Himachal Pradesh High Court
Kasauli vs State Of Himachal Pradesh on 29 March, 2022
Bench: Sabina, Satyen Vaidya
IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA
ON THE 29th DAY OF MARCH, 2022
BEFORE
.
HON'BLE MS. JUSTICE SABINA
&
HON'BLE MR. JUSTICE SATYEN VAIDYA
ARBITRATION APPEAL NO. 6 OF 2014.
Between:-
KASAULI.
r to
UNION OF INDIA THROUGH GE, SHIMLA HILLS
....APPELLANT.
(BY MR. BALRAM SHARMA, ASSISTANT
SOLICITOR GENERAL OF INDIA)
AND
M/S MEERA BUILDERS, DHANDA THROUGH ITS
PROPRIETOR SHRI J.D. SUD, DHANDA, P.O. TOTU,
SHIMLA-11.
...RESPONDENT.
This appeal coming on for hearing this day, Hon'ble
Ms. Justice Sabina, delivered the following:-
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JUDGMENT
.
The appellant has filed the instant Appeal challenging the order, dated 20th September, 2013, passed by the learned Single Judge in Arbitration Case No. 23 of 2013, whereby the petition filed by the appellant was dismissed.
2. We have heard the learned counsel for the parties and have also gone through the record available on the file carefully.
3. Tenders were floated by the appellant on 3.7.2007 and the respondent participated in the tender process. Tender of the respondent was accepted on 12.07.2007. Thereafter, the parties executed an agreement. The work was to be executed by 22.01.2008 by the respondent. However, the said period was extended upto 19th July, 2008. The work was completed by the respondent by the extended date. The final bill was submitted by the respondent on 15th May, 2009. Since, the payment was not released to the respondent by the appellant, the respondent sought the appointment of an Arbitrator and the Arbitrator passed the award on 21.12.2012.
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.
4. Aggrieved against the said award, the appellant preferred objection petition under Section 34 of the Arbitration & Conciliation Act, 1996.
5. The learned Single Judge dismissed the objection petition filed by the appellant. Hence, the present appeal has been filed by the appellant.
6. to Learned Single Judge after going through the record found that the rates and interest had been calculated as per the rates recommended by the Garrison Engineering.
7. It has been held by the Hon'ble Supreme Court in UHL Power Company Limited vs. State of Himachal Pradesh, Civil Appeal No. 10341 of 2011, decided on 7th January, 2022 :-
"15. As it is, the jurisdiction conferred on Courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an Appellate Court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Limited v. Vedanta Limited, (2019)4 SCC 163 , the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act has been explained in the following words:::: Downloaded on - 31/03/2022 20:10:56 :::CIS
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"11. As far as Section 34 is concerned, the position is .
well- settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b) (ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral r award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."
16. A similar view, as stated above, has been taken by this Court in K. Sugumar v. Hindustan Petroleum Corporation Ltd. (2020) 12 SCC 539 , where it has been observed as follows:
"2. The contours of the power of the Court under Section 34 of the Act are too well established to require any reiteration. Even a bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...5...
alternate mechanism for dispute resolution, they must .
be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by the arbitrator which can find manifestation in different forms including exercise of legal perversity by the arbitrator."
17. It has also been held time and again by this Court that if there are two plausible interpretations of the terms and conditions of the contract, then no fault can be found, if the learned Arbitrator proceeds to accept one interpretation as against the other. In Dyna Technologies (P) Ltd. V. Crompton Greaves Ltd. (2019) 20 SCC 1, the limitations on the Court while exercising powers under Section 34 of the Arbitration Act has been highlighted thus:
"24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...6...
arbitral award and the party autonomy to get their .
dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated."
18. In Parsa Kente Collieries Limited v. Rajasthan Rajya Vidyut Utpadan Nigam Limited (2019)7 SCC 236, adverting to the previous decisions of this Court in McDermott International Inc. v. Burn Standard Co. Ltd.
And Others (2006) 11 SCC 181 and Rashtriya Ispat Nigam Ltd. V. Dewan Chand Ram Saran (2012) 5 SCC 306 , wherein it has been observed that an Arbitral Tribunal must decide in accordance with the terms of the contract, but if a term of the contract has been construed in a reasonable manner, then the award ought not to be set aside on this ground, it has been held thus:
"9.1 ...........It is further observed and held that construction of the terms of a contract is primarily for an Arbitrator to decide unless the Arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do. It is further observed by this Court in the aforesaid decision in paragraph 33 that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...7...
errors of fact cannot be corrected. A possible view by the .
Arbitrator on facts has necessarily to pass muster as the Arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. It is further observed that thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score.
9.2 Similar is the view taken by this Court in NHAI v. ITD Cementation (India) Ltd. (2015) 14 SCC 21, para 25 and SAIL v. Gupta Brother Steel Tubes Ltd. (2009) 10 SCC 63, para 29."
[emphasis supplied]
19. In Dyna Technologies (P) Ltd. (supra), the view taken above has been reiterated in the following words:
"25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."
20. An identical line of reasoning has been adopted in South East Asia Marine Engg. & Constructions Ltd. [SEAMAC Limited] V. Oil India Ltd. (2020)5 SCC 164 and it has been held as follows:
"12. It is a settled position that a court can set aside the award only on the grounds as provided in the Arbitration Act as interpreted by the courts. Recently, this Court in ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...8...
Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.
.
[Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1 : 2019 SCC OnLine SC 1656] laid down the scope of such interference. This Court observed as follows : (SCC pp. 11-12, para 24) "24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated."
13. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. This Court in Dyna Technologies [Dyna Technologies (P) Ltd. V. Crompton Greaves Ltd., (2019) 20 SCC 1 : 2019 SCC OnLine SC 1656] observed as under : (SCC p.12, para 25)
25. Moreover, umpteen number of judgments of this Court have categorically held that the Court should ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...9...
not interfere with an award merely because an .
alternative view on facts and interpretation of contract exists. The Courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."
[emphasis supplied]
21. In the instant case, we are of the view that the interpretation of the relevant clauses of the Implementation Agreement, as arrived at by the learned Sole Arbitrator, are both, possible and plausible. Merely because another view could have been taken, can hardly be a ground for the learned Single Judge to have interfered with the arbitral award. In the given facts and circumstances of the case, the Appellate Court has rightly held that the learned Single Judge exceeded his jurisdiction in interfering with the award by questioning the interpretation given to the relevant clauses of the Implementation Agreement, as the reasons given are backed by logic."
8. Learned counsel for the appellant has submitted that the entire objections raised by the appellant have not been dealt with by the learned Single Judge. However, a perusal of the order passed by the learned single Judge, reveals that at the time of arguments the appellant had confined the challenge to the amount awarded for the star rates, besides interest paid by ::: Downloaded on - 31/03/2022 20:10:56 :::CIS ...10...
.
the Arbitrator. Hence, there is no force in the argument raised by the learned counsel for the appellant.
9. In the present facts and circumstances of the present case, we are of the opinion that the order passed by the learned Single Judge does not call for any interference as it does not
10. to suffer from any vice of illegality.
For the foregoing reasons, we find no merit in the instant appeal and it is dismissed. All pending applications, if any, also stand disposed of.
(Sabina) Judge (Satyen Vaidya) Judge 29th March, 2022.
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