attention on Sec.18 of the Indian Contract Act which reads like this:
Section 18 in The Indian Contract Act, 1872
18. "Misrepresentation" defined.
--"Misrepresentation" means and includes-- --"Misrepresentation" means and includes--"
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading 43 Com.A.S.No.46/2016 another to his prejudice, or to the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
On close reading of the above provision, it is clear the information of the person making it of that which is not true, though he believes it to be true.
27. In the instant case, the arbitral award clearly reflects though the assets which are not belongs to the plaintiff while entering a sub contract agreement dated 30.11.2004 has informed to the defendant that the assets are belongs to the plaintiff for which the sole arbitrator while answering the issue No.3 has clearly stated that the defendant has not misrepresented, but whereas the plaintiff has misrepresented the facts knowing fully well that the assets are not belongs to the plaintiff. So, the plaintiff has failed to establish that the arbitral tribunal has not taken into consideration of Sec.18 of the Indian Contract Act. Therefore, the arguments which advanced by the learned counsel for the plaintiff on this aspect holds no water.
28. The learned counsel for the plaintiff while canvassing her arguments has much argued that the award which passed is 44 Com.A.S.No.46/2016 in conflict with justice and morality and the award which passed is perverse, patent, illegality and against the public policy of India and drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2021 SCC Online SC 508 in between PSA Sical Terminals Pvt. Ltd., Vs Board of Trustees of V.I. Chidambranar Port Trust Tuticorin, AIR 2003 SC 2629 in between ONGC Ltd. Vs Saw Pipes Ltd., and AIR 1992 SC 232 in between Associated Engineering Company Vs Government of Andhra Pradesh and Ors. On careful perusal of the above decisions, in the said decisions their lordship held that a judicial intervention on account of interfering on the merits of the award would not be permissible however the principles of natural justice as contained in Sec.18 and 34(2)(a)(iii) of the Arbitration and Conciliation Act would continue to be the grounds of challenge of an award. The public policy of India has been used in Sec.34 of the Arbitration and Conciliation Act in contest is require to be given a wider meaning and the arbitrator cannot act arbitrarily, irrationally and capriciously or independently of the contract and his soul funding is to arbitrate that the award which passed by the sole arbitrator either capricious, patent illegality nor violation of public policy of India to apply the decisions which relied. Therefore, I do respect 45 Com.A.S.No.46/2016 to the decisions which relied, but the facts and circumstances of the present case and the decisions which relied are different.
29. The learned counsel for the plaintiff while canvassing her arguments has submitted that the arbitrator cannot go behind the terms of the contract and the documents which marked only for the purpose of identification is not admitted in evidence is not be looked into for any purpose and drawn the court attention on the judgment of Hon'ble High Court of Karnataka which reported in ILR 1999 Karnataka 4634 in between K. Amarnath Vs Puttamma and 96 (2002) DLT 131 in between Shail Kumari Vs Saraswati Devi. On careful perusal of the said decision in the said decision their lordship held that when the document is not admitted but is assigned a number only for identification purposes then the endorsement to that effect should be made on that document. The documents which have been tendered in evidence and have been admitted in evidence and in view of the court they have been proved by judicial evidence, otherwise admissible in law are marked in exhibit number. But the plaintiff has not made out any of the grounds to interfere of this court to set aside the award. So, I do respect to the decisions which relied, but the facts of the present case and the decisions which relied are different. 46 Com.A.S.No.46/2016
30. The learned counsel for the defendant while canvassing his arguments has relied on 3 judgments which relied by the plaintiff. So question of re-discussion of the said judgments does not arise and the said counsel has drawn one more decision which reported in 1994 SC (1) SCC 644 in between Renusagar Power Company Ltd. Vs General Electric Company Ltd. On careful perusal of the said decision, in the said judgment their lordship held that the distinction has to be drawn while applying the rule of public policy between a matter governed by domestic law and a matter involving conflict of law, the application of doctrine of public policy in the field of conflict of law is more limited than that in the domestic law and the courts are slower to invoke public policy in cases involving a foreign element than when a purely municipal issue is invalid. But in the instant case, the plaintiff has not made out that there is a violation of public policy while passing the award. Therefore, the principles of judgment which relied applicable to the case on hand.
47 Com.A.S.No.46/2016
31. It is an admitted fact the respondent has sought for counter claim of Rs.5,50,67,582/- on account of payment due with interest and cost and for sum of Rs.25 crores loss of its business and loss of future profits at Rs.35 lakhs towards time and money which spent on a litigation arisen out and consequent to the conduct of the actions of the plaintiff and also sought for Rs.80 lakhs which encashed consequent to the conduct and action of the plaintiff. Admittedly, the sole arbitrator passed the award by rejecting the claim of the defendant as sought in C to E by granting only Rs.1.34 crores with interest @ 12% p.a. from 05.11.2005 till its realization. So, one thing is clear after the award, if at all the defendant aggrieved by the award which passed would have challenge the award which passed by the sole arbitrator. But the defendant has not filed any suit by challenging the award which passed as the sole arbitrator, since the sole arbitrator allowed the counter claim in partly and awarded an amount of Rs.1.34 crores with interest @ 12% p.a. from 05.11.2005. Therefore, the award which passed is remained unchallenged by the defendant and the defendant has admitted the award which passed. On the other hand, the plaintiff has utterly failed to bring the case within the ambit of Sec.34 of the Arbitration and Conciliation Act, to set aside the award. Therefore, 48 Com.A.S.No.46/2016 looking from any angle, the plaintiff has not made out any of the grounds which enumerated under Sec.34 of the Arbitration and Conciliation Act to set aside the award which passed by the sole arbitrator. Hence, I am of the opinion that the point No.1 is answered as Negative.
32. POINT NO.2: In view of my answer to point No.1 as stated above, I proceed to pass the following;
ORDER The petition under Sec.34 of Arbitration and Conciliation Act 1996 r/w Rule 4 of the High Court of Karnataka, Arbitration (proceedings before the courts) Rules 2001 filed by the petitioner is hereby dismissed.
No order as to costs.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 14th day of September, 2021) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City