Bombay High Court
Nishant Multistate Co-Op. Credit Soc. ... vs M/S Baba Sai Corporation Through Its ... on 18 February, 2025
Author: G. A. Sanap
Bench: G. A. Sanap
2025:BHC-NAG:1837
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
ARBITRATION APPEAL NO. 09 OF 2018
APPELLANT : Nishant Multistate Co-operative
Credit Society, Ltd. Gandhi Road,
Akola, through its authorized and
Special Recovery Officer, Mr. Rajesh
Vasantrao Babhulkar.
//VERSUS//
RESPONDENT : M/s. Baba Sai Corporation, through
its Proprietor Mr. Vivek Sudhakarrao
Kakad, Aged Major, R/o. Dahigaon
Road, Near Gandhi Petrol Pump,
Anjangaon Surji, District - Amravati.
**************************************************************
Mr. Amol B. Patil, Advocate for the Appellant.
Mr. Anup H. Lohiya, Advocate for the Respondent.
**************************************************************
CORAM : G. A. SANAP, J.
RESERVED ON : 27th SEPTEMBER, 2024.
PRONOUNCED ON : 18th FEBRUARY, 2025.
JUDGMENT
. In this appeal, filed under Section 37 of the Arbitration
and Conciliation Act, 1996 (for short, "the Act of 1996"),
challenge is to the judgment and order dated 31 st October, 2017,
passed by the learned Principal District Judge, Amravati, whereby
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the learned Principal District Judge allowed the application made
by the respondent under Section 34 of the Act of 1996 and set
aside the award dated 26th April, 2014, passed by the learned sole
Arbitrator.
02] The facts are as follows:
The appellant is a Multistate Credit Co-operative
Society. The respondent borrowed a sum of Rs.17,00,000/- from
the appellant on 28th January, 2011. The loan agreement stipulated
the terms and conditions with regard to the repayment, interest,
security, etc. As agreed, the respondent pledged 100 cotton bales
weighing 187 quintals at the relevant time, lying in the Charbhuja
Ware Housing Godown owned by the appellant. The rate of the
cotton bales mutually agreed at that time was Rs.13,202.25 per
quintal. The loan amount was to be repaid on or before 19 th March,
2011. In case of failure of the respondent to repay the loan amount
within the stipulated time, the appellant had the right to sell the
cotton bales and recover the loan amount.
03] It is the case of the appellant that the respondent did
not repay the loan amount before 19 th March, 2011. The appellant
made a demand of the money orally as well as in writing. The
appellant, on the request of the respondent, extended the period
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for repayment of the loan amount up to 17 th September, 2011. The
payment was not made within the extended time. The appellant,
therefore, issued number of notices to the respondent and called
upon the respondent to repay the loan amount. Similarly, the
respondent was informed by the appellant that the appellant was
proceeding ahead to call bids for the sale of the cotton bales. The
notice, calling bids from the public, was published in the
Deshonnati Newspaper on 9th February, 2012. The bids were to be
opened on 17th February, 2012. The bids were opened, and M/s.
Amrut Cotton Industries, Khamgaon, District Buldhana, was
declared to be the successful bidder. The cotton bales were sold for
Rs.13,58,282/-. The sale proceeds were credited in the loan
account of the respondent. It is the case of the appellant that, after
adjusting the amount of the sale proceeds of the cotton bales, the
sum of Rs.7,73,083/- was still outstanding against the respondent.
The appellant, vide notice dated 13th June, 2013, called upon the
respondent to pay the amount with interest. The respondent did
not pay the amount. Therefore, the Board of the appellant decided
to initiate the proceeding under Section 84 of the Multistate Co-
operative Societies Act, 2002, against the respondent.
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04] The dispute was, therefore, referred to the learned sole
Arbitrator. The appellant filed a claim statement with the
documents before the learned Arbitrator. The notice of the claim
was issued to the respondent. The respondent, despite receipt of
the notice, failed to appear before the learned Arbitrator. The
affidavit of the evidence of witness No.1 on behalf of the appellant
was filed. The witness produced the relevant documents. The
cross-examination of the witness examined by the appellant was
treated as closed, inasmuch as the respondent failed to contest the
claim. The learned Arbitrator, vide award dated 26th April, 2014,
allowed the claim and directed the respondent to pay a sum of
Rs.7,73,083/- to the appellant with interest @ 15.50% from 13 th
June, 2013, till the realization of the said amount.
05] The respondent, on being served with this award by
the learned Arbitrator, filed an application under Section 34 of the
Act of 1996 for setting aside the award on multiple grounds before
the learned Principal District Judge, Amravati. The appellant
appeared in the said proceeding and contested the said application.
The learned Principal District Judge, on re-appreciation of the
material on record, allowed the application made under Section 34
of the Act of 1996 and set aside the award. The appellant, being
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aggrieved by this judgment and order passed by the learned
Principal District Judge, Amravati, has come before this Court in
appeal.
06] I have heard Mr. Amol B. Patil, learned advocate for
the appellant and Mr. Anup H. Lohiya, learned advocate for the
respondent. Perused the record and proceedings.
07] Learned advocate for the appellant made following
submissions:
The learned Principal District Judge has committed a
patent illegality while setting aside the award passed by the learned
sole Arbitrator. The learned Principal District Judge has not
properly appreciated the undisputed facts and the evidence in
proper perspective. The conduct of the respondent proved on
record suggests mala fides. Number of notices had been issued to
the respondent before filing of the claim application. The
respondent did not reply a single notice. The contents of the
notices had, therefore, been admitted. No grievance was made by
the respondent as far as the contents of the notices are concerned.
The respondent was made aware of the sale of the cotton bales by
calling bids from the public. The notice was published in
Deshonnati Newspaper. The publication of the notice was known
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to the respondent. The respondent did not object for the sale of the
cotton bales by calling bids from the willing purchasers. The
learned advocate submitted that this ground was not specifically
pleaded in the application under Section 34 of the Act of 1996.
The learned Principal District Judge, without pleading of material
fact to this effect, has recorded a finding against the appellant on
the basis of oral submissions advanced by the learned advocate for
the respondent. Learned advocate submitted that it was specifically
pleaded in the application filed before the learned Arbitrator that
the period for repayment of the loan was extended up to 17 th
September, 2011. There was no grievance in this regard from the
respondent.
08] Learned advocate, in this appeal, produced on record
the letter dated 29th September, 2011, received from the respondent
seeking extension of one month time for repayment of the loan.
Along with this letter, the appellant produced the notice dated 29 th
September, 2011, and notice of the even date issued by the
advocate for the respondent to the prospective purchasers of the
respondent of the cotton bales. It is submitted that this
documentary evidence has not been challenged by filing the
counter. These documents are not denied. It is submitted that,
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therefore, the undisputed documents can be looked into for doing
complete justice. Learned advocate submitted that the grounds, on
which the award has been set aside by the learned Principal District
Judge, Amravati, have not at all been pleaded in Section 34
application. Learned advocate submitted that since the claim before
the learned Arbitrator was proceeded ex parte and has gone
unchallenged and uncontroverted, the learned Arbitrator was not
supposed to unnecessarily lengthen the award. The reasons
recorded by the learned Arbitrator reflect the application of mind
to the material placed on record. Learned advocate, in support of
his submissions, placed reliance on number of decisions.
09] The first judgment, relied upon by learned advocate
Mr. Patil, is in the case of K. Sugumar and Anr. Vs. Hindustan
Petroleum Corporation Limited and Anr. [(2020) 12 SCC 539] ,
wherein the Hon'ble Apex Court has held that a bare reading of
Section 34 indicates the highly constricted power of the Court to
interfere with an arbitral award. It is observed that when parties
have chosen to avail an alternate mechanism for dispute resolution,
they must be left to wisdom of decision of arbitrator and role of
court should be restricted to bare minimum as per the grounds
enumerated in Section 34. The re-appreciation of the evidence is
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not permissible either in an application under Section 34 or in an
appeal under Section 37.
10] The second judgment, relied upon by learned advocate
Mr. Patil, is in the case of Sutlej Construction Limited Vs. Union
Territory of Chandigarh [(2018) 1 SCC 718] , wherein the Hon'ble
Apex Court has held that the interference in the award is not
warranted when the award is reasonable and takes a view which is
plausible. It is held that when it comes to setting aside of an award
under the public policy ground, it would mean that the award
should shock the conscience of the Court, and would not include
what the Court thinks is unjust on the facts of the case seeking to
substitute its view for that of the arbitrator to do what is considers
to be "justice".
11] The third judgment, relied upon by learned advocate
Mr. Patil, is in the case of MMTC Limited Vs. Vedanta Limited
[(2019) 4 SCC 163], wherein the Hon'ble Apex Court has held
that in exercise of the jurisdiction under Section 34, the Court does
not sit in appeal over the arbitral award and may interfere on merits
only on the well-settled limited grounds. The interference under
Section 37 cannot travel beyond the restrictions laid down under
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Section 34, and in case an arbitral award has been confirmed by the
Court under Section 34. It is held that, while interpreting the terms
of the contract, the conduct of parties and correspondence
exchanged would be relevant factors and it is within the arbitrator's
jurisdiction to consider the same.
12] Learned advocate submitted that the above-stated legal
position has been completely glossed over by the learned Principal
District Judge, while addressing the limited issue within the scope
of Section 34 of the Act of 1996. Learned advocate submitted that,
therefore, the judgment and order passed by the learned Principal
District Judge deserves to be set aside, and the award passed by the
learned Arbitrator deserves to be restored.
13] Learned advocate for the respondent supported the
judgment and order passed by the learned Principal District Judge,
Amravati. Learned advocate made following submissions:
The award passed by the learned sole Arbitrator is not
in accordance with the provisions of the Act of 1996. The relevant
provisions have not been strictly followed by the learned
Arbitrator, namely the provisions of Sections 23, 24, 25 and 31.
The award travels beyond the agreed terms of the contract between
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the parties. The award is thus against the public policy. The learned
Arbitrator did not ensure the valid service of the notice of the
claim application filed by the appellant. The change of method of
sale of the pledged goods adopted by the appellant was contrary to
the express contract. There was failure to take timely steps to
dispose of the pledged goods. By the time the goods were sold, the
prices of the cotton bales had fallen drastically, and ultimately it
caused a huge loss to the respondent. This was contrary to the
agreement. There was no extension of time for repayment of the
loan as sought to be contended. The learned Arbitrator did not
apply his mind to the claim and the evidence placed on record. The
learned Arbitrator has not recorded the reasons in support of his
findings. Even though the claim application was proceeded ex
parte against the respondent, the learned Arbitrator was duty-
bound to record the cogent and concrete reasons in support of his
findings. The evidence was not appreciated by the learned
Arbitrator in proper perspective. The award was, therefore,
contrary to the Fundamental Policy of Indian Law and the
principles of natural justice. The learned Arbitrator, on account of
his failure to record the reasons, has committed a patent illegality.
The award was accordingly vitiated by the patent illegality. Learned
advocate has relied upon number of decisions in support of his
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submissions.
14] The first judgment, relied upon by learned advocate
Mr. Lohiya, is in the case of Dyna Technologies Private Limited
Vs. Crompton Greaves Limited [(2019) 20 SCC 1] , wherein the
Hon'ble Apex Court has held that passing of a reasoned award is
not an empty formality under the Arbitration Act. The reasons
should be proper, intelligible and adequate. The Court, while
exercising jurisdiction under Section 34, has to adjudicate the
validity of an award based on the degree of particularity of
reasoning required, having regard to the nature of issues falling for
consideration. It is held that the degree of particularity cannot be
stated in a precise manner as the same would depend on the
complexity of the issues in the facts and circumstances of each case.
15] The second judgment, relied upon by learned advocate
Mr. Lohiya, is in the case of Som Datt Builders Limited Vs. State of
Kerala [(2009) 10 SCC 259], wherein the Hon'ble Apex Court has
held that the requirement of reasons in support of the award under
Section 31(3) of the Act of 1996 is not an empty formality. It
guarantees fair and legitimate consideration of the controversy by
the Arbitral Tribunal. It is held that the Arbitral Tribunal is not
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expected to write a judgment like a court nor is it expected to give
elaborate and detailed reasons in support of findings but mere
noticing the submissions of the parties or reference to documents is
no substitute for reasons which the Arbitral Tribunal is obliged to
give. Howsoever brief these may be, the reasons must be indicated
in the award as that would reflect the thought process leading to a
particular conclusion. If there are no reasons, then it would make
such an award legally flawed.
16] The third judgment, relied upon by learned advocate
Mr. Lohiya, is in the case of M/s. Suraj Mal Ram Niwas Oil Mills
(P.) Ltd. Vs. United India Insurance Co. Ltd. & Anr. [2011(1) All
MR 453 (S.C.)], wherein the Hon'ble Apex Court, while
considering the contract of insurance, has held that the Court
cannot add, delete or substitute any words of the contract. The
terms of the contract have to be strictly construed to determine the
extent of insurer's liability.
17] The last judgment, relied upon by learned advocate
Mr. Lohiya, is in the case of Oil and Natural Gas Corporation Ltd.
Vs. Western Geco International Ltd. [AIR 2015 SC 363] , wherein
the Hon'ble Apex Court has held that the expression 'Fundamental
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Policy of Indian Law' must include all such fundamental principles
as providing a basis for administration of justice and enforcement
of law in this country. The requirement that adjudicatory authority
must apply its mind while adjudicating the dispute is a tenet of
'Fundamental Policy of Indian Law'. This judgment has been
considered by the learned Principal District Judge while addressing
the principal issue.
18] It is to be noted that the applicability of the principles
culled out from the decisions of the Hon'ble Apex Court (supra)
need to be considered in the backdrop of the nature of the dispute,
the evidence on record, and the undisputed facts and
circumstances. The learned Principal District Judge on
re-appreciation of the evidence, set aside the award. The learned
Principal District Judge has held that there was unexplained delay
on the part of the appellant in the process of the sale of the cotton
bales pledged with the appellant by the respondent. The learned
Principal District Judge further held that the appellant committed
a patent illegality by selling the cotton bales by adopting the tender
method instead of the auction method, which was set out in the
contract. The learned Principal District Judge has held that the
learned Arbitrator has failed to consider the above-stated two
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factors. The learned Arbitrator has not applied his mind to the facts
and the evidence. It is held that the learned Arbitrator has not
recorded the reasons in support of his findings. In my view, since
the learned Principal District Judge, Amravati, has unsettled the
award passed in an ex parte proceeding, it is necessary to examine
the facts, evidence, and the reasons recorded by the learned
Principal District Judge.
19] It is to be noted that, while addressing the issue within
the conspectus of Section 34 or Section 37 of the Act of 1996,
there cannot be a hard and fast rule or straight jacket formula. The
issue has to be addressed on the basis of the facts and circumstances
of each case and the evidence adduced by the parties. The law
cannot be applied dehors the facts of a particular case and the
evidence brought on record by the parties. It is to be noted that in a
claim filed before the Arbitrator, there must be a claim application
setting out the material facts vis-a-vis the dispute. The parties are
required to lead the evidence to prove the disputed facts. It is to be
noted that the proceeding before the Arbitrator could not be
stricto sensu equated with the civil suit. It is to be noted that,
before the award passed by the Arbitrator is unsettled, there must
be an application under Section 34 of the Act of 1996, which must
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set out the grounds within the parameters of Section 34. The
grounds pleaded in the application must be supported by the
evidence. Before examining the reasons recorded by the learned
Principal District Judge, while unsettling the award, it would be
necessary to consider the material facts pleaded in the application
made under Section 34 of the Act of 1996 by the respondent.
20] It was specifically contended in the claim application
by the appellant that the time for repayment of the loan was
extended up to 17th September, 2011. It is true that before the
Arbitrator, the documentary evidence was not produced. The
documentary evidence to that effect has been produced before this
Court for the first time by the appellant. Perusal of the application
under Section 34 filed by the respondent would show that this
ground was not specifically pleaded in the application. It was only
stated that the goods had not been sold within time and therefore
the respondent suffered the loss. It is to be noted that this ground
was canvassed at the stage of the argument before the learned
Principal District Judge without pleading the material facts. In my
view, the learned Principal District Judge was not right in accepting
the submissions advanced by the learned advocate for the
respondent in the absence of pleading of the material facts.
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21] It is to be mentioned that, at the stage of the appeal
under Section 37, for the first time, the documentary evidence
cannot be introduced. However, while addressing this issue in this
proceeding, I am satisfied that the respondent has not denied this
document by filing any counter affidavit. I may briefly refer to that
document. It is at Annexure-14. It is the letter dated 29 th
September, 2011, issued on behalf of the respondent to the Branch
Manager of the appellant-Society. Along with this letter, the notice
issued by advocate Mr. G.K. Sarda dated 22 nd September, 2011, and
the notice dated 29th September, 2011, addressed on behalf of the
respondent by advocate Mr. P.P. Mahalle, were annexed. The
purpose of annexing these two notices was to apprise the appellant
that his purchasers or the prospective purchasers of the cotton bales
of the respondent had committed a breach. The sale of the cotton
bales could not fructify, and therefore the request was made vide
letter dated 29th September, 2011, to the appellant to extend the
time for repayment of the loan by one month. This document has
not been denied by filing counter. The written argument has been
filed on behalf of the respondent. This document has not been
dealt with in this argument. In short, the respondent has not
denied the existence of this document. This document was very
much available with the respondent. The respondent did not plead
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this ground in the application under Section 34 of the Act of 1996.
If the respondent had pleaded this ground, then the appellant
would have adduced the evidence oral as well as documentary to
meet this ground. The failure to plead this ground is the most
important circumstance while appreciating the submissions on this
ground. In my view, therefore, the contention of the appellant that
there was an extension of time to repay the loan is not without
substance.
22] It is to be noted that the parties to a litigation must
come before the Court with clean hands. The suppression of
material fact or document reflects upon the mala fides of the
parties. The failure on the part of the respondent to deny this
document by filing a counter is the very vital circumstance. It was
categorically stated in the claim application filed before the
Arbitrator that the time for repayment of the loan amount was
extended up to 17th September, 2011, on the oral as well as written
request made by the respondent. It is to be noted that the learned
Arbitrator had served the notice of the proceeding filed before him
by the appellant to the respondent. The respondent did not appear
before the learned Arbitrator, and therefore the claim proceeded ex
parte. This relevant material fact pleaded in this application had
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gone unchallenged and uncontroverted. In my view, this is a very
important aspect. In this backdrop, the production of the
documents at Annexure-14 assumes significance. It reflects upon
the mala fides of the respondent. The learned Principal District
Judge has failed to consider the pleadings from the claim
application made before the learned Arbitrator.
23] I have minutely perused the application under Section
34 of the Act of 1996 made by the respondent. Perusal of the
application would show that the material facts vis-a-vis the mode of
sale of the pledged goods and the breach of the covenant to that
effect set out in the contract, had not been pleaded. There was no
pleading of material facts vis-a-vis the denial of extension of time
to repay the loan amount. It is to be noted that the learned
Principal District Judge, without pleading of the material facts, has
come to a conclusion that the appellant was solely responsible to
delay the sale of the cotton bales. In my view, the learned Principal
District Judge has failed to properly appreciate the material placed
on record. The appellant has produced on record the notices dated
10th May, 2011, 11th July, 2011, 26th September, 2011, and 2nd
February, 2012, issued to the respondent. Under these notices, the
respondent was called upon to make the repayment of the loan
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amount. Not a single notice was replied by the respondent. There
was no grievance or murmur on the part of the respondent vis-a-vis
the categorical statement made in some of the notices with regard
to the failure to repay the loan amount within time, the publication
of the auction notice, intimation of the same to the respondent, etc.
Exh.21 is the most important document. By this letter at Exh.21,
the respondent was informed about the mode of sale of the cotton
bales. Similarly, the respondent was put to the notice that the
notice, calling bids from the prospective purchasers, was published
in the newspaper. Exh.18 is the notice calling bids published in the
Deshonnati Newspaper. The publication of this notice has not
been denied or challenged. The learned Principal District Judge,
while addressing this issue, has observed that this document is
doubtful. The acknowledgment, in token of the receipt of Exh.21,
was not by the authorized person. The learned Principal District
Judge has observed that the comparison of this signature in token
of acknowledgment with the other signatures of the authorized
representative of the respondent would show that there is a
substantial difference between the two signatures. In my view, this
finding is flawed for the simple reason that it was not pleaded nor
established by the respondent that this notice was not received.
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24] The notices dated 10th May, 2011, 11th July, 2011, 26th
September, 2011, and 2nd February, 2012, clearly prove that the
respondent was apprised about the real state of affairs, and after
doing so, the demand of repayment of the loan was made. It is to
be noted that all these documents had been produced before the
Arbitrator. There was no dispute about the existence as well as the
admissibility of the documents on behalf of the respondent. The
respondent has admitted all these notices. The bidder by name,
M/s. Amrut Cotton Industries, made the payment of the sold
cotton bales, and the same was credited in the loan account of the
respondent. The sale of goods and the delivery of cotton bales to
M/s. Amrut Cotton Industries was known to the respondent. In
fact, the goods had been delivered to M/s. Amrut Cotton Industries
after receipt of the communication from the appellant.
25] The witness on behalf of the appellant filed the
affidavit of examination-in-chief. Along with the affidavit of
examination-in-chief, the witness produced the documents. Perusal
of the record shows that the learned Arbitrator, by a separate order,
exhibited the documents, after verifying the contents and the fact
that the documents were duly proved on the basis of the evidence
of the respondent.
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26] The learned Principal District Judge has failed to
notice that there was no grievance on behalf of the respondent with
regard to the receipt of public notice at Exh.18 or the notice at
Exh.21. It was not contended in the application under Section 34
that they had no knowledge about the sale of pledged goods. The
respondent did not raise any objection for the sale of the goods to
the highest bidder, i.e., M/s. Amrut Cotton Industries. In my view,
all these facts ought to have been considered by the learned
Principal District Judge before unsettling the award. The learned
Principal District Judge has not considered all these material and
relevant facts.
27] It is to be noted that number of notices had been
issued to the respondent. The respondent did not reply a single
notice. The respondent, on receipt of the notice in the arbitration
proceeding before the sole Arbitrator, did not appear before the
Arbitrator. It is submitted that the learned Arbitrator did not
ensure the compliance of mandatory provisions of the Act of 1996.
It is not the grievance of the respondent that, along with the notice,
the claim application or the documents had not been received. It is
evident that the respondent was in deep slumber. The respondent
slept over its right throughout. The respondent got a wake-up call
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when the notice was received after passing the arbitral award. It is
further evident that the application filed under Section 34 was also
a halfhearted and casual attempt. Even the material facts and
grounds, which have been made the basis for unsettling the award,
were not pleaded. The appellant in Section 34 application was
denied this opportunity to deal with each and every specific ground
put-forth to challenge the validity of the award.
28] In the above backdrop, the third ground, that the
award passed by the learned Arbitrator shows non-application of
mind, inasmuch as the learned Arbitrator has not recorded the
reasons, needs consideration. I have perused the claim application.
The material facts in support of the prayer have been pleaded in
the claim application. An exhaustive affidavit of examination-in-
chief was filed. The relevant documents to substantiate the claim
had been filed. The learned Arbitrator, by a speaking order,
exhibited those documents on being satisfied that the contents of
those documents were proved. The respondent has not denied
those documents. The claim for recovery of money is based on the
documentary evidence. It is to be noted that even in an ex parte
proceeding, the Court or the Arbitrator is not bound to accept the
claim or suit as it is, simply because the other side has not
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participated in the proceeding. In an ex parte proceeding, on
perusal of the material facts and the evidence, the Court or
Arbitrator has to record a finding that the said material is sufficient
to prove the claim. It is to be noted that when a matter proceeds ex
parte, the material averments made in the claim application go
uncontroverted. If uncontroverted statement of relevant fact is
supported by the documentary evidence, then the claim cannot be
rejected. The respondent, in this case, has not set out any reason for
not contesting the claim application. In my opinion, in this
context, no mala fides can be attributed either to the appellant or
to the learned Arbitrator. The learned Arbitrator, consistent with
the principles of natural justice and fair play, ensured the service of
notice to the respondent. The respondent has not placed on record
plausible explanation to justify the failure to participate in the
proceeding before the Arbitrator. There is cogent evidence of a
service of a notice by the Arbitrator. No mala fides or malice could
be attributed to the appellant or to the learned Arbitrator. The
respondent failed to appear before the Arbitrator and thereby
invited the trouble. The respondent was, therefore, required to
establish that the award was flawed and not sustainable under the
law. He was also required to establish the reasons for his failure to
contest the claim.
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29] In this backdrop, the reasons recorded by the learned
Arbitrator need scrutiny. The learned Arbitrator in paragraph 10 of
the award has analyzed the oral and documentary evidence. The
observation made by the learned Arbitrator would show that the
majority of the facts had not been disputed. On the basis of the
evidence, the contract has been proved. The learned Arbitrator has
recorded a finding that, on the basis of this evidence, the appellant
has proved its claim. In my view, these reasons are sufficient in the
factual situation. There was no denial of the claim of the appellant
by the respondent at any time. In my view, therefore, the learned
Principal District Judge was not right in unsettling the award
passed by the learned Arbitrator. The learned Principal District
Judge has failed to consider the material on record and the settled
position in law. In my view, the basic premise of the submissions of
the learned advocate that for want of the detailed reason the award
could be said to be against the Fundamental Policy of Indian Law
cannot be sustained.
30] The material on record does not support the
submissions advanced by the learned advocate for the respondent
on all the points. The learned Arbitrator followed the principles of
natural justice and fair play. The respondent cannot blame the
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appellant and the learned Arbitrator for this state of affairs. The
respondent has invited this situation. The examination of the
material on record in the conspectus of the settled legal provisions
would show that the learned Principal District Judge was not right
in setting aside the award. The decisions relied upon by the learned
advocate for the respondent are not applicable in the fact situation.
In view of this, the appeal deserves to be allowed. Hence, the
following order:
ORDER
i] The appeal is allowed with costs.
ii] The judgment and order dated 31st October, 2017,
passed by the learned Principal District Judge, Amravati, is set
aside.
iii] The application made by the respondent under Section
34 of the Act of 1996, is rejected. As a consequence thereof, the
award passed by the learned sole Arbitrator dated 26 th April, 2014,
is restored.
iv] The appeal stands disposed of in the above terms.
(G. A. SANAP, J.)
Vijay
Signed by: Mr. Vijay Kumar
Designation: PA To Honourable Judge
Date: 24/02/2025 19:43:40
