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Karnataka High Court · body

2016 DIGILAW 948 (KAR)

G. D. SHANKER v. UNION OF INDIA

2016-12-09

K.N.PHANEENDRA

body2016
JUDGMENT : K.N. PHANEENDRA, J. 1. The appellant has preferred this appeal calling in question the judgment passed in AS No. 2/2013 (Arbitration Suit) dated 21.11.2015 by the Principal District and Sessions Judge, Mysuru, in dismissing the Petition and the Cross Objection filed by the appellant herein who is arrayed as respondent No. 1 in Arbitration Suit No. 2/2013. 2. The brief factual matrix that emanate from the records are that: The appellant and the respondent No. 1 have entered into a work contract for the period from 29.9.2010 to 28.9.2011. The respondent No. 1 has made a claim in detail describing the items and also the claim amount. The respondent No. 1 has claimed an amount of; Rs. 25,81,439/- under different heads which are enumerated below. The Arbitrator, after due contest of the proceedings, has awarded a sum of Rs.4,92,151. The summary of the award is as follows: Sl. No. Description Claim Amount Award Amount 1. Deduction of penalty and wages for short deployment of manpower Rs. 8,89,600 NIL 2. Security Deposit Rs. 2,46,051 Rs. 2,46,051 3. Performance Guarantee Rs.2,46,100 Rs. 2,46,100 4. Service Tax Rs. 3,09,122 NIL 5. Reimbursement of PF/ESI Rs. 8,90,566 NIL Total: Rs. 25,81,439 Rs. 4,92,151 3. Being aggrieved by the said award, the : respondent No. 1 herein has filed Arbitration Suit No. 2/2013 before the Principal District and Sessions Judge, Mysuru. After service of notice in the said suit, the first defendant (appellant herein) has filed a Cross-Objection Petition under Order 41, Rule 22 of CPC seeking reversal of the award making averments that the award passed by the Arbitrator is not proper and correct as the Arbitrator has only awarded a meager sum of Rs. 4,92,151/- as against claim of the appellant in a sum of Rs. 25,81,439/-. The District and Sessions Judge, Mysuru has dismissed the said suit as well as Cross-Objection filed by the appellant. The learned District and Sessions Judge has observed that the claimant instead of filing the Arbitration Suit u/S. 34 of the Arbitration and Conciliation Act, 1996 seeks reversal of the rejection of his claim by filing Cross-Objection Petition under Order 41, Rule 22 of CPC. The Cross-Objector can only claim relief in a duly constituted suit against the order of the Arbitrator in an Arbitration Suit. The Arbitration and Conciliation Act, 1996 is a special enactment which prevails every general law. The Cross-Objector can only claim relief in a duly constituted suit against the order of the Arbitrator in an Arbitration Suit. The Arbitration and Conciliation Act, 1996 is a special enactment which prevails every general law. Therefore, considering that the application filed u/S. 34 read with Order 41, Rule 22 of CPC is not maintainable and on that ground, the said application filed by the appellant came to be rejected. 4. The learned counsel for the appellant strenuously contends before this court that principles of natural justice require that the justice has to be administered wherever illegality or injustice has been caused by the subordinate courts. It is contended that the Arbitrator has not properly considered the claim of the appellant. Even he has not looked into the Central Government notifications with reference to the service taxes and wrongly concluded that his entitlement is only a meager amount of Rs. 4 lakhs and add. Therefore, he claims that this appeal has to be entertained, allowed and set aside by reversing the Arbitrator award and to grant the amount claimed by the appellant. He also contends that the work completion certificate has also been accepted by the Union of India, Railways Department. Therefore, they cannot have any objection to grant such an amount. 5. Having heard the arguments of the learned counsel for the appellant, this court expressed its doubt as to whether the application filed u/S. 34 read with Order 41, Rule 22 of CPC, is maintainable before the Trial Court or not. Even assuming that the said application is maintainable before the Trial Court, whether the averments made in the said application falls exactly under any one of the grounds contemplated under Section 34 of the Act. If either of one is not available to the appellant, then he is not entitled for any remedy before this court. As the Trial Court has entertained the application u/S. 34 of the Arbitration and Conciliation Act read with application under Order 41, Rule 22 of CPC, the next important aspect that the court has to look into whether any grounds are urged in the application filed u/S. 34 of the Act. For the purpose of easy understanding and convenience, the provision u/S. 34 of the Arbitration and Conciliation Act is reiterated below: "34. For the purpose of easy understanding and convenience, the provision u/S. 34 of the Arbitration and Conciliation Act is reiterated below: "34. An arbitral award may be set aside by the Court Only if- (a) party making 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 application not given proper notice of the appointment of the arbitrator or was otherwise unable to present his case; or (iv) the arbitral award deals with the 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 submission to Arbitration. (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: Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81." On careful perusal of the said provision, it clearly enumerates as to under what grounds, the application can be made for setting aside the Arbitral award. In comparison with the said provision u/S. 34 of the Arbitration and Conciliation Act, with that of the application filed u/S. 34 read with under Order 41, Rule 22 of CPC, nowhere in the said petition, the appellant has taken up any of the grounds as contemplated u/S.34 of the Act. It is only contended that the Arbitrator has not properly appreciated the materials on record and wrongly awarded a meager amount of Rs. 4 lakhs and add. Except saying that, it is not enumerated under which provision of Section 34 sub-clause (2), the arbitral award can be set aside by the court. It is only contended that the Arbitrator has not properly appreciated the materials on record and wrongly awarded a meager amount of Rs. 4 lakhs and add. Except saying that, it is not enumerated under which provision of Section 34 sub-clause (2), the arbitral award can be set aside by the court. Therefore, if none of the grounds under Section 34(2) of the Arbitration and Conciliation Act, is available to the petitioner, in my opinion, such filing of the application before the trial Court without urging any grounds u/S. 34 of the Act, itself is not maintainable, even assuming that such an application being entertained by the District Judge. 6. Under the above said facts and circumstances of the case without going to the merits or demerits of this particular case, in my opinion, the District court gets no jurisdiction to deal with the matter where the application is devoid of any grounds as contemplated u/S. 34(2) of the Arbitration and Conciliation Act, 7. Hence, in my opinion, the order passed by the learned District Judge in dismissing the said application holding that the said application is not maintainable though on some other ground, does not call for interference by this court. Consequently, the appeal is devoid of merit and the same is liable to be dismissed. 8. Accordingly dismissed.