Bombay High Court
Jawaharlal Nehru Port Trust vs Ornate Multi Model Carriers Pvt. ... on 5 July, 2016
Bench: Anoop V. Mohta
PVR 1/17 appl201-16.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (lodg)NO.201 OF 2016
IN
ARBITRATION PETITION NO.898 OF 2015
Jawaharlal Nehru Port Trust )
Operation Department Container Terminal, )
POC Building, JNPT Sheva, Navi Mumbai )
through Manager. ig )...Appellant
(Orig.Petitioner)
versus
Ornate Multi Model Carriers Pvt.Ltd. )
a Company incorporated under the )
provisions of the Companies Act,1956, )
having its registered office at Orient )
house,4th floor, Adi Marzaban Path, )
Ballard Estate, Mumbai-400038, )
through Director. )... Respondent
(Orig.Respondent)
---
Mr.Kevic Setalwad, Senior Advocate with Mr.Subhash Bhalawal, Ms.Decisy
Dubash i/b. Vyas and Bhalawal, for the Appellant.
Mr.Rahul Narichania, Senior Advocate with Mr.Prathamesh Kamat i/b.
M/s.A.Mehta Laljee & Co., for the Respondent.
----
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CORAM : ANOOP V. MOHTA &
G.S. KULKARNI, JJ.
Reserved on : 17th June,2016
Pronounced on : 5th July,2016
----
JUDGMENT: (Per G.S.Kulkarni, J.)
1. This appeal by the Appellant (original Respondent before the
learned Arbitrator) under Section 37 of the Arbitration and Conciliation
Act,1996 (for short 'the Act'), is directed against the judgment and order
dated 9th March,2016 whereby the learned Single Judge has rejected the
Appellant's Petition filed under Section 34 of the Act, assailing the arbitral
Award dated 10th December,2014 of the learned sole Arbitrator.
In nutshell the facts are:
2. The Appellant had issued a tender notice inviting bids "for
hiring services for operation of 58 tractors / trailers for transportation of
ISO freight tenderers within the container terminal of the Appellant." The
Respondent was a successful bidder and accordingly, a contract was
awarded to the Respondent. An agreement dated 6 th September,2000
came to be entered between the Appellant and the Respondent. The
contract period was for three years i.e. from 1 st September,2000 to 31st
August,2003. As per the tender conditions a successful tenderer was
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required to furnish a bank guarantee towards security deposit equivalent
to Rs.65 lakhs and was entitled to raise monthly bills towards containers
handled by it during the contract period. Payment of bills, for the work to
be executed by the contractor, was required to be settled by the Appellant
within thirty days from the date of submissions of the bills.
3. As seen from the pleadings and the award, there was no issue
between the parties till July,2003. The Appellant had made payments of
the bills raised by the Respondent for the contractual work. A dispute
arose between the parties after completion of the contract. The
Respondent raised claims under different heads and initially made a
money claim of Rs.1,87,17,444.62 with further interest at 18% per annum
which amount was later reduced by the Respondent to Rs.1,39,17,644.62.
4. The Respondent had approached this Court in Arbitration
Application No.134 of 2006. The learned Single Judge by an order dated
6th October, 2006 held that the dispute between the parties as urged in the
said Arbitration Application was not arbitrable and accordingly, rejected
the arbitration application. The Respondent thereafter approached the
Supreme Court. By an order dated 16 th February,2009 the Supreme Court
appointed a retired Hon'ble Judge of the Karnataka High Court as the sole
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Arbitrator.
5. Before the learned Arbitrator in support of its claim, the
Respondent asserted that in pursuance of a representation made by the
Respondent, a meeting was held on 20 th October,2009 in the Chamber of
Mr.S.K.Kaul, Chief Manager (Admn.) & Secretary, of the Appellant, for
discussing the claims of the Respondent and the counterclaims of the
Appellant, to resolve the disputes amicably, as pending before the learned
Arbitrator. According to the Respondent in the said meeting Mr.S.K.Kaul,
Chief Manager (Admn.) & Secretary of the Appellant alongwith other
officers on behalf of the Appellant, offered a proposal based on a summary
prepared by the Appellant dated 31st May,2005. A total sum of
Rs.77,47,991/- was agreed as payable to the Respondent on the condition
that the Respondent withdraws its claim for refund of breakdown charges,
which the Respondent agreed in the said meeting so as to amicably
resolve the dispute. By a letter of the Respondent dated 28 th
October,2009, the minutes of the said meeting dated 20 th October,2009
were forwarded by the Respondent to the Chief Manager (Admn.) &
Secretary of the Appellant.
6. By a letter of the Deputy Manager (Legal) dated 10 th
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November,2010 the said minutes of the meeting were forwarded to the
Chief Manager (Admn) and Secretary as also the Senior Manager (CT)
and the Manager (Finance). Thus the Appellants cannot dispute that the
Appellants were not aware about this settlement. Admittedly, these
developments had taken place during the pendency of the arbitration
proceedings.
7. Before the learned Arbitrator, the Respondent filed an
additional affidavit of evidence of its Director Mr.Jameel Jalali dated 13 th
January,2014 by which the above referred documents pertaining to the
meeting held on 20th October,2009 and the minutes of the same were
placed on record. It may be useful to refer to paragraphs 2 to 6 of this
affidavit as the entire issue in the present appeal revolves on these facts.
"2. The claimant is filing the additional evidence by way of
affidavit since these evidences are very relevant for just decision of
the instant Petition.
3. I say that the respondent has taken a decision to constitute
the Committee composed of Shri.S.K.Kaul, Chief Manager (Admn.)
& Secretary, Shri.D.S.Garde, Sr.Manager, and Shri.B.V.Rao,
Manager (Finance), JNPT, to scrutinise the claim submitted by the
Claimant before the ld.Tribunal. A letter was sent by the respondent
on 9.10.2009 informing the claimant about the fixation of
preliminary meeting on 16.10.2009. True copy of the respondent's
letter dated 9.10.2009 is annexed hereto and marked as Exhibit
CW1/21 (page 4-5)
4. But instead of 16.10.2009, on 20th October 2009, a meeting
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was held by the said Committee wherein the Claimant was also
present. In the said meeting the claimant withdrew its claim for
Break down charges of Rs.47,75,800/-. After taking into account
the total claims of the Claimant, including the bank guarantee,
amount received by the Claimant under indemnity, and the
withdrawal of claim of the Claimant for release of breakdown
charges, the Committee decided that the amount as mentioned in
the following table is due to the Claimant.
Sr.N Particulars Amount
o.
1 Penalty under clause 20 of the contract Rs.1,98,000.00
i.e. for non-availability of tractor-
trailers
2 Penal interest due Rs.5,42,644.00
3 Cost of spares Rs.49,65,950.00
4 Service tax deducted Rs.9,34,392.00
5 Fuel Escalation invoices not settled Rs.2,07,005.00
6 Amount held back for Workmen Rs.4,50,000.00
compensation policy
7 Amount held up towards accident claim Rs.4,50,000.00
8 Residue of real estate dues to be Rs. Nil
refunded after deducting all amount due
to JNPT
Total amount Rs.77,47,991.00
The true copy of the minutes of the meeting dated 20.10.2009 held
in the office of Mr.S.K.Kaul, Chief Manager (Admn.) & Secy.JNPT to
discuss the claim of the claimant is annexed hereto and marked as
Exhibit CW 1/22 (page 6-7)
5. I say that the Claimant as a gesture of cooperation and
keeping in mind their longstanding goodwill, accepted the decision
of the Committee except for the item no.8 in the above table to
resolve the disputes pending before this ld. Tribunal and the
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claimant wrote a letter dated 28.10.2009 to the respondent to that
effect. The true copy of the letter dated 28.10.2009 by the claimant
to the respondent is annexed hereto and marked as Exhibit CW
1/23 (page 8-9).
6. I say that the above act on the part of the claimant shows his
readiness and willingness to settle the matter with the respondent
but still the respondent is not doing anything, therefore, I submit
that in view of the facts and circumstances of this case, this Hon'ble
Tribunal may allow the Claim of the claimant."
Perusal of the above averments of the Respondent in the additional
affidavit of evidence makes it clear that the documents pertaining to the
minutes of meeting as forwarded by the Respondent were part of the
record before the learned Arbitrator. Not only that but as noted above the
Deputy Manager (Legal) by letter dated 19th November,2010 had
forwarded the same for record and information of Mr.S.K.Kaul, Chief
Manager (Admn.) & Secretary.
8. It is an admitted position, that before the learned Arbitrator,
the Appellant did not in any manner dispute the minutes of the meeting
dated 20th October,2009 or the other documents as forming part of the
affidavit of evidence. The Appellant also did not avail of an opportunity
to cross examine Mr.Jameel Jalali, the deponent of the said additional
affidavit of evidence.
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9. The learned Arbitrator in his Award recorded that though the
Respondent had earlier made a claim of Rs.1,39,41,644.62, however,
relying on the subsequent additional affidavit of evidence, held that the
claim of the Respondent would be Rs.77,47,991/- as agreed between the
parties in the meeting held on 20 th October,2009 and as recorded in the
minutes of the meeting. It would be useful to refer to the observations of
the learned Arbitrator in the Award in this regard which read thus:
"
From the proceedings of the meeting held on 20.10.2009
which was produced as Ex.CW 1/22 by the claimant along with
the additional affidavit of Shri.Jaleem Jalali, it is clear that the
respondent has offered to pay sum of Rs.77,44,991/- (Seventy
Seven lakhs Forty Seven Thousand Nine Hundred and Ninety
One). As against the total claim of Rs.1,87,17,444.62/- (One
Crore Eighty Seven Lakhs Seventeen Thousand four Hundred
and Forty Four and Sixty Two paise) made by the claimant in
his claim petition and the claimant has agreed to accept the
said sum of Rs.77,44,991/- (Seventy Seven Lakhs Forty Seven
Thousand Nine Hundred and Ninety One) and also has agreed
for settlement of his claim for residue of real estate due to be
refunded after deducting all amount due by the claimant to the
respondent. According to the proceedings of the said meeting,
no amount was due on the said account to be paid by the
respondent to the claimant. However, so far as item 8
regarding residue of real estate due claimed by the claimant is
concerned, claimant expressed his reservation with regard to
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the stand taken by the respondent that it is not liable to pay
any amount on the account to the claimant and made a request
to refer the matter to the Estate Department of the respondent
for reconciliation.
In light of the discussion made above and the materials
available on record. I am of the view that the claimant is
entitled for judgment and award directing the respondent to
pay sum of Rs.77,44,991/- (Seventy Seven lakhs Forty Seven
Thousand Nine Hundred and Ninety One). So far as the claim
of the respondent for the residue of real estate dues is
concerned, I find considerable force in the submission of Sri.
Ajay Sharma that since the claimant has failed to establish the
said claim with cogent evidence, he is not entitled for the said
claim. Therefore, I am of the opinion that it is not just and
proper to make any award directing the respondent to pay any
amount towards the residue of the real estate dues as claimed
by the claimant from the Respondent."
10. The learned Single Judge by the impugned judgment has
rejected the Appellant's challenge to the Award inter alia observing that
the conclusion as drawn by the learned sole Arbitrator was clearly on
evidence. It was observed that there was no material on record to accept
the contention as urged on behalf of the Appellant that the learned sole
Arbitrator ought not to have accepted the minutes of the meeting dated
20th October,2009 to allow the claim of Rs.77,47,991/-. On perusal of the
entire record the learned Judge observed that the Appellant had not
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sought any opportunity to cross examine the witness of the Respondent
nor the document of the minutes of the meeting dated 20 th October,2009
and the other documents in relation thereto as annexed to the additional
affidavit of evidence, were disputed by the Appellant by any objection in
writing. Accordingly, the learned Judge dismissed Section 34 petition
filed by the Appellant.
11. In assailing the impugned order the only contention as urged
on behalf of the learned Senior Counsel for the Appellant is that there is
failure on the part of the Respondent to prove the document of the
minutes of meeting dated 20th October,2009 as annexed to the additional
affidavit of evidence and filed on behalf of the Respondent. It is
submitted that the said document is not proved by the respondent. The
burden to prove the said document under Section 101 of the Indian
Evidence Act was on the Respondent and as the burden is not discharged
by the Respondent, the question of the Appellant disputing the said
document and/or calling the Respondent's witness for cross examination
did not arise. In support of his submission, the learned Senior Counsel for
the Appellant has placed reliance on the decision in the case "Om Prakash
Berlia & Anr. Vs. Unit Trust of India & Ors, (AIR 1983 Bombay 1)", "Indian
Oil Corporation Ltd. Vs. M/s.Kadbrotee Engineering Industries" in
Arbitration Petition No.212 of 2007 decided on 14 th January,2011, Bi-water
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Penstocks Ltd. Vs. Municipal Corporation of Greater Bombay & Anr.,
(2011(1)Bom.C.R. 622)", "M/s.Bareilly Electricity Supply Co.Ltd. Vs. The
Workmen and others, (AIR 1972 Supreme Court 330)".
12. On the other hand, the learned Senior Counsel appearing for
the Respondent has supported the Award of the learned Arbitrator and the
observations as made by the learned Single Judge in confirming the
Award. The learned Senior Counsel for the Respondent submits that the
Appellant is not correct in contending that the Respondent had not proved
the document of the minutes of the meeting. It is submitted that the
Appellant neither disputed the document which formed part of the
deposition in the additional affidavit of evidence nor the Appellant availed
of an opportunity to cross examine witness of the respondent. It is
submitted that this position amounted to clear admission of the facts
pertaining to the minutes of the meeting and the contents of the said
document of the minutes of the meeting as placed on record for
consideration of the learned Arbitrator. It is submitted that in any event,
the learned Arbitrator has extensively considered the facts and
circumstances including the non denial on the part of the Appellant of the
minutes of the meeting dated 20 th October,2009 and accordingly made the
Award. It is contended that the learned Single Judge has extensively
examined all these issues in rejecting the Section 34 petition. It is
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therefore submitted that the Appeal is wholly devoid of merit.
13. We have heard the learned Counsel for the parties as also we
have gone through the impugned Award as also the impugned order
passed by the learned Single Judge and the other documents as placed on
record in the paper book. On examining the relevant documents what is
revealed is that the Respondent had initially made a claim of
Rs.1,87,17,444.62 with interest at the rate of 18% p.a. Subsequently as
recorded by the learned Arbitrator, the Respondent had given up the claim
of Rs.47,75,800/- being a claim made for refund of break down charges.
During the pendency of the arbitration proceedings, in pursuance of a
representation which was made by the Respondent, the Appellant had
fixed a meeting for discussing the claim made by the Respondent.
Accordingly, a letter was addressed by the Appellant to the Respondent in
this regard dated 9th October,2009 informing the Respondent about fixing
of a preliminary meeting on 16th October,2009. This meeting was,
however, held on 20th October,2009. The meeting was held in the
chamber of Mr.S.K.Kaul, Chief Manager (Admn.) & Secretary to discuss /
settle amicably the dispute between the Respondent and the Appellant
which was pending before the learned Arbitrator. It was attended by
three senior officers of the Appellant namely Mr.S.K.Kaul, Chief Manager
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(Admn.) & Secretary, Mr.D.S.Garde, Senior Manager and Mr.B.V.Rao,
Manager (Finance) and Mr.Jameel Jalali, Director of the Respondent
alongwith the other representatives. In this meeting various claims were
discussed and on behalf of the Appellant an offer of Rs.77,47,991/- was
made, to be paid to the Respondent on the condition that the Respondent
withdraws their claim for refund of break down charges for which the
Respondent's representative agreed to withdraw as a gesture of co-
operation to amicably resolve the dispute.
14.
By a letter dated 28th October,2009 the minutes of the above
meeting held on 20th October,2009 were forwarded to the Appellant's
Chief Manager and Secretary, by the Respondent. Thereafter, this letter
alongwith the minutes of the meeting were forwarded by the Deputy
Manager (Legal) of the Appellant to Mr.S.K.Kaul, Chief Manager (Admn)
& Secretary, to Mr.D.S.Garde, Senior Manager (CT) and to Mr.B.V.Rao,
Manager (Finance) and same was duly received by them. Things did not
stop at this, but further correspondence was exchanged between the
parties on the basis of this meeting. All these documents formed part of
the record before the learned Arbitrator in the additional affidavit of
evidence filed on behalf of the Respondent. As can be seen from the
record admittedly these were subsequent developments which had taken
placed during the pendency of the arbitration proceedings. It is, thus, not
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the case that these documents could be placed on record before the
learned Arbitrator at the threshold, alongwith the statement of claim.
Further, the Appellant did not in any manner dispute these documents as
placed on record in the additional affidavit of evidence as filed on behalf
of the Respondent. Admittedly at no point of time, till the arbitration
proceedings were closed, for an Award to be delivered, the Appellant
neither disputed the minutes of the meeting and the settled claim as
offered to be paid on behalf of the Appellant. Further at no point of time
an opportunity to cross examine the witness of the Respondent was
sought for by the Appellant. If this be the case, then, in our opinion, it
was not in any manner inappropriate for the learned Arbitrator to proceed
to decide the dispute on the basis of these facts which stood
uncontroverted. The minutes of the meeting dated 20 th October,2009 and
the correspondence in relation thereto which includes even internal letters
of the Appellant, remain uncontroverted and the facts contained therein
being not disputed became available to the learned Arbitrator for
pronouncing the Award. We, thus, do not find any substance in the
contention as urged on behalf of the learned Counsel for the Appellant
that in the fact situation there was a burden on the Respondents to prove
these documents and/or that the Respondent has failed to discharge the
said burden namely to prove the said minutes of the meeting, and the
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correspondence in relation thereto and thus these documents were not
admissible in evidence. In our opinion, the submission is wholly
unfounded as it is clear from the facts of the present case, that the
Appellant never disputed the affidavit of evidence alongwith the annexed
documents. The Appellant's contention cannot be accepted also for the
reason that the Appellant did not, in any manner known to law, controvert
the deposition as contained in the additional affidavit of evidence of the
Respondents and/or sought an opportunity to cross examine the deponent
and/or disputed any of the documents which were annexed to the same
and which were part of the record before the learned Arbitrator. What
could therefore be clearly inferred by the learned Arbitrator, was the
admission of these facts by the Appellant. Non traverse of these facts
clearly makes applicable the doctrine of implied admission as would flow
from Section 58 of the Evidence Act. Further it is also not a case that the
Appellant has placed on record any evidence to the contrary. Thus it is a
case where the principles as contained in Section 58 of the Indian
Evidence Act would get clearly attracted being one of the basic rules of
evidence. The learned Arbitrator had correctly proceeded on the ground
that the Appellant had admitted the facts in regard to the minutes of
meeting dated 20th October,2009 and the documents in relation thereto.
The approach adopted by the learned Arbitrator in appreciation of this
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evidentiary position cannot be faulted on any count. It is well settled that
the learned Arbitrator is the ultimate master of the quality and the
quantity of evidence.
15. The Appellant raised an issue to assail the minutes of the
meeting dated 20th October,2009 for the first time in the Section 34
petition before the learned Single Judge. In our opinion, the entire
approach of the Appellant in raising such a challenge is wholly untenable.
As seen from the record, the officers of the Appellant were completely
aware about the offer of the Appellant of Rs.77,47,991/- and the same
being accepted by the Respondent as recorded in the minutes of the
meeting dated 20th October,2009. The Appellant never disputed the
documents as observed above and, therefore, it was wholly permissible
and appropriate for the learned Arbitrator to proceed and pronounce an
Award on the basis of the settlement as arrived and recorded in the
minutes of the meeting, in the absence of any contradictory material.
16. The learned Single Judge, in our opinion, has correctly
rejected the challenge as raised by the Appellant. In view of the above
discussion, we are of the clear opinion that the reliance on behalf of the
Appellant to the decisions as referred above are wholly misconceived as in
all these cases there was admittedly a dispute/objection to the
documents,or an assertion on the part of the litigant, of a denial of an
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opportunity to cross examine which is admittedly not the situation in the
present case, in which there was no contest by the Appellants as noted
above.
17. It is now well settled as laid down in the decision of the
Supreme Court in the case "Associate Builders Vs. Delhi Development
Authority, ((2015)3 SCC 49)" that in applying the test of public policy in
a challenge to the Arbitration Award, the Court would not act as a Court
of Appeal and that a possible view that the arbitrator has taken on the
basis of the quantity and quality of the evidence, cannot be interfered
with. This is not a case where the approach of the learned Arbitrator was
arbitrary or capricious so as to render the award perverse requiring
interference under the jurisdiction vested in the Court under Section 34 of
the Act.
18. In view of the above discussion, we find no reason to upset
the award of the learned Arbitrator and the findings of the learned Single
Judge in dismissing the Section 34 petition of the Appellants. The Appeal
is devoid of any merit and accordingly, is rejected.
19. In view of the order passed in the Appeal, Notice of Motion
(lodg)No.1739 of 2016 does not survive and is disposed of.
(G.S.KULKARNI, J.) (ANOOP V. MOHTA, J.)
