Union Of India Represented By Executive Engineer Bangalore Central Division Iii Central Public Works Department v. Warsaw Engineers No. 3/89
2021-04-17
ABHAY S.OKA, SURAJ GOVINDARAJ
body2021
DigiLaw.ai
JUDGMENT : On the last date, we have heard the submissions of the learned counsel appearing for the appellant and the learned counsel for the respondents. 2. By this appeal preferred under sub-section (1A) of Section 13 of the Commercial Courts Act, 2015 (for short, "the Commercial Courts Act"), the appellant has taken an exception to the judgment and order dated 25th September 2020 passed by a learned Judge of the Commercial Court at Bengaluru. By the said judgment and order, a petition filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the said Act of 1996") has been dismissed. 3. The challenge in the petition under Section 34 of the said Act of 1996 was to the award dated 1st February 2016 made by the learned Sole Arbitrator. The arbitration clause was incorporated in the agreement dated 22nd August 2007 concerning construction of Aircraft hanger and associated facilities at Belur Campus, Bengaluru consisting of various works. The dispute was as regards the amount payable to the respondents for the work carried out. The dispute was referred to the learned Arbitrator. 4. The learned Arbitrator granted the claims made by the respondents partially. The award was made in the sum of Rs.1,07,05,858/-along with the interest at the rate of 10% per annum payable by the appellant. 5. Various submissions have been canvassed by the learned counsel for the appellant in support of the appeal. One of the main contentions raised is that the grounds which are urged by the appellant in support of the petition under Section 34 of the said Act of 1996 have not been specifically dealt with by the learned Judge of the Commercial Court. The other submission is that the reasons have not been recorded for rejecting the challenge made by the appellant. 6. The learned counsel for the respondents supported the impugned judgment and order. He submitted that, in fact, no ground of challenge which is covered by Section 34 of the said Act of 1996 was made out and there is nothing wrong with the ultimate conclusion drawn by the learned Judge of the Commercial Court.
6. The learned counsel for the respondents supported the impugned judgment and order. He submitted that, in fact, no ground of challenge which is covered by Section 34 of the said Act of 1996 was made out and there is nothing wrong with the ultimate conclusion drawn by the learned Judge of the Commercial Court. He would submit that considering the limited scope of interference under Section 34 of the said Act of 1996, no fault can be found with the ultimate conclusion drawn by the learned Judge of the Commercial Court that there is no ground to interfere with the award. 7. We have given careful consideration to the submissions. As far as the scope of interference in a petition under Section 34 of the said Act of 1996 is concerned, the law is well settled. As far as the approach and scope of interference is concerned, we may make a reference to the decision of the Apex Court in the case of DYNA TECHNOLOGIES PRIVATE LIMITED vs. CROMPTION GREAVES LIMITED, (2019) 20 SCC 1 . In paragraphs 24 and 25, the Apex Court held thus: "24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 25. Moreover, umpteen number of judgments of this Court have categorically held that the Courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists.
25. Moreover, umpteen number of judgments of this Court have categorically held that the Courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act." (underline supplied) 8. The grounds on which an interference can be made with the arbitral award by invoking Section 34 of the said Act of 1996 have been provided in sub-section (2) of Section 34 itself. As can be seen from the Scheme of Section 34 of the said Act of 1996 and the object of enacting the said Act of 1996, the scope of interference in a petition under Section 34 is limited only on the grounds provided in sub-section (2) of Section 34 of the said Act of 1996. One more ground is provided in sub-section (2A) of Section 34 of the said Act of 1996 added with effect from 23rd October 2015. While considering the peculiar nature of the impugned judgment and order in this case, for the reasons which we are recording, it is not necessary for us to go into the specific grounds of challenge urged by the appellant. 9. We have carefully perused the impugned judgment. Paragraphs 1 to 8 contain the narration of facts. Paragraph 9 contains the point for consideration framed by the learned Judge and paragraph 10 contains the answer. A perusal of paragraphs 11 to 15 of the Judgment shows that the same contain reproduction of the facts including the details of the claims made by the respondents. 10. Paragraph 17 refers to some contentions raised by the learned counsel for the appellant. Paragraph 17 thereafter refers to two decisions of the Apex Court. Without adverting to the ratio of the said two decisions, the learned Judge of the Commercial Court has simply observed that the principles laid down in the said decisions are distinguishable and not applicable to the facts of the case.
Paragraph 17 thereafter refers to two decisions of the Apex Court. Without adverting to the ratio of the said two decisions, the learned Judge of the Commercial Court has simply observed that the principles laid down in the said decisions are distinguishable and not applicable to the facts of the case. In paragraph 18, in a cryptic manner, the learned Judge has recorded a finding that the appellant has not made out a cogent case that the arbitral award is opposed to public policy and the arbitrator has exceeded his limits in passing such an award. 11. In view of Section (1A) of Section 13 of the Commercial Court Act, an appeal lies to this Court against the judgment and order passed on a petition under Section 34 of the said Act of 1996. It is true that though for procedural reasons, even a petition under Section 34 of the said Act of 1996 is numbered as a suit and the petitioner and the respondent therein are described as the plaintiff and the defendant, the adjudication to be made in a petition under Section 34 of the said Act of 1996 is completely different from that of a suit. 12. We have also referred to the decision of the Apex Court which holds that the scope of interference is confined to specific grounds which are available under Section 34 of the said Act of 1996. It is also well settled that the Court should not interfere with an award merely because another view on facts and interpretation of contract exists. When a Judge dealing with the petition under Section 34 of the said Act of 1996 hears the petition on merits, firstly, he must advert to the grounds agitated at the time of hearing in support of the petition under Section 34 of the said Act of 1996. He has to examine whether the grounds urged are available under sub-section (2) and sub-section (2A) of Section 34 of the said Act of 1996. If the grounds pleaded are available under Section 34 of the said Act of 1996, the next step will be to consider each and every ground pressed into service on merits and to come to conclusion whether the grounds have been established. 13.
If the grounds pleaded are available under Section 34 of the said Act of 1996, the next step will be to consider each and every ground pressed into service on merits and to come to conclusion whether the grounds have been established. 13. Therefore, it is necessary for a Judicial Officer dealing with the petition under Section 34 of the said Act of 1996 to precisely record the submissions made by the counsel for the petitioner in support of the petition under Section 34 of the said Act of 1996. It is also necessary to precisely record the submissions made by way of reply to the specific grounds pleaded by the petitioner. It is not necessary to make verbatim reproduction of oral or written submissions. The gist of every ground agitated and reply to it by the rival party needs to be incorporated. This helps the Judges to deal with every ground urged. 14. Thereafter, each and every ground will have to be separately considered. It is necessary for the Judicial Officer to firstly consider whether the ground agitated is covered by any of the grounds set out under Section 34 of the said Act of 1996. If according to the learned Judge the ground agitated is not available for challenge in accordance with Section 34 of the said Act of 1996, the Judicial Officer will have to record the reasons for the said conclusion. If he is of the view that the ground agitated is available under Section 34 of the said Act of 1996, he will have to consider whether the said ground is established and record reasons in that behalf. 15. Now coming to the issue of decisions relied upon by the parties, it is not necessary for the Judicial Officer to quote the relevant parts of the said decisions. What is more important is that the judgment should show that the Judicial Officer has adverted to the ratio of the judgment. Only after adverting the ratio of the judgment, the Judicial Officer can come to a conclusion whether the same can be applied to the facts of the case before him. 16.
What is more important is that the judgment should show that the Judicial Officer has adverted to the ratio of the judgment. Only after adverting the ratio of the judgment, the Judicial Officer can come to a conclusion whether the same can be applied to the facts of the case before him. 16. Thus, while dealing with the petition under Section 34 of the said Act of 1996, for arriving at a correct conclusion, the Judicial Officer, as stated earlier, must precisely record the submissions canvassed in support of the petition and the submissions canvassed for opposing the petition. It is not necessary to reproduce the submissions verbatim. The substance of the grounds urged must be briefly recorded. As a remedy of an appeal is available against the judgment and order in a petition under Section 34 of the said Act of 1996, recording of the submissions made across the Bar helps the Appellate Court to decide the appeal properly. If the submissions are not properly recorded, it gives a scope to an argument that a particular submission was made before the concerned Court but the same has not been considered. If such submissions are made, as per the settled law, the Appellate Court has to relegate the aggrieved party to the same Court for making an appropriate application as the Appellate Court cannot decide what transpired before the Court which has passed the impugned order. 17. In the present case, we find that the submissions made in support of the petition under Section 34 of the said Act of 1996 are not properly recorded. There is a cursory reference to only one or two submissions in paragraph 17 of the judgment. 18. As stated earlier, the jurisdiction under Section 34 of the said Act of 1996 is not an appellate jurisdiction. The exercise of jurisdiction is confined to the grounds set out in Section 34 of the said Act of 1996. 19. In the facts of the case, we find that after having gone through the impugned judgment and order, it is very difficult for us to know what were the precise submissions made in support of the petition and for opposing the petition. As the submissions are not properly recorded, the learned Judge has dealt with the issue in a very cryptic manner. 20.
As the submissions are not properly recorded, the learned Judge has dealt with the issue in a very cryptic manner. 20. Thus, the impugned judgment and order will have to be set aside only on the aforesaid grounds. We are conscious of the fact that normally, the Appellate Court should be slow in passing orders of remand. In this case, there is non-consideration of the grounds pleaded in support of the petition under Section 34 of the said Act of 1996. If the Appellate Court for the first time goes into the grounds urged and gives its own findings, perhaps one of the parties will be deprived of a right of statutory appeal provided in Section 13 of the Commercial Courts Act. Therefore, we have no option but to remit the case for a fresh decision of the Commercial Court. 21. Hence, we pass the following order: (i) The impugned judgment and order dated 25th September 2020 in Com A.S No.71 of 2016 is hereby quashed and set aside and the said proceeding is remanded to the same Court; (ii) We direct the appellant and respondents to appear before the said Court on 26th May 2021 for fixing the date for hearing; (iii) We make it clear that the Commercial Court will be under no obligation to issue notice of the date fixed to the authorities; (iv) Considering the fact that the petition is of the year 2016, we are sure that the learned Judge of the Commercial Court will give necessary out of turn priority to the disposal of the petition; (v) The appeal is partly allowed on the above terms; (vi) There is no order as to costs; (vii) The pending interlocutory application does not survives for consideration and stands disposed off.