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Rajasthan High Court · body

2007 DIGILAW 1289 (RAJ)

Kanishka Complex Pvt. Ltd. v. Rebecca Expo

2007-07-10

K.S.RATHORE

body2007
JUDGMENT 1. - The present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 is preferred against the order dated 9.3.2007 passed in Arbitration Application No. 312/06 titled as "M/s. Kanishka Complex (P) Ltd. v. M/s. Rebecca Expo Investment Company (P) Ltd. & Others " by the District Judge, Jaipur City, Jaipur, whereby application under Section 34 of the Arbitration and Conciliation Act, 1996 has been dismissed.The appellant M/s. Kanishka Complex Private Limited and respondent M/s. Rebecca Expo Investment Company (P) Ltd. entered into memorandum of understanding for development of plot No. 25, Ajmer Road, Jaipur. Some dispute arose between the parties therefore, they have decided to arbitrate the dispute from Shri Sudhanshu Kasliwal, Advocate and he has been appointed sole Arbitrator.According to the term of reference the appellant claimant and respondent No. 1 entered into agreement to refer dispute to sole arbitrator Mr. Sudhanshu Kasliwal. The term of reference is under : 1. Whether subsequent to the execution of the MOU dated 25.10.2004 the terms of the MOU were modified and accepted by both the parties and if so then what would be effect of the same on the term of the said them ? 2. Whether in given circumstances would it be practically feasible for both the parties to go ahead together for the development of the project and if so then on what terms. 3. In case, both the parties cannot go ahead together then on what terms party of the other part is entitled to be compensated? 2. It was also agreed that the Arbitrator shall give oral hearing to both the parties on the same day, however, both the parties will also be free to give their respective written statement at the time of making oral submission and the arbitrator shall give its award within three days. 3. Both the parties have also agreed to bear the cost of Arbitrator equally for a consolidated fee of Rs. 2,20,000/- beside expenses as may be decided by the Arbitrator and pay the same before the arbitration proceedings are initiated. The Arbitrator passed the award dated 20.2.2006. 4. The appellant filed objection under Section 34 of the Arbitration & Conciliation Act, 1996 before the District Judge, Jaipur City against the award dated 20.2.2006 passed by the Sole Arbitrator in the arbitration proceedings. 5. The Arbitrator passed the award dated 20.2.2006. 4. The appellant filed objection under Section 34 of the Arbitration & Conciliation Act, 1996 before the District Judge, Jaipur City against the award dated 20.2.2006 passed by the Sole Arbitrator in the arbitration proceedings. 5. The appellant submits that the District Judge, Jaipur City has utterly failed to appreciate the argument of the appellant that the partnership came into existence between the parties by execution of MOU dated 25.10.2004 whereby the respondent made available the aforesaid plot of land and all enjoyable rights thereto for the development, for which a sum of Rs. 26 Crore was taken as notional value which was to be considered while working out the profitability between the parties and both the parties agreed to invest in the ratio of 75 : 25 towards construction. 6. It was also established that the plot become the partnership property but the arbitrator without any reason came to the conclusion that respondent No. 1 never surrendered the said plot of land to the partnership firm and said conclusion is against the written and agreed conditions of the MOU. 7. As per the terms of the MOU, it is categorically mentioned that "whereas both the parties hereto have decided to join hands today for the development of said plot bearing No. 25, Ajmer Road, Jaipur on following broad terms" and as per clause 2, 3, 4, 5, 6, 7, 8 and 9 it is abundantly clear that both the parties entered into business to earn and share profit in the specified ratio by developing the plot in question for commercial purposes but the District Judge has not considered the MOU particularly clause 9 which reveals that the plot of land become the property of partnership. 8. The District Judge has held that under Section 34, jurisdiction of the Court is very limited but he himself has entered into the merits of the matter and gave reasons even going beyond the reasons of the Arbitrator to reach the conclusion that plot in question never became the property of partnership. 9. And the observation made by the District Judge and the Award passed by the Arbitrator is against the Public Policy as has been held by Hon'ble the Supreme Court in the matter of ONGC Ltd. v. Saw Pipes Ltd., reported in 2003 (1) WLC (SC) Civil 709 : (2003) 5 SCC 705 . 9. And the observation made by the District Judge and the Award passed by the Arbitrator is against the Public Policy as has been held by Hon'ble the Supreme Court in the matter of ONGC Ltd. v. Saw Pipes Ltd., reported in 2003 (1) WLC (SC) Civil 709 : (2003) 5 SCC 705 . 10. The District Judge further seriously propounded very unique theory on the basis of Section 14 and 18 of the Partnership Act without giving due consideration to the wordings of the Power of Attorney in question and has held that since partner is an agent in the firm there was no occasion for respondent No. 1 to give Power of Attorney and since Power of Attorney was given, therefore, it cannot be said that by MOU the said property became the property of partnership. 11. The finding of the District Judge that the arbitrator after considering all the facts has come to the right conclusion regarding the fact that land in question never became partnership property, is bad in law, as well as on facts, for the simple reason because Arbitrator while arriving on his conclusion regarding the fact that whether land in question became the property of partnership or not has not considered any of the facts so considered by the District Judge. The Arbitrator after writing the contentions of the parties at page 11 of the award has only mentioned "I have perused the judgment and have re - examined the MOU dated 25.10.2004 in the light of the observations made in the judgment and rulings given. I am of confirm view that the non-claimant have never intended to bring the subject property in the firm of their capital contribution. In fact, the non-claimant had agreed to contribute 75% of the revenue required in completion of the project". Thus, the aforesaid conclusion/finding given by the Arbitrator is without any basis and reasons. 12. I am of confirm view that the non-claimant have never intended to bring the subject property in the firm of their capital contribution. In fact, the non-claimant had agreed to contribute 75% of the revenue required in completion of the project". Thus, the aforesaid conclusion/finding given by the Arbitrator is without any basis and reasons. 12. The District Judge further seriously erred in not considering the argument submitted by the appellant in proper manner and had observed that the appellant has not argued that how the compliance of Section 10 of the Specific Relief Act has been made whereas it was specifically pleaded and argued before the District Judge and there is a specific pleading in this regard in para 19 of the Statement of Claim, Page 10, which clearly indicates that specific plea was taken in the written statement which is reproduced as under : "19. The claimant submits that they discharge their obligation under partnership/MOU sincerely and faithfully without committing any breach of any of its terms and are still willing and prepared to continue doing so but the Respondents have failed to extend their hand on their part to the expectation in this regard. (They admittedly spent no amount except the amount of conversion) and practically they declined to extend their support to the desired extent with the claimant towards the development of the work of the project and even for the execution of formal partnership deed." 13. As held by Hon'ble the Supreme Court in the case of ONGC (supra), the award passed by the Arbitrator is contrary to the substantive provisions of law or the provision of the Act of 1996 or against the terms of the contract and is contrary to substantive law, fundamental policy of Indian Law, unfair, unreasonable and shocked the conscious of the Court. Thus, the scope of Section 34 as held by Hon'ble the Supreme Court is not having limited scope. 14. The appellant has pointed out several illegalities and irregularities committed by the Arbitrator in award. The arbitrator mentioned that both of them have submitted their respective unsigned written submission and the statement of case, reply and rejoinder were signed by the parties and the record contrary to the finding recorded in the award reflects malafide on the part of the Arbitrator. 15. The arbitrator mentioned that both of them have submitted their respective unsigned written submission and the statement of case, reply and rejoinder were signed by the parties and the record contrary to the finding recorded in the award reflects malafide on the part of the Arbitrator. 15. Further pointed out that there is no mention in the award who appeared for claimant and who appeared for respondent. But in the order sheet/proceedings presence of the representatives of the parties have been shown, whereas nobody appeared from respondent side before Arbitrator in presence of claimant and no proceeding conducted in the presence of both the parties. Thus, it is clear violation of natural justice and also provisions of Sections 18, 23 and 24 of the Act of 1996. 16. It was specifically pointed out that the Arbitrator confirms in the letter dated 25.2.2006 that there is no question of recording the proceedings whereas in the record of Arbitrator proceedings sheets from page No. 1 to 9 have been drawn by the Arbitrator and it was alleged that all the proceedings sheets are manipulated and are forged. The claimant's contention was that there were only two dates i.e. 2.1.2006 and 4.2.2006 and he appeared before the Arbitrator and signed the proceedings. Signed proceedings were not made available to the claimant nor submitted before the Court. But false and manipulated order sheets were submitted and the claimant has objected this in appeal. 17. The appellant also referred memo of appeal and grounds to show that the Arbitrator has mentioned in its award that the Arbitrator has heard both the parties whereas the Arbitrator has never heard both the sides in presence of each other and after establishing this fact has contended that the Arbitrator has not heard the parties in presence of each other which is clear violation of principle of natural justice and against the provisions of Sections 18, 23 and 24 of the Act. Not only this the Arbitrator has not given the copy of reply and written statement to the claimant. The proceeding sheet shows that there was proceeding on 22.1.2006 but there was no proceeding on 22.1.06 and the claimant never attended such proceeding. In fact no such date was ever informed by the Arbitrator to the claimant. Only verbal grounds of defense were communicated. The proceeding sheet shows that there was proceeding on 22.1.2006 but there was no proceeding on 22.1.06 and the claimant never attended such proceeding. In fact no such date was ever informed by the Arbitrator to the claimant. Only verbal grounds of defense were communicated. It was also alleged that the appellant was not given proper opportunity to rebut the facts mentioned by the respondent in their written statement and reply and violated the bare minimum principles of natural justice. 18. The appellant vehemently argued that the award is ante dated and referred para 26, page 14 to 16 and Ground (v), Paper book page 40, 41 and 42 and Rejoinder paragraph 18 submitted in application under Section 34, further at Page 118 of paper book letter by respondent No. 1 which contains their admission that award is passed on 21.2.2006 which supports the contention of appellant that the award is ante dated and the arbitrator passed the awards ante dated after preparing false document. 19. As already discussed hereinabove, learned counsel for the appellant placed reliance on the judgment in the case of Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., reported in 2003 (1) WLC (SC) Civil 709 : (2003) 5 SCC 705 (supra) wherein Hon'ble the Supreme Court has held as under : 'Arbitral Procedure' In Section 34(2)(a)(v) of the Act, the composition of the Arbitral Tribunal should be in accordance with the agreement. Similarly, the procedure which is required to be followed by the arbitrators should also be in accordance with the agreement of the parties. If there is no such agreement then it should be in accordance with the procedure prescribed in Part I of the Act i.e. Sections 2 to 43. These provisions prescribe the procedure to be followed by the Arbitral Tribunal coupled with its powers. Power and Procedure are synonymous in the present case. By prescribing the procedure, the Arbitral Tribunal is empowered and is required to decide the dispute in accordance with the provisions of the Act, that is to say, the jurisdiction of the Tribunal to decide the dispute is prescribed. In these sections there is no distinction between the jurisdiction/power and the procedure. Therefore, if the award is dehors the said provisions, it would be, on the face of it, illegal. In these sections there is no distinction between the jurisdiction/power and the procedure. Therefore, if the award is dehors the said provisions, it would be, on the face of it, illegal. The decision of the Tribunal must be within the bounds of its jurisdiction conferred under the Act or the contract. In exercising jurisdiction, the Arbitral Tribunal cannot act in breach of some provision of substantive law or the provisions of the Act." 20. Learned counsel for the appellant also referred the judgment in the case of M/s A.T. Brij Paul Singh & Others v. State of Gujarat, reported in it (1984) 4 SCC 59 . 21. He also referred the judgment in the case of Dwarka Das v. State of M.R & Another, reported in 1993 (3) SCC 500 wherein Hon'ble the Supreme Court has observed as under : (B) Contract Act, 1872-S. 73-Damages for breach of contract-When the breach of contract is held to have been proved being contrary to law and terms of the agreement, the erring party is legally bound to compensate the other party to the agreement-Works contract rescinded on ground that contractor had not completed even 10% of the work-Contract found to have been improperly rescinded and thereby breach of contract committed-Contractor claiming Rs. 20,000/- as damages being 10% of the value of the contract-Held, Contractor entitled to claim damages for loss of profit which he expected to earn by undertaking the works contract-Claim of Rs. 20,000/- on account of damages as expected profit out of the contract found to have been illegally rescinded justified-High Court erred in construing the claim to be based on actual loss suffered." 22. He also placed reliance on the judgment reported in AIR 1966 SC 1300 . After placing reliance on the aforesaid judgments, learned counsel for the appellant has referred Section 34 of the Arbitration and Conciliation Act, 1996 which prescribes the procedure of proper hearing : "12. Proper hearing The minimum requirements of a proper hearing are as follows : Each party must have notice that the hearing is to take place and of the date, time and place for holding such hearing. Each party must have a reasonable opportunity to be present at the hearing along with his witness and legal advisers, if any. Each party must have the opportunity to be present throughout the hearing. Each party must have a reasonable opportunity to be present at the hearing along with his witness and legal advisers, if any. Each party must have the opportunity to be present throughout the hearing. Each party must have a reasonable opportunity to present statements, documents evidence and arguments in support of his own case. Each party must have a reasonable opportunity to cross-examine his opponent's witnesses and reply to the arguments advance in support of opponent's case." 23. An arbitral tribunal should ensure that the date for the hearing is not so close that the case cannot be properly prepared. Equally, an arbitral tribunal, while fixing date of hearing, should try to accommodate any party who is placed in difficulty by the absence abroad, illness or competing engagement of himself or of an important witness. However, a party has no absolute right to insist on his convenience being consulted in every respect. The matter is within the discretion of the arbitral tribunal and the court may intervene only in the cases of positive abuse. As observed by Darling, J. in British Oil & Cake Mills Ltd. v. Horace Battin & Co. Ltd., (1922) 13 LI L Rep. 443 , in each case, the arbitrator must balance the legitimate interests of each party against the general purpose of arbitration, which is to provide a speedy method of resolving disputes. The arbitral tribunal's duty goes no further than to ensure that a party has an opportunity to attend the hearing if he wishes. If, despite proper notice, a party chooses not to attend, then the arbitral proceedings may be continued in the absence of such party. 24. Since each party has a right to remain present throughout the hearing, the arbitral tribunal is not to exclude either party even from a portion of hearing without the consent of such party. However, the arbitral tribunal should play safe with patience and dignity and give opportunity to both parties to present their respective cases and evidence in support thereof before it. Each party must be given equal opportunity to address arguments on the facts and on the law. In Kishore Textiles Mills v. Union of India, 2000 (3) Bom CR 688 , where the award was challenged on the ground that opportunity to make submissions was not given to the petitioners, since the allegation was not proved, the award was not set aside. In Kishore Textiles Mills v. Union of India, 2000 (3) Bom CR 688 , where the award was challenged on the ground that opportunity to make submissions was not given to the petitioners, since the allegation was not proved, the award was not set aside. However, the arbitral tribunal is not expected to do more than what is reasonable. Within certain limits, the arbitral tribunal should receive all evidence tendered by the parties. The shutting out of evidence which should have been admitted may result in the arbitral award being set aside. In Faure, Fairdought Ltd. v. Premier Oil & Cake Mills Ltd., (1968) 1 Llyod's Rep. 237 , where there were pleading which defined the scope of the evidence which was to be adduced, it was held that if an issue had ceased to be in,dispute, the arbitrator should not allow time to be wasted by receiving evidence in relation thereto. No doubt, the obligation to receive evidence tendered by the parties involves the arbitral tribunal in a duty to consider the evidence so received, the arbitral tribunal is not obliged to accept it as accurate. Arriving at an opposite conclusion, even if mistaken, from one indicated by the evidence is not a matter which vitiates the arbitral award. Each party must have a reasonable opportunity to challenge the case put forward by his opponent. The arbitral tribunal is neither to hear evidence nor arguments of one party in the absence of other party unless despite opportunity, the other party choose to remain absent. 25. Each party to arbitration reference is entitled to sufficient advance notice of any hearing and of any meeting of the arbitral tribunal as provided in section 24 and if a party is not served with a proper advance notice, he would suffer injustice and he would be entitled to have the arbitral award set aside by the court. Similarly, if a party is otherwise unable to present his case for good reasons before the arbitral tribunal, the arbitral award, on proper application being made to the court, may be set aside. Similarly, if a party is otherwise unable to present his case for good reasons before the arbitral tribunal, the arbitral award, on proper application being made to the court, may be set aside. Even under the Act of 1940 want of proper appointment of an arbitrator as also proper service of notice of the arbitral proceedings, unless subsequently acquiesced by the party who made a grievance about it, had been entertained by courts as grounds to set aside an award.And after referring the aforesaid minimum requirements of the proper hearing he further submits that each party must have reasonable opportunity to plead its case put forward by the opponent. And with regard to the fact whether the arbitral tribunal should hear one party in the absence of the other as per Chapter-V-conduct of Arbitral Proceedings, it is the duty of the arbitral tribunal to act fairly to both the parties and as such, the arbitral tribunal must not hear one party in the absence of the other. After referring this, he also submits that "Russell on Arbitration" has summarised this obligation on the part of the arbitral tribunal in the following words : "The tribunal does however have power to proceed in the absence of a party and for a hearing to take place even if one of the parties is not present, or for the case to proceed in the absence of submissions, evidence or indeed any case at all from one of the parties." 26. Thus, the-sole arbitrator has committed misconduct while passing the award, the District Judge has also seriously erred in not properly considering the submission of the appellant, as such, the award passed by the arbitrator and the order passed by the District Judge be quashed and set aside. 27. Per contra, learned counsel for the respondent submitted that no illegality, perversity or infirmity in the award as well as in the order passed by the District Judge is committed which calls for any interference by this Court. The award could not be pronounced within 3 days from reference to disputes as appellant was not keen to get proceedings concluded. Fee was deposited late and parties filed written submissions. Parties participated in proceedings without any objection. There is no time restriction on pronouncement of the award by law. There is no abnormal delay by arbitrator. The award could not be pronounced within 3 days from reference to disputes as appellant was not keen to get proceedings concluded. Fee was deposited late and parties filed written submissions. Parties participated in proceedings without any objection. There is no time restriction on pronouncement of the award by law. There is no abnormal delay by arbitrator. Merits of the case is not effected by delay in pronouncement of the award. 28. The award is pronounced on 20.2.2006 and it is not ante dated. Respondent referred the date 21.2.2006 because covering letter sent with award is dated 21.2.2006. Therefore, in that context the date 21.2.2006 is mentioned. 29. It is denied that the appellant claimant made any objection on pronouncement of award before midnight of 20/21.2.2006. In fact the award was signed and pronounced on 20.2.2006 at the office of Arbitrator. 30. It is also denied that the award is patently illegal as alleged by the appellant. It is also denied that the Arbitrator has alleged in award that only unsigned written submissions were submitted. The parties agreed to submit orally and later on they agreed to submit written submissions. The arbitrator did not mention that he did not record arbitral proceedings, he has only mentioned that it is not mandatory to record proceedings. 31. It is also vehemently denied that the arbitrator has not heard both the sides and has not given full opportunity of hearing. Copies of the written submissions were supplied to the other party and reply/rejoinder were filed. Proceeding sheets were drawn in its due course and cannot be said forged. There is no need of signing the proceeding sheets by any party nor it was signed. 32. Learned counsel appearing for the respondent has referred a judgment in the case of " Jatinder Nath v. Chopra Land Developers Pvt. Ltd. and Another, reported in 2007 (1) Arbitration Law Reporter 490 wherein Hon'ble the Supreme Court has held as under : "a bare failure of an arbitrator to make an award within time allowed by law will not involve consequences of it being set aside only on that ground. Court has ample powers in a given case to extend time- Power to be exercised with judicial discretion." 33. He further placed reliance on the judgment in the case of Union of India v. Col. Court has ample powers in a given case to extend time- Power to be exercised with judicial discretion." 33. He further placed reliance on the judgment in the case of Union of India v. Col. L.S.N. Murthy and Another, reported in 2006 (3) Arbitration Law Reporter 552 wherein it was held as under : In absence of any agreement between the parties, the Arbitral Tribunal has to conduct the proceedings in the manner it considers appropriate which includes the power to determine the admissibility, relevancy, materiality and weight of any evidence." 34. He further referred a judgment in the case of Bharat Cooking Coal Ltd. v. L.K. Ahuja, reported in 2004 (1) ALR 652 wherein Hon'ble the Supreme Court has held as under : "When Arbitrator has applied his mind to the pleadings, the evidence, the evidence adduced before him and the term of the contract there is no scope for the Court to re-appreciate the matter as if this were an appeal and even two views are possible, view taken by the Arbitrator would prevail." 35. He also referred a judgment in the case of " The State of Kerala and Another v. K.P. Poulose, reported in AIR 1973 Kerala 237 wherein Kerala High Court has held that "an objection not taken first in arbitration proceedings cannot be sustained subsequently." 36. And the further placed reliance on the judgment in the case of " State of Orissa v. Dandasi Sahu, reported in AIR 1988 Supreme Court 1791 wherein Hon'ble the Supreme Court has held that "mistake of law or fact-Same not apparent on face of award or document appended thereto-Remitting or settling aside of award not warranted. 37. He also placed reliance on the judgments reported in AIR 1965 MP 118 , 2004(3) ALR 534, 2006(2) ALR 534, 2006(2) ALR 343, 2003(3) ALR 141 SC, 2001(5) SCC 691 and ALR 1989 SC 1263. 38. 37. He also placed reliance on the judgments reported in AIR 1965 MP 118 , 2004(3) ALR 534, 2006(2) ALR 534, 2006(2) ALR 343, 2003(3) ALR 141 SC, 2001(5) SCC 691 and ALR 1989 SC 1263. 38. After referring the aforesaid judgments and provisions of law, learned counsel for the respondent specifically prayed that this Court is having a limited scope of interference with the award passed by the Arbitrator as no illegality has been committed by the Arbitrator as also no interference is required by this Court in the order passed by the District Judge as the District Judge has also not committed any wrong while upholding the award passed by the sole Arbitrator and thus the appeal deserves to be dismissed with cost. 39. Having heard rival submissions of the respective parties and upon careful perusal of the award passed by the sole Arbitrator and the impugned order passed by the District Judge, the judgments referred by both the parties and the provisions of the Indian Partnership Act, 1932, the Specific Relief Act, 1963 and Arbitration and Conciliation Act, 1996, it is not disputed that the matter is referred to the sole Arbitrator to arbitrate the dispute and reference of dispute was made whether subsequent to the execution of the MOU dated 25.10.2004, the term of the MOU were modified and accepted by both the parties and if so then what would be effect of the same on the term of the said MOU and the second reference was whether in given circumstances would it be practically feasible for both the parties to go ahead together for the development of the project and if so then on what terms and the third one was in case both the parties cannot go ahead together then on what terms either party is entitled to be compensated. 40. The Arbitrator has decided the point of reference 1 and 2 together and issue involved in both the aforesaid reference is common and, therefore. 40. The Arbitrator has decided the point of reference 1 and 2 together and issue involved in both the aforesaid reference is common and, therefore. he dealt both the point of reference simultaneously and after considering both of the references has observed that grant of relief of specific performance of the terms of the said MOU does not appear to be feasible specially because the aforesaid venture has not taken conclusive shape by detailed documentation as stated in the MOU itself and otherwise also, whole of the process of the proposed development requires numerous details which would be dependent on the personal qualifications or violation of the parties and even otherwise, specific performance of the material terms of the MOU have become unenforceable, as such, it is not possible to grant the relief of specific performance of the aforesaid MOU, in view of the provisions envisaged in clause (b) of sub section (10) of Section 14 of the Specific Relief Act, 1963. 41. Section 14 of the Specific Relief Act, 1963 reads as under : 4. Contracts not specifically enforceable.-(1) The following contracts cannot be specifically enforced, namely : (a) a contract for the non-performance of which compensation in money is an adequate relief; (b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or violation of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; (c) a contract which is in its nature determinable; a contract the performance of which involves the performance of a continuous duty which the court cannot supervise. (2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub section (1), the court may enforce specific performance in the following cases : (a) where the suit is for the enforcement of a contract, (i) to. (3) notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub section (1), the court may enforce specific performance in the following cases : (a) where the suit is for the enforcement of a contract, (i) to. execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to reply at once : Provided that where only of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract; or (ii) to take up and pay for any debentures of a company; (b) where the suit is for, (i) the execution of a formal deed of partnership; the parties having commenced to carry on the business of the partnership; or (ii) the purchase of a share of a partner in a firm; (c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land; Provided that the following conditions are fulfilled, namely : (i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. 42. But in the instant case the Arbitrator while arriving at the conclusion not considered the submission made on behalf of the appellant whether the appellant qualified the essential three conditions of Section 14 as to how he was not able to satisfy the essential three conditions of Section 14(3) (c). Thus, while deciding the point of reference No. 1 and 2 the arbitrator has not properly considered the provisions and decided in favour of the appellant and ultimately decided reference No. 3 against the appellant. 43. Thus, while deciding the point of reference No. 1 and 2 the arbitrator has not properly considered the provisions and decided in favour of the appellant and ultimately decided reference No. 3 against the appellant. 43. With regard to misconduct and malafide, the appellant is able to establish the fact that in the manner the proceedings initiated by the Arbitrator itself creates doubt- and admittedly the parties were not heard in presence of each other which is clear violation of principle of natural justice and also contrary to the provisions of Sections 18, 23 and 24 of the Arbitration and Conciliation Act, 1996. And the letter written by the Arbitrator also shows that award is passed ante dated. In spite of the fact that the appellant has issued a telegram prior to passing of award and after receipt of telegram ante dated award is passed. 44. It is true that this Court has limited power to interfere with the award passed by the Arbitrator but the District Judge has not cared to examine the submissions which are raised before him as the appellant has categorically referred the pleadings but the District Judge has not cared to consider the same and propounded his new theories which was also not subject matter of reference. 45. Upon careful perusal of the judgments referred by Hon'ble the Supreme Court in the case of ONGC Ltd. v. Saw Pipes Ltd. (supra), it appears that Hon'ble the Supreme Court has dealt with the Court's jurisdiction under section 34 of the Arbitration and Conciliation Act, 1996 and while dealing Section 34 dealt with the ingredients of clause (v) which is reproduced as under : (1) The court may set aside the award : (i)(a) if the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties, (b) failing such agreement, the composition of the Arbitral Tribunal was not in accordance with Part I of the Act. (ii) if the arbitral procedure was not in accordance with : (a) the agreement of the parties, or (b) failing such agreement, the arbitral procedure was not in accordance with Part I of the Act. 46. (ii) if the arbitral procedure was not in accordance with : (a) the agreement of the parties, or (b) failing such agreement, the arbitral procedure was not in accordance with Part I of the Act. 46. Hon'ble the Supreme Court has further while dealing with serious irregularity observed that serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant (a) failure by the Tribunal to comply with Section 33 (general duty of Tribunal); (b) the Tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction); (c) failure by the Tribunal to conduct the proceedings in accordance with the procedure agreed by the parties; (d) failure by the Tribunal to deal with all the issues that were put to it; (e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers; (f) uncertainly or ambiguity as to the effect of the award; (g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy; (h) failure to comply with the requirement as to the form of the awards; or (i) any irregularity in the conduct of the proceedings or in the award which is admitted by the Tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the awards. (3) If there is shown to be serious irregularity affecting the Tribunal, the proceedings or the award, the court may (a) remit the award to the Tribunal, in whole or in part, for reconsideration; (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. 47. And as per "Public Policy of India' which is relevant in the instant case an award could be set aside if it is contrary to the fundamental policy of Indian law; or the interests of India; or justice or morality or it is patently illegal. 48. Here, in the instant case, clause (c) and (d) of serious irregularity is applicable. And as per "Public Policy of India' which is relevant in the instant case an award could be set aside if it is contrary to the fundamental policy of Indian law; or the interests of India; or justice or morality or it is patently illegal. 48. Here, in the instant case, clause (c) and (d) of serious irregularity is applicable. As the Arbitrator has committed illegality and has passed patently illegal award as he has agreed that no order sheet has been drawn in the proceedings whereas he submits that the order sheet are later on drawn. Further, admittedly, the Arbitrator has not heard the parties in presence of each other and after receipt of telegram from the appellant has passed the award ante dated. Thus, as per the ratio decided by Hon'ble the Supreme court in the case of "ONGC" (supra), the Arbitrator has committed illegality and it is incorrect to say that the appellant has not raised objection well within time whereas the appellant has issued a telegram not to pass the award and after receipt of the telegram award has been passed and the District Judge also not considered all the objections which are raised before him and even not cared to examine the relevant provisions which are referred before him. In such circumstances, even the limited scope is available to this Court, in view of the ratio decided by Hon'ble the Supreme Court in the case of "ONGC" (supra) and as observed hereinabove, this is a fit case where interference is required by this Court. 49. Consequently, the appeal stands allowed and the order impugned passed by the District Judge dated 9.3.2007 and the award dated 20.2.2006 passed by the Arbitrator being contrary to settled principle of law are herewith quashed and set aside.Record be sent back.Appeal Allowed - Award and order of district judge set aside. *******