Successfully Completed The Contract By ... vs That The Same Were Raised Adopting The ... on 12 January, 2022

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Bangalore District Court

Successfully Completed The Contract By ... vs That The Same Were Raised Adopting The ... on 12 January, 2022

                             1
                                        Com.AS.No.87/2017



 IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
           JUDGE, AT BENGALURU (CCH.83)

          THIS THE 12TH DAY OF JANUARY 2022.

                      PRESENT:
         SRI.DEVARAJA BHAT.M., B.COM, LL.B.,
       LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
                     BENGALURU.

                   Com.A.S.No.87/2017
BETWEEN:

M/s. URC Construction
Private     Limited,     A
Company      Incorporated
under the Companies
Act, 1956, having its
Registered Office at No.
H- 102, Periyar Nagar,
Erode     -    638   001,
Tamilnadu,      and    its
Corporate Office at Plot
No. 810, 1st Cross, 7th
Main, HAL 2nd Stage,
Indiranagar, Bengaluru -
560 008, represented by
its Managing Director,
Mr. S. Palaniswamy.


                                 :      PETITIONER
(Petitioner           is
represented by Sri. P.B.
Appaiah- Advocate)
                              2
                                   Com.AS.No.87/2017



                             AND

1. M/s Bangalore Metro
Rail Corporation Limited,
A Company Incorporated
under the Companies
Act, 1956, having its
Registered Office at 3rd
Floor, BMTC Complex,
K.H. Road, Shantinagar,
Bengaluru - 560 027.,
represented     by     its
Managing Director.

2.   Hon'ble Sri. Justice
A.V.      Chandrashekar
(Retd), Former Judge,
High Court of Karnataka,
and Presiding Arbitrator,
No.    329/1,    Krishna
Krupa, 2 Floor, Behind
         nd

Malabar Gold, 9th Main,
2nd   Block,  Jayanagar,
Bengaluru - 560 011.

3.   Mr. G.C. Tallur, Co-
Arbitrator, "Sushanty",
No. 90, 2nd Main, 11th
Cross,   Nirmal    Nagar,
Dharwad - 580 003.

4.            Mr.     V.
Somasundaram,       Co-
Arbitrator,  G-14,  Rail
Nagar,      Padikuppam,
                                3
                                                  Com.AS.No.87/2017

Koyambedu,       Chennai   -
600 107.

(Respondnet   No.1    is
represented by M/s. Just
Law - Advocates)

                                            :       RESPONDENTS



Date of Institution of the 07.08.2017
suit
Nature of the suit (suit on
pronote,        suit      for Petition for setting aside Arbitral
declaration & Possession, Award
Suit for injunction etc.)
Date of commencement of
recording of evidence                   - Nil -
Date on which judgment 12.01.2022
was pronounced
Date  of  First   Case -
Management Hearing
Time taken for disposal
from    the     date  of 35 days
conclusion of arguments
Total Duration                     Year/s       Month/s   Day/s
                                    04            05       05




                      (DEVARAJA BHAT.M),
              LXXXII Addl. City Civil & Sessions Judge,
                            Bengaluru.
                                 4
                                               Com.AS.No.87/2017

                     JUDGMENT

This is a Petition filed under Section 34 of the Arbitration & Conciliation Act, 1996 for setting aside the Arbitral Award dated 09.05.2017 by the Hon'ble Arbitral Tribunal.

2. The Petitioner "M/s. URC Construction Private Limited" had invoked the Arbitration Agreement and preferred certain Claims against "M/s Bangalore Metro Rail Corporation Limited" the Respondent.

3. The Brief facts leading to the case are as follows:-

That the 1st Respondent awarded to the Petitioner the contract by name "Construction of Metro Train Depot Structures (Package-2) at Byappanahalli in Reach-1 Section for Bangalore Metro Rail Project" as per contract dated 29.04.2009, that the total value of the contract was Rs. 136.45 Crores and the Petitioner successfully completed the contract by 18.04.2012, that in terms of Clause 22.3 percentage of the labour components of the work was fixed at 22%, for the cement components at 15%, for the Fuel components at 5%, at plant and machinery spares component at 18% and for the steel components at 25%, that the 1st Respondent had issued Corrigendum- 2 to the Bill of Quantity for the structural work of 5 Com.AS.No.87/2017 the contract wherein Sub-section 4 related to Reinforcement Work, that the 1st Respondent had also issued Corrigendum -2 Package EW-D2 relating to the Approved Makes of the Materials and Item No.2 relating to Reinforcement bars, that there is no dispute the work under the contract was completed by the Petitioner on 15.04.2012 as evidenced by the Letter dated 15.04.2012 issued by the Engineer of the 1 st Respondent approving extension of time without levy of liquidated damages, that during the period of contract the Petitioner had raised its Interim Payment Certificates on various dates on the 1 st Respondent, that the same were raised adopting the available indices on a provisional basis as permitted by Clause 22.3 of the contract since at that time the SAIL stockyard prices for Steel components were not available, that while making payment of the same the 1st Respondent recovered a sum of Rs.

7,62,23,022/- adopting the rates of RINL as provided by the General Consultant as defined in Clause 1.0 of the GCC, that by its letter dated 04.05.2011, the Petitioner had brought to the notice to the 1st Respondent the IPC 17 Escalation statement certified by the General Consultant up to February 2011 and submitted its revised escalation statement for the period up to February 2011, that the rectification made in the IPC till that date and the reasoning on which such revised escalation was sought were as detailed in Ex.C.7, that along with Ex.C.7 the 6 Com.AS.No.87/2017 Petitioner had also furnished 14 Offer Letters and Delivery Orders issued by SAIL between the period October 2008 and May 2010 which showed the SAIL prices for the equivalent Steel components, that the Petitioner also furnished other material along with Ex.C.7 justifying its request for revised escalation, that the Petitioner had originally considered 09.01.2009 as being the date on which the financial bid was opened for determining the rate for steel components as per Clause 22.3 of the SCC, that by a letter dated 13.01.2011 the General Consultant had informed the Petitioner that escalation would be based on the rate prevalent on 22.10.2008 as the base date till such time the tender opening date was finalized by the 1 st Respondent in terms of the contract, that the General Consultant had issued a letter dated 22.02.2012 wherien he issued recommendation to the 1st Respondent in respect of the adjustment of steel components and the manner in which its should be done taking into consideration the fact that many civil contractors had been furnishing steel prices which were different from the steel prices furnished by the SAIL, Bengaluru, that in pursuance to the circular dated 23.05.2012 issued by the 1st Respondent in order to ensure that no unintended benefits go to contractor and accepted the General Consultant's recommendation suitable, that having regard to the letter of the General Consultant and the said circular, by its letter dated 7 Com.AS.No.87/2017 28.09.2012 the Petitioner informed that in the absence of SAIL rates on the date of opening the tender the Petitioner had continued claiming steel escalation rate based on VSP rate for 20MM dia for the month of January 2009, that by its letter dated 09.09.2012, the Petitioner reiterated that it had been claiming the price veriaiton up to IPC 14 on the basis of SAIL, that upon completion of the contract work within the extended period of time i.e., 15.04.2012 there is no dispute that the Petitioner was entitled to claim price variation, that on examining its legitimate request the 1st Respondent settled the final variation bill of the Petitioner's no claim certificate, that thereafter the Petitioner issued a reminder on 10.12.2013 to the 1 st Respondent to release the balance escalation amount, that in view of the same dispute arose and refer to the Arbitration Tribunal, that after enquiry the Hon'ble Arbitral Tribunal has passed the Majority Impugned Award.

4. Being aggrieved by the said Majority Arbitral Award, the Petitioner has challenged the same on several grounds, which will be discussed later in the body of the Judgment.

5. The records of the Arbitral Tribunal were secured. Thereafter, this case was transferred to this Court as per the Orders dated 23.03.2018. I have heard the oral arguments of 8 Com.AS.No.87/2017 the Advocates for the both parties. The Advocate for the Petitioner has filed written arguments on 02.12.2020. The Advocate for the 1st Respondent has filed written arguments on 08.12.2020.

6. Based on the above contentions of both parties, following Points arise for my consideration:-

1. Whether there are grounds to set aside the Impugned Award under Section 34 of the Arbitration & Conciliation Act?

2. What Order?

7. My findings on the above points are as follows:-

Point No.1:- In the Negative.

Point No.2:- As per the final Order for the following reasons.

REASONS

8. Point No.1: - The Petitioner has preferred a Claim Petition before the Hon'ble Arbitral Tribunal and the same was rejected in its entirety by the Majority Award of the Hon'ble Arbitral Tribunal.

Com.AS.No.87/2017

9. The Petitioner has challenged the said Impugned Majority Award in this proceeding. The Hon'ble High Court in the Judgment dated 17.04.2021 in Com.A.P.No.25/2021 (Union of India vs. M/s Warsaw Engineers) (which is relied on by the Advocate for the 1st Respondent) has laid down certain guidelines/principles about the writing of Judgments in a Petition filed under Section 34 of the Arbitration & Conciliation Act. Keeping in my mind the said guidelines, I now propose to examine each and every ground urged by the Plaintiff specifically with reference to the submissions made by both Advocates.

10. The First Ground is that the Impugned Award is contrary to facts, the evidence on record and probability of case and is also opposed to well settled law.

10.a. This is a general ground and the same will be discussed along with other grounds urged by the Petitioner.

11. The Second Ground is that in the Majority Award, the learned Arbitrators rejected the claims of the Petitioner in blatant violation of Section 28 (3) of the Arbitration and Conciliation Act, by disregarding Clause 22.3 of Ex.C.1/SCC requiring payment of price variation for steel component by adopting SAIL rates.

Com.AS.No.87/2017

11.a. The learned Advocate for the 1st Respondent has argued that the Clause 22.3 of Ex.C.1/SCC does not stipulate provisional payment, that price variation can be claimed and paid only once, that the same has already been exhausted, that Ex.C.8 is only an internal communication and Ex.C.10 does not state that price variation of payments were provisional in nature, that it is also supported by CW.1 that there is no provision in the contract which enables the Petitioner to seek price variation more than once. He has drawn my attention to Question No. 60 of cross-examination of CW.1 wherein he has admitted that there is no provision in the contract which enables the Petitioner to seek price variation more than once.

11.b. By elaborating his arguments on this ground, the learned Advocate for the Petitioner has also relied on a decision reported in 2018 (14) - S.C.C. - 688 (National Highways Authority of India vs. Progressive MVR (JV)). In the said decision it is discussed about the price variation clause in the contract in question and how to interpret the said clause in detail. By considering the ratio of the said decision, now I propose to examine the said clause in the present contract.

11.c. The Clause 22.3 of Ex.C.1/GCC provides that the contract price shall be adjusted for increase of decrease in rates and price of labour, material and lubricants. As per this Clause, 11 Com.AS.No.87/2017 the furnishing of monthly running bills by the Petitioner is provisional in nature and the preparation and submission of Final Bill and payment thereof will decisive. The contract provides for payment towards on account bills of Stockyard price of SAIL. Further, the Engineer has to certify the adjusted amount. The fixation of Steel price for the purpose of payment of bills would be on the basis of Bangalore Stockyard price of SAIL. The Respondent No.1 fixed SO rate at Rs. 51,480/- based on RINL rate. As per the letter dated 22.09.2014, the Respondent No.1 revised the rate at Rs. 47,516/- based on SAIL rate as on 22.02.2008 and recover Rs. 1,11,76,282/- from Ex.C.1 to Ex.C.14/RA Bills. At Page No. 4 of Ex.C.1/GCC there is a Clause regarding adjustment of Steel component based on a formula. In the Majority Award, the Arbitral Tribunal based on the admission of the Petitioner/CW.1 in his evidence dated 23.04.2015 has held that he admitted that he does not have any objection for applying actual stockyard price of SAIL for arriving at the amount as per Clause 22.3 of Ex.C.1/GCC and that Ex.R.1 to Ex.R.21 were confronted to CW.1 and based on the said evidence, the Arbitral Tribunal in its Majority Award has interpreted the Clauses of Ex.C.1/GCC, and held that the Petitioner is not entitled to claim price variation as claimed by him.

Com.AS.No.87/2017

11.d. On perusal of the above-mentioned observations, discussions and findings of the Majority Award of the Arbitral Tribunal about the terms of the contract between the parties, it cannot be held that the Arbitral Tribunal has completely ignored the terms of the contract and traveled beyond all the terms of the contract while interpreting the same.

11.e. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The findings of fact by the Arbitral Tribunal, if based on evidence, even where a different opinion can be held on the basis of that evidence, the findings given by the Arbitrator has to be accepted and the Courts cannot substitute its opinion. The power to interpret the contract also lies with the Arbitrator. If the Arbitrator interpreted the terms of contract in a particular way based on the material before him and the evidence adduced before him, even if another view is possible to be taken on the same materials and evidence, the Court cannot interfere the said findings of the learned Arbitrator, as held by 13 Com.AS.No.87/2017 the Hon'ble Supreme Court in the decision reported in 2009(6)

- S.C.C. - 414 (G.Ramachandra Reddy & Company vs. Union of India & another), wherein it is held that the interpretation of a contract will fall within the realm of arbitrator, that the Court while dealing with an award would not re-appreciate the evidence, that an award containing reasons may not be interfered unless they are found to be perverse or based on a wrong proposition of law. In another decision reported in 2009 (10) - S.C.C. - 63 (Steel Authority of India Limited vs. Gupta Brothers Steel Tubes Limited), it is held that once the arbitrator has constructed Clause 7.2 of the contract of the said case, in a particular manner and such construction is not absurd and appears to be plausible, it is not open to the Court to interfere with the award of the arbitrator.

11.f. For the same principle, I wish to refer another decision reported in 2019 (7) - S.C.C. - 236 (Parsa Kenta Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan Nigam Limited). Once the courts reach to the conclusion that the Arbitrator has acted within its jurisdiction, even if the courts are of the view that the opinion of the arbitrator is wrong the same cannot be disturbed unless it is against the public policy.

11.g. Therefore, the ratio of the above-mentioned decision reported in 2018 (14) - S.C.C. - 688 (National Highways 14 Com.AS.No.87/2017 Authority of India vs. Progressive MVR (JV)) is not applicable to the facts of the present case. Further, the above- mentioned decision reported in 2019 (7) - S.C.C. - 236 (Parsa Kenta Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan Nigam Limited), is a subsequent decision of the Hon'ble Apex Court.

11.h. Therefore, an award warrants interference by the Court under Section 34 of the Arbitration and Conciliation Act only when it contravenes a substantive provision of law or is patently illegal or shocks the conscious of the Court and that a plausible/reasonable view taken by an Arbitrator, even if the same is based on insufficient evidence, is not to be substituted by the Court. Hence, this ground is not available for the Petitioner under Sub-Section (2) and Sub-Section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of Arbitral Award on this count is thwarted and rejected.

12. The Third Ground is that the learned Arbitrators failed to note that in Ex.C.3 the 1st Respondent has specifically provided for procurement of steel from TISCO, SAIL and RINL, and in case of shortfall, to procure steel from SRMB, Shyam Steel, Usha Martin, and Rathi.

Com.AS.No.87/2017

12.a. In fact, this ground is nothing but repetition of Ground No.2. Further, in order to answer this ground, this court has to re-evaluate and re-appreciate the evidence adduced before the Arbitral Tribunal. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re- evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

13. The Fourth Ground is that the learned Arbitrators failed to note that even after allowing for procurement of steel from any of the specified manufacturers as per Ex.C.3, the 1 st 16 Com.AS.No.87/2017 Respondent maintained the adoption of SAIL rates in the price variation formula in Clause 22.3 of the SCC.

13.a. In fact, this ground is nothing but repetition of Ground No.2. Further, in order to answer this ground, this court has to re-evaluate and re-appreciate the evidence adduced before the Arbitral Tribunal. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re- evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

Com.AS.No.87/2017

14. The Fifth Ground is that the learned Arbitrators failed to note that Clause 22.3 provides an explanation for adjustment on account on price variation and that Clause 73.3 of the Ex.C.6/ GCC that the contingency of non-availability of SAIL rates was already an expected event and provided for on account payment to the adjusted later on when SAIL rates were made available.

14.a. In fact, this ground is nothing but repetition of Ground No.2. Further, in order to answer this ground, this court has to re-evaluate and re-appreciate the evidence adduced before the Arbitral Tribunal. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re- evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) 18 Com.AS.No.87/2017 and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

15. The Sixth Ground is that the learned Arbitrators failed to note the statement made by the General Consultant of the 1 st Respondent in the Ex.C.8/Letter dated 20.02.2012 to the Respondent No.1, that which clearly indicates that the 1 st Respondent and its General Consultant had taken almost the entire responsibility to avail the SAIL rates for the steel components as per the terms of the contract and in a fair and transparent manner apply the price variation in the IPC raised by the Petitioner.

15.a. The learned Advocate for the 1st Respondent has argued that a perusal of Ex.C.8 clearly indicates that the said letter was an internal communication between the GC and the 1st Respondent whereby the GC made certain recommendations, that the said recommendations were not given effect to by the 1st Respondent, that no reliance can be placed on Ex.C.8 as it constitutes an internal correspondence, that in so far as Ex.C.10 is concerned, a perusal of the said document makes it clear that for payments made upto March 2012, based on prices obtained by the contractors from SAIL 19 Com.AS.No.87/2017 was said to be in order and it applied even for payments made after March 2012 due to various reasons like contractors submitting bills belatedly, bill processing took additional time etc. For the said aspect, the learned Advocate for the 1 st Respondent has drawn my attention to Question No. 23 & 24 of cross-examination of CW.1 dated 23.04.2015 and has argued that the CW.1 has deposed that Ex.C.8 was communicated as per Ex.C.9 to the Petitioner, that a perusal of Ex.C.9 shows that Ex.C.10 was communicated to Plaintiff and not Ex.C.8 and hence Ex.C.8 was only an internal communication. He has also argued that no payments have been made to the Petitioner in terms of Ex.C.8 or Ex.C.10. For the said aspect, he has drawn my attention to Question No. 30 of the cross-examination of CW.1 dated 23.04.2015, wherein he has deposed that claim of the Petitioner that provisional indices and provisional payment were permissible only in terms of Clause 22.3 of SCC and they were based on Ex.C.8 and Ex.C.10.

15.b. On perusal of the Arbitral records along with the discussions made in the Majority Award of the Arbitral Tribunal, I cannot brush aside the said arguments of the learned Advocate for the 1st Respondent. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and 20 Com.AS.No.87/2017 re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

16. The Seventh Ground is that the learned Arbitrators failed to note that the 1st Respondent in its Ex.C.10/Circular dated 23.05.2012 and Ex.C.7/ Letter of the Petitioner dated 04.05.2011, Ex.C.20/ Letter dated 02.09.2014, Ex.C.16/ Letter dated 09.07.2014, erred in not noting that the adoption of RINL rates by the Petitioner in any of its IPCs was done only to facilitate provisional payment and such adoption cannot be interpreted that Petitioner has given up its legitimate rights to 21 Com.AS.No.87/2017 claim revision of rates at a later date when SAIL rates are made available.

16.a. The learned Advocate for the Respondent No.1 has argued that the Petitioner for the first time in this proceedings contended that the price variation claims were provisional in nature and the Petitioner has adopted RINL rates only due to non-availability of SAIL rates, that from the aribtral records, it is clear that SAIL stockyard prices were available at all times during the currency of the contract in question, that the Respondent No.1 has produced Ex.R.1 to 21, the ex-stockyard prices at Bengaluru stockyard given by SAIL to various contractors of the 1st Respondent at a similar period of time, that the Petitioner himself had obtained ex-stockyard prices of steel at Bengaluru stockyard form SAIL from claiming price variation in IPC No.14 & 15, that therefore the contentions of the Petitioner that SAIL stockyard prices were not available cannot be accepted and considered.

16.b. In order to answer the respective contentions of both parties on this ground, this court has to re-evaluate and re- appreciate the evidence adduced before the Arbitral Tribunal. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not 22 Com.AS.No.87/2017 empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

17. The Eighth Ground is that the learned Arbitrators failed to note that the 1st Respondent and its General Consultant have failed to keep up their promise made in their Ex.C.10/Circular dated 23.05.2012 and Ex.C.8/Letter dated 20.02.2012, to obtain and communicate the SAIL rates forcing the Petitioner's Officer to approach SAIL through its RTI applications dated 11.07.2014 and 05.08.2014 referred to in Ex.C.19/ Letters of SAIL.

Com.AS.No.87/2017

17.a. I have already discussed about the contentions urged by the Petitioner in this ground, while answering Ground No.6 above. Hence, for the same reasons, I cannot accept the contentions urged by the Petitioner in this ground. Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

18. The Ninth Ground is that the learned Arbitrators failed to note that the 1st Respondent by its Ex.C.21/Letter dated 22.09.2014 has rejected the request for revision in price variation without going into the details of the revised price variation bill adopting SAIL rates as submitted in the Ex.C.20/Letter dated 02.09.2014.

18.a. The learned Advocate for the 1st Respondent has argued that a perusal of derivation table of PVC claim submitted by the Petitioner along with Ex.C.20 or under the table at Ex.C.25, it is very clear that the Petitioner had not included rebate as well as stockyard margin, which are undoubtedly the components of stockyard price, that under such circumstances, when the benefits of stockyard margin and rebate forming the part of stockyard price should have ultimately gone in favour of 24 Com.AS.No.87/2017 the 1st Respondent as one of the components of stockyard price of Bengaluru SAIL office and when the derived price table in Ex.C.20 and Ex.C.25 prepared by the Petitioner based on ex- works price, does not appear to be containing the required component and hence no reliance can be place on either Ex.C.20 or Ex.C.25 are any other documents in which contract price is worked out based on ex-works price alone, as done by the Petitioner.

18.b. In fact, this ground is nothing but repetition of earlier grounds. Further, in order to answer the respective contentions of both parties in this ground, this court has to re-evaluate and re-appreciate the evidence adduced before the Arbitral Tribunal. Moreover, this ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 25 Com.AS.No.87/2017 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

19. The Tenth Ground is that the learned Arbitrators failed to note that the wrongful recovery by the 1st Respondent of Rs. 7,62,23,022/- without any notice formed the basis for subsidiary claim for compensation of Rs. 4,24,23,307/- under Section 73 of the Contract Act.

19.a. On perusal of the Majority Award of the Arbitral Tribunal while answering Issue No.6 after referring Clause No. 79 of Ec.C.1/GCC and also referring various case-laws on the subject, the Arbitral Tribunal has held that there is no question of granting damages or interest to the Petitioner. In the said circumstances, if this ground is read, it is nothing but in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have 26 Com.AS.No.87/2017 repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

20. The Eleventh Ground is that the learned Arbitrators without considering the price variation by adopting SAIL rates for steel component and hence is in violation of Section 28 (3) of the Arbitration and Conciliation Act.

20.a. I have already discussed about this aspect while answering Ground No.2 above. Therefore, for the same reasons, I cannot accept the contentions raised by the Petitioner in this ground also. Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

Com.AS.No.87/2017

21. The Twelfth Ground is that the learned Arbitrators erred in holding that the Petitioner should have on its own obtained the SAIL rates.

21.a. This ground is in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

22. The Thirteenth Ground is that the learned Arbitrators were in error accepting the price variation worked out by the 1 st 28 Com.AS.No.87/2017 Respondent by adopting RINL rates in the Final Bill instead of SAIL rates which is totally against the contract conditions.

22.a. This ground is also in the nature and tenor of appeal. Further, most of the said aspect is already discussed while answering earlier grounds. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019) - S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

23. The Fourteenth Ground is that the learned Arbitrators has failed to consider and decide the Issue No.5 in the Majority Award.

Com.AS.No.87/2017

23.a. In fact, in the Majority Award, the Arbitral Tribunal has discussed Issue No.5 jointly with Issue No. 1 to 3 contending that all the said Issues are inter-related. It has discussed from Para No. 9 to 31 and answered Issue No.5 in the Negative. When such being the case, I cannot accept the said contentions of the Petitioner. Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

24. The Fifteenth Ground is that the learned Arbitrators wholly misrepresents the documentary evidence on record.

24.a. This ground is also in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 30 Com.AS.No.87/2017 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

25. The Sixteenth Ground is that the learned Arbitrators wrongly interpreted the oral evidence of the Petitioner.

25.a. This ground is also in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner 31 Com.AS.No.87/2017 calling for the setting aside of arbitral award on this ground is thwarted and rejected.

26. The Seventeenth Ground is that the Majority Award also suffers from glaring errors on the face of the record.

26.a. The Petitioner has not specifically mentioned any of the alleged glaring errors in the Majority Award of the Arbitral Tribunal. Further, this ground is also in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

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27. The Eighteenth Ground is that the learned Arbitrators were seriously in error in doubting the authenticity of documentary evidence on record and ignoring the same for the said reason, failing to note that the same were obtained from a Government of India undertaking and no strict rules of evidence for required to be applied to consider the case of the Petitioner based on such evidence.

27.a. This ground is also in the nature and tenor of appeal. Section 34 of the Arbitration & Conciliation Act, 1996 does not empower the Courts to re- appreciate and re-evaluate the evidence produced before the Arbitral Tribunal and thereafter to judge if the findings of the Arbitral Tribunal are correct or wrong. The Superior Courts have repeatedly held that it is not permissible to a Court to examine the correctness of the findings of the arbitrator, as if it were sitting in appeal over his findings. The nature of proceedings under Section 34 of the Act is summary in nature as held in the decision reported in (2019)

- S.C.C. Online - S.C. - 1244 = (2019) 9 - S.C.C. - 462 (Canara Nidhi Limited vs. M. Shashikala). Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner 33 Com.AS.No.87/2017 calling for the setting aside of arbitral award on this ground is thwarted and rejected.

28. The Nineteenth Ground is that the Majority Award is also erroneous for being in violation of Section 19 (1) of the Arbitration and Conciliation Act.

28.a. In order to appreciate the contentions urged by the Petitioner on this ground is concerned, I deem appropriate to reproduce Section 18 and 19, nestled under Chapter V - Conduct of Arbitral Proceedings of the Arbitration and Conciliation Act, which reads as under:-

"CHAPTER V Conduct of arbitral proceedings

18. Equal treatment of parties:- The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

19. Determination of rules of procedure:-

(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject 34 Com.AS.No.87/2017 to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub- section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence."

28.b. I, am of the considered view that the aforesaid challenge flanked by the Petitioner to the arbitral award is on a very thin ice. In the decision reported in 2002 - S.C.C. OnLine - Bom - 983 (Maharashtra State Electricity Board vs. Datar Switchgear Ltd.), it is observed that sub-section (1) of Section 19 of the Act has prescribed that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 or by the Evidence Act, 1872. The Para No. 41 of the said decision is reproduced verbatim, as under:-

"41. In sub-section (1) of section 19, the Act has prescribed that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 or by the Evidence Act, 1872. These are words of amplitude and 30 not of restriction. These words no not prohibit the Arbitral Tribunal from drawing sustenance from the fundamental principles underlying the Civil Procedure or Evidence Act, but free the Tribunal from being bound, as would a Civil Court, by the requirement of observing the provisions of the Code and the law relating to evidence with all its rigour. Sub-section(2) of section 35 Com.AS.No.87/2017 19 preserves the consensual nature of the arbitral proceedings by laying down that subject to the provisions of Part-I, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings. The freedom which is conferred upon the parties to agree on the procedure to be followed by the Arbitral Tribunal is regulated by Part-I but subject to that regulation parties are otherwise free to agree on arbitral procedure and the conduct of proceedings. In the even that parties are not agreed on the procedure to be followed in the conduct of proceedings, the Arbitral Tribunal is against, subject to Part-I, free to conduct the proceedings in a manner which it considers appropriate. Sub-section (4) of section 19 provides some indication of the contents of sub- section (3). Sub-section (4) lays down that the power of the Arbitral Tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence. Sub-section (4) is of course not exhaustive of the content of sub-section (3) but provides an instance of the power conferred by sub-section (3)."

28.c. In Para No. 52 of the said decision, the Hon'ble Bombay High Court has eloquently reiterated the concept of an arbitral tribunal. The relevant extract of the same is as under: -

"52. The jurisprudential concept of an Arbitral Tribunal is that it is a private forum which is chose by the parties as a means of a speedy and expeditious resolution of disputes between them. The Arbitral Tribunal is not akin to a Court of law which has 36 Com.AS.No.87/2017 ordinarily a jurisdiction in general and an existence in perpetuity. The existence of an Arbitral Tribunal arises out of an arbitral agreement between the parties and upon the invocation of arbitration. The adjudicatory powers of an Arbitral Tribunal extend to such matters as parties have referred to it. The Arbitration and Conciliation Act, 1996 is a regulatory statute which has consolidate and amended the law of arbitration. The legislature in its wisdom has conferred power upon the Arbitral Tribunal to terminate its proceedings or to suspend its hearings in situations envisaged in the statute. It would, in my view, be impermissible for an Arbitral Tribunal to transcend the ambit of the powers which the parties have conferred and what the legislature has envisaged."

28.d. Further, I shall not refrain to pull out a leaf of knowledge and enlightenment from the decision reported in 2014 (6) - R.A.J. - 465 (Del) ( Silor Associates SA vs. Bharat Heavy Electrical Ltd). In the said decision, the Hon'ble High Court of Delhi while deciding a Petition under Section 27 of the Arbitration and Conciliation Act, seeking necessary orders and directions to direct the respondent to produce two documents traversed through the scheme and provisions of the Arbitration and Conciliation Act, has held a follows :-

"15. While hearing a petition under Section 27 of the Act, no doubt, I am not hearing an appeal from the order passed by the Tribunal. An appeal from an 37 Com.AS.No.87/2017 order passed by the Tribunal is maintainable only in terms of Section 37(2) of the Act, and not otherwise. But that does not mean that when an order passed by the Tribunal invoking Section 27 of the Act - to seek the assistance of the Court in taking evidence, is placed before the Court, the Court would simply act on the request of the Tribunal, even if it appears to the Court that the order of the Tribunal has been passed on an erroneous premise in law. The Court is not bound to act on the request of the arbitral tribunal mechanically - even when the order appears to have been passed by the arbitral tribunal on a misconception of law. In such a situation, the Court would not only be entitled to, but would be duty bound to correct the error, if any, found in the order passed by the Tribunal. In Managing Director, Army Welfare Organisation (supra), the Supreme Court observed:

"72. This Court cannot sit in appeal over the award of the arbitrator but can certainly interfere when the award suffers from non-application of mind or when a relevant fact is ignored or an irrelevant fact not germane for deciding the dispute is taken into consideration".

In my view, the same principle applies to orders placed before this court under Section 27 of the Act.

16. Section 27(3) mandates that the Court "may" within its competence "and according to its rules on taking evidence", execute the request made by the tribunal by ordering that the evidence be provided directly to the tribunal. The use of the expression "may" shows that the court is not bound to act on the request in every case where a request for taking 38 Com.AS.No.87/2017 evidence is made by the tribunal. The Court "may" decline the request of the tribunal, if either it is not within the competence of the court to make an order on the request, or the request is not in accordance with the rules of the court on taking evidence.

17. Section 19(1) of the Act, inter alia, provides that "The Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872)". This means that the Tribunal is not bound by the rigor and strict provisions of the Code of Civil Procedure, 1908 (CPC), or the Indian Evidence Act, 1872 (Evidence Act).

18. Section 19(2) states that subject to the provisions of Part I, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings. In the present case, the parties have not agreed on any specific procedure to be followed by the Arbitral Tribunal in conduct of its proceedings. Section 19(3) states that "failing any agreement referred to in sub-section (2), the Arbitral Tribunal may, subject to this part, conduct the proceedings in the manner it considers appropriate"

(emphasis supplied). Therefore, the Arbitral Tribunal is free to devise its own procedure, subject to the condition that such procedure should conform with the provisions of Part I of the Act. The procedure that the Tribunal may devise should meet the basic tenets of an adjudicatory process, namely, that the procedure should treat parties equally, and each party should be given a full opportunity to present its case (see Section 18). The procedure to be evolved by the Tribunal cannot be such that it curtails the rights of the parties under Sections 39 Com.AS.No.87/2017 13, 16, 17, 22, 23, 24, 25 & 26 of the Act, or any of them.

19. There is nothing in the Act to contra indicate the existence of jurisdiction/power in the tribunal to require the parties to produce documents, exhibits or other evidence, as the arbitral tribunal may determine. The aforesaid provision has the effect of vesting the tribunal with much greater autonomy in the matter of regulating its procedure for conduct of the arbitration proceedings, than that exercised by a civil court- which is bound by the rigour of the Code of Civil Procedure (CPC) and the Indian Evidence Act. The scheme contained in Section 19 of the Act is not to denude the arbitral tribunal of its power to regulate its procedure for effective and expeditious conduct of the arbitration proceedings in a transparent and fair manner. On the contrary, the legislative intent appears to be vest the arbitral tribunal with autonomy and flexibility in the matter of conduct of its proceedings so as to expedite the proceedings and cut the procedural wrangles witnessed in courts - which are governed by the CPC and the Evidence Act.

20. The procedure that the Tribunal may adopt for conducting the proceedings need not be evolved by consensus of the parties. It is for the Tribunal to devise its own procedure, if the parties have themselves not evolved the procedure consensually under Section 19(2).

21. At this stage, I may take note of the procedure prescribed by the CPC, and the courts power to direct production of documents by a party to the proceedings.

Com.AS.No.87/2017 Section 30 CPC provides that, subject to such conditions and limitations as may be prescribed, the Court may, at any time, either on its own motion or on the application of any party make an order relating to, inter alia, production of documents. Order 11 deals with the aspect of service of interrogatories, discovery, inspection and production of documents. The aspect of production of documents is dealt with in Order 11 Rule 14, which states that it shall be lawful for the court, at any time during the pendency of the suit, to order the production by any party thereto, upon oath of such of the documents in his possession or power, relating to any matter in question in such suit, as the court shall think right and the court may deal with such documents, when produced, in such manner as shall appear just.

22. Order 11 Rule 21 CPC deals with the consequences of non compliance of an order directing a party to answer interrogatories or to discover documents or grant inspection of documents. If the plaintiff fails to comply with any such direction, the suit is liable to be dismissed for want of prosecution. If the defendant is in breach of such an order, his defence is liable to be struck out. Pertinently, Order 11 Rule 21 does not take within its scope the aspect of non production of documents directed to be produced by a party under Order 11 Rule 14 CPC.

23. Order 16 CPC deals with the aspect of summoning and attendance of witnesses. Order 16 Rule 6 states that any person may be summoned to produce a document, without being summoned to give evidence, and any person summoned merely to produce a document shall be deemed to have complied with the 41 Com.AS.No.87/2017 summons if he causes such document to be produced, instead of attending personally to produce the same. The expression "any person" used in Order 16 Rule 6 CPC would include a party to the proceedings. This is evident from Order 16 Rule 20 CPC and is well accepted in judicial pronouncements referred to a little later. Order 16 Rule 10 CPC deals with the procedure to be adopted qua the person to whom summons have been issued, inter alia, for production of documents, and who fails to produce the documents in compliance with such summons. If the person - without lawful excuse, fails to produce the document in compliance with the summons, the court may issue a proclamation requiring him to attend and to produce the document at a time and place to be named. If, inspite of this procedure being adopted, the person fails to produce the document, the court may issue a warrant for his arrest - with or without bail, and may make an order for attachment of his property for an amount not exceeding the amount of the costs of attachment and of fine which may be imposed under Order 16 Rule 12.

24. Order 16 Rule 15 imposes a duty upon the person summoned to give evidence or produce documents before the court. Order 16 Rule 20 provides that where any party to a suit present in court refuses, without lawful excuse when required by the court, to give evidence or to produce any document, then and there in his possession or power, the court may pronounce judgment against him or make such order in relation to the suit as it thinks fit.

25. From the above provisions, it appears that the reason why Order 11 Rule 21 does not deal with the 42 Com.AS.No.87/2017 aspect of non compliance of an order directing production of documents by a party, is that such a default is covered and dealt with by Order 16 CPC.

26. Consequently, it is evident that the discovery, inspection and production of documents by a party, at the request of the opposite party, is a matter of procedure. It is for this reason that the same has been dealt with in Order XI Rules 12 to 15 and 21, and Order 16 of the CPC. Thus, the arbitral tribunal is not powerless to direct production of a document - considered to be relevant evidence by it, by one or the other party to the proceedings. This power is statutorily conferred upon the tribunal Section 19 of the Act. Exercise of this statutory power by the arbitral tribunal does not tantamount to assumption of "inherent power"

by the arbitral tribunal - which power does not vest in an arbitral tribunal.

27. It is one thing to say that the arbitral tribunal does not have the power or the jurisdiction to direct production of documents by one of the parties, and it is another thing to say that the arbitral tribunal does not have the power to enforce compliance of such a direction. If a direction issued by the arbitral tribunal directing production of documents by a party is not complied with, it appears that the arbitral tribunal would be in a position to invoke Section 27 of the Act, since Section 27 of the Act deals with the aspect of taking the courts assistance for taking evidence. The aspect of production of documents is specifically dealt with in Section 27(2)(c)(ii). However, the arbitral tribunal in the present case has proceeded on an erroneous premise that it does not have the jurisdiction 43 Com.AS.No.87/2017 to direct production of documents by the respondent, even though the arbitral tribunal has found the aforesaid two documents to constitute relevant evidence, and the arbitral tribunal has straightaway invoked the provisions contained in Section 27 of the Act to seek the courts assistance for a direction to the respondent to produce the said documents.

28. The Supreme Court, in Delta Distilleries Limited v. United Spirits Ltd. & Anr., (2014) 1 SCC 113, has held that the expression "any person" used in Section 27 of the Act is wide enough to cover not merely the witnesses, but also the parties to the proceedings and that, in the event of the document not being produced as directed by the arbitral tribunal, the arbitral tribunal would be entitled to draw an adverse inference against such a party. The Supreme Court has held:

"21. As seen from these two sections, Section 25(c) provides that in the event a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings, and make the arbitral award on the evidence before it. This evidence can be sought either from any third person or from a party to the proceeding itself. The substitution of the phrase "parties and witnesses" under Section 43 of the earlier act by the phrase 'any person' cannot make any difference, or cannot be read to whittle down the powers of the Arbitral Tribunal to seek assistance from the court where any person who is not cooperating with the Arbitral Tribunal or where any evidence is required from any person, be it a party to the proceedings or others. It is an enabling provision, and it has to be read as such. The term 'any person' appearing under Section 27(2)(c) is wide enough to cover not merely the witnesses, but also the parties to the proceeding. It is 44 Com.AS.No.87/2017 undoubtedly clear that if a party fails to appear before the Arbitral Tribunal, the Tribunal can proceed ex- parte, as provided under Section 25(c). At the same time, it cannot be ignored that the Tribunal is required to make an award on the merits of the claim placed before it. For that purpose, if any evidence becomes necessary, the Tribunal ought to have the power to get the evidence, and it is for this purpose only that this enabling section has been provided. The Supreme Court has further observed "23. It was contended that if the necessary documents are not produced, at the highest an adverse inference may be drawn against the Appellant. That is a power, of course available with the Arbitral Tribunal, and if necessary the same can be used. However, as observed by the learned Arbitrator in her order dated 27.3.2007, the documents sought in the present matter were required to arrive at the decision on the claim of the Respondent No. 1, since, the quantification in support of the claim on a theoretical basis. A hypothetical calculation should not be resorted to when actual Sales Tax Assessments are available, which would show as to whether the quantum of set-off allowed and claimed was in fact justified".

29. Therefore, it is evident that the arbitral tribunal is empowered on its own, without taking resort to Section 27 of the Act, to direct, a party to produce documents, and upon the failure to comply with the tribunals direction to produce documents, the aggrieved party - who is aggrieved by the non production of documents, may either require the arbitral tribunal to draw an adverse inference against the defaulting party, or may chose to require the arbitral tribunal to enforce the direction to produce the relevant document with the 45 Com.AS.No.87/2017 assistance of the court by resort to Section 27 of the Act.

30. It may be that the aggrieved party (who is aggrieved by the non production of the documents by the opposite party) may be satisfied by the arbitral tribunal drawing an adverse inference against the defaulting party, and may not wish to pursue the aspect of production of documents by the opposite/defaulting party by resort to Section 27 of the Act. It is not necessary for the arbitral tribunal in every such case to seek assistance of the court, and it would depend on the facts and circumstances of each case, whether such assistance should be sought. In any event, there would be no cause to seek assistance of the court by resort to Section 27 of the Act, without first issuing a direction to the concerned party to produce the document, and only upon the failure to comply with such a direction, the arbitral tribunal would be justified in seeking the assistance of the court under Section 27 of the Act - if so desired by the aggrieved/non defaulting party.

31. I find merit in the submission advanced by the petitioner before the arbitral tribunal that if the arbitral tribunal is held not to have jurisdiction to evolve its procedure requiring production of documents (when there is no agreed procedure laid down by the parties themselves), the same would delay the conclusion of the arbitration proceedings as, in every case, the arbitral tribunal would necessarily have to move for the courts assistance under Section 27 of the Act to obtain a direction for production of the relevant documents by one of the parties, even though the party from whom documents are required to be produced may be willing 46 Com.AS.No.87/2017 to comply with such a direction if it were to be so directed by the arbitral tribunal. It would also mean that even in a case where a party requiring production of documents were to be satisfied with the drawing of adverse inference against the defaulting party, the resort to Section 27 of the Act would necessarily have to be undertaken - leading to unnecessary waste of time and resources of the parties and delay in the arbitral process.

32. The scheme of the Act, when seen as a whole, is to minimise the interference by the courts during the arbitration proceedings. That is why Section 5 specifically prohibits any judicial authority to intervene in the arbitration proceedings, notwithstanding anything contained in the other law for the time being in force, in matters governed by Part I of the Act except to the extent provided for in the Act. The aforesaid scheme is also evident from Sections 13 and 16 of the Act, which provide that issues relating to challenge to the arbitral tribunal on grounds of justifiable doubt, competence (qualification), and jurisdiction of the tribunal cannot be agitated midway when the arbitral proceedings are on, and such challenges should await the making of the award by the tribunal."

28.e. The Hon'ble Apex Court in the decision reported in (2018) 9 - S.C.C. 49 (Emkay Global Financial Services Ltd. vs. Girdhar Sondhi) has held that an application under Section 34 of the Act for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the arbitrator. I, have carefully perused the arbitral record and it 47 Com.AS.No.87/2017 is observed that as per Section 19(2) of the Arbitration and Conciliation Act, no procedure between the parties was agreed to be followed by the arbitral tribunal in conducting its proceedings. It is further observed that the Arbitral Tribunal rightfully exercised the power vested in it under the mandate of Section 19 of the Arbitration and Conciliation Act. Hence, the arbitral award is neither against the fundamental policy of India nor in contravention of law. Thus, the challenge flanked by the respondent calling for the setting aside of arbitral award on this count is thwarted and rejected.

29. The Twentieth Ground is that the learned Arbitrators also erred in rejecting the second claim of compensation of the Petitioner based on Section 73 of the Contract Act, due to breach of contract by the 1st Respondent.

29.a. I have already discussed about this aspect, while answering Ground No. 10 above. For the same reasons, I cannot accept the contentions urged by the Petitioner in this ground. Hence, this ground is not available for the Petitioner under Sub- section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

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30. The Twenty First Ground is that the Majority Award is also opposed to Section 18 of the Arbitration and Conciliation Act, that the 1st Respondent filed further material by way calculation based on Ex.R.3 to Ex.R.21 on 10.02.2017, that thereafter no sitting to enable the Petitioner to have its say on the same and without giving opportunity the Majority Award was passed.

30.a. The learned Advocate for the Petitioner has drawn my attention to Para No. 5.9 of the Minority Award passed by the 4 th Respondent, wherein it is clearly mentioned that no opportunity was granted to the Claimant/Petitioner to make his submission on the calculation submitted by the Respondent No.1 based on Ex.R.3 to Ex.R.21, as formal herein was already concluded, and has argued that in view of the said finding by the learned Arbitrator/4th Respondent in his Minority Award, it is very clear that no opportunity was granted to the Petitioner to submit his contentions on Ex.R.3 to Ex.R.21 and hence the Impugned Award is contrary to Section 18 of the Arbitration and Conciliation Act.

30.b. However, on perusal of the Arbitral Records, on 10.02.2017 the 1st Respondent has filed his written submissions with Table Containing S-0 & S-1 values and comparative Table of Actual Stocks and Price & calculation of Price Variation before 49 Com.AS.No.87/2017 the Arbitral Tribunal. The written submission runs about 63 pages. The Table containing S-0 & S-1 values is at Annexure-I is available at Page No. 64 to 66. The Comparative Table of Actual Stockyard Price of Steel and derived Stockyard Price is at Annexure-II is available at Page No. 67 to 70. The Calculation showing the amount payable to Claimant towards price variation and amounts already paid is at Annexure-III, is available at Page No. 71 to 73.

30.c. It is to be noted that on the very same day, i.e., on 10.02.2017, the Advocate for the Claimant/ Petitioner, M/s. Sundaraswamy and Ramdas, has filed their written synopsis/arguments which is running about 12 pages along with details of Steel rate as per SAIL and a chart showing comparation of Steel prices and another chart showing comparation of steel percentage, before the Arbitral Tribunal. When such being the case on 10.02.2017, both parties have filed their respective written submissions before the Arbitral Tribunal along with supporting documents. Therefore, there is no merits in the contentions of the Petitioner about not giving equal treatment to both parties under Section 18 of the Arbitration and Conciliation Act, by the Arbitral Tribunal. The award cannot be set aside on the said ground.

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30.d. The discussions. Observations and findings made in the Minority Award of the Arbitral Tribunal, not only about the above-mentioned aspect, but also about the aspects discussed under heading "Reason for Dissent" at Para No. 6 of the Award are contrary to the contentions, evidence and material before the Arbitral Tribunal. To find out the said aspect, though I have gone through the contentions and both oral and documentary evidence, but I have not re-appreciated the said evidence while passing this judgment.

30.e. Hence, this ground is not available for the Petitioner under Sub-section (2) and Sub-section (2-A) of Section 34 of the Arbitration & Conciliation Act. Thus, the challenge flanked by the Petitioner calling for the setting aside of arbitral award on this ground is thwarted and rejected.

31. The scope of this court is limited with regard to Section 34 of the Act. The position of law stands crystallized today, that findings, of fact as well as of law, of the arbitrator/Arbitral Tribunal are ordinarily not amenable to interference under Section 34 of the Act. The scope of interference is only where the finding of the Tribunal is either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by this court, is absolutely necessary. The arbitrator is the final arbiter on facts as well as 51 Com.AS.No.87/2017 in law, and even errors, factual or legal, which stop short of perversity, do not merit interference under Section 34 of the Act. The Hon'ble High Court of Delhi in the decision reported in 2015 - S.C.C. OnLine - Del - 13192 (P.C.L. Suncon (JV) vs. NHAI), in Paragraph No. 24 has held as follows :-

"24. As a postscript, this Court believes that it is imperative to sound a word of caution. Notwithstanding the considerable jurisprudence advising the Courts to remain circumspect in denying the enforcement of arbitral awards, interference with the awards challenged in the petitions before them has become a matter of routine, imperceptibly but surely erasing the distinction between arbitral tribunals and courts. Section 34 jurisdiction calls for judicial restraint and an awareness that the process is removed from appellate review. Arbitration as a form of alternate dispute resolution, running parallel to the judicial system, attempts to avoid the prolix and lengthy process of the courts and presupposes parties consciously agreeing to submit a potential dispute to arbitration with the object of actively avoiding a confrontation in the precincts of the judicial system. If a court is allowed to review the decision of the arbitral tribunal on the law or on the merits, the speed and, above all, the efficacy of the arbitral process is lost."

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32. The Hon'ble Supreme Court in the decision reported in (2006) 11 - S.C.C. - 181 ( McDermott International Inc. vs. Burn Standard Co. Ltd. and Ors.), has held as follows :-

"52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."

33. Thus, it is observed and held that the arbitral award is not marred by any patent illegality, as there is no contravention of the substantive law of India, which would result in the death knell of an arbitral award. It is also observed that there is no patent illegality in the arbitral award, which must go to the root of the matter. The arbitral award is also a well reasoned and a speaking award. The arbitral award is also held to not be in contravention of Section 28(3) of the Act, which pertains to the terms of the contract, trade usages applicable to the nature of 53 Com.AS.No.87/2017 contract and substance of dispute.

34. The Arbitration and Conciliation (Amendment) Act, 2015 made major changes to Section 34. The changes were suggested by the 246th Report of the Law Commission of India on Amendments to the Arbitration and Conciliation Act, 1996 of August 2014 and the Supplementary to the 246th Report of the Law Commission of India on Amendments to the Arbitration and Conciliation Act, 1996 of February 2015. These changes were aimed at restricting Courts from interfering with arbitral awards on the ground of "public policy." Accordingly, the amendment added "Explanation 2" to Section 34(2) as well as Section 2A. Explanation 2 of Section 34(2) states -

"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."

35. Because of this amendment, Courts would no longer be able to interfere with the award passed by the arbitrator. The explanation makes it especially clear that in no way would a Court be entailed to review the award on merits of the dispute. The learned Advocate for the Petitioner has relied on a decision reported in 2003 (5) - S.C.C. - 705 (ONGC vs. Saw Pipes Limited). However, after amendment to Arbitration and 54 Com.AS.No.87/2017 Conciliation Act, Section 2A also curtails the scope of interpretation of "patently illegal" as propounded in the said decision reported in 2003 (5) - S.C.C. - 705 (ONGC vs. Saw Pipes Limited). Section 2A states :-

"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 vitiate 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 law or by reappreciation of evidence."

36. Thus, Courts can no longer reappraise evidence or set aside awards merely because the Arbitral Tribunal has made errors when dealing with the same.

37. Hence, the scope of interference is only where the finding of the Tribunal is either contrary to the terms of the contract between the parties, or, ex facie, perverse, that interference, by this court, is absolutely necessary. The Arbitrator is the final arbiter on facts as well as in law, and even errors, factual or legal, which stops short of perversity, does not merit interference under Section 34 of the Arbitration & Conciliation Act, 1996. Courts can no longer reappraise evidence or set aside awards merely because the Arbitral Tribunal has made 55 Com.AS.No.87/2017 errors when dealing with the same.

38. Per-contra, the learned Advocate for the Petitioner has relied on a decision reported in 2015 (3) - S.C.C. - 49 (Associate Builders vs. DDA). The ratio of the said decision is to be appreciated along with the subsequent decisions of the Hon'ble Supreme Court.

39. Subsequent to the said decision, In the decision reported in (2017) 13 - SCALE - 91 (SC) (Venture Global Engineering LLC and Ors vs. Tech Mahindra Ltd. and Ors), the Hon'ble Supreme court has held as follows:-

"The Award of an Arbitral Tribunal can be set aside only on the grounds specified in Section 34 of the Arbitration & Conciliation Act and on no other ground. The Court cannot act as an Appellate Court to examine the legality of Award, nor it can examine the merits of claim by entering in factual arena like an Appellate Court."

40. A similar view is also taken in the decision reported in (2017) 14 - SCALE - 240 (SC) (Sutlej Construction vs. The Union Territory of Chandigarh).

Com.AS.No.87/2017

41. The learned Advocate for the 1 st Respondent has relied on the decision reported in 2019 (15) - S.C.C. - 131 (Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India Ltd.), wherein the Hon'ble Supreme Court has once again reiterated the law related to the examination by a Court of an Award under Section 34 of the Arbitration & Conciliation Act, 1996 and has held as under:-

"34. What is clear, therefore, is that the expression public policy of India, whether contained in Section 34 or in Section 48, would now mean the fundamental policy of Indian law as explained in paragraphs 18 and 27 of Associate Builders (supra), i.e., the fundamental policy of Indian law would be relegated to the "Renusagar" understanding of this expression. This would necessarily mean that the Western Geco (supra) expansion has been done away with. In short, Western Geco (supra), as explained in paragraphs 28 and 29 of Associate Builders (supra), would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, in so far as principles of natural justice are concerned, as contained in Sections 18 and 34(2) (a) (iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in paragraph 30 of Associate Builders (supra).

Com.AS.No.87/2017

35. It is important to notice that the ground for interference in so far as it concerns "interest of India"

has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basic notions of morality or justice". This again would be in line with paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.

36. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders (supra), or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders (supra). Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco (supra), as understood in Associate Builders (supra), and paragraphs 28 and 29 in particular, is now done away with.

37. Insofar as domestic awards made in India are concerned, an additional ground is now available under subsection (2A), added by the Amendment Act, 2015, to Section 34.Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within the fundamental policy of Indian law, namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the back door 58 Com.AS.No.87/2017 when it comes to setting aside an award on the ground of patent illegality.

38. Secondly, it is also made clear that re-

appreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.

39. To elucidate, paragraph 42.1 of Associate Builders (supra), namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.

40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (supra), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2A).

41. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (supra), while no longer being 59 Com.AS.No.87/2017 aground for challenge under public policy of India, would certainly amount to a patent illegality appearing on the face of the award. Thus, 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. Additionally, a finding based on 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."

42. In the decision reported in 2019 (16) - SCALE - 823 (Hindustan Construction Company Limited & Anr. vs. Union of India & Ors.), the Hon'ble Apex Court has held as under:-

"49. Further, this Court has repeatedly held that an application under Section 34 of the Arbitration Act, 1996 is a summary proceeding not in the nature of a regular suit - see Canara Nidhi Ltd. v. M. Shashikala 2019 SCC Online SC 1244 at paragraph 20. As a result, a court reviewing an arbitral award under Section 34 does not sit in appeal over the award, and if the view taken by the arbitrator is possible, no interference is called for - see Associated Construction v. Pawanhans Helicopters Limited. (2008)16 SCC 128 at paragraph 17.

50. Also, as has been held in the recent decision Ssangyong Engineering & Construction Co. Ltd. vs. NHAI 2019 SCC Online SC 677, after the 2015 Amendment Act, this Court cannot interfere with an arbitral award on 60 Com.AS.No.87/2017 merits."

43. The learned Advocate for the 1 st Respondent has relied on the decision reported in 2020 - SCC Online - S.C. - 466 = 2020 (7) - S.C.C. - 167 (Patel Engineering Ltd. vs. North Eastern Power Corporation Ltd). In the said decision, the Hon'ble Supreme Court has once again exposited the 'patent illegality' ground, appearing in Section 34 (2A) of the Arbitration and Conciliation Act, 1996. The most significant part of this judgment is the recognition and re-affirmation given to the test of patent illegality, as set out in Paragraph (42.3) of the above- mentioned decision reported in 2015 (3) - S.C.C. - 49 (Associate Builders vs. DDA) and which was reiterated in Paragraph (40) of the decision reported in 2019 (15) - S.C.C. - 131 (Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India Ltd.). The aforementioned test of 'patent illegality' lays down that any contravention of Section 28 (3) of the Arbitration & Conciliation Act, 1996 is deemed to be a sub-head of patent illegality. According to it, an Arbitral Tribunal must decide in accordance with the terms of the contract, but if an Arbitrator construes a term of the contract in such a way that it could be said to be something that no fair minded or reasonable person could do, the same will render the award 'patently illegal'.

Com.AS.No.87/2017

44. By keeping in mind about the said legal aspects, I am of the opinion that the Arbitral Award is not marred by any patent illegality, as there is no contravention of the substantive law of India, which would result in the death knell of an Arbitral Award. It is also observed that there is no patent illegality in the Arbitral Award, which must go to the root of the matter. The Arbitral Award is also a well reasoned and a speaking award. The Arbitral Award is also held to not be in contravention of Section 28(3) of the Arbitration & Conciliation Act, which pertains to the terms of the contract, trade usages applicable to the nature of contract and substance of dispute.

45. On a parting note, I would like to add, that the challenge to the various clauses of contract by the Petitioner under the present petition is not tenable. It is accordingly, held that the Arbitral Award is neither against the fundamental policy of India nor in contravention of law. Therefore, I find no perversity in the Arbitral Award and the same is upheld.

46. Having given my careful consideration to the submissions urged and the complete case record in the preceding paragraphs of this judgment, I am of the view that is not a fit and proper case for exercise the jurisdiction of this court under Section 34 of the Arbitration & Conciliation Act and 62 Com.AS.No.87/2017 interfere with the Arbitral Award and the same is upheld.

47. As far as reliance placed by the Learned Advocate for the 1st Respondent on the recent judgment of the Hon'ble Apex Court reported in 2021 - S.C.C. Online - S.C. - 508 (PSA Sical Terminals Pvt. Ltd. vs. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and Others) is concerned, the Hon'ble Apex Court has held that a decision, which is perverse, though may not be a ground for challenge under public policy of India, however, the same can certainly amount to a patent illegality appearing on the face of the award. The Hon'ble Apex Court has further 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.

48. In my humble opinion, it cannot be said, in the present matter, that finding recorded by the Learned Arbitrator is based on no evidence or it has ignored vital evidence before arriving at the decision. A bare perusal of the award passed by the Learned Arbitrator shows that evidence of both the parties have been considered in detail and the Learned Arbitrator has taken into account each and every submissions advanced by 63 Com.AS.No.87/2017 the parties before him, including appreciation of evidence in proper manner before arriving at the decision to pass the impugned award.

49. For the said aspect, I wish to refer a recent decision of the Hon'ble Apex Court reported in (2021) 3 - S.C.C. - 308 (Anglo American Metallurgical Coal Pty. Ltd. vs. MMTC Limited), wherein it has laid down the parameters of judicial review and Courts have been permitted to interfere only if there is a ground of patent illegality or violation of fundamental policy of Indian law and if a possible view is based on oral and documentary evidence led in the case, which cannot be characterized as being either perverse or being based on no evidence and as such, no interference is permissible. The relevant portion of the judgment is reproduced hereunder:-

"48. Given the parameters of judicial review laid down in Associate Builders, it is obvious that neither the ground of fundamental policy of Indian law, nor the ground of patent illegality, have been made out in the facts of this case, given the fact that the majority award is certainly a possible view based on the oral and documentary evidence led in the case, which cannot be characterized as being either perverse or being based on no evidence."

Com.AS.No.87/2017

50. The learned Advocate for the 1 st Respondent has relied on a recent Judgment of the Hon'ble Supreme Court in Delhi Airport Metro Express Private Limited vs. Delhi Metro Rail Corporation Limited in Civil Appeal No.5627/2021 (arising out of SLP (C) No. 4115/2019) decided on 09.09.2021. In the said judgment, the Arbitral Award which was challenged before the Hon'ble High Court under Section 34 was dismissed and in appeal under Section 37. The Division Bench of Hon'ble High Court has allowed the appeal and set aside the award. In this judgment, the Hon'ble Supreme Court has set aside the order of the Division Bench. In the said Judgment, the Hon'ble Supreme Court in Para 24 has held as under:-

"24. This court has in several other judgments interpreted Section 34 of the 1996 Act to stress on the restraint to be shown by courts while examining the validity of the arbitral awards. The limited grounds available to courts for annulment of arbitral awards are well known to legally trained minds. However, the difficulty arises in applying the well-established principles for interference to the facts of each case that come up before the courts. There is a disturbing tendency of courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases to come to a conclusion that the award needs intervention and thereafter, dubbing the award to be vitiated by either perversity or patent illegality, apart from the other grounds available for annulment of the award. This approach would lead to corrosion of the 65 Com.AS.No.87/2017 objection of the 1996 Act and the endeavours made to preserve this court, which is minimal judicial interference with arbitral awards. That apart, several judicial pronouncements of this court would become a dead letter if arbitral awards are set aside by categorizing them as perverse or patently illegal without appreciating the contours of the said expressions."

51. The Hon'ble Supreme Court at Para 35 of the said Judgment has held that as the arbitrator is the sole judge of the quality as well as the quantity of the evidence, the task of being a judge on the evidence before the Tribunal does not fall upon the court in exercise of its jurisdiction under Section 34. The Hon'ble Supreme Court has also held in Para 39 of the said Judgment that construction of the contract is within the jurisdiction of the Tribunal and merely because another view is possible, the court cannot interfere with such construction and substitute its own view.

52. On going through these Judgments, it makes further clear that Arbitrator is sole judge of the quality and quantity of the evidence and construction of contract is within the jurisdiction of the Tribunal and the court cannot lightly interfere with the award passed by the learned Arbitrator. On considering the facts of the present case, as held in this Judgment there are 66 Com.AS.No.87/2017 no grounds to set aside the award of the learned Arbitrator under Section 34 of the Act. The Hon'ble Supreme Court in this Judgment has even held that patent illegality which do not go to the root of the matter and every error of law committed by the Arbitral Tribunal could not fall within the expression patent illegality.

53. No error is apparent in respect of the Impugned Award. I do not find any contradiction in the observations and findings given by Arbitral Tribunal. The Impugned Award does not suffer from vice of irrationality and perversity. The conclusion of the Arbitral Tribunal 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 Arbitral Tribunal 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 Arbitration and Conciliation Act. Therefore, I answer this Point in Negative.

54. Point No. 2 :- Therefore, I proceed to pass the following Order.

Com.AS.No.87/2017 ORDER The Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, is dismissed.

The Majority Award of the Arbitral Tribunal dated 09.05.2017 is hereby upheld.

The Petitioner shall pay the cost of this proceeding to the Respondent No. 1.

Office is directed to return the arbitral records to the Arbitration Center after the appeal period is over.

The Office is directed to send copy of this judgment to both parties to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.

( Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 12th day of January, 2022).

(DEVARAJA BHAT.M), LXXXII Addl. City Civil & Sessions Judge, Bengaluru.

68 Com.AS.No.87/2017 The Judgment is pronounced in Open Court. The operative portion of the said Judgment is as follows :-

ORDER The Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, is dismissed.

The Majority Award of the Arbitral Tribunal dated 09.05.2017 is hereby upheld.

The Petitioner shall pay the cost of this proceeding to the Respondent No. 1.

    Office is    directed to
return the arbitral records to
the Arbitration Center after
the appeal period is over.

      The Office is directed to
send copy of this judgment to
both parties to their email ID
as required under Order XX
Rule 1 of the Civil Procedure
Code   as   amended      under
Section 16 of the Commercial
Courts Act.

     (vide  my    separate   detailed
  Judgment dated 12.01.2022 ).

      (Typed to my dictation)
 69
              Com.AS.No.87/2017




     LXXXII ACC&SJ, B'LURU.

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