JUDGMENT : (Prayer in Arb.O.P.No.314 of 2021: Arbitration Original Petition has been filed under Section 34 (2) (b) (ii) & 2 A of the Arbitration and Conciliation Act, 1996, to set aside the Arbitration Award dated 19/10/2020 passed by the Arbitral Tribunal which has arisen out of the dispute between the petitioner and respondent and allow the petitioner’s claim petition. Arb.O.P.No.97 of 2021: Arbitration Original Petition has been filed under Section 34 (2) (b) (ii) & 2 A of the Arbitration and Conciliation Act, 1996, to set aside the impugned portion of the majority Arbitral Award dated 19/10/2020 rendered by the learned Tribunal whereby the petitioner was directed to pay a sum of Rs.10,00,000/- to the respondents as compensation for the investments made with interest @ 18% p.a., w.e.f the date of the award.) 1. Challenging the majority award passed by the arbitral Tribunal, while the petitioner/claimant has filed Arb.O.P.No.314 of 2021, challenging the said portion of the award in and by which the compensation of Rs.10 lakhs has been awarded, the respondent in Arb.O.P.No.314 of 2021 has filed Arb.O.P.No.97 of 2021. 2. Since both the Arbitration Original Petitions are arising out of the same award, this Court is inclined to dispose of both the Arb.O.Ps by way of a common order. 3. The brief facts leading to the filing of the O.Ps are as follows:- The petitioner and respondent had entered into a dealership agreement, on 14/2/2014, for a period of two years, for the dealership of NISSAN Brand Passenger Car, for the State of Maharashtra, West/Nagpur Region. On expiry of two years, fresh agreement was signed, on 14/2/2016, for an another period of two years, i.e., upto 31/3/2018. As per the respondent’s policy, the petitioner had to raise infrastructure (showroom, workshop etc.). The passenger car selling and servicing is a specialised business which requires technical skills with a hope that the dealership can be for a minimum period of 15-20 years. Accordingly, the petitioner had invested a huge amount of 10.5 crores on building. Though the agreement period is mentioned as two years, the dealership and the period mentioned in the dealership agreement was not followed by the parties. Suddenly in the year 2018, the respondent had started discontinuing the existing dealership. 4. Accordingly, the petitioner had invested a huge amount of 10.5 crores on building. Though the agreement period is mentioned as two years, the dealership and the period mentioned in the dealership agreement was not followed by the parties. Suddenly in the year 2018, the respondent had started discontinuing the existing dealership. 4. In view of the sudden discontinuation, the petitioner in Arb.O.P.No.314 of 2021 had suffered huge loss and hence raised the following claims:- S.No Heads Amount 1 Lying of spare parts and stocks 72,83,214/- 2 GST 4,48,304/- 3 Infrastructure 93,78,569/- 4 Computer peripherals 2,60,353/- 5 Installations of electrical and technical 9,15,168/- 6 Investment on Signage 11,81,904/- 7 Tools and Equipments 23,85,023/- 8 Furniture and Fixtures 6,58,882/- 9 Test drive vehicles 16,65,486/- 10 Training and Development of staff 5,34,573/- 11 Advertisement 40,46,373/- 12 Zero target in the months of October 2017, January to March 2018 4,73,000/- 13 Unsold vehicles 6,83,431/- 5. As per Clause 17.1 of the agreement, dated 14/2/2016, period of agreement shall continue till 31/3/2018. However, the petitioner in Arb.O.P.No.314 of 2021, received a letter, dated 15/2/2018, only on 14/3/2018, stating that the dealership will not be continued beyond the date of expiry of the agreement. According to him, the discontinuance of the dealership agreement is contrary to the terms of the agreement and the petitioner is entitled to the losses and damages suffered by them on account of the discontinuance. Therefore, as on 12/11/2018, respondent is liable to pay a sum of Rs.3,34,35,009/-, with interest, at the rate of 18% p.a. 6. It is stated by the petitioner in the rejoinder before the Arbitral Tribunal that the claims made by the petitioner are well established through the data available on the Dealer Management System was maintained and handled jointly by the parties. Initially, Letter of Intent was signed by the parties on 18/9/2012. Since, the inventory of stock and other accounts were maintained on the Dealer Management System controlled by the respondent, respondent is liable to take back all the unsold vehicles. 7. It is the case of the respondent that the agreement was entered between the parties for the period from 14/2/2016 to 31/3/2018. The term of two years is specifically recorded under Clause 17.1 of the agreement. 7. It is the case of the respondent that the agreement was entered between the parties for the period from 14/2/2016 to 31/3/2018. The term of two years is specifically recorded under Clause 17.1 of the agreement. There is no automatic renewal of the agreement and since the same was not terminated by the respondent, it has come to an end by the efflux of time by 31/3/2018. The respondent, vide letter, dated 14/3/2018, intimated the claimant, regarding the expiry of dealership. As per the terms of the agreement, the petitioner willfully agreed to provide, establish, maintain the infrastructures on their own expense and the respondent never agreed to share or reimburse the expenses. 8. On the basis of the pleadings, the learned Arbitrator has framed the following issues:- (i). Whether the petitioner has proved that the discontinuation of dealership by the respondent was arbitrary and unreasonable in terms of the Letter of Intent and agreement between parties? (ii). Is the petitioner entitled to compensation for alleged discontinuation of Dealership Agreement by respondent? If so, to what extent? (iii). Did the claimant make huge investments by way of showroom and workshop on account of dealership agreement with the respondent? (iv). Whether the claimant has proved that the respondent is under an obligation to take back the unsold vehicles, unsold spares and service tools or reimburse the amount on that account to the claimant? (v). Whether the agreement dated 14/2/2016 was terminated or the same expired by efflux of time on 31/3/2018? (vi). Whether the claims are barred by limitation? (vii). Has the claimant proved that it suffered damages as claimed in para 15 of the claim statement? (viii). To what reliefs are the parties entitled? 9. After considering the various clauses and contract, the learned Tribunal had passed an award in favour of the petitioner, for a sum of Rs.10 lakhs, with interest from the date of the award till the date of payment at 18% p.a. Claims raised by the respondent were negatived. 10. Heard Mrs.Abitha Banu for Mr. A.Damodaran, learned counsel for the petitioner and M/s. M.Velmurugan, Piyush Sharma and Shivam Chanana for the respondent in Arb.O.P.No.314 of 2021. 11. 10. Heard Mrs.Abitha Banu for Mr. A.Damodaran, learned counsel for the petitioner and M/s. M.Velmurugan, Piyush Sharma and Shivam Chanana for the respondent in Arb.O.P.No.314 of 2021. 11. It is the contention of the learned counsel appearing for the petitioner that the majority arbitral tribunal having found that there is no evidence available on record to prove the damages, allowing the compensation of Rs.10 lakhs, that too merely under assumption is not sustainable in the eye of law. It is his further contention that such compensation awarded by the majority tribunal on equity cannot be sustained under law. 12. As per the contract, there is no obligation on the respondent either to reimburse the investment as the land and infrastructure are the assets of the dealer or to reimburse any loss of rent. Hence submitted that without any evidence, awarding compensation of Rs.10 lakhs on equity, which goes to the root of the matter is nothing but perverse finding. 13. Learned counsel appearing for Nissan Motor India Private Limited, has relied on the following judgments:- (i). The National Project Director, National Highways No.45 E and 220, National Highways Authority of India Vs. M Hakeem & Another {SLP (Civil) No.13020 of 2020} (ii). Oil and Natural Gas Corporation Ltd Vs. Saw Pipes Ltd (2003) 5 Supreme Court Cases 705 (iii). Nabha Power Limited (NPL) Vs. Punjab State Power Corporation Limited (PSPCL) and Another (2018) 11 Supreme Court Cases 508 (iv). Dyna Technologies Pvt Ltd Vs. Crompton Greaves Ltd (2019) 20 SCC - 1 (v). R.S.Jiwani, Mumbai Vs. IRCON International Ltd., Mumbai 2010 (1) Mh.L.J (vi). Manilal Ramjibhai Chaudhary Vs. State of Gujarat through Executive Director, Gujarat Minerals and Another (2013 SCC Online Guj 2213). 14. Whereas the learned counsel appearing for the respondent submitted that the minority award was passed, after considering the entire aspect and awarded compensation on various heads. Hence, it is her contention that the Court can take into consideration of the minority award and allow the Arbitration Original Petition No.314 of 2021 by confirming the award passed by the minority award, considering the fact that the dealership agreement was discontinued. 15. To substantiate her case, learned counsel appearing for the petitioner, in Arb.O.P.No.314 of 2021, relied upon the judgment of DAKSHIN HARYANA BIJI VITRAN NIGAM LTD Vs. NAVIGANT TECHNOLOGIES PVT LTD (2021 SCC Online SC 157). 16. 15. To substantiate her case, learned counsel appearing for the petitioner, in Arb.O.P.No.314 of 2021, relied upon the judgment of DAKSHIN HARYANA BIJI VITRAN NIGAM LTD Vs. NAVIGANT TECHNOLOGIES PVT LTD (2021 SCC Online SC 157). 16. Heard the arguments advanced on either side and perused the entire materials available on record. 17. The entire dispute is with regard to the expiry of the dealership agreement. Though it is the contention of the learned counsel for the petitioner that the dealership is meant for a minimum period of 15 –20 years, they had invested Rs.10.50 crores on building. A perusal of Clause 5.1 of the Dealership Agreement deals with Location and Facilities, wherein it is specified that dealer shall provide at the dealership location approved by NMIPL in accordance with Section 5.2 of the condition. The entire Clause makes it very clear that the investment particularly the show room and building should be as per the specifications of the respondent. The business was commenced as per Letter of Intent, dated 12/7/2013, which followed by the agreement, dated 14/2/2014, for a period of two years. Thereafter, on 14/2/2016, agreement was signed by the claimant for an another period of two years, i.e., upto 31/3/2018. 18. Vide, letter, dated 15/2/2018, the respondent intimated the petitioner that the Dealership Agreement would lapse on 31/3/2008 and there will not be any renewal further. The learned Arbitrator, considering the various correspondences found that the dealership has not been cancelled rather it is only expired has not been renewed after a specific period. 19. Clause 18 of the contract makes it very clear that upon termination of the agreement either by respondent or dealer for any reason, or expiration of the agreement, the dealer shall cease to be an Authorised Dealer and Dealer shall immediately discontinue the distribution and sale of products as an authorised dealer. The majority member of the Arbitral Tribunal, considered the various Clauses in the agreement and found that there is no deemed provision or extension of dealership agreement between the parties and neither of the parties have filed any communication between the parties, immediately prior to 31/3/2018 to the effect that whether the petitioner is willing to continue the dealership or to whether the respondent reminding the dealer to express his willingness to renew the agreement. However, by letter, dated 15/2/2018, the respondent has intimated to the petitioner that the Company would not be renewing the agreement which is going to expire on 31/3/2018 and finally found that there is no evidence available on record to show that a sum of Rs.10.5 crores has been invested in a building by way of infrastructure, workshop etc. 20. Though the learned Arbitrator has found that Clause 5 of the agreement clearly state that the Dealership facilities shall be satisfactory in space, appearance and layout and the dealer has to maintain these items at his own expense and held that petitioner is not entitled to claim any compensation. However, observed that the money spent on the repair works which are meant to attract customers and such buildings may not be useful for other purposes, awarded Rs.10 lakhs, as compensation. To record such a finding there is no evidence on record to show that the building was built in such a manner which are unfit to be used for any other purpose. In the absence of any evidence on record such finding that building will not be useful for any other purpose and awarding compensation at the rate of Rs. 10 lakhs on mere opinion of the Tribunal without any evidence is nothing but perversity. Therefore, merely on the basis of some equity such compensation ought not to have been awarded by the Tribunal, unless the parties have expressly authorised the Tribunal to decide the issue on equity. Awarding such compensation on equity is violation of Sub clause 2 of Section 28 of the Arbitration and Conciliation Act, and the same reads as under:- The arbitral tribunal shall decide ex aequo et bono or as amicable compositeur only if the parties have expressly authorised it to do so. 21. Further, the Tribunal has passed such an award without any evidence or any relevant materials, on the side of claimant, even though sufficient opportunities were given, such compensation was passed merely on the assumption that building may not be useful for any other purpose, such finding is nothing but perversity which goes to the root of matter and falls within the ambit of Section 34 of the Act. 22. In Ssangyong Engineering and Construction Co. 22. In Ssangyong Engineering and Construction Co. Ltd., v. National Highways Authority of India (NHAI) [ (2019)5 MLJ 7 (SC)] in paras 24 and 30 the Honourable Supreme Court has held as follows: 24. It is important to notice that the ground for interference insofar as it concerns “interest of India” has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. This again would be in line with paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground. 1. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (supra), while no longer being a ground for challenge under “public policy of India”, would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse. 23. Having regard to the above judgment and a settled position when the award was passed merely on the basis of some assumption is nothing but perverse and the same is liable to be set aside. Since the particular award can be severable, the Court can set aside the portion of the award. The Hon’ble Apex Court in DYNA TECHNOLOGIES PRIVATE LIMITED Vs. CROMPTON GREAVES LIMITED {(2019) 20 Supreme Court Cases 1}, has held that requirements of a reasoned order are that the reasons should be proper intelligible and adequate and the Court, while exercising jurisdiction under Section 34 of the Act has to adjudicate the validity of an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. In view of the above settled position, the majority award passed by the learned Arbitral Tribunal awarding compensation of Rs.10 lakhs alone is set aside. 24. As far as the minority award is concerned, it is held that before taking the decision to discontinue the dealership, the respondent neither took the consent of the petitioner nor estimated the financial impact of the discontinuation of the claimant. The learned Arbitrator not even took note of the contractual terms agreed upon between the parties. Merely because the contract was not renewed, it cannot be said that such discontinuation ought not to have been done. Therefore, this Court is of the view that minority award is against the very contractual terms and beyond the Terms of Contract. 25. Be that as it may. The very finding of the majority arbitral tribunal, on appreciation of all the evidence show that there was no evidence of huge investment of more than Rs.10.5 crores. In such a view of the matter, this Court, as discussed above, the majority award, awarding Rs.10 lakhs, is liable to be set aside. 26. In the result, O.P.No.97 of 2021 is allowed and 314 of 2021 is dismissed.