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2024 DIGILAW 725 (GAU)

GSR Ventures Pvt. Ltd. v. State of Mizoram

2024-05-21

MICHAEL ZOTHANKHUMA

body2024
JUDGMENT : MICHAEL ZOTHANKHUMA, J. 1. Heard Ms. S. Bhattacharjee, learned counsel for the appellant. Also heard Mrs. Mary L. Khiangte, learned Government Advocate, appearing for all the respondents. 2. The appellant is aggrieved by the Order dated 27.09.2023 passed by the District Judge, Aizawl dismissing Arbitration Case No. 1/2023 as infructuous. The Arbitrator in Arbitration Proceeding No. 4/2020 had allowed several of the claims of the appellant while rejecting others vide Arbitral Award dated 30.05.2022. The appellant had prayed for execution of the claims that had been allowed by the Arbitrator vide Execution Case No. 15/2023. The same was allowed vide Order dated 11.08.2023. With regard to the claims that had been rejected by the Arbitrator, the appellant challenged the rejection under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”) vide Arbitration Case No. 1/2023. However, the same was dismissed vide order dated 27.09.2023 passed in Arbitration Case No. 1/2023 on the ground that the arbitral award had been executed vide Execution Case No. 15/2023. 3. The genesis of this appeal under Section 37(1)(c) of the 1996 Act is that the appellant had been awarded the contract work for construction of Tawngkolong to Longmasu Road 0.00 kmp-27.50 kmp. The appellant’s contract was terminated by the State respondents. As a dispute arose between the parties in respect of the said contract, an application under Section 11 of the 1996 Act was filed in this Court, vide Case No. Arbitration Petition 4/2019. This Court disposed of Case No. Arbitration Petition 4/2019, vide judgment dated 12.03.2020, appointing a sole Arbitrator to decide the dispute between the parties. 4. The appellant made 10 claims against the respondents, vide the Statement of Claims and the respondents submitted their statement of defence. 5. The case was registered before the Arbitrator as Arbitration Proceeding No. 4/2020. The Arbitration Proceeding No. 4/2020 was disposed of, vide Award dated 30.05.2022, by allowing Claim Nos. 2, 3, 4, 9 and 10 in favour of the petitioner. Claim No. 6 was withdrawn by the petitioner, while the petitioner’s Claim Nos. 1, 5, 7 and 8 were rejected by the Arbitrator. 6. The appellant thereafter filed Execution Case No. 15/2023 in respect of the Award dated 30.05.2022 pertaining to the claims which had been allowed by the Arbitrator. Claim No. 6 was withdrawn by the petitioner, while the petitioner’s Claim Nos. 1, 5, 7 and 8 were rejected by the Arbitrator. 6. The appellant thereafter filed Execution Case No. 15/2023 in respect of the Award dated 30.05.2022 pertaining to the claims which had been allowed by the Arbitrator. Execution Case No. 15/2023 was disposed of by the District Judge, Aizawl, vide order dated 11.08.2023 in terms of the Arbitrator’s Award dated 30.05.2022. 7. The appellant had also filed an application under Section 34 of the 1996 Act, in respect of Claim Nos. 1, 5, 7 and 8 which had been rejected by the Arbitrator, vide Arbitration Case No. 4/2022 before the District Judge, Aizawl. The District Judge, Aizawl dismissed Arbitration Case No. 4/2022, vide the impugned order dated 27.09.2023, on the ground that the Arbitral Award dated 30.05.2022 arising out of Arbitration Proceeding No. 4/2020 had been executed, vide order dated 11.08.2023 passed in Execution Case No. 15/2023 and as such, the application under Section 34 was found to be infructuous. 8. The appellant’s counsel submits that there was no challenge made to the Arbitral Award dated 30.05.2022 by the State respondents and as such, the appellant was claiming execution of a part of the Arbitral Award passed in arbitration proceeding, pertaining to release of performance guarantee, release of security deposit and cost of arbitration, as had been allowed by the Arbitrator. However, as Claim Nos. 1, 5, 7 and 8 had been rejected by the Arbitrator, the same had been put to challenge by the appellant, vide Arbitration Proceeding No. 4/2020. However, the dismissal of the same by the learned District Judge, Aizawl only on the ground that the execution case had been executed in terms of Award dated 30.05.2022 could not be a ground for dismissing the petitioner’s application made under Section 34. She submits that the learned District Court erred in ignoring the merits of the case and without giving an opportunity to the appellant to plead the case on merits. The same has caused prejudice to the appellant. Secondly, the challenge to a part of the award is not infructuous, as the District Court failed to ascertain that the claims are severable. The same has caused prejudice to the appellant. Secondly, the challenge to a part of the award is not infructuous, as the District Court failed to ascertain that the claims are severable. The claims granted in favour of the appellant are stand-alone claims and the Executing Court can execute the award pertaining to those claims completely, as Section 34 proceedings with regard to those claims were not disputed by both parties. 9. The learned Counsel for the respondents submits that there is no infirmity with the impugned order and the appeal should be dismissed. 10. I have heard the counsels for the parties. 11. The petitioner had made 10 claims before the Arbitrator which are as follows: Claim No. 1 Rs. 12,25,17,638/- for the work done by the claimant which has not been paid. Claim No. 2 Rs. 13,33,340/- towards the interest @18% per annum from the due date to the date of payment on account of delay in payment of RA bills. Claim No. 3: Refund of Rs. 21,22,055/- withheld from payment by the respondent under the garb of non-achievement of milestone. Claim No. 4 Rs. 5,19,84,356/- for loss of business/profit. Claim No. 5 Rs. 8,66,04,147/- on account of damages for onsite expenses incurred on plant and machineries including site staff during the extended period of contract. Claim No. 6 Rs. 5,19,84,356/- as damages for off-site expenses/loss of overheads during the extended period of contract. Claim No. 7 Rs. 3,30,24,100/- on account of damages due to loss suffered because of increase in the cost of material (other than re-enforcement steel, cement and POL) and labour during the extended period of contract. Claim No. 8 Rs. 23,87,921/- on account of damages due to loss suffered because of increase in the cost of POL during the extended period of contract. Claim No. 9 Release of security deposit amount of Rs. 53,31,855/-. Claim No. 10 Release of performance security amount of Rs. 26,65,928/-. 12. As can be seen from the facts stated above, the appellant has challenged a part of the Award, wherein his claims, i.e. Claim Nos. 1, 5, 7 and 8 have been rejected by the Arbitrator. The application filed by the appellant under Section 34 of the 1996 Act against the Arbitral Award has been dismissed as infructuous by the District Judge, Aizawl, on the ground that the Arbitral Award had been executed. 13. 1, 5, 7 and 8 have been rejected by the Arbitrator. The application filed by the appellant under Section 34 of the 1996 Act against the Arbitral Award has been dismissed as infructuous by the District Judge, Aizawl, on the ground that the Arbitral Award had been executed. 13. The impugned Order dated 27.09.2023 passed by the District Judge, Aizawl in Arbitration Case No. 1/2023 is reproduced herein below as follows: “ORDER Learned counsel Ms. Snigdha Bhattacharjee and Mr. Miller Biakrempuia Renthlei appearing for the petitioner in Arbitration Case No. 1/2023, A/o Arbitration Proceeding No. 4/2020 and learned Addl. G/A Mrs. Rose Mary assisted by learned Asst. G/A Ms. Lalhriatsangi, appearing for the respondent are present. In this case, Execution Case No. 15/2023, A/o Arbitration Proceeding No. 4/2020 was filed and executed vide order dated 11.08.2023. Hence, the present Arbitration Case No. 1/2023, A/o Arbitration Proceeding No. 4/2020 is infructuous and dismissed.” 14. In the present case, the learned District Judge, Aizawl has not given any reason as to why the appellant’s appeal under Section 34 of the 1996 Act cannot be considered in respect of Claim Nos. 7 to 10 independently, except to state that the Arbitral Award having been executed, the application had become infructuous. 15. The question that has to be decided is as to whether the appellant can make a challenge to a part of the Arbitral Award, while praying for execution of a separate part of the Arbitral Award, wherein the appellant’s claims have been allowed by the Arbitrator. Section 2(1)(c) of the 1996 Act states that an Arbitral Award includes an interim Award. Section 34 of the 1996 Act provides the manner for setting aside an Arbitral Award and the grounds under which and Arbitral Award can be set aside. The Execution Case had been filed for executing a part of the Award, i.e. the claims allowed by the Arbitrator. On the other hand, the appellant has challenged a part of the Award under Section 34, as some of the appellant’s claims were rejected by the Arbitrator. 16. In the case of National Highways Authority of India vs. Trichy Thanjavur Expressway Ltd. 2023 Online Del. 5183, the Delhi High Court while analyzing whether an Arbitral Award may be set aside partially held that an award can be partly set aside if the claims are independent of each other. 16. In the case of National Highways Authority of India vs. Trichy Thanjavur Expressway Ltd. 2023 Online Del. 5183, the Delhi High Court while analyzing whether an Arbitral Award may be set aside partially held that an award can be partly set aside if the claims are independent of each other. Para 70 and 87 of the above judgment states as follows: “70. The Court is thus of the firm opinion that the power to set aside an award in part would have to abide by the considerations aforenoted mindful of the imperatives of walking a line which would not dislodge or disturb another part of the award. However, as long as the part which is proposed to be annulled is independent and stands unattached to any other part of the award and it could be validly incised without affecting the other components of the award, the recourse to partial setting aside would be valid and justified. 87. The Court thus records its conclusions as follows: .................. K. The expression “modify” would clearly mean a variation or modulation of the ultimate relief that may be accorded by an AT. However, when a Section 34 Court were to consider exercising a power to partially set aside, it would clearly not amount to a modification or variation of the award. It would be confined to an offending part of the award coming to be annulled and set aside. It is this distinction between a modification of an award and its partial setting aside that must be borne in mind. ..................” 17. The Delhi High Court on going through Section 34(2) of the 1996 Act further held that the option to partially annul an Award was present in Section 34(2) as it acknowledged separable components within an Award. The Court held that an Award involves decisions made in relation to multiple claims. If a claim isn’t subservient, meaning it’s not “entwined or interdependent upon another”, the decision made by the Arbitral Tribunal on that claim is its own separate award. While the final Award might cover numerous claims, each decision on an individual claim shall be treated as a distinct award. The Court acknowledged that this understanding stems from the Arbitral Tribunal’s authority to issue not only a final award, but also interim awards for different claims during the arbitration. While the final Award might cover numerous claims, each decision on an individual claim shall be treated as a distinct award. The Court acknowledged that this understanding stems from the Arbitral Tribunal’s authority to issue not only a final award, but also interim awards for different claims during the arbitration. Therefore, when an award is perceived as made up of separate components, each with its own independent significance, there should not be any obstacle to applying the principle of severability to partially annul or set aside an Award. This authority to “set aside” an Award in part, thus qualifies as a valid use of jurisdiction under Section 34 of the 1996 Act. 18. In the case of M/s NHPC Ltd. vs. M/s Jaiprakash Associates Ltd. OMP (ENF) (COMM.) No. 184/2023, Ex. APPL. (OS) No. 1736/2023, the Delhi High Court has held that as long as the part of an Award which is proposed to be annulled is independent and stands unattached to the other part and can be validly incised, the partial setting aside would be valid and justified. The same also applies to execution proceedings. The part of the Award which can be validly incised must be enforced as a decree of Court. Section 36 of the Arbitration and Conciliation Act, 1996 describes the manner of enforcement. 19. In the case of M/s R.S. Jiwani, a proprietorship firm and having its office at Narayan Niwas and Others vs. Ircon International Ltd. and Others, (2009) 0 Supreme (Bom) 1735, the Full Bench of the Bombay High Court has held that principle of severability to an award is not prohibited under the provision of Section 34 of the 1996 Act. The language of Section 34 (2) of the 1996 Act does not debar the Court from exercising its discretion, to set aside the award wholly or partially as the case may be. It further held that the power of the Court under Section 34(2) is wide enough to apply the principle of severability of award and/or pass such other directions as are contemplated under Section 34(4) of the Act. It further held that an award can only be set aside under the provisions of Section 34 as there is no other provision except Section 33 which permits the arbitral tribunal to correct or interpret the award or pass additional award, that too, on limited grounds stated in Section 33. It further held that an award can only be set aside under the provisions of Section 34 as there is no other provision except Section 33 which permits the arbitral tribunal to correct or interpret the award or pass additional award, that too, on limited grounds stated in Section 33. It further held that an arbitral award shall be final and binding on the parties and even on the persons claiming under them respectively in terms of Section 35 of the Act. This award attains not only finality, but becomes enforceable as a decree of the Civil Court under the Code of Civil Procedure, after the period stated under Section 34 of the Act. Thus, an award which attains finality, becomes enforceable vesting a legal right in the claimants. It would be unjust and unfair to deny statutory rights accrued to the parties, by not applying the doctrine of severability, if some part of the award is unsustainable and where other part of the award is found to be good and enforceable in law by the Court in exercise of its powers vested under Section 34 of the Act. 20. In the case of National Buildings Construction vs. Lloyd Insulations India Limited, AIR 2004 Delhi 235, the Division Bench of the Delhi High Court has held that the part of an award which is not under challenge having become final, is enforceable under Section 36 of the Act, irrespective of the pendency of the application under Section 34 of the Act, challenging and seeking the setting aside of the other part of the award. 21. Severability of the Award into different components has also been discussed in J.G. Engineers vs. Union of India, (2011) 5 SCC 758 , where the Supreme Court affirmed the Courts authority to segregate different parts of the Award that are independent and identifiable, which do not suffer from any legal infirmity. 22. The Telengana High Court has also held in Saptarishi Hotels Pvt. Ltd. and Others vs. National Institute of Tourism and Hospitality Management, 2019 (6) ALT 439 , that where parts of an Award are found to be unsustainable and severable, setting aside those parts would clearly not amount to a modification of the Award, as modification of an Award is not permissible. 23. 23. The sum and substance of the decisions made in the above cases go to show that the Court under Section 34 of the 1996 Act, can decide a part of the Award and as such, a party can challenge only a part of the Arbitral Award, if the claims made by the party is independent and separately identifiable from the other claims of the same Award. 24. In the case of MMTC Limited vs. Vedanta Limited, (2019) 4 SCC 163 , the Supreme Court held that Section 34 proceeding does not contain any challenge on the merits of the award. It held that as far as interference with an Order made under Section 34, as per Section 37 is concerned, such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of the power by the Court under Section 34 has not exceeded the scope of the provision. The above law has been reiterated in UHL Power Company Limited vs. State of Himachal Pradesh, (2022) 4 SCC 116 . 25. In the case of MMTC Ltd. Ssangyoung Engg. and Construction Ltd. vs. NHAI, (2019) 15 SCC 131 , the Supreme Court has held that Section 34(2)(a) does not entail a challenge to the arbitral award on merits. In the case of Maharashtra State Electricity Distribution Co. Ltd. vs. Datar Switchgear Ltd. (2018) 3 SCC 133 , the Supreme Court has held that in a hearing against the Section 34 petition, the Court does not sit in appeal. 26. In the case of McDermott International Inc. vs. Burn Standard Co. Ltd. (2006) 11 SCC 181 , the Supreme Court has held that in respect of challenge an arbitral award under Section 34, the arbitration Act does not permit the District Court to correct errors of arbitrators, but only to quash and set them aside, leaving it to the parties to get the dispute resolved again via arbitration or any other means. In the case of Dyna Technologies Ltd. vs. Crompton Greaves Ltd. (2019) 20 SCC 1 , the Supreme Court held that the arbitral tribunal can be given an opportunity to cure any defects in the award under Section 34(4), to ensure that the award remains enforceable, and only in rare cases can the Courts set aside an arbitral award. It further held that while sections 15 and 16 of the Arbitration Act, 1940 permitted the Court to modify an award, the provisions was deliberately removed from the 1996 Act. 27. In the cases of Larsen Air Conditioning and Refrigeration Company vs. Union of India, 2023 SCC Online SC 982 and the Project Director National Highways No. 45E & 220 National Highways Authority of India vs. M. Hakeem and Another, AIR 2021 SC 3471 , the Supreme Court has held that the Court cannot modify an arbitral award and at best can only be partially or wholly set aside by the Court, if the condition spelt out under Section 34 has been established. Further, modification of an arbitral award, when done by the Supreme Court, is done under Article 142 of the Constitution. In the case of S.V. Samudram vs. State of Karnataka, 2024 INSC 17 , the Supreme Court has held that the scheme of Sections 34 and 37 of the 1996 Act, did not permit Courts to modify an award and it is not open to Courts under the Arbitration Act to sit as an appellate court and re-examine the merits of the Arbitral Award when it has been challenged. 28. As can be seen from the various judgments cited in the foregoing paragraphs, there are conflicting decisions stating that Courts cannot modify/can modify an arbitral award. 29. In the case of Gayatri Balasamy vs. M/s ISG Novasoft Technologies Limited, SLP (C) No. 15336-15337/2021, the 3 Judges Bench of the Supreme Court, in its Order dated 20.02.2024, has held that the conflicting decisions need to be referred to a larger Bench for answers. Paragraphs 3 and 4 of the Order dated 20.02.2024 states as follows: “(3) We are of the considered view that the following questions need to be referred to a larger Bench for answers: “1. Whether the powers of the Court under section 34 and 37 of the Arbitration and Conciliation Act, 1996, will include the power to modify an arbitral award? 2. Whether the powers of the Court under section 34 and 37 of the Arbitration and Conciliation Act, 1996, will include the power to modify an arbitral award? 2. If the power to modify the award is available, whether such power can be exercised only where the award is severable and a part thereof can be modified? 3. Whether the power to set aside an award under section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent? 4. Whether the power to modify an award can be read into the power to set aside an award under section 34 of the Act? 5. Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem, followed in Larsen Air Conditioning and Refrigeration Company vs. Union of India and SV Samudram vs. State of Karnataka lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa) and three Judges (in J.C. Budhraja Chairman, Orissa Mining Corporation Ltd. and Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India and Shakti Nath vs. Alpha Tiger Cyprus Investment No. Ltd.) of this Court have either modified or accepted modification of the arbitral awards under consideration?” (4) The special leave petitions may be placed before the Hon'ble the Chief Justice of India for an appropriate order.” 30. The issue as to whether a Court can modify an award will thus have to await the outcome of a larger Bench, to give finality to the issue. 31. Section 32 and 34 of the 1996 Act states as follows: “32. Termination of proceedings: (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where: (a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the dispute. (b) the parties agree on the termination of the proceedings. (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where: (a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the dispute. (b) the parties agree on the termination of the proceedings. (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. (3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.” “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 [establishes on the basis of the record of the arbitral tribunal that]: (i) a party was under some incapacity. (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. (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. (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. (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. (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. (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. (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. (ii) it is in contravention with the fundamental policy of Indian law. (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 reappreciation 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 sub-section (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 for 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.” 32. On considering the decisions of the various High Courts and the Supreme Court mentioned above, it appears that under Section 34 of the 1996 Act, the Principal Civil Court can partially or wholly set aside an Arbitral Award, provided the claims are separable and independent of each other. Further, the conditions spelt out under Section 34 would have to be established. In the present case, the learned District Judge gave a very cryptic order while dismissing the application under Section 34 of the Act. It has apperently not dwelt upon as to whether there can be a partial setting aside of an Award, which is independent and severable from the other parts of the Award. The learned District Judge should have applied its mind with regard to whether the doctrine of severability could be applied to an Award, while dealing with an application under Section 34 of the Act. It has rejected the application under Section 34 without giving any finding as to the issue of whether the rejected claims of the appellant were inter dependent or independent vis-a-vis the claims that had been allowed. 33. In the case of J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. and Another, (2008) 2 SCC 444 , the Supreme Court has held that a part of the award which is valid and separable can be upheld. 34. In the case of Hindustan Construction Co. Ltd. vs. Governor of Orissa and Others, (1995) 3 SCC 8 , the Supreme Court held that the Court while considering the question whether the award should be set aside, does not examine that question as an appellate Court. While exercising the said power, that Court cannot re-appreciate all the materials on the record for the purpose of recording or finding whether in the facts and circumstances of the particular case, the award in question could have been made. 35. While exercising the said power, that Court cannot re-appreciate all the materials on the record for the purpose of recording or finding whether in the facts and circumstances of the particular case, the award in question could have been made. 35. On considering the issue raised by the learned counsel for the appellant, this Court is of the view that if the rejected claims are independent and severable from the claims that had been allowed, the District Judge would have to consider whether the findings and decision made by the arbitrator on the rejected claims falls within the provisions of Section 34 of the Arbitration Act. This Court is also of the view that the interference with the part of the award under Section 34 of the 1996 Act should also be allowed, provided there is severability of the claims made under the different heads. To avoid modification of an award, the Court should not go beyond up-holding or set aside a part of the award which is severable and independent of the other claims/heads. As the District Judge has not taken a decision on this aspect of the matter, this Court is of the view that the case should be remanded back to the learned District Judge to take a decision on the question of whether the appellant’s rejected claims are independent and severable from the allowed claims. Thereafter, it can take a decision with regard to the challenge made to the findings and decision under the lens provided under Section 34 of the Act. However, as the issue of whether a Court can modify an Award is still to be decided by a larger Bench of the Supreme Court, in terms of the order dated 20.02.2024 passed in Gayatri Balasamy vs. M/s ISG Novasoft Technologies Limited, SLP (C) No. 15336-15337/2021, the Principal Civil Court may have to confine itself, only to the question as to whether the findings/decision of the Principal Civil Court in relation to the petitioner’s rejected claim nos.1, 5, 7 & 8 are to be upheld or set aside. Beyond that, it would not be proper for the Principal Civil Court to give any further decision. This would be due to the fact that under Section 32 of the 1996 Act, an arbitral proceeding stands terminated on the issuance of an Award by the Arbitrator/Arbitral Tribunal. Beyond that, it would not be proper for the Principal Civil Court to give any further decision. This would be due to the fact that under Section 32 of the 1996 Act, an arbitral proceeding stands terminated on the issuance of an Award by the Arbitrator/Arbitral Tribunal. If the Principal Civil Court comes to a finding that the findings in relation to the petitioner’s rejected claims are not sustainable and are set aside, a fresh arbitral proceeding would have to be initiated. 36. In the present case, as the Arbitration Case No. 4/2022 filed under Section 34 of the 1996 Act was dismissed only on the ground that the Arbitral Award had been executed vide Execution Case No. 15/2023, this Court is of the view that the District Judge, Aizawl would have to take a decision, as to whether the challenge made in respect of the findings/decisions of the Arbitrator in respect of the rejected claims are severable and independent vis-a-vis the allowed claims, by giving reasons, keeping in view the above observations. If it holds that the challenge can be entertained under Section 34 of the 1996 Act, it would have to further decide whether the rejection of claim nos. 1, 5, 7 & 8 are to be upheld or set aside. As the District Judge, Aizawl has not taken a decision on merits in Arbitration Case No. 1/2023, the impugned order dated 27.09.2023 dismissing the Arbitration Case No. 1/2023 is hereby set aside. The case is remanded back to the District Judge, Aizawl for taking a decision, keeping in view the observations made above. 37. The appeal is accordingly allowed.