Research › Search › Judgment

Uttarakhand High Court · body

2018 DIGILAW 416 (UTT)

CHIEF ENGINEER NORTH ZONE II v. RAPTI CONTRACTOR

2018-08-07

SUDHANSHU DHULIA

body2018
JUDGMENT : SUDHANSHU DHULIA, J. 1. This is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 by the appellants. Pursuant to the contract entered between the appellants and the opposite party on 31.03.2001 for construction of a road, respondent constructed the road at Mussoorie, District Dehradun. Thereafter, a dispute arose between the parties and since there was an arbitration clause, ultimately the opposite party was constrained to move an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator before this Court. Initially, the arbitrator appointed by this Court was Sri Ashok A. Desai who is the former Chief Justice of this Court and subsequently after his demise, this Court appointed Sri Krishna Kumar, who is the former High Court Judge of Allahabad High Court as an arbitrator vide order dated 03.03.2006. The learned Arbitrator gave the award on 01.10.2007 in favour of the respondent. The entire claim of the respondent was for Rupees One Crore odd under the various heads, out of which, the respondent was given the claim of Rupees Sixty Three Lakh odd. Against the order dated 01.10.2007, an application was moved by the appellants before the principal civil court at Dehradun for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. 2. Section 34 of the Arbitration and Conciliation Act, 1996 provides only limited interference of the court to set aside an award. Section 34 of the Arbitration and Conciliation Act, 1996 reads as under:- "34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). Section 34 of the Arbitration and Conciliation Act, 1996 reads as under:- "34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (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 of 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 decisions on matters submitted to arbitration 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 in 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. (2A) 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. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under subsection (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds fro setting aside the arbitral award. (5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party." 3. After hearing the submissions of the parties, the learned District Judge came to the conclusion that none of the grounds, as mentioned in section 34 of the Arbitration and Conciliation Act, 1996 have been made out by the petitioner to set aside the impugned award. After hearing the submissions of the parties, the learned District Judge came to the conclusion that none of the grounds, as mentioned in section 34 of the Arbitration and Conciliation Act, 1996 have been made out by the petitioner to set aside the impugned award. All the grounds agitated by the petitioner, in fact appear to be grounds warranting re-appreciation of material submitted before and relied upon by the learned Arbitrator. The court below has held that it is not empowered to re-examine the evidence or interfere in the findings of facts arrived at by the learned Arbitrator and has dismissed the application of the appellants. Hence, the present appeal before this Court. 4. This matter is pending before this Court since 2012 in which stay was granted by this Court on 09.07.2012 and thereafter on 05.03.2013, this Court directed that the amount of award be deposited in a fixed deposit with some nationalised bank so that it may earn interest meanwhile. 5. Heard learned counsel for the parties. 6. All this Court has to see is whether the principal civil court has rightly exercised its jurisdiction vested under Section 34 of the Arbitration and Conciliation Act, 1996 while deciding the application for setting aside the award. 7. As already stated above, Section 34 of the Arbitration and Conciliation Act, 1996 gives very limited grounds for interference in the matter, such as, those already been referred above in Section 34 of the Arbitration and Conciliation Act, 1996. The application for setting aside the award was not filed on any of the grounds given under Section 34 of the Arbitration and Conciliation Act, 1996, which is an admitted fact. The only ground is that the amount given to the respondent is in excess! Merely by making a bald statement that the amount itself is in excess does not give the appellants the ground for setting aside the award as for setting aside the award, a plea must be there within the confines of Section 34 of the Arbitration and Conciliation Act, 1996, where either a party is under some incapacity or arbitration agreement is not valid or proper notice and procedure has not been adopted by the Arbitrator, etc. The award can also be set aside if it is in conflict with the public policy of India or if there is an error apparent on the face of record. The award can also be set aside if it is in conflict with the public policy of India or if there is an error apparent on the face of record. But these were not the grounds taken in the application under Section 34 of the Arbitration and Conciliation Act, 1996. 8. None of these grounds in fact are available to the appellants. Consequently, the appeal fails and it is hereby dismissed. Interim order dated 09.07.2012 stands vacated. Let the lower court record be sent back. 9. By the orders of this Court, the award amount is deposited before this Court. Let the amount, along with interest be forwarded to the court below i.e. Trial Court. Let the award be executed in accordance with law.