Bangalore District Court
M/S.M/S Jalan Infotech Private Limited vs M/S Lenovo India Private Limited on 21 May, 2020
1
Com.AS No.46/2015
IN THE COURT OF LXXXII ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE CITY. (CCH.NO.83)
Dated: This the 21st day of May 2020.
PRESENT : Sri. Jagadeeswara.M., B.Com, LL.B.,
LXXXII Addl. City Civil & Sessions Judge, Bangalore.
Com.AS No.46/2015
Petitioner M/s.M/s Jalan Infotech Private Limited
A Company incorporated under the
provisions of the Companies Act, 1956
and having its registered office at :
54/C, Hazra Road, 1st Floor,
Kolkata-700 019, represented by its Director
Mr. Arun KumarM/s Jalan.
(By Ms. B.V. Nidhishree - Advocate)
- Versus -
Respondents 1. M/s Lenovo India Private Limited
A Company incorporated under the
provision of the Companies Act, 1956,
and having its registered office at :
Ferns Icon, Level 2, Doddanekundi Village,
Marathahalli Outer Ring Road,
Marathahalli post, K.R. Puram Hobli,
Bengaluru-560 037,
represented by its Managing Director.
2. Mr. Justice (Retd.) H. Rangavittalachar
Sole Arbitrator, Arbitration Centre -
Karnataka (Domestic & International), 3rd
Floor, East Wing,'Khanija Bhavana', #49,
Race Course Road, Bengaluru-560 001.
(R.1 By M/s Crestlaw Partners - Advocates)
2
Com.AS No.46/2015
JUDGMENT
This petition is filed U/Sec.34 of Arbitration and Conciliation Act 1996 requesting to set aside the Arbitral Award dated 12.12.2014 passed by the Sole learned Arbitrator, who is respondent No.2 herein, in AC No.12/2014.
1(a). Petitioner herein by nameM/s Jalan Infotech Pvt.Ltd., was respondent and respondent No.1 herein by name M/s Lenovo India Pvt.Ltd., was claimant in the Arbitral proceedings. Hon'ble Justice Sri. H.Rangavittalachar (Retd.) was the Sole Arbitrator, who is respondent No.2 of this petition.
1(b). For the sake of convenience, petitioner herein would be referred to asM/s Jalan and respondent No.1 herein would be referred to as M/s Lenovo hereinafterwards.
2. Brief facts of the cases are as under:
Both petitioner and respondent are the Companies incorporated under the Indian Companies Act, 1956. Respondent herein by name M/s Lenovo is engaged in the manufacture and sale of computers and laptops since the year 2005 and the business is carried on through Independent Distributor who sells to the End Users or Resellers. Petitioner herein by name M/s Jalan is also engaged in the independent business of distribution, sale and marketing of manufactured goods. Both parties herein had entered into an Agreement dated 11/15.2.2006 under which M/s Lenovo had appointed 3 Com.AS No.46/2015 M/s Jalan as a "Non-exclusive Distributor" of its "Computes and Laptops", within the territories of West Bengal, Bihar, Orissa and 8 North Eastern States viz., Assam, Meghalaya, Mizoram, Tripura, Sikkim, Arunachala Pradesh, Manipur and Nagaland. The Agreement was initially for a period of one year. It was being renewed periodically according to the say of M/s Lenovo and this say is disputed by M/s Jalan. Certain disputes arose between the parties including the dispute of non-payment of sale price of the goods by M/s Jalan to M/s Lenovo. M/s Lenovo issued legal notice dated 25.3.2011 (marked as Ex.P.9 in the Arbitral Proceedings) to M/s Jalan demanding to pay balance sale price of Rs.3,03,75,313/- and also another sum of Rs.21,72,600/- towards reimbursement of sales tax etc. M/s Jalan had issued reply notice dated 20.8.2011 (marked as Ex.P.10 in the Arbitral proceedings), denying the claim of M/s Lenovo, and making counter claim in a sum of Rs.1,18,75,670/- under various heads like aging, Dead on arrival, credit note, shipment, entry tax due as on 2.6.2009 and also further sum of Rs.821.76 lakhs on the heads of closure of business. Subsequently M/s Lenovo had issued notice dated 15.6.2011 (which was marked as Ex.P.11 in the arbitral proceedings), invoking arbitration clause of the Agreement, for which M/s Jalan had issued reply notice on 24.8.2011 denying the continuation of arbitration clause and refused to submit to arbitration. Therefore, M/s Lenovo approached Hon'ble High Court of Karnataka by way of filing application under Sec.11(5) of the 4 Com.AS No.46/2015 Arbitration & Conciliation Act 1996 in CMP No.172/2012 requesting to appoint an Arbitrator to adjudicate the dispute. This petition was allowed on 8.1.2014 and Hon'ble Justice Sri.H.Rangavittalachar(Retd)., was appointed as Sole Arbitrator who commenced Arbitration proceedings in AC.No.12/2014.
2(a). M/s Lenovo being claimant in the arbitration proceedings, filed its claim statement for recovery of Rs.3,03,75,313/- towards balance of sale price for the goods sold and delivered to M/s Jalan, Rs.1 Crore as damages and Rs.4,05,550,000/- towards difference of sales tax, along with interest at 18% per annum by contending in the petition that as per the terms of the Agreement, as and when, M/s Jalan placed purchase orders for the goods, for the purpose of selling to the reseller or to the end users, depending upon market requirements, M/s Lenovo used to sell and deliver the materials by raising invoices and M/s Jalan was required to pay the price of the goods sold and delivered to it as per the terms of the invoice. Further M/s Jalan was also required to bear the burden of such taxes. M/s Jalan was also entitled for the discount on the sale price of the goods as and when provided by M/s Lenovo. Though M/s Lenovo delivered the goods to M/s Jalan as per the invoices raised, but M/s Jalan was irregular in making payment of the price of the goods sold and delivered to it. Therefore, M/s Jalan was due to a sum of Rs.4,29,66,312/- under the heading of non-payment of the sale price of the goods and a sum of 5 Com.AS No.46/2015 Rs.4,05,552/- towards sales tax due to non-furnishing of C-Forms. Through letter dated 11.9.2009, M/s Lenovo called upon M/s Jalan to pay said amount, consequent upon which the parties held discussions to resolve the dispute on 14.9.2009 and 15.9.2009, whereunder M/s Lenovo as a special case, in order to maintain the cordial relationship raised and issued a credit note for Rs.1,25,91,999/- subject to M/s Jalan paying all the due amounts. But M/s Jalan has failed to pay the due amounts. After giving discount of Rs.1,25,91,999/-, the balance due towards sale price for the goods is Rs.3,03,75,313/-.
2(b). M/s Jalan being respondent in the arbitral proceedings, filed its counter statement/objection statement along with counter claim in the Arbitral proceedings, in which it has admitted the execution of the agreement, but asserts that after the expiry of period of one year, the agreement dated 11/15.2.2006 was not renewed and therefore, arbitration clause in the agreement was perished with the expiry of the agreement and thus, there is no arbitrable clause and due to this reason, Arbitral Tribunal has no jurisdiction to arbitrate the claim. Further, it is also contended by M/s Jalan that claim of M/s Lenovo is barred by time. On the claim of M/s Lenovo for the unpaid price for the goods sold and delivered to it, M/s Jalan insists while not disputing the same, that the, "price" of the goods is not what is reflected in the invoice, but that is arrived at after adjusting from the amounts paid by it in respect of the "non-marketable" goods i.e., 6 Com.AS No.46/2015 goods that are dead on arrival, short shipment etc., have become obsolete. Accordingly M/s Jalan seeks for set off of Rs.143 Lakhs and another Rs.100 Lakhs towards interest on the said sum. Further it was also contended by M/s Jalan that parties held several meetings to resolve the differences and in the meeting held on 26.11.2008, M/s Lenovo had agreed to pay Rs.2.04 Crores "on clear claims" and hold Rs.75 lakhs as against dead on arrival, and again in the meeting held on 2.6.2009, the claimant had agreed to raise a credit note for Rs.1,52,29,351/-, which became non- marketable. Accordingly M/s Jalan made counter claim in a sum of Rs.721 Lakhs on the following heads:
Balance Claims pending (270 lacs - 125.91 ) - 143 lakhs Interest on claims (as mentioned in paragraph h) - 118 lakhs Loss arising out of withdrawal of business because of bad business practices (paragraph O) - 100 lakhs Non payment of prc (as mentioned in paragraph x) - 10 lakhs Commitment of claimant (vide their e-mail) - 50 lakhs Loss of reputation - 300 lakhs _____________
- 721 lakhs ____________ (Rupees Seven Crores and Twenty One lakhs only) 2(c). Learned Arbitrator framed necessary issues in the arbitral proceedings and after giving opportunity to the parties to place their oral and documentary evidence and after hearing them, passed Award on 12.12.2014 directing M/s Jalan, who was respondent in the Arbitral 7 Com.AS No.46/2015 proceedings, to pay Rs.3,03,75,313/- to M/s Lenovo, who was claimant in the arbitral proceedings, with interest at 10% per annum from the date of claim petition. Aggrieved by the same, M/s Jalan has filed this petition under Sec.34(2) of Arbitration & Conciliation Act 1996 requesting to set aside the Arbitral Award.
3. The grounds urged in the petition are that:
(a). The impugned Award is contrary to the letter and spirit of Section 34 t of the Arbitration & Conciliation Act, 1996 .
(b) The impugned award is patently illegal and opposed to public policy as well as squarely opposed to the terms of the Agreement entered into between the parties. The impugned award is ultra virus the terms of reference and adjudicates matters that were beyond the scope of the dispute and were otherwise not arbitrable.
(c). The impugned Award loses sight of the fact that since the Agreement was only valid till 15.02.2007 and Claim amounts were admittedly of the years 2008 - onwards, the claim was itself not arbitrable, and the Arbitral Tribunal did not have the jurisdiction to try the same.
(d). Learned Arbitrator while passing the impugned Award, has misconstrued the renewal clause in the agreement which show that the agreement was for a period of one year and could be renewed also for another period of one year and not beyond.
(e). Learned Arbitrator has misapplied the law of quasi-contract in 8 Com.AS No.46/2015 holding that the Agreement between the parties was still subsisting at the time the transactions in respect of which the Claim was made were concluded.
(f). Learned Arbitrator lost sight of the fact that the claim was hopelessly barred by limitation.
(g). Learned Arbitrator has wrongly held that the Counter-Claim made by the petitioner herein was barred by limitation. The reason adopted to reject the Counter-Claim as barred by limitation is suspect, and does not have any basis in law. Learned Arbitrator has failed to consider the reconciliation meetings held between the parties on 05.06.2009 and 16.09.2009, and that the petitioner continuously followed up with the respondent regarding the debts due from the respondent to the petitioner.
(h). Learned Arbitrator has erred in considering that even if the renewal agreement be for an unlimited period, the claim as made for March, 2007 is barred by limitation on the date when the notice was sent.
(i). Learned Arbitrator has erred in understanding that in the premise that jural relationship exists even after the expiry of the agreement it merely partakes the relation of a seller and purchaser, the terms whereof are guided by the Purchase order and not by any agreement that has lost its force.
(j). Learned Arbitrator while passing the impugned award has progressed on a wrong understanding of the transactions being a running 9 Com.AS No.46/2015 and continuous account. Each of the purchase order was, in the absence of a contract to the contrary, was a separate agreement and payment admittedly was also made bill wise and not on account.
(k). Learned Arbitrator has failed to consider the voluminous material on record including correspondences between the parties whereby the liability owned by the respondent to the petitioner is admitted.
(l). Learned Arbitrator has not taken into account the evidence led in by the petitioner showing the unfair trade practices on the part of the respondent.
(m). The impugned Award is violative of the public policy of India, and causes great hardship to the petitioner for no fault of its own.
(n). The impugned Award simply grants the respondent amounts under the invoices alleged due to it, and does not consider the legitimate set-offs from the said Invoice which the respondent had indeed agreed to.
(o). The impugned Award grants an excessive, unreasonable, and exorbitant rate of interest, in violation of the Arbitration and Conciliation Act, 1996 and the public policy of India.
(p). The impugned Award fails to consider or make reference to the rejoinder to the Counter Claim made by the petitioner herein. As such, the Award suffers from non-consideration of pleadings.
(q). Learned Arbitrator has casually disregarded the correspondence between the parties on record to create a claim in favor of the respondent 10 Com.AS No.46/2015 when the agreement itself had provided that communication would be by means of electronic communication and that such communication is acceptable as a signed writing.
Accordingly petitioner herein has requested to set aside the impugned Award.
4.The respondent No.1 herein has appeared through its learned advocate and has filed its objection statement contending that it is a Company incorporated under the provisions of Companies Act, 1956 and engaged in the business of manufacture and sale of computers and laptops. Respondent No.1 entered into a Distributorship Agreement dated 5.2.2006 with the petitioner whereby the petitioner was appointed as a non-exclusive distributor of the respondent No.1's products. The petitioner as per the agreement was required to market and distribute first respondent's products in the territories of West Bengal, Bihar, Orissa and all the eight North eastern states. As per the terms of Agreement and on receipt of purchase orders from the petitioner, the first respondent regularly supplied its products to the petitioner and has raised invoices for the same. Petitioner became irregular in its payments from April 2007 in respect of supplies made by the respondent and also failed to provide requisite 'C' Forms to the first defendant in respect of sales tax, on account of which the respondent had to bear additional burden of tax liability also. Inspite of communicating the said fact through various emails, petitioner failed and 11 Com.AS No.46/2015 neglected to pay the amounts due to the first respondent.
4(a). It is further contended in the objection statement that on 14.9.2009 and 15.9.2009 parties held discussions to discuss the possibilities of settling the accounts between them, in relation to the agreement, wherein the respondent No.1 also agreed to issue credit notes worth Rs.1,25,91,999/- provided that the petitioner agreed to pay the outstanding dues. But the settlement failed. Therefore, the respondent No.1 sent a notice dated 25.3.2011 to which the petitioner gave an untenable reply dated 20.8.2011. After having exhausted all the avenues for amicable settlement, respondent No.1 got issued legal notice dated 15.6.2011 seeking appointment of an Arbitrator as per Clause-30 of the Agreement and approached the Hon'ble Hon'ble High Court of Karnataka in CMP No.172/2012 seeking appointment of Arbitrator and the Hon'ble Hon'ble High Court of Karnataka appointed the 2nd respondent as Arbitrator. The respondent No.1 filed its claim petition before the learned Arbitrator on 3.3.2014 and the petitioner filed its Statement of Objections to the claims on 1.7.2014 and also raised Counter Claims against the first respondent/claimant. After conclusion of trial and after hearing both the parties, the learned Arbitrator has formed a well-considered Award dated 12.12.2014.
4(b). It is further contention of the respondent No.1 in its objection statement that the petitioner has not entered into any other fresh agreement 12 Com.AS No.46/2015 with the first respondent nor has caused the issuance of any mandatory notice for non-renewal in terms of the Agreement and hence, learned Arbitrator has rightly concluded that the Agreement continued to subsist and was not terminated. Petitioner has raised its counter claim on 1.7.2014 clearly after more than three years from the date of cause of action and hence, the counter claims raised were rightly to be rejected on the ground of limitation. Respondent No.1 has not indulged in any unfair trade practices while transacting with the petitioner. There are no grounds whatsoever made out by the petitioner to contend that the impugned Award is in violation of public policy and patently illegal. Petitioner has miserably failed to point out to any defect in the Award which would render it illegal and void. The impugned Award does not suffer from any defect and is liable to be upheld by this court. Petitioner has not made out any grounds in the petition seeking to set aside the impugned Award dated 12.12.2014.
Accordingly respondent No.1 has requested to dismiss the petition.
5. From the above, the following points have arisen for my consideration:
1. Whether Petitioner has made out grounds to set aside arbitral Award passed in AC No.12/2014 ?
2. what Order ?
6. Arbitral records are produced in this case. I have heard arguments 13 Com.AS No.46/2015 of both sides and I have carefully gone through the Arbitral records and also reasons given in the Arbitral Award.
7. My findings to the above points are as under:
Point No.1 : Negative Point No.2 : As per final order for the following:
REASONS
8. Point No.1 : It is argument of learned advocate for petitioner/Jalan that Business Agreement dated 11/15.2.2006 entered into between the parties was for a period of one year with renewable clause for further period of one year and thereafter Agreement was expired and Arbitral Clause was perished. The relationship of the parties after expiry of the contract, in carrying on the business is nothing but quasi contract within the meaning of Sec.70 of the Indian Contract Act. Therefore, there was no Arbitration Clause since agreement dated 11/15.2.2006 was expired on 15.2.2008. Therefore the dispute was not arbitrable one and the Arbitral Tribunal had no jurisdiction to arbitrate the claim. Accordingly it is submission of learned advocate for petitioner that the impugned Award is patently illegal and it is opposed to public policy.
9. On the other hand, it is submission of learned advocate for respondent herein/M/s Lenovo, who was claimant before the Arbitral 14 Com.AS No.46/2015 Tribunal, that the Arbitral Tribunal has properly considered the terms in the attachment of the contract which provides the duration and the renewal clause and admittedly no notice was issued in writing by either party not to renew the agreement/contract and therefore, the transaction done subsequent to 15.2.2008 was on the basis of same terms and conditions of the agreement dated 11/15.2.2006. Further it is also submission of learned advocate for respondent that the petitioner herein, who was respondent before the Arbitral Tribunal, having filed counter claim cannot be allowed to contend that there was no agreement with the arbitration clause after 15.2.2008 and Arbitral Tribunal had no jurisdiction.
10.At this stage itself, it is relevant to note that Section 34(2) of the Arbitration & Conciliation Act 1996, relating to grounds to set aside Arbitral Award, reads as under:
" (2) An arbitral award may be set aside by the Court only if -
(a) the party making the application furnishes proof that -
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
provided that, if the decision on matters submitted to arbitration 15 Com.AS No.46/2015 can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that -
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
(Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is conflict with the most basic notions of morality or justice.
Explanation 2 - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.) (2-A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the court, if the court finds that the award is vitiated by patent illegality appearing on the face of the award;
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence."
11. It is held by Hon'ble Apex Court in (1989)1 SCC 411 (Puri Construction Private Limited Vs. Union of India) that the Court deciding objections against the award cannot examine correctness of the 16 Com.AS No.46/2015 award on merits by re-appreciating evidence. When a court is called upon to decide the objections raised by a party against an Arbitration Award, the jurisdiction of the court is limited, as expressly indicated in the Arbitration Act, and it has no jurisdiction to sit in appeal and examine the correctness of the award on merits with reference to the materials produced before the Arbitrator. The court cannot sit in appeal over the views of the Arbitrator by re-examining and re-assessing the materials. Further, it is also held by Hon'ble Apex Court in (2015)5 SCC 698 (Navodaya Mass Entertainment Limited Vs. J.M Combines) that re-appraisal of material on record by the court and substituting its own view in place of arbitrator's view, not permissible in absence of perversity, merely because two views are possible. Once the Arbitrator has applied his mind to the matter before him, court cannot re-appraise said matter as if it were an appeal. Even if two views are possible, view taken by the Arbitrator would prevail.
12. Learned Counsel appearing for the respondent herein has placed citation reported in (2019) 9 SCC 798 ( State of Jharkhand & Ors. Vs. HSS Integrated SDN & Anr.), wherein it is held as under:
"6.1 In progressive-MVR after considering the catena of decisions of this Court on the scope and ambit of proceedings under Section 34 of the Arbitration Act, this Court has observed and held that even when the view taken by the Arbitrator is a plausible view, and/or when two views are possible, a particular view taken by the Arbitral Tribunal which is also reasonable should not be interfered with in a proceeding under Section 34 of the Arbitration Act.
6.2. In Datar Switchgear Ltd., this Court has observed and held 17 Com.AS No.46/2015 that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the Arbitrators on the basis of the evidence on record are not to be scrutinised as if the Court was sitting in appeal. In Para 51 of the judgment, it is observed and held as under : (SCC pp.169-70) "51. Categorical findings are arrived at by the Arbitral Tribunal to the effect that insofar as Respondent 2 is concerned, it was always ready and willing to perform its contractual obligations, but was prevented by the appellant from such performance. Another specific finding which is returned by the Arbitral Tribunal is that the appellant had not given the list of locations and, therefore , its submission that Respondent 2 had adequate lists of locations available but still failed to install the contract objects was not acceptable. In fact, on this count, the Arbitral Tribunal has commented upon the working of the appellant itself and expressed its dismay about lack of control by the Head Office of the appellant over the field offices which led to the failure of the contract. These are findings of facts which are arrived at by the Arbitral Tribunal after appreciating the evidence and documents on record. From these findings it stands established that there is fundamental breach on the part of the appellant in carrying out its obligations, with no fault of Respondent 2 which had invested whopping amount of Rs.163 crores in the project. A perusal of the award reveals that the Tribunal investigated the conduct of the entire transaction between the parties pertaining to the work order, including withholding of DTC locations, allegations and counter-allegations by the parties concerning installed objects. The Arbitrators did not focus on a particular breach qua particular number of object/class of objects. Respondent 2 is right in its submission that the fundamental breach, by its very nature, pervades the entire contract and once committed, the contract as a whole stands the entire contract and once committed, the contract as a whole stands abrogated. It is on the aforesaid basis that the Arbitral Tribunal has come to the conclusion that the termination of contract by Respondent 2 was in order and valid. The 18 Com.AS No.46/2015 proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the Arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by a catena of judgments pronounced by this Court without any exception thereto."
7. As held by this Court in a catena of decisions, the award passed by the Arbitral Tribunal can be interfered with in the proceedings under Sections 34 and 37 of the Arbitration Act only in a case where the finding is perverse and/or contrary to the evidence and/or the same is against the public policy. (See Associate Builders v. DDA, etc)"
13. By keeping in the mind the above proposition of law of Hon'ble Apex Court and also the nature of the provision of Section 34(2) of the Arbitration & Conciliation Act 1996, it is necessary to go through the materials on record to find out as to whether petitioner has made out grounds as contemplated under said Section 34(2) of the Act to set aside the Arbitral Award.
14. After having heard arguments of both sides, I have carefully gone through the relevant clauses of Agreement dated 11/15.2.2006 which was produced and marked as Ex.P.1 in the Arbitral proceedings. Clause-30 of this agreement is Arbitration Clause; and an attachment dealing with duration of the contract. The said attachment of the contract/agreement at Ex.P.1 reads as under:
"ATTACHMENT 1 - DETAILS OF OUR RELATIONSHIP Contract Start Date : 15th February 2005 19 Com.AS No.46/2015 Duration : ONE YEAR Contract Number : INP002289DS01 This agreement, may be renewed and mutually agreed terms and conditions for subsequent period of One (1) year each, "Renewal Terms". However, either party may give the other party notice of its intention not to renew by providing notice in writing to the other party at least three (3) months prior to the expiration of the Terms then in effect".
15. As rightly noted in the Arbitral Award, the year 2005 mentioned in the above noted attachment is a typographical error and it must be read as '2006'. Further, as correctly observed in the Arbitral Award, the above noted terms in the attachment of the contract shows that the parties intended the contract to be renewed automatically unless either of the parties issues notice not to renew it. In the first instance the agreement at Ex.P.1 was initially for one year from the date of its execution, but as per the attachment to Ex.P.1, notices must be given in writing by either party not to renew, which clearly suggests that the intention of the parties was to make the contract a running contract until it was novated or rescinded or the parties have entered into a fresh contract. Admittedly no such notice has been given by either of the parties to the contract either terminating the original contract or rescinding it or stating not to renew the contract. Similarly parties did not enter into a fresh contract superseding the contract entered into through agreement dated 11/15.2.2006 at Ex.P.1. As noted in page No.16 of the impugned Award, the respondent herein, being claimant 20 Com.AS No.46/2015 in the Arbitral proceedings, has placed his affidavit evidence and in page No.4 it is his evidence as under:
"However, the parties with intent to renew the agreement and until then, agreed to carry on business on the same terms and conditions contained in the Distributor agreement dated 11/15.02.2006. I state that it was specifically agreed that the said agreement will continue in force till such time a fresh agreement executed by and between M/s Lenovo and Distributor/respondent. The letter of renewal has been produced by the respondent along with Statement of Objections, I State that all the sales and purchases made and listed in Annexure-1 of the claim petition are in terms of the agreement dated 11/15.02.2006 and aforesaid letters only".
16. I have carefully gone through the cross examination of PW.1. The above noted evidence deposed by PW.1 in page No.4 of his chief examination affidavit, stands uncontroverted since no reliable materials are brought out in the cross-examination of PW.1 to discredit this part of the evidence. After going through the materials on record including nature of clauses in the agreement at Ex.P.1 and nature of terms in the annexure of the agreement, nature of say of both the parties in the claim petition and also in the counter statement and also the nature of the oral evidence placed by the parties, it has been observed in the Arbitral Award that after expiry of the original contract at Ex.P.1 dated 11/15.2.2006, the parties carried on the transaction of sale and distribution till 27.2.2009 in accordance with the terms of the contract and therefore, the contract at Ex.P.1 dated 11/15.2.2006 including the Arbitration Clause-30 continued to 21 Com.AS No.46/2015 exist and it was operative.
17. It is also relevant to note that respondent herein had issued notice dated 15.6.2011 to the petitioner herein invoking Arbitration Clause-30 of the Agreement to decide the disputes. Petitioner herein issued reply notice to the respondent herein stating that there was no purported agreement which is valid or subsisting to invoke arbitration clause to decide the dispute. Subsequently respondent herein filed petition before Hon'ble High Court of Karnataka under Sec.11(5) of the Arbitration & Conciliation Act 1996 for appointment of an Arbitrator. The said application was allowed and respondent No.2 herein was appointed as Sole Arbitrator. Petitioner herein did not make out his counter claim before the Hon'ble High Court of Karnataka in the response filed to the petition under Sec.11(5) of the Act 1996. After Arbitral Tribunal was constituted, petitioner herein being respondent in the Arbitral proceedings, filed his counter statement along with counter claim which is nothing but this counter claim was filed invoking Arbitration Clause-30 of the Agreement at Ex.P.1. Thus, as rightly noted in the Arbitral Award, the petitioner herein, who was respondent in the Arbitral proceedings, having filed its counter claim invoking Arbitration Clause-30 of the Agreement, cannot be allowed to contend that there was no valid agreement in force consisting of Arbitration Clause. This type of contention raised by the petitioner herein before the Arbitral proceedings, is nothing but blowing hot and cold 22 Com.AS No.46/2015 simultaneously. Learned Arbitrator has properly considered the materials placed by the parties and also proposition of law of the citations placed by both the sides and has rightly held that after expiry of the original contract at Ex.P.1 dated 11/15.2.2006, the parties had carried on the transactions of the sale and distribution till 27.2.2009 in accordance with the terms of the contract and therefore, the contract including arbitration clause continued to exist and became operative. After going through the materials on record, I am of the considered opinion that this finding recorded by the Arbitral Tribunal is not opposed to law or the contract between the parties and there is no patent illegality committed in recording this finding. Therefore, there are no grounds to set aside this finding recorded by the Arbitral Tribunal relating to jurisdiction is concerned.
18. It is submission of learned advocate for petitioner that the claim made before the Arbitral Tribunal relating to two invoices in Ex.P.2 bearing Invoice Nos.6400001622 & 640001623 dated 17.3.2007 was time barred and in fact Ex.R.9 does not amount to acknowledgement of debt under Sec.18 of Limitation Act., but learned Arbitrator has wrongly held that mail at Ex.R.9 is acknowledgement of debt within the meaning of Sec.18 of Limitation Act. Accordingly it is submission of learned advocate for petitioner that impugned Award to the extent of holding that claim made in the claim petition relating to the two invoices in Ex.P.2 bearing invoice Nos.6400001622 & 640001623 dated 17.3.2007 is not time 23 Com.AS No.46/2015 barred, is patently illegal and it is against to the public policy of India.
19. On the other hand, it is submission of learned advocate for respondent that learned Arbitrator has considered the materials on record placed by the parties and also considered the nature of mail at Ex.R.9 in which petitioner herein had agreed to pay dues and therefore it is an acknowledgement of debt within the meaning of Sec.18 of Limitation Act and therefore there are no grounds to hold that Arbitral Award is patently illegal and opposed to the public Policy.
20. It is relevant to note that there is no specific point of reference of limitation was made by the petitioner herein, in his counter statement filed in the Arbitral proceedings. But during the course of hearing, its learned advocate raised this point of limitation before the Arbitral Tribunal relating to the claims made in the Claim Statement in respect of two invoices in Ex.P.2 bearing Invoice Nos.6400001622 & 640001623 dated 17.3.2007 as barred by time. In view of this contention raised by the learned advocate forM/s Jalan before the Arbitral Tribunal, and by considering the nature of Sec.3 of the Limitation Act, learned Arbitrator has considered this point of limitation relating to those two invoices separately.
21. Learned Arbitrator after considering the materials on record has rejected this contention of the petitioner/Jalan, with the reasonings that the defence of M/s Jalan in the Arbitral proceedings is that amounts from it 24 Com.AS No.46/2015 became due, if any, after taking accounts,in as much as, after adjusting the amounts payable by M/s Lenovo to it, on the heads of "Dead on arrival", "short shipments", "promotional offerings", "transportation" and "associate charges", from the invoices raised and it is only after such adjustment, could it pay the claimant its dues. It was common ground that the parties held meetings on 14.9.2009 and 15.9.2009 in the office ofM/s Jalan which is evidenced by e-mails at Ex.R.3 & R.5 dated 26.6.2009 which were issued by M/s Lenovo and reading of these mails makes it clear that M/s Lenovo had claimed the amounts due to it, after deducting whatever M/s Jalan was entitled to as per its credit notes Ex.P.8. Accordingly M/s Lenovo got a right to sue for the amount due to it as on 26.9.2009 and if this date is taken as starting point of limitation, it should have raised the dispute by issuing notice invoking arbitration clause within three years from that date. M/s Lenovo issued notice dated 15.6.2011 toM/s Jalan invoking arbitration clause and this notice was issued well within three years from 26.9.2009 and therefore, the claim of M/s Lenovo is well within time as per Article 113 of Limitation Act.
22. Further, it is also observation of Learned Arbitrator that undisputedlyM/s Jalan had issued e-mail dated 11.11.2008 stating that it is arranging to make another 200 Lakhs by 14 th November in form of RTGS and another 100 Lakhs was supposed to be released by claims team for which claims have been cleared but batch has not been raised for last three 25 Com.AS No.46/2015 months and another 150 lakhs which has fallen due will be paid by 25 th of the month. It is observation in the Award that by sending this mail dated 11.11.2008 at Ex.R.9 M/s Jalan acknowledged that it was due in certain sum and as such it is an acknowledgement of debt within the meaning of Sec.18 of the Limitation Act. By calculating the limitation from 11.11.2008, which is the date of mail at Ex.R.9 till the date 15.6.2011 on which date notice was issued invoking arbitration clause, it is held that claims of M/s Lenovo are not barred by time.
23. After going through the materials on record particularly the dates of the two invoices at Ex.P.2, the nature of the admission to pay dues in the mail dated 11.11.2008 at Ex.R.9 and also the observation of learned Arbitrator, there are no grounds to set aside the finding recorded in the Arbitral Award holding that claim relating to two invoices in Ex.P.2 is not barred by time.
24. M/s Lenovo filed its claim statement in the Arbitral proceedings in which it claimed recovery of Rs.3,03,75,313/-. M/s. Jalan in its counter statement pleaded that it is entitled to claim adjustments from the invoices raised by M/s Lenovo in respect of the goods supplied as pleaded in Para No.h of counter statement/counter claim. Relating to claim and counter claim made before the Arbitral Tribunal is concerned, it is relevant to note that it was specifically pleaded by M/s Lenovo in its claim statement that 26 Com.AS No.46/2015 in terms of the agreement at Ex.P.1, it sold and delivered its computers and laptops to M/s Jalan on the basis of purchase orders, by raising invoices against purchase orders. M/s Jalan was irregular in making payments and it was due to a sum of Rs.4,29,67,312/- as on 11.09.2009. But, in the interest of good business relationship and as a special case M/s Lenovo agreed to issue credit notes to the tune of Rs.1,25,91,999/- subject to M/s Jalan paying all the dues.
25. To prove the claim of M/s Lenovo, its witness filed his affidavit evidence in the Arbitral proceedings stating that goods were sold and delivered to M/s Jalan on the basis of purchase orders placed byM/s Jalan as per Ex.P.4 (I to XXXIX) and M/s Lenovo raised invoices as per Ex.P.3 (I to LXXVIII) and M/s Jalan has failed to pay amount of invoices and M/s Lenovo has agreed to raise a credit note for Rs.1,25,91,999/- as a special case and in the business interest. This part of evidence has not been controverted in the cross examination of this witness of M/s Lenovo.
26. Witness of M/s Jalan, in his oral evidence has admitted that goods were sold by M/s Lenovo to M/s Jalan as per purchase orders and invoices. However, it is his evidence that price of the goods sold could be adjusted only after adjusting the amounts paid by M/s Jalan relating to "non marketable goods" sold and delivered to it by M/s Lenovo. In the cross examination he has admitted that amount of invoice was to be paid 27 Com.AS No.46/2015 within credit period mentioned in the invoice. Further he has admitted that no payments have been made in respect of the invoices raised as per Ex.P.3(A). As rightly noted in the Award, Ex.P.3(A) is a tabular column wherein the figures of Ex.P.4 (I to XXXIX) have been transferred to a sheet of paper containing all the data of Ex.P.4. Based on these purchase orders as per Ex.P.4 (I to XXXIX) and invoices at Ex.P.3 (I to LXXVIII) and tabular column at Ex.P.3(A), which are admitted by the witness ofM/s Jalan, it is observed in the Award that the total sum of the invoices raised on Ex.P.3 from 17.03.2007 to 27.02.2009 aggregates to Rs.4,29,67,312/- and M/s Lenovo has voluntarily given discount of Rs.1,25,99,999/- by issuing credit note and the balance due is Rs.3,03,75,313/- payable by issuing credit note and the balance due is Rs.3,03,75,313/- payable by M/s Jalan to M/s Lenovo.
27. Relating to claim of M/s Jalan for adjustment of value of defective materials is concerned as noted in the Award, burden to prove the value of defective materials is on M/s Jalan. The relevant clauses in the agreement at Ex.P.1 in this regard are Clause Nos.5(h), 12.2, 13.2, 13.3 and 13.4. As per these clauses, M/s Jalan has to report to M/s Lenovo relating to suspected defects in the materials supplied and discrepancies in shipping. M/s Jalan can claim credit if it notifies M/s Lenovo regarding non-marketability of the goods due to defect. After so notifying, M/s Lenovo must approve the goods as not marketable provided the goods are 28 Com.AS No.46/2015 returned to it by M/s Jalan in same conditions, which are questions of fact to be proved. It is the evidence of witness of M/s Jalan that in the meeting held on 26.11.2008 M/s Lenovo had agreed to give a credit of Rs.1,52,29,351/- and further in the meeting held on 02.06.2009 and 11.9.2009 M/s Lenovo agreed to pay Rs.2.4 crores on clear claims and Rs.75 lakhs against dead on arrival. But to prove this fact minutes of the meetings or any other records are not placed by M/s Jalan. Though M/s Jalan has relied on email dated 16.09.2009 at Ex.R.3 purported to have been sent by M/s Lenovo to one Mr.Praveen M/s Jalan (Since deceased), as per which, the parties met on 14.09.2009 in the office of M/s Jalan at Calcutta to discuss about the full and final settlement of accounts. Summary of claims raised by M/s Jalan in this email at Ex.R.3 is under 10 heads like 'aging', 'inventory', new DOA Cases', 'Credit note for short shipment' etc, for Rs.2,69,29,351/-. After going through the nature of oral and documentary evidence of the parties it is observation of learned Arbitrator that this claim of M/s Jalan is not proved since attachment of mail at Ex.R.3 is not produced and the evidence of witness of M/s Jalan does not give full details such as full description of items, quantity, unit rate, assessable value, total amount, purchase order number, invoice number relating to defective materials and the dates of its notification to M/s Lenovo etc. Further it is observed by the learned Arbitrator that oral evidence of witness of M/s Lenovo and also credit notes at Exs.P.8(1) to 29 Com.AS No.46/2015 (11) show that the goods for which credit is given are described by their items, quantity, unit rate, assessable value, its total amount, invoice number and its date and other required particulars and as per these records the sum of credit given works out to Rs.1,25,91,999/- and this was deducted from the total dues of Rs.4,29,67,312/- payable by M/s Jalan and after such deduction made, the balance due is Rs.3,03,75,313/- payable by M/s Jalan to M/s Lenovo, being balance sale price for the goods sold and delivered. This finding recorded by the learned Arbitrator is based on the proper appreciation of facts pleaded and from the nature of oral and documentary evidence placed by the parties. There is no scope for this court under Sec.34(2) of Arbitration & Conciliation Act, 1996 for re-appreciation of facts and materials to replace the view taken by the Arbitral Tribunal.
28. It is held in the Arbitral Award that claim made by M/s Jalan in its counter claim is barred by limitation. Relating to this finding recorded in the Arbitral Award is concerned, it is submission of learned advocate for M/s Jalan, who is petitioner herein and it is also contended in the notes of argument that this finding recorded in the Award is patently illegal and it vitiates the Award and therefore this finding is to be set aside. Further it is also submission of learned advocate for petitioner herein that the claims of both parties are being in the nature of balance due on a mutual open and current account where there has been reciprocal demands made between the parties and therefore limitation would commence from the close of the 30 Com.AS No.46/2015 year in which the last item admitted or proved is entered in the account as per Article-1 of the limitation Act. The limitation would commence from March 2011 and not March/September, 2009 as held by the learned Arbitrator. Further it is submission of learned advocate for petitioner herein that learned Arbitrator has construed that claimant/M/s Lenovo got a right to sue for the amount due to it on 26.09.2009 and on 15.06.2011 when it had issued notice invoking Arbitration clause and accordingly its claims are within limitation under Article 113 of Limitation Act. This finding of the learned Arbitrator is contradictory since the transactions between the parties were in the nature of mutual open and current account where there were mutual demands between the parties either in the nature of price of goods or in the nature of reimbursement of promise under the agreements which would attract Article-1 of the Limitation Act, and it is the fact that the amount under the credit note was reduced from the claim of M/s Jalan only on March 2011 and thereby making 31.03.2011 as the date of commencement of limitation to the counter claim. Learned Arbitrator has failed to appreciate this fact. Further it is also submission of learned advocate for petitioner herein that learned Arbitrator has held that counter claim filed on 03.06.2014, which is beyond three years, is barred by limitation. With the same analogy, the learned Arbitrator has held that the date of commencement of limitation was 26.9.2009 and the claim of the claimant/M/s Lenovo before the Tribunal should have been filed within 31 Com.AS No.46/2015 three years from that date and not on 03.03.2014. Learned Arbitrator has failed to note that the facts of the judgment of State of Goa Vs. Praveen Enterprises (2012)12 SCC 581 and Voltas Limited Vs. Rolta India (2014)14 SCC 516 were different from the facts of the case on hand since the opposite party in the proceedings of the reported judgments filed its counter claim for the first time in the Arbitral proceeding without raising the same in any independent manner by a letter or in reply to the notice of invocation and therefore such delayed counter claims were barred by limitation as held by the Hon'ble Apex Court in both the cases. But in the case on hand the claims of M/s Lenovo were denied by M/s Jalan and the counter claim was raised as early as in reply to the notice of 2009 and also 2011 and thereafter counter claim was filed before the learned Arbitrator and due to this reason counter claim is not barred by limitation. Accordingly learned advocate for petitioner herein has requested to set aside the finding recorded by the learned Arbitrator that the counter claim is barred by limitation.
29. On the other hand, it is submission of learned advocate for respondent/ M/s Lenovo that in fact M/s Jalan did not make its claims in the reply notice issued to the notice of M/s Lenovo in the year 2009 and subsequently though M/s Lenovo issued notice on 15.06.2011 invoking Arbitration Clause, but M/s Jalan issued reply notice denying the Arbitration Clause. Subsequently for the first time M/s Jalan filed its 32 Com.AS No.46/2015 counter claim on 03.06.2014. In the cross examination it is admitted by the witness of M/s Jalan that counter claim filed relates to the transaction for the period 2006-08. It is also stated in Page No.17 of the statement of objections of M/s Jalan that the claim of Rs.270 Lakhs-125.91 Lakhs pertains to the period 2006-08. Learned Arbitrator has properly considered the materials on record and also the proposition of law of Hon'ble Apex Court in its reported judgment of Praveen Enterprises case and also Voltas Ltd. case and has rightly held that counter claim is barred by limitation. Accordingly it is submission of learned advocate for M/s Lenovo that there are no grounds to set aside this finding recorded by the learned Arbitrator holding that the counter claim of M/s Jalan is barred by limitation.
30. After having heard both sides, I have carefully gone through the materials on record and also the reasonings in the Arbitral Award. It is pertinent to note that M/s Jalan who was respondent in the Arbitral proceedings, has made counter claim for a sum of Rs.721 lakhs on the following grounds:
Balance Claims pending (270 lacs - 125.91 ) - 143 lakhs Interest on claims (as mentioned in paragraph h) - 118 lakhs Loss arising out of withdrawal of business because of bad business practices (paragraph O) - 100 lakhs Non payment of prc (as mentioned in paragraph x) - 10 lakhs Commitment of claimant (vide their e-mail) - 50 lakhs 33 Com.AS No.46/2015 Loss of reputation - 300 lakhs _____________
- 721 lakhs ____________ (Rupees Seven Crores and Twenty One lakhs only)
31. Though counter claim was made as noted above under different headings, in all for Rs.721 lakhs, but as observed in Page No.40 of the Award, learned advocate appearing for M/s Jalan restricted the counter claim to the claim under 1 & 2 of the above mentioned claim statement namely balance claims pending (270 Lakhs-125.91 Lakhs)=143 Lakhs and interest on the said sums amounting to Rs.118 Lakhs. This type of restriction made relating to the counter claims, has not been disputed in the case on hand and no dispute is raised in that regard in the written argument filed by the learned advocate for petitioner/Jalan. After going through the materials on record it is observation of learned Arbitrator that none of the claims made by M/s Jalan, in its counter claim could be supported by the pleadings and evidence on record. This observation is made after appreciation of materials on record and therefore there is no scope for this court to re-appreciate the materials on record to set aside this observation of learned Arbitrator.
32. Learned advocate who appeared for the claimant/M/s Lenovo in the Arbitral proceedings, raised the contention that the counter claim is barred by limitation and in support of this contention, the above noted two 34 Com.AS No.46/2015 reported judgments of the Hon'ble Supreme Court in Praveen Enterprises case and also Voltas Limited case were placed before the Arbitral Tribunal. In view of Sec.3 of Limitation Act 1963, learned Arbitrator has considered the point as to whether the counter claim made by M/s Jalan who was respondent in the Arbitral proceedings, is time barred. Learned Arbitrator has recorded the finding that the counter claim filed on 3.6.2014 is time barred with the reasonings that by legal notice dated 25.3.2011 at Ex.P.9, M/s Lenovo called upon M/s Jalan to pay sum of Rs.3,03,75,313/- and another sum of Rs.21,72,600/- under the heading of 'balance sale price and reimbursement of sales tax' respectively, for which M/s Jalan had issued its reply notice dated 20.8.2011 at Ex.P.10 denying the claim and making a counter claim in a sum of Rs.1,18,75,670/- under various heads like aging Dead on arrival, credit note, shipment, entry tax due as on 2.6.2009 and further sum of Rs.821.76 Lakhs on the heads of closure of business. In the said reply notice there is no mention of cause of action and there is no request for referring the matter to the Arbitration. Subsequently M/s Lenovo had issued notice dated 15.6.2011 at Ex.P.11 invoking arbitration clause for which M/s Jalan had issued reply dated 24.8.2011 denying the continuation of arbitration clause and refused to submit to arbitration. Learned Arbitrator has considered these facts with the proposition of Hon'ble Apex Court in the above noted Praveen Enterprise's case in which it is held as under:
35Com.AS No.46/2015 "The respondent in any claim petition filed U/s. 23 of the Arbitration Act, is entitled to make a counter claim like in any ordinary civil suit or can also independently seek for arbitration provided his counter claim is not time barred. For reckoning the period of limitation the date of institution is the date in which the notices issued by the Claimant for institution of arbitration proceedings, issues a notice making a claim and in answer to it the Respondent in his reply makes a counter claim and also referring to arbitration followed by raising a counter claim, the limitation for counter claim should be computed as on the date of service of notice. After noticing and interpreting the effect of Sec.2(9), Sec.25(a) and Sec.32(2)(a)(b) of the Arbitration Act, 1996."
33. By applying this proposition of law of Hon'ble Apex Court it is observed in para-62 of the impugned Award that it is admission of witness of M/s Jalan in the cross-examination that amount of Rs.143 Lakhs mentioned under the heading 'balance claims pending' (270 Lakhs - 125.91 Lakhs) at Page-17 of statement of objections pertains to the period 2006-08. Hence, M/s Jalan had a right to sue at any rate in the year 2008. As per M/s Jalan's own showing, its right to sue accrued on 2.6.2009 when it made counter claim in its reply notice to the notice of M/s Lenovo in a sum of Rs.1,18,75,670/- and Rs.821.76 Lakhs against M/s Lenovo. Reckoning the said point for the purpose of limitation, the counter claim should have been filed within three years from that date as per Sec.113 of Limitation Act. But the counter claim has been filed on 3.6.2014 beyond three years and it is barred by time.
34. It is pertinent to note that either in the reply notice dated 36 Com.AS No.46/2015 20.8.2011 at Ex.P.10 or in the reply notice dated 24.8.2011 M/s Jalan has not requested M/s Lenovo to refer the dispute to the arbitration even though M/s Lenovo had issued notice dated 15.6.2011 at Ex.P.11 invoking arbitration clause, but M/s Jalan in its reply dated 24.8.2011 denied continuation of arbitration clause and refused to submit to arbitration. Even M/s Jalan, in its counter statement filed in the arbitration proceeding had gone to the extent to deny the existence of agreement with arbitration clause and thereby it has contended that Arbitral Tribunal has no jurisdiction. Having stated so, M/s Jalan filed its counter claim for Rs.721 Lakhs under various heads. However during the hearing counter claims were restricted to Rs.143 Lakhs and interest thereon amounting to Rs.118 Lakhs. After considering the nature of reply notice at Ex.P.10 dated 20.8.2011 which reply notice was issued to the notice of M/s Jalan dated 25.3.2011, which reply notice was issued after lapse of about five months, it cannot be said that M/s Jalan had laid foundation of its counter claim in the said reply notice at Ex.P.10. In the said reply notice at Ex.P.10, there is no mention of the date of cause of action and also there is no request for referring the matter to the arbitration. Even though M/s Lenovo had issued notice dated 15.6.2011 at Ex.P.11 to M/s Jalan invoking arbitration Clause- 30 of the Agreement at Ex.P1, but M/s Jalan in its reply notice dated 24.8.2011 denied the continuation of the arbitration clause and refused to submit to arbitration. Therefore, it is manifest that there was no genuine 37 Com.AS No.46/2015 and clear intention to M/s Jalan to lay foundation to make counter claim in the reply notice dated 20.8.2011 and also in the reply notice dated 24.8.2011. It is undisputed fact that M/s Jalan had filed its counter claim on 3.6.2014. Viewing from any angle, the counter claim filed on 3.6.2014 is barred by limitation.
35. As noted above, the findings recorded by the learned Arbitrator is based on proper appreciation of materials on record. There is no scope for this court under Sec.34(2) of the Arbitration & Conciliation Act, 1996 to sit in appeal and examine the correctness of the Award on merits with reference to the materials produced before the Arbitrator. The re-appraisal of materials on record by the court and to substitute its own view in the place of Arbitrator's view is not permissible in the absence of any perversity merely because two views are possible. It is well established principle of law that once the Arbitrator has applied his mind to the matter before him, Court cannot re-appraise the said matter as if it were an appeal. Therefore, there are no grounds to set aside the Arbitral Award passed by the respondent No.2 in AC No.12/2014. For these reasons, this Point No.1 is answered in the 'Negative'.
36. Point No.2 : For the reasons stated above, I proceed to pass the following:
38Com.AS No.46/2015 ORDER Petition filed U/Sec.34(2) of Arbitration and Conciliation Act 1996 is dismissed.
No order as to cost.
(Dictated to the JW, typed by her, corrected and then pronounced by me in Open Court, on this the 21st day of May 2020.) (JAGADEESWARA.M.) LXXXII Addl. City Civil & Sessions Judge, Bangalore.