Namita Paul v. Oil And Natural Gas Corporation Ltd.
2022-06-22
INDRAJIT MAHANTY, S.G.CHATTOPADHYAY
body2022
DigiLaw.ai
JUDGMENT S.G. Chattopadhyay, J. - The present Appeal under Section 37 of The Arbitration and Conciliation Act, 1996 ('the Arbitration Act' hereunder) arises from the judgment and order dated 04.01.2021 passed by the District Judge, West Tripura, Agartala in case No. Civil. Misc. (Arbitration) 17 of 2018 whereby the learned District Judge in an application filed under Section 34 of the Arbitration Act set aside the arbitral award dated 28.07.2018 passed by the sole Arbitrator in the arbitral proceedings arising out of contract No.9010011736 dated 29.03.2010 between Smt. Namita Pal, claimant appellant and Oil and Natural Gas Corporation Ltd. (ONGC)-respondent. 2. Pursuant to the written agreement between the parties, ONGC hired 4 buses from the appellant for the period from December 2009 to June 2013. When the bills were submitted by the appellant for payment of her dues, a huge amount was deducted by ONGC from those bills arbitrarily without offering any opportunity of hearing to the appellant. As a result, a dispute cropped up between the parties with regard to payment of hiring charges to the appellant. A reference was made in terms of clause 28 of agreement No. 9010011736 dated 29.03.2010 for arbitration. Accordingly, the sole Arbitrator was appointed on 24.06.2016 and the dispute between the parties was referred to the sole arbitrator for adjudication. 3. Husband of the appellant namely Swapan Kumar Paul who was also a registered contractor entered into four different agreements with ONGC and rented different types of vehicles to ONGC under those agreements. After Sri Paul submitted the bills claiming hiring charges, ONGC made similar deductions from his bills mostly by reducing the Kilometers run by those vehicles. As a result, dispute also arose between Swapan Kumar Paul and ONGC arising out of contract No. 9010014028 dated 16.03.2011, 9010014069 dated 22.03.2011, 9010016874 dated 07.12.2012 and 9010018962 dated 18.12.2013. 4. A reference was also made for adjudication of the disputes arising out of the aforesaid 04 contracts executed between ONGC and said Swapan Kumar Paul. Since the facts and circumstances of all the 5 disputes were identical and parties were also same, the sole Arbitrator with the consent of the parties disposed the matters by a common award dated 28.07.2018 which reads as under: 'AWARD(S) In view of the foregoing discussions, the instant five arbitral proceedings succeed and the claims of the Claimants in all the five matters are allowed in full.
The Respondent-ONGC shall pay the Claimants: (i) The sum of Rs.6,87,563.09 in Matter No.1, arising out of Contract No.9010014028 dated 16/03/2011 (ii) The sum of Rs.26,72,500/- only in Matter No.2, arising out of Contract No.9010014069 dated 22/03/2011 (iii) The sum of Rs.7,66,357.30 only in Matter No.3, arising out of Contract No.9010016874 dated 7/12/2012; (iv) The sum of Rs.2,63,822.07 only in the Matter No.4, arising out of Contract No.9010018962 dated 18/12/2013; and (v) The sum of Rs.8,52,406.86 only in Matter No.5, arising out of contract No.9010011736 dated 29/03/2010. The Respondent shall also pay the Claimants interest on the amounts so awarded in the aforesaid five matters at the rate of 12% per annum from 14.03.2016 till this date, in the facts and circumstances contended by the latter. The sums so directed to be paid by these arbitral awards in all these five matters shall also carry interest @18% p.a from this date to the date of payment. For the reasons amply and appallingly indicated above, the Claimants shall also get costs of these proceedings in all five matters. Since no statement/account had been submitted on behalf of the Claimants regarding the expenses incurred by them in respect of the instant proceedings, the Claimants shall get lumpsum cost of Rs.1.5 Lac in each of the instant five matters for the expenses incurred by them towards Arbitrator's fees, travelling expenses and accommodation charges etc. Advocate's fees, Legal and Miscellaneous expenses, which seems to me to be reasonable, fair and modest for the parties concerned. The Awards have been transcribed on stamp papers worth Rs.100/- only in the five matters. The parties shall be at liberty to get the exact value of the stamp papers assessed by the Collector of Stamps, and pay the same before the Awards are sought to be enforced, if so required. It is placed on record that no original document has been filed by any of the parties in these arbitral proceedings. Since the Arbitral Tribunal is not a court of records, the parties are directed to take back their pleadings and documents etc. filed before it, on condition to produce the same before any competent forum/court, as and when required, in the absence of any provision for preservation of the same.
Since the Arbitral Tribunal is not a court of records, the parties are directed to take back their pleadings and documents etc. filed before it, on condition to produce the same before any competent forum/court, as and when required, in the absence of any provision for preservation of the same. The Arbitral Awards having thus been made, all the five arbitral proceedings shall stand terminated under Section 32(1) of the Arbitration and Conciliation Act, 1996, as amended by the Amendment Act of 2015(3 of 2016)' 5. ONGC filed separate applications under Section 34 of the Arbitration Act challenging the said composite arbitral award dated 28.07.2018 before the District Judge, West Tripura, Agartala. Application arising out of contract No. 9010011736 dated 29/03/2010 between ONGC and Smt. Namita Paul was registered as Civil Misc. (Arbitration) No.17 of 2018 which was disposed of by the District Judge, West Tripura by judgment delivered on 04.01.2021. 6. Application filed by ONGC under Section 34 of the Arbitration Act from the common arbitral award in respect of the other 04 contracts between ONGC and Swapan Kumar Paul was registered before the learned District Judge as Civil Misc.(Arbitration) 18 of 2018 which was disposed of by the learned District Judge by judgment delivered on 28.06.2019. 7. While deciding the application filed by ONGC against Smt. Namita Paul in Civil. Misc.(Arbitration)17 of 2018, learned District Judge held that the sole Arbitrator should not have tagged the case of the present appellant with the cases of her husband namely Swapan Kumar Paul. Relying on the decision of the Apex Court in the case of Navodaya Mass Entertainment Ltd. v. J.M.Combines reported in MANU SC 1225 of 2015, learned district judge held that the Arbitrator erroneously merged the case of the present appellant with those of her husband. The District Judge was of the view that on this ground alone, the arbitral award was required to be interfered with. The relevant extract of the judgment passed by the learned District Judge is as under: '10) This Court has already held that the case of the present O.P. ought not to have been tagged with the cases of her husband and as such Ld.
The relevant extract of the judgment passed by the learned District Judge is as under: '10) This Court has already held that the case of the present O.P. ought not to have been tagged with the cases of her husband and as such Ld. Arbitrator committed illegality in merging her cases with the cases of her husband which is an error apparent on the face of the record, and as per law laid down in Navodaya Mass Entertainment Ltd. (supra), this Court can interfere with the award under section 34 of the Act only on said ground. Moreso, as discussed above, there was no discussion made by Ld. Arbitrator in respect of one clause of agreement regarding reduction of bill for off days . In view of above discussions, there is no alternative but to remand the matter to the Ld. Arbitrator for fresh decision of the dispute of present O.P. separately and independently. When the matter is already decided to be remanded back, no decision is given on the points of reduction of kilometer run, limitation, interest etc. The parties may raise their such issues before the Ld. Arbitrator within the permissibility of legal contour. O R D E R In view of above discussions, the impugned award dated 28.07.2018 passed by the Sole Arbitrator, so far it relates to O.P., Smti Namita Paul in respect of contract no. 9010011736 dated 29.03.2010, is set aside and matter is remanded to the Ld. Arbitrator for fresh decision of the connected disputes between the parties. 8. Appellant Namita Paul has challenged the said judgment of the learned district judge by filing this appeal under Section 37 of the Arbitration Act mainly on the following grounds: (i) The District Judge has interfered with the arbitral award in a casual and cavalier manner without coming to a conclusion that said award was perverse and illegal. (ii) Learned District Judge has failed to appreciate the fact that Section 34 of the Arbitration Act is different in its approach and the jurisdiction provided under Section 34 cannot be equated with normal appellate jurisdiction. (iii) Learned District Judge did not also appreciate the fact that commercial wisdom behind the legislation would be defeated if the arbitral award is interfered with only on factual grounds.
(iii) Learned District Judge did not also appreciate the fact that commercial wisdom behind the legislation would be defeated if the arbitral award is interfered with only on factual grounds. (iv) It was not appreciated by the learned District Judge that the Sole Arbitrator heard and adjudicated all the 5 disputes together by a common judgment with the consent of the parties. 9. Heard Mr.Somik Deb, learned Sr.Advocate appearing along with Mr.K.Pandey, advocate for the appellant. Heard Mr.D.K.Biswas, learned Sr.Advocate appearing along with Mr.G.K.Nama, advocate for the respondent. 10. Learned counsel appearing for the appellant submits that no interference is called for with the arbitral award because admittedly with the consent of the parties disputes arising from 5 different contracts were decided by a common arbitral award. Learned counsel contends that an arbitral award may be set aside in the event the arbitral proceeding was not in accordance with the agreement between the parties. Learned counsel argues that in the instant case the arbitration proceedings were conducted in accordance with law and in terms of the agreement between the parties and therefore, there is no wrong with the arbitral procedure adopted by the sole arbitrator in adjudicating the disputes. Learned counsel further contends that already a considerable period of time has been consumed in adjudicating the disputes between the parties by the Arbitrator and for disposing the application filed by the respondent corporation under Section 34 of the Arbitration Act. Learned counsel urges the court to take into consideration all these aspects and most particularly the object of the arbitration law for deciding the appeal. 11. Mr.D.K.Biswas learned Sr. Advocate appearing for ONGC supports the impugned judgment passed by learned District Judge and contends that the sole question which falls for consideration before this court is whether 5 references under 5 different contracts can be disposed of by the Arbitrator by a common award. Counsel contends that the Arbitrator has no authority to consolidate the disputes arising from 5 different contracts for adjudication by a common arbitral award. Counsel contends that the Arbitrator derives his authority from the arbitration clause only in the relevant contract under which he is appointed.
Counsel contends that the Arbitrator has no authority to consolidate the disputes arising from 5 different contracts for adjudication by a common arbitral award. Counsel contends that the Arbitrator derives his authority from the arbitration clause only in the relevant contract under which he is appointed. If the contract executed between the parties to the lis does not authorize him by specific terms to decide several disputes arising from different contracts by a common arbitral award, he cannot do so even if the parties consent to do. According to the counsel of the respondent an Arbitrator has ho inherent power to dispose several claims by a common award for the convenience either of himself or of the parties unless the agreement support it. 12. Counsel, therefore, urged the court to uphold the judgment of the District Judge whereby the learned District Judge remanded the matter back to the Sole Arbitrator for fresh adjudication. 13. We have considered the submissions made by the counsel representing the parties and perused the entire facts and circumstances of the case. Section 34 of the Arbitration Act deals with the application for setting aside arbitral award. Under sub-section (2) of Section 34, the grounds on which arbitral award may be set aside have been provided which are 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).
Under sub-section (2) of Section 34, the grounds on which arbitral award may be set aside have been provided which are 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.
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. (2-A) 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.' 14. Admittedly the appellant had executed a separate contract with the respondent having an independent existence with separate arbitration clause. It would emerge from the minutes of the proceedings dated 19.11.2016 held by the arbitrator that the learned Arbitrator held analogous hearing of the 5 arbitration matters for the following reasons: 'Proceedings The above noted 5 (five) arbitration matters between almost the same parties, arising out of almost similar disputes and differences between them, are taken up for analogous hearing for reasons of convenience and for avoiding avoidable wastage of time until further orders and so long not inconvenient to do so, as agreed upon by the Ld. Advocates for both the parties. The orders passed and direction (s) issued herein shall govern all the five matters ................................................................................................' 15. Even though the contract executed between the appellant and ONGC was akin to 04 contracts executed between her husband Swapan Kumar Paul and ONGC but the nature of the dispute which arose between the present appellant and ONGC was different for which the arbitrator framed separate issues for determination of the dispute arising between the appellant and ONGC. Amount of claim involved in the dispute between the appellant and ONGC was also different. Set of her evidence was also different. Situated thus, the Sole Arbitrator should have appreciated the evidence led in her case separately to determine the issues framed in her case. Merger of her case with those of her husband arising out of separate contracts is patently illegal and erroneous. As a result, we do not find any reason to interfere with the impugned judgment passed by the learned District Judge. 16. Resultantly, the appeal stands dismissed. Pending application(s), if any, shall also stand disposed of. Send down the LCR.