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2023 DIGILAW 1041 (ALL)

Union Of India v. Presiding Officer, Commercial Court, Meerut

2023-04-17

MANOJ KUMAR GUPTA, PRASHANT KUMAR

body2023
JUDGMENT Prashant Kumar, J. Heard Sri Naveen Chandra Gupta for the appellants and Sri Vikash Bhatnagar for the claimant-respondent no. 3. 2. The instant appeal has been filed under section 37 of the Arbitration and Conciliation Act, 1996 (herein after for the sake of brevity has been referred to as "Arbitration Act"). 3. The issue in this appeal arises out of a contract entered between the parties for "maintenance and operation of sewage treatment plant" at Meerut. Certain disputes arose between the parties out of the contract. As per agreement, the sole Arbitrator was appointed by the appellants vide its letter dated 18.05.2012 who was their Chief Engineer of Bareilly Zone, Bareilly. Both the parties had filed their claims. On behalf of Respondent No. 3 (who was claimant), claims were made under the four heads, which were (a) amount payable towards work done but was not paid by the appellant, (b) reimbursement towards the damages, cost on account of non payment R.A.R.s and final bills, (c) claim of interest at the rate of 18% from the due date, till the actual date of payment and (d) cost of the arbitration. The appellants, however, also made the claim which were (a) recovery of amount for not carrying out certain works and for non deployment of entire work force, (b) cost for over drawn DHPP oil, (c) damages for non performances of contract, (d) cost of arbitration, (e) claim from the date of commencement of the contract, pendent lite and future interest at the rate of 18% . 4. After going through all the documents and records, and after considering all the evidence, the Arbitrator was pleased to pass an award, allowing the claims made by the respondent No. 3 and disallowing the claims made by the appellants. Vide Award dated 22.07.2013, the Arbitrator awarded, (i) Rs. 7,63,035/- towards the claim No. 1 which was payment towards the work done, this was not the entire amount which was claimed by the claimants, (ii) Rs. 1,18,240/- towards claim No. 2 which was payment against the damages suffered on account of non payment of RARs and final bills, (iii) towards the interest, the Arbitrator only awarded 12 % interest pendente lite and 18 % future interest till the date of payment, against the demand of 18% by the claimant and (iv) Rs. 73,500/- was granted towards the cost of arbitration. 5. 73,500/- was granted towards the cost of arbitration. 5. The appellants, challenged this award by filing application under section 34 of the Arbitration Act, before the District Court, Meerut. 6. After the enactment of Commercial Court Act, 2015, this case was transferred to Commercial Court, Meerut. 7. The Commercial Court, Meerut after hearing both the parties and perusing all the evidence on record has gone in detail and held that the award given by the Arbitrator was correct and justified. Each and every arguments of the appellants have been dealt with in detail, though the Commercial Court in the, proceedings under Section 34 was not obliged to go into the details and re-appreciate the documents and evidence. However, once again after re-appreciating the evidence on record, the Commercial Court could not find any reason to interfere with the award. Hence, the application filed under section 34 of the Arbitration Act was rejected vide its order dated 19.11.2022. This appeal emanates from this decision passed by the Commercial Court, Meerut. 8. Counsel for the appellants tried to take us on facts which has already been decided by the Arbitrator and affirmed by the Commercial Court. Since the scope of interference on fact is very limited in appeal under section 37 of the Arbitration Act. Hence, we are not inclined to re-appreciate the evidence in this appeal. 9. It was laid down that award passed by the Arbitral Tribunal are ordinarily not amenable to interference either under Sections 34 or Section 37 of the Act. The scope of interference is only where the finding of the tribunal is either contrary to the terms of the contract between the parties or ex facie, perverse, that interference by this Court, is absolutely necessary. The Arbitrator/Tribunal is the final arbiter on facts as well as in law, and even errors, factual or legal, which stop short of perversity, do not merit interference under sections 34 or 37 of the Arbitration Act. 10. The law is settled that, where the Arbitrator has assessed the material and evidence placed before him in detail, the court while considering the objections under Section 34 of the said Act does not sit as a court of appeal and is not expected to re-appreciate the entire evidence and reassess the case of the parties. 10. The law is settled that, where the Arbitrator has assessed the material and evidence placed before him in detail, the court while considering the objections under Section 34 of the said Act does not sit as a court of appeal and is not expected to re-appreciate the entire evidence and reassess the case of the parties. The jurisdiction under Section 34 is not appellate in nature and an award passed by an Arbitrator cannot be set aside on the ground that it was erroneous. It is not open to the Court to interfere with the award merely because in the opinion of the Court, another view is possible. The duty of the Court in these circumstances is to see whether the view taken by the Arbitrator is a plausible view on the fact, pleadings and evidence before the Arbitrator. 11. As laid down by the Supreme Court in McDermott International Inc. v. Burn Standard Co. Ltd. & Ors,( 2006) 11 SCC 181 the supervisory role of the Court in arbitration proceedings has been kept at a minimum level and this is because the parties to the agreement make a conscious decision to exclude the courts' jurisdiction by opting for arbitration as the parties prefer the expediency and finality offered by it. 12. In the matter of SSangyong Engineering and Construction Company Pvt. Ltd. v. NHAI, (2019) 15 SCC 131 , the Hon'ble Supreme Court has clarified that, under no circumstances, can any court interfere with an arbitral tribunal on the ground that justice has not been done in the opinion of the Court. This would amount to, entering into the merits of the dispute, which is contrary to the ethos of Section 34 of the Act, 1996. 13. In view of the aforesaid decision ratio laid down by Hon'ble Supreme Court, the law is well settled that interference under section 37 of the Arbitration Act is very narrow. However, in this case, the learned Commercial Court has already dealt with all the evidence on record and thereafter upheld the award passed by the Arbitrator. We see no reason to interfere with the order passed by the Commercial Court under section 34 of the Arbitration Act, hence the instant appeal filed under section 37 of the Arbitration Act is accordingly dismissed.