Vipan Mahajan v. Himachal Pradesh Forest Corporation Ltd.
2025-03-12
JYOTSNA REWAL DUA
body2025
DigiLaw.ai
JUDGMENT : (Jyotsna Rewal Dua, J.) OMPM-346 of 2024 Notice. Ms. Kiran Dhiman, Advocate, appears and waives service of notice on behalf of respondent. The main appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter called as ‘Act’), is barred by 35 days. Hence, this application has been moved for condoning the aforesaid delay. Learned counsel appearing for the respondent submits that she has no objection for condoning the delay. Taking note of this submission as also the grounds taken in the application, I am satisfied that cogent reasons have been Whether reporters of Local Papers may be allowed to see the judgment? Yes made out by the applicant for condoning the delay in instituting the appeal. Accordingly the application is allowed and delay is condoned. Application to stand disposed of. Arbitration Appeal No.31 of 2025 Be registered. 2. With consent of learned counsel for the parties, matter is heard at this stage. The appellant preferred a claim petition seeking recovery of Rs.2,66,000/- from the respondent. Learned Arbitrator vide award dated 09.09.2019 dismissed the claim petition. The appellant next preferred objections under Section 34 of the Act before learned District Judge, Kangra. The objections were dismissed on 12.07.2024. The appellant has now invoked Section 37 of the Act for setting aside order dated 12.07.2024 passed by learned District Judge and award dated 09.09.2019 passed by learned Arbitrator. 3. The case. 3(i). An agreement was entered into between the parties on 12.03.2009 for crop-setting, extraction of resin from 6560 resin blazes and carriage of the same upto road- side depot. The agreement concerned Lot No.20-R/2009/Dharamshala. The target for the appellant for extraction was 242.72 quintal from 6560 resin blazes of the aforesaid lot @ 37 quintals per section and at the rate of Rs.1,195/- per quintal. As per the agreement, the work was to be completed by 30.11.2009. 3(ii). The appellant extracted 142.40 quintals of pure resin as against 242.72 quintals target given to him under the agreement. There was a shortfall of 100.28 quintals in the extraction of the resin. At the request of the appellant and on considering the material available, the Director North vide office letter dated 30.06.2010, waived shortfall of 24.27 quintals. There was still shortfall 76.01 quintals. Rs.2,26,035/- were recovered from the appellant, as loss caused to the respondent in view of less extraction of resin than the target fixed in the agreement.
At the request of the appellant and on considering the material available, the Director North vide office letter dated 30.06.2010, waived shortfall of 24.27 quintals. There was still shortfall 76.01 quintals. Rs.2,26,035/- were recovered from the appellant, as loss caused to the respondent in view of less extraction of resin than the target fixed in the agreement. 3(iii). The appellant raised a dispute which was referred to the learned Arbitrator. 3(iv). Learned Arbitrator vide award dated 09.09.2019, dismissed the claim holding that the appellant had signed the agreement deed with the respondent for providing 242.72 quintals of pure resin after extraction at the end of the year 2009. The appellant did not immediately start his work; Five notices were issued to him by the respondents directing to speed up extraction work, in order to achieve the target as per the agreement; Appellant failed to achieve the fixed target as per the agreement; The reasons being projected by the appellant for loss in the yield of resin extraction during the year 2009 were never reported by him to the respondents during the currency of the resin extraction/agreement; It was only after recovery for the shortfall in resin extraction by the respondent, the appellant decided to raise a dispute and proceed against the respondent in arbitral proceedings. The appellant could not lead any cogent evidence in support of his claim for recovery of the amount claimed by him. 3(v). The objections preferred under Section 34 of the Act by the appellant against the aforesaid award, were dismissed by learned District Judge on 12.07.2024. Learned District Judge concluded that the appellant could not bring his objections within the purview of grounds available for challenging the award under Section 34 of the Act. 4. Learned counsel for the appellant contends that the award is in conflict with the public policy. The appellant could not have been given the target extraction of 242.72 quintals of pure resin, extraction of this much resin would have dried out many trees, it would have impacted the climate. Action of the respondent in recovering Rs.2,26,035/- from the appellant was illegal. Learned counsel for the respondent defended impugned award and the order. 5. It is not in dispute that appellant had himself entered into the agreement with the respondent on 12.03.2009 for extraction of 242.72 of pure resin in Lot No.20.
Action of the respondent in recovering Rs.2,26,035/- from the appellant was illegal. Learned counsel for the respondent defended impugned award and the order. 5. It is not in dispute that appellant had himself entered into the agreement with the respondent on 12.03.2009 for extraction of 242.72 of pure resin in Lot No.20. There is also no dispute that the appellant had extracted 142.40 quintals of pure resin against 242.72 quintals - the agreed target of extraction. There was a shortfall of 100.28 quintals in the extraction of resin. Even after waiving shortfall of 24.27 quintals, the respondent had sustained loss of 76.01 quintals. It is for this reason that Rs.2,26,035/- was recovered from the appellant. The appellant has not disputed that he did not start resin extraction work immediately. That five notices were issued by the respondent, directing him to speed up resin extraction work, in order to achieve the target as per the agreement. The reasons now being projected by the appellant for less extraction of resin were never communicated by him to the respondent during currency of the agreement and performance of work thereunder. It is not the case of the appellant that he was forcefully and illegally compelled to execute agreement with the respondent. Learned District Judge has discussed the evidence adduced by the parties and has justly concluded that resin extraction work was awarded to the appellant by the respondent only after he understood the terms & conditions of the agreement. It is well-settled that an award can be set aside only if it is against the public policy of India. The award can be set aside under Sections 34/37 of the Arbitration Act, if the award is found to be contrary to, (a) fundamental policy of Indian Law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. [Refer: Haryana Tourism Limited vs. M/s. Kandhari Beverages Limited , [Civil Appeal No.266 of 2022 decided on 11.01.2022] ]. None of the aforesaid exceptions are attracted to the facts of the case on hand. The merits of the claim cannot be decided under Section 37 of the Arbitration Act as if the Court is deciding an appeal against the judgment and decree passed by the learned trial Court.
None of the aforesaid exceptions are attracted to the facts of the case on hand. The merits of the claim cannot be decided under Section 37 of the Arbitration Act as if the Court is deciding an appeal against the judgment and decree passed by the learned trial Court. Hon’ble Apex Court while considering the powers of the Appellate Court under Section 37 of the Act in Punjab State Civil Supplies Corporation Limited & Anr. vs. M/s Sanman Rice Mills & Ors. , [Civil Appeal No.10889 of 2024 decided on 27.09.2024.] held that scope of appeal is akin to and limited to the grounds enumerated under Section 34 of the Act. An arbitral award is not liable to be interfered with only on the ground that it is illegal or erroneous that too upon re-appraisal of the evidence adduced before the Arbitrator. Even if two view are possible, there is no scope for the Court to re-appraise evidence and to take different view than taken by the Arbitrator. Mere possibility of an alternate view on facts or interpretation of the contract does not entitle the Courts to reverse the findings of Arbitral Tribunal. After relying upon several precedents following conclusion were drawn in the judgment:- “20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereunder or has exceeded or failed to exercise the power so conferred. The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal.
The Appellate Court has no authority of law to consider the matter in dispute before the arbitral tribunal on merits so as to find out as to whether the decision of the arbitral tribunal is right or wrong upon reappraisal of evidence as if it is sitting in an ordinary court of appeal. It is only where the court exercising power under Section 34 has failed to exercise its jurisdiction vested in it by Section 34 or has travelled beyond its jurisdiction that the appellate court can step in and set aside the order passed under Section 34 of the Act. Its power is more akin to that superintendence as is vested in civil courts while exercising revisionary powers. The arbitral award is not liable to be interfered unless a case for interference as set out in the earlier part of the decision, is made out. It cannot be disturbed only for the reason that instead of the view taken by the arbitral tribunal, the other view which is also a possible view is a better view according to the appellate court. 21. It must also be remembered that proceedings under Section 34 of the Act are summary in nature and are not like a full-fledged regular civil suit. Therefore, the scope of Section 37 of the Act is much more summary in nature and not like an ordinary civil appeal. The award as such cannot be touched unless it is contrary to the substantive provision of law; any provision of the Act or the terms of the agreement. 22. In the case at hand, the arbitral award dated 08.11.2012 is based upon evidence and is reasonable. It has not been found to be against public policy of India or the fundamental policy of Indian law or in conflict with the most basic notions of morality and justice. It is not held to be against any substantive provision of law or the Act. Therefore, the award was rightly upheld by the court exercising the powers under Section 34 of the Act. The Appellate Court, as such, could not have set aside the award without recording any finding that the award suffers from any illegality as contained in Section 34 of the Act or that the court had committed error in upholding the same.
Therefore, the award was rightly upheld by the court exercising the powers under Section 34 of the Act. The Appellate Court, as such, could not have set aside the award without recording any finding that the award suffers from any illegality as contained in Section 34 of the Act or that the court had committed error in upholding the same. Merely for the reason that the view of the Appellate Court is a better view than the one taken by the arbitral tribunal, is no ground to set aside the award. 23. Thus, in our opinion, the Appellate Court committed manifest error of law in setting aside the order passed under Section 34 of the Act and consequently the arbitral award dated 08.11.2012.” No such ground as envisaged under Sections 34/37 of the Act exists in the instant case. Learned Arbitrator did not commit any error in interpreting the terms & conditions of the agreement and appreciating the evidence adduced by the parties. Learned District Judge justly held that the view taken taken by the Arbitrator in dismissing appellant’s claim for Rs.2,66,000/- is a plausible view. In view of above, no interference is required. The appeal fails and is accordingly dismissed. The pending miscellaneous application(s), if any, to stand disposed of.