Judgment Heard Mr. S.K. Ghosh, the learned Counsel appearing for the appellant (claimant). The respondent is represented by the learned Senior Counsel Mr. D. Majumder. 2. This appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”) to challenge the judgment dated 8.12.2005 (Page-49) in the Title Suit (Arbitration) No.7/2003, whereby the learned District Judge, Hailakandi quashed the Award rendered by the sole Arbitrator on 27.1.2003 (Annexure-1), by allowing the petition under Section 34 of the Arbitration Act filed by the respondent. The Court held that the Award was made solely on the basis of presumption and therefore the same was set aside. 3. The appellant and the respondent are brothers and were partners of the firm i.e. M/s Union Food Industries, which was carrying on the business of oil extraction, Ata Chakki, Chira Mill etc. But a dispute arose between the two partners and the appellant Md. Abu Bakkar Barbhuiya in furtherance to his claim for a share in the partnership income, filed the Arbitration Petition No.17/2000 in the High Court, for nomination of Arbitrator, under Section 11 of the Arbitration Act. The respondent appeared in the proceeding and denied the existence of the Partnership Deed dated 14.7.1987 and objected to nomination of the suggested Arbitrator. But the Chief Justice referred to the independent power available to the Arbitrator under Section 16, to give a ruling on his own jurisdiction and after considering the decision in Konkan Railway Corporation Ltd. vs. Rana Construction reported in (2002) 2 SCC 388 held that the Arbitrator can decide on existence/validity of the agreement. Consequently on 28.2.2002 the Arbitrator proposed by the claimant was nominated. But while disposing of the Arbitration Petition No.17/2000, the Chief Justice left it open for the Arbitrator to decide on the existence/validity of the Arbitration Agreement. 4. When the arbitration proceeding was then initiated, the respondent through his application dated 17.9.2002 (Exbt.19) questioned the Arbitrator’s impartiality and raised a jurisdictional objection. But the Arbitrator proceeded to consider the matter on merit and decided that the claimant appellant is entitled to get Rs.6,01,066.50 from the other partner of the partnership farm plus interest and cost. 5. When the aggrieved respondent challenged the Award under Section 34 of the Arbitration Act, the learned District Judge primarily focused on the Arbitrator’s finding on Issue No.7. 5. When the aggrieved respondent challenged the Award under Section 34 of the Arbitration Act, the learned District Judge primarily focused on the Arbitrator’s finding on Issue No.7. In the absence of any evidence on the Profit & Loss Account of the firm, the Arbitrator determined the alleged dues by referring to the electricity consumption bills of the Mill and accordingly notional sale and profit was calculated. Thus the Award was held to be based on presumption and accordingly the same was quashed by the Court. 6.1 Assailing the legality of the impugned decision, Mr. S.K. Ghosh, the learned Counsel for the appellant (claimant) contends that although the Award was based on 8 separate Issues, the entire Award was quashed by limited scrutiny of the finding on Issue No.7. The Counsel argues that because of the narrow supervisory role of Court under Section 34 of the Arbitration Act, unless the Award is found to suffer from the specified infirmities under Sub-Section (2) of Section 34, it can’t be disturbed by the Court on the limited challenge, permitted under Section 34 of the Arbitration Act. 6.2 The appellant’s lawyer agrees that in the absence of regular Books of Account of the firm, the payable quantum was determined with reference to the electricity consumption to notionally decide the sale and profit figures but he contends that this exercise can’t be said to be an impermissible exercise, in the context of the facts in the case. 7.1 On the other hand, the respondent justifies the impugned decision of the Court by contending that even if all the other Issues (barring Issue No.7) are decided in favour of the claimant, the arbitral Award can’t benefit the claimant and therefore it is argued that since the key issue which encompasses the entire claim was examined by the Court, there is no infirmity with the impugned decision. 7.2 For the respondent, the learned Senior Counsel Mr. D. Majumder also projects that impartiality of the Arbitrator was questioned at the threshold by the respondent through his application (Exbt.19) but the said objection was never specifically decided only because, the Arbitrator was nominated by the Chief Justice through the Arbitration Petition No.17/2000. This approach is contended to be contrary to the provision of Section 16 and also the decision in Konkan Railway (supra) which in fact was referred to in the Chief Justice’s order recorded on 28.2.2002. This approach is contended to be contrary to the provision of Section 16 and also the decision in Konkan Railway (supra) which in fact was referred to in the Chief Justice’s order recorded on 28.2.2002. 7.3 Since the Arbitrator was the Chartered Accountant of the partnership firm, his appointment was opposed by the respondent by questioning his impartiality by projecting that he went out of his way to visit the Mill to arrive at notional sale and profit figures with reference to electricity consumption. To further demonstrate the arbitrariness of the procedure, the Counsel points out that the firm’s unpaid loan liability was unjustly added towards profit instead of liability, to determine the payable share of the claimant. 8. On the basis of pleadings of the parties, the Arbitrator framed 8 Issues which are extracted hereinbelow for ready reference – “1. Whether present dispute between the partners comes within the purview of the Arbitration and Conciliation Act, 1996? 2. Whether the Arbitrator has the jurisdiction to adjudicate upon the dispute? 3. Whether Abubakkar Barbhuiya voluntarily left the partnership farm in July/August 1993 ? 4. Whether thereafter the business of the firm has been changed to Milling products of private consumers ? 5. Whether the firm did function properly after July/August 1993 ? 6. Whether proper accounts of the firm were maintained ? 7. Whether any of the parties is entitled to get the business profit and other dues and/or to pay any dues to the partnership firm and if so, to what extent ? 8. Whether there is requirement of appointment of receiver for running the firm?” 9. While considering the jurisdictional Issue No.1 & 2, merely because the Arbitrator was appointed by the Chief Justice under Section 11, the 2 key jurisdictional Issues were decided in the affirmative. But in the process the Arbitrator failed to take into account that he was empowered under Section 16 to independently decide the issue and was not shackled in any way by this Court’s appointment order dated 28.2.2002. The Issue No.4 & 5 was decided by the Arbitrator by referring to his observation during his visit to the Mill premises on 8.11.2002. But he failed to consider whether the Mill was similarly operational on all other days. The Issue No.4 & 5 was decided by the Arbitrator by referring to his observation during his visit to the Mill premises on 8.11.2002. But he failed to consider whether the Mill was similarly operational on all other days. More importantly, no attention was paid as to whether the Mill was functioning for the business which was envisaged by the partnership concern or whether it was a separate business of the other partner, after the claimant abandoned the partnership in July/August 1993. 10. The Arbitrator himself noted that account details of the firm was not available for inspection and no proper accounts was maintained by the respondent since the inception of the firm. Yet in the absence of actual figures, the electricity consumption bills were taken into account to determine the notional sale and profit for the partnership firm. In his anxiety to help the claimant, the term loan and cash credit loan liabilities were added towards the firm’s profit and through such arbitrary exercise, the notional profit was determined. This strange procedure adopted by the Arbitrator was held to be based on presumption without any scientific basis and accordingly the learned District Judge quashed the Award through the impugned order dated 28.2.2002. 11. While the scope for interfering with arbitral Award is limited to the grounds specified in Section 34 of the Arbitration Act, when the Award is perverse or is in conflict with the public policy of India and is illogical, interference by the Court would be justified for entertaining an application Section 34 of the Arbitration Act. Here one can see that the decision on profit of the partnership firm was not based on any actual sale or profit figure but was determined on presumption. In fact the electricity consumption in the Mill was made the basis for the notional figure of sale and profit, but surprisingly no expenditure figures were considered. Moreover the liability for unpaid loan was also added to the profit figures of the firm. The Apex Court in ONGC vs. Saw Pipes Ltd. reported in (2003) 5 SCC 705 while interpreting the phrase Public Policy of India occurring in Clause (ii) of Section 34(2)(b) of the Arbitration Act held that an Award could be set aside if it is contrary to justice or patently illegal but such illegality must go to the root of the matter. Moreover if the Award is so unfair and unreasonable that it shocks conscience of the Court, such Award can be adjudged void as being opposed to public policy. 12. If we consider the permissible contour of challenge under Section 34 as enunciated by the Apex Court, when the Award is based on presumption and is not based on any cogent evidence, it can be declared to be a patently unreasonable and illegal and in such situation, interference by the Court under Section 34 would be justified. 13. In this case, the respondent objected to appointment of the Chartered Account of the partnership firm even at the stage of nomination of the Arbitrator who was proposed by the claimant. The Chief Justice didn’t reject the objection but left the issue to be decided under Section 16, by the Arbitrator himself. But unfortunately the respondent’s objection to the Arbitrator was never considered on merit and the jurisdictional issue was decided in the affirmative solely because, the arbitrator was nominated by the High Court. Even in cases where the Chief Justice or his delegatee nominates the Arbitrator, the jurisdictional issue can be independently decided by the Arbitrator himself under Section 16 but in this case, the core issue which goes to the root of the matter, was brushed-aside by the Arbitrator. This too makes the arbitral award illegal. 14. Undoubtedly the impugned decision of the learned District Judge was based entirely on the scrutiny of decision of the Arbitrator on the Issue No.7 and there was no real consideration of the remaining issues. But it must be borne in mind that if the Issue No.7 is decided against the claimant while all the other issues are decided in his favour, no relief can be given to the claimant. Therefore since the Court chose to examine the core issue which impacts all the other issues, impugned decision in my view, can’t be faulted on this ground. 15. The approach of the Court is found to be logical and germane and no illegality is noticed in the manner of consideration of the Section 34 challenge, to the Award. Therefore this Appeal under Section 37 of the Arbitration Act, is found to be without legal merit and the same is accordingly dismissed. The parties to bear their own cost.