Madras High Court
Ecs Biztech Pvt. Limited vs M/S.Redington (India) Ltd on 10 July, 2019
Equivalent citations: AIRONLINE 2019 MAD 695, (2019) 6 MAD LJ 309
Author: V.K
Bench: Vineet Kothari, C.V.Karthikeyan
Judgt. dt. 10.7.19 in O.S.A.148/19
ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd.
1/12
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 10.7.2019
CORAM
THE HONOURABLE DR.JUSTICE VINEET KOTHARI
AND
THE HONOURABLE MR.JUSTICE C.V.KARTHIKEYAN
O.S.A.No.148 of 2019
and
C.M.P.No.13246 of 2019
ECS Biztech Pvt. Limited,
(Previously known as ECS
Biztech Private Limited),
rep. by Managing Director,
Mr.Vijay Mandora
"ECS House, No.11, Garden View,
Opp. Auda Garden, Pakwan Circle,
Sindhu Bhavan Road,
Off.S.G.Highway, Bodakdev,
Ahmedabad 380 054. Appellant
Versus
M/s.Redington (India) Ltd.
rep. by Mr.Srinivasan
Senior Manager-Credit,
SPL, Guindy House,
No.95, Mount Road,
Guindy, Chennai 600 032. Respondent
Prayer: Original Side Appeal filed under Order XXXVI Rule 1 of O.S. rules
read with Section 37 of Arbitration and Conciliation Act, 1996 against the
order of this court dated 29.6.2018 in O.P.No.866 of 2017.
For appellant : Mr.P.Sidharthan
For Respondent : Mr.S.S.Rajesh
http://www.judis.nic.in
Judgt. dt. 10.7.19 in O.S.A.148/19
ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd.
2/12
JUDGMENT
(Judgment of the court was made by Dr.VINEET KOTHARI, J.) The Appellant M/s.ECS Biztech Limited, previously known as ECS Biztech Private Limited, filed the present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996, aggrieved by the order dated 29.6.2018, passed by the learned Single Judge dismissing their petition under Section 34 of the said Act viz., O.P.No.866 of 2017 (ECS Biztech Limited v. Redington (India) Ltd.
2. The reasons assigned by the learned Single Judge in the impugned order are quoted below for ready reference:-
" 7. From the materials available on record and after hearing the submissions made by the respective counsels, the following facts are made clear :
(a) There is no dispute with regard to the sale of goods to the petitioner by the respondent;
(b) It is not in dispute that the invoices were raised by the respondent only in favour of the petitioner;
(c) It is not in dispute that the payments are payable to the respondent under the invoices;
(d) It is not in dispute that the petitioner did not establish the existence of a tripartite agreement before http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 3/12
the Arbitral Tribunal;
(e) It is not in dispute that in the proof affidavit filed by the petitioner before the Arbitrator, the date of the tripartite agreement was mentioned, when such document was filed before the Arbitrator;
(f) It is not in dispute that there is a clear finding by the Arbitrator that despite opportunities given to the petitioner to cross examine the respondent witnesses, the petitioner did not make use of those opportunities;
(g) The Arbitrator has passed a reasoned Award considering the pleadings and materials available on record; and the findings and conclusions are plausible conclusions;
(h) The petitioner has also not produced any documentary or oral evidence to controvert the findings of the Arbitrator;
8. From the above findings, it is clear that the petitioner has not made out any case for interference of the Arbitral Award, by this Court. The Arbitral Award dated 27.06.2017 does not suffer from any http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 4/12 perversity or patent illegality. This Court cannot re- appreciate the evidence available with the Arbitrator who has arrived at a plausible conclusion since the scope of Section 34 of the Arbitration and Conciliation Act is limited.
9. The Hon'ble Supreme Court in a Catena of decisions starting from Renusagar Power Company Ltd vs. General Electric Company 1994 Supp (1) SCC 644 to the recent Associated Builders Vs DDA (2015) 3 SCC 49 has held only under the following grounds the Arbitrator Award can be challenged under Section 34 of the Arbitration and Conciliation Act "
3. Learned counsel for the Appellant Mr.P.Sidharthan has submitted before us that there was a tripartite agreement among the present Appellant, M/s.ECS Biztech Private Limited, M/s.Redington (India) Limited, the respondent herein and one M/s.Sai Info System India Limited, according to which, the Claimant/Respondent herein would supply certain Computer parts to the Appellant, ECS Biztech Pvt. Limited, through M/s.Sai Infosystem India Limited and the payments were to be made after such payments http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 5/12 realised from the said Sai Infosystem India Limited and on account of certain disputes arisen between the parties, the Arbitral clause was invoked by the supplier viz. M/.Redington (India) Limited which resulted in the Award in favour of the claimant, dated 27.6.2017 passed by the learned Arbitrator Mr.K.Balasubramanian, a retired District Judge as the Sole Arbitrator.
4. The main contention raised before us in support of the present Appeal is that sufficient opportunity to cross-examine the claimant's witnesses were not allowed to the Appellant and the learned Single Judge also ought to have summoned the records from the learned Arbitrator to look into such proceedings as there was a failure of principles of natural justice and therefore, the Arbitral Award deserves to be set aside.
5. On the other hand, the learned counsel for the Respondent Mr.S.S.Rajesh, who appears on caveat, supported the Award passed by the learned Arbitrator as well as the order passed by the learned Single Judge.
6. Having heard the learned counsel for the parties, we are satisfied that the present Appeal filed under Section 37 is without any merits and the same deserves to be dismissed as held in several judgments of this Court and various High Courts and also the Supreme Court. The scope of Section 34 is very limited and still narrower is that of Section 37. We had recently held thus in a judgment in W.A.No.151 of 2019 dated 8.7.2019 (Fomra http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 6/12 Housing and Infrastructure v. Raagul Foundations Pvt. Ltd.,) the relevant portion of which is extracted below for ready reference:-
"10. Having heard the learned counsel for the parties, and on considering the above averments and arguments of the learned counsel for the parties, we are satisfied that no case for interference was made out before the learned Single Judge under Section 34 of the Act. We are of the considered opinion that the manner of appreciation of the evidence of the learned Arbitral Tribunal cannot be a ground to set aside the Arbitral Award. It is simply outside the parameters of Section 34 of the Act and it is not a regular Appeal provided against the Arbitral Award. It would be contrary to the letter and spirit of Section 34 of the Act itself if such petitions were to be treated as regular Appeal against the Arbitral Awards. The narrow parameters provided in Section 34 of the Act which require to be established with averments and cogent evidence. None of them is found in the present case except the reiteration of the provisions of Sections 34 of the Act. The very emphasis placed by the learned counsel for the appellant before us on the manner in which the learned Arbitrator considered the documents leads us to believe http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 7/12 that there is nothing beyond this in the case under Section 34 of the Act, which in our opinion could not satisfy the parameters of Section 34 of the Act. It is neither against morality nor justice much less against the public policy.
11. We are rather baffled with the manner in which Petitions under Section 34 of the Act are so casually filed by invoking the court process against the very spirit to get expeditious justice through the Alternative Dispute Mechanism provided in the Act and the purpose is defeated. Mere filing of the Petition under Section 34 of the Act and pendency thereof will become an excuse for the parties not to permit the execution of the Arbitral Awards in such cases, even though there is no stay granted by High Court and that is precisely what defeats the purpose of the Act itself. Section 37 of the Act is a further remedy still on a narrower compass. The said provision is also quoted below for ready reference:-
"37. Appealable orders. –(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely: -
http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 8/12
(a) refusing to refer the parties to arbitration under Section 8;
(b) granting or refusing to grant any measure under section 9;
(b) setting aside or refusing to set aside an arbitral award under section 34.
(2) An appeal shall also lie to a court from an order of the arbitral tribunal--
(a) accepting the plea referred to in sub-
section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."
12. The scope of Appeal under Section 37 of the Act is only to the extent of clause (a) refusing to refer the parties to arbitration under Section 8; (b) granting or refusing to grant any measure under Section 9 and (c) setting aside or refusing to set aside an Arbitral Award under Section 34. A mere refusal of the learned Single of http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 9/12 this Court with cogent reasons for confirming the Arbitral Award is not a ground to entertain an Appeal under Section 37 of the Act. That only further delays and defeats the very purpose for which a remedy of this nature is provided for very exceptional circumstances in the Act.
13. We are completely satisfied that these parameters are not even touched, nor established with with proper averments and evidence in the present case. Therefore, the learned Single Judge, in our opinion, was perfectly justified in rejecting the Original Petition filed under Section 34 of the Act.
13. We do not find any merit in the present Appeal and the same is liable to be dismissed. Accordingly, it is dismissed. No costs. The connected miscellaneous petition is also dismissed. "
7. The contention raised before us by the learned counsel for the Appellant that sufficient opportunity was not given at all cannot be a ground to invoke Section 34 of the Act to set aside an Arbitral Award. Having participated in the Arbitral Proceedings and produced certain documents for perusal of the Arbitral Tribunal which resulted in a finding by the Arbitral Tribunal as well as the learned Single Judge that despite the grant of opportunity to the present Appellant to cross-examine the witnesses of the http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 10/12 claimants, they did not avail the same, the Appellant cannot be permitted to raise these grounds in the manner raised before us under Section 37 of the Act.
8. Non-service of notice to the appellant, being a party to the contract out of which the dispute arises and the Arbitral Award being passed just as a surprise can only be said to be the breach of principles of natural justice, which can possibly be a ground to invoke Section 34 of the Act. Nothing of this sort has happened in the present case and therefore, the said ground cannot be raised by the Appellant before us, either in the Petition filed under Section 34 before the learned Single Judge or in the Appeal filed under Section 37 of the Act before the Division Bench. Therefore, we do not find any merit in the Appeal and the same is liable to be dismissed. Accordingly, it is dismissed. No costs. The connected miscellaneous petition is also dismissed.
(V.K.,J.)(C.V.K.,J) 10.7.2019 Index:Yes Internet:Yes ssk.
To:
1. ECS Biztech Pvt. Limited, (Previously known as ECS Biztech Private Limited), rep. by Managing Director, Mr.Vijay Mandora "ECS House, No.11, Garden View, Opp. Auda Garden, Pakwan Circle, http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 11/12
Sindhu Bhavan Road, Off.S.G.Highway, Bodakdev, Ahmedabad 380 054.
2. M/s.Redington (India) Ltd.
rep. by Mr.Srinivasan Senior Manager-Credit, SPL, Guindy House, No.95, Mount Road, Guindy, Chennai 600 032.
http://www.judis.nic.in Judgt. dt. 10.7.19 in O.S.A.148/19 ECS Bizitech Pvt. Ltd. v. Redington (India) Ltd. 12/12
DR.VINEET KOTHARI, J.
AND C.V.KARTHIKEYAN, J.
ssk.
O.S.A.No.148 of 2019 10.7.2019.
http://www.judis.nic.in