Deepak Bhargava And Ors vs Jagrati Trade Services Ltd. And Ors
2024 Latest Caselaw 2821 Cal/2

Calcutta High Court

Deepak Bhargava And Ors vs Jagrati Trade Services Ltd. And Ors on 4 September, 2024

Author: Sabyasachi Bhattacharyya

Bench: Sabyasachi Bhattacharyya

                      In the High Court at Calcutta
                        Original Civil Jurisdiction
                           Commercial Division

The Hon'ble Justice Sabyasachi Bhattacharyya

                        AP-COM No. 388 of 2024
                     (Old Case No. AP 777 of 2023)

                       Deepak Bhargava and Ors.
                                  Vs
                  Jagrati Trade Services Ltd. and Ors.

                                  With

                        AP-COM No. 389 of 2024
                     (Old Case No. AP 783 of 2023)

                  Jagrati Trade Services Ltd. and Ors.
                                  VS
                       Deepak Bhargava and Ors.

    For the Petitioner in
    AP-COM 388 of 2024       :    Mr. S. N. Mookherjee, Sr. Adv. (VC),
                                  Mr. Suman Dutt, Adv.,
                                  Mr. Paritosh Sinha, Adv.,
                                  Mr. K. K. Pandey, Adv.
    For the respondent in

AP-COM 389 of 2024 : Mr. S. N. Mookherjee, Sr. Adv. (VC), Mr. Suman Dutt, Adv., Mr. Paritosh Sinha, Adv., Mr. K. K. Pandey, Adv., Mr. Zeeshan Haque, Adv., Ms. Yamini Mukherjee, Adv., Mr. Subhrojyoti Mukherjee, Adv.

For the petitioner/respondent : Mr. Ratnanko Banerjee, Sr. Adv., Mr. Anirban Ray, Adv. (VC), Mr. Rudrajit Sarkar, Adv., Mr. Debangshu Dinda, Adv., Mr. Jai Kr. Surana, Adv., Ms. Arundhuti Barman Roy, Adv., Ms. Muskan Bangani, Adv.

    Hearing concluded on     :    28.08.2024

    Judgment on              :    04.09.2024



     Sabyasachi Bhattacharyya, J:-

1. Two applications under Section 34 of the Arbitration and Conciliation

Act, 1996 (for short, "the 1996 Act") have fallen for consideration

before this Court. AP-COM 388 of 2024 has been preferred by

respondent nos. 1 to 11 in the arbitral proceeding whereas AP-COM

389 of 2024 has been filed by the claimant.

2. The matter emanates out of a Share Purchase Agreement (SPA) dated

March 24, 2011 entered into between the parties. The claimant

sought specific performance of the contract, along with damages for

breach of the contract, whereas the respondents, in their counter

claim, sought specific performance of their version of the self-same

agreement.

3. The claimant's prayer for specific performance was refused by the

learned Arbitrator on the ground that the copy of the contract filed by

it is incorrect, suspicious and differs from the original as well as that

the entire payment obligation of 36 per cent of the shares of Rs. 82 Cr.

was not discharged by the claimant by payment of Rs. 19.92 Cr.

4. Damages were also refused to the claimant. However, the respondents

were directed to refund the amount of Rs. 19.92 Cr. (Approx.) which

was admittedly received by the respondents from the claimant as

consideration. Interest was also granted on the same at the rate of 9

per cent per annum from the date of filing of the Statement of Claim

till recovery.

5. The claimant challenges the non-grant of interest from the date of

payment till the date of commencement of the arbitration whereas the

respondent nos. 1 to 11 assail the award as a whole, including the

dismissal of their counter claim.

6. Learned senior counsel for the respondent nos. 1 to 11 in the arbitral

proceeding (hereinafter referred to as "the respondents") argues that

since the learned Arbitrator found that the document produced by the

claimant is doctored and refused to grant the relief of specific

performance on such ground, no claim for refund, which is an

equitable relief, ought to have granted in favour of the claimant. As

the claimant did not come with clean hands, the discretionary relief,

based on equity was also to be denied.

7. It is also argued that the claimant did not claim the relief of refund of

the amount paid at all. Section 22(2) of the Specific Relief Act, 1963

(in brief, "the 1963 Act") provides that no relief under Clause (a) or

Clause (b) of sub-section (1) of the said Section shall be granted by the

court unless it has been specifically claimed. Although the proviso

thereto permits an amendment to be allowed where the plaintiff has

not claimed any relief in the plaint for including a claim for such relief,

no such amendment was asked for by the claimant and as such, the

refund was directed in contravention of Section 22(2) of the said Act.

8. Insofar as the interest is concerned, since no relief was claimed for

refund, the cause of action for the said relief could arise only on the

date of the award, as it was the award itself that for the first time

created such right for the claimant. As such, no pre-award interest

could be granted to the claimant.

9. Learned senior counsel appearing for the respondents places reliance

on Section 31(7)(a) of the 1996 Act which provides that interest can be

granted for the whole or any part of the period between the date on

which the cause of action arose and the date on which the award is

made. In the present case, cause of action for interest having arisen

only on the date of the award, no interest could be granted at all.

10. It is further argued by the respondents that the payment which was

made to the respondent no. 13 in the arbitral proceeding (the

Company) was not paid by the claimant of its own. Two assignees of

the claimant substantially paid such amount. As such, since the said

assignees, namely one Tirupathi Vancom and one Goldsmith, were not

parties either to the SPA or the arbitration agreement, no relief of

refund of the amount paid by them could be granted by the learned

Arbitrator. As such, the direction to refund the entire amount to the

claimant was unlawful.

11. It is next argued by learned senior counsel for the respondents that

the liability of refund has been imposed by the award jointly and

severally on all the respondents whereas the consideration was

received as per their respective number of shares. Hence, the ratio of

shares which were paid for by each of the respondents ought to have

been the yardstick for saddling the respondents with the liability of

refund, if refund was to be directed at all.

12. It is further argued that a substantial portion of the payments were

made by way of loans to the respondent no. 13-Company. As such,

the shareholders could not be held to be jointly and severally liable to

pay/refund the portion of payments made by way of such loans. If at

all, the said liability is cast on the Company itself.

13. Insofar as costs are concerned, the learned Arbitrator refused to grant

the same on the ground that cost-sheets were not filed by the

respondents, whereas no direction was given to file such cost-sheets.

In any event, the remuneration of the Arbitrator and the

administration fees, which were admittedly shared in half by each of

the parties, was available as a parameter for grant of costs, which was

not availed of by the learned Arbitrator, although in the first sitting

dated August 13, 2019, the distribution of costs was enumerated by

the learned Arbitrator himself.

14. Learned senior counsel appearing for the respondents/petitioners

herein cites S.P. Chengalvaraya Naidu (dead) by LRs. v. Jagannath

(dead) by LRs. and others , reported at (1994) 1 SCC 1 to argued that a

person whose case is based on falsehood has no right to approach the

court and can be summarily thrown out at any stage of the litigation.

A litigant who approaches the court is bound to produce all the

documents executed by him which are relevant to the litigation. If he

withholds a vital document in order to gain advantage on the other

side then he would be guilty of playing fraud on the court as well as

on the opposite party.

15. Learned senior counsel next cites Dalip Singh v. State of Uttar Pradesh

and others, reported at (2010) 2 SCC 114 where the court took into

consideration the fact that the post-Independence period has seen

drastic changes in our value system and a creed of litigants has

cropped up who shamelessly resort to falsehood and unethical means

for achieving their goals. If there is no candid disclosure of relevant

and material facts or the petitioner is guilty of misleading the court, it

was held that his petition may be dismissed at the threshold without

considering the merits of the claim.

16. Learned senior counsel next cites Ssangyong Engg. & Construction Co.

Ltd. v. National Highways Authority of India (NHAI), reported at (2019)

15 SCC 131, where the Supreme Court, while discussing the context

of "Public Policy of India", observed that the same means firstly that a

domestic award is contrary to the fundamental policy of Indian Law as

understood in Paragraph Nos. 18 and 27 of Associate Builders or

secondly that such award is against basic notions of justice or

morality as understood in Paragraph Nos. 36 to 39 of Associate

Builders. Patent illegality appearing on the face of the award, which

refers to such illegality as goes to the root of the matter but which

does not amount to mere erroneous application of the law, was also

linked to public policy or public interest.

17. Next relying on Associate Builders v. Delhi Development Authority,

reported at (2015) 3 SCC 49, it is argued that the binding effect of a

judgment of a superior court being disregarded would be violative of

the fundamental policy of Indian Law. The Supreme Court held

therein that if an award is against justice or morality, the third ground

of public policy in Section 34(2) of the 1996 Act is satisfied. To come

under the purview of such yardsticks, an award has to shock the

conscience of the court.

18. Learned senior counsel also cites Batliboi Environmental Engineers

Ltd. v. Hindustan Petroleum Corpn. Ltd. and another, reported at (2024)

2 SCC 375 to argue that computation of damages should not be

whimsical and absurd, resulting in a windfall and bounty for one

party at the expense of the other. Further, the computation of

damages should not be disingenuous and the damages should

commensurate with the lost sustained.

19. Learned senior counsel next cites S.V. Samudram v. State of

Karnataka and another, reported at (2024) 3 SCC 623, where the

Supreme Court laid down the parameters of when an award can be

said to be against public policy of India, including situations where an

award is patently illegal or in contravention of any substantive law of

India or is unreasonable or perverse or in patent violation of a

statutory provision.

20. Lastly, learned senior counsel cites Project Director, National Highways

No. 45E and 220 National Highways Authority of India v. M. Hakeem

and another, reported at (2021) 9 SCC 1 where the contours of

interference and modification of an arbitral award by the court under

Section 34 were dealt with by the Supreme Court.

21. Learned senior counsel for the claimant/respondent no. 1 submits

that the respondents/present petitioners have consistently made an

offer to refund the amount of Rs. 19.92 Cr. which was admittedly

received by them from the claimant. Findings to that effect of the

learned Arbitral Tribunal at various places of the award are cited in

support of such contention. Learned senior counsel for the claimants

also hands over a copy of a modification application filed by the

present petitioners in connection with an application under Section 9

of the 1996 Act. In Paragraph No. 6 thereof, it was stated on oath by

the respondents/applicants that they accept the portion of the award

directing payment of the principal sum of Rs. 19,92,30,500/- to the

petitioner and intend to pay the said sum at the earliest. It was also

clarified that the applicants therein further intended to challenge the

portion of the award whereby interest had been awarded on the said

sum. Thus, the respondents/petitioners themselves and through

counsel, have repeatedly reiterated the offer of refund of the amount of

Rs. 19.92 Cr. (approx.) at various stages of the litigation, also post-

award, and expressed the specific intention that they wanted to

challenge only the interest component of the award and not the refund

of the principal. It is argued that thus, the respondents/petitioners

cannot now resile from such position and challenge the refund as

directed by the learned Arbitrator.

22. It is further argued that the agreement between the parties includes

the possibility of refund with interest. The limited scope of forfeiture

was up to Rs.1 Crore and is not applicable in the present case at all.

23. Learned senior counsel next argues that the provision of Section 22(2)

of the 1963 Act regarding a relief having to be claimed for being

granted is a technical objection and not mandatory. Since an

amendment is provided for in the proviso thereto, which could be done

at any stage during the course of the arbitration, the relief cannot be

refused for non-inclusion of the same in the original pleadings.

24. It is submitted that the bar in Section 22(2) is merely to ensure that

none of the parties are taken by surprise by a particular claim. In the

present case, the relief of refund and interest was argued by both

sides extensively and dealt with by the learned Arbitrator. This,

coupled with the fact that the respondents/petitioners repeatedly

offered a refund of the amount, establishes that there is no

conceivable reason as to why the non-mention of the same in the

Statement of Claim would disentitle the claimant from being granted

such amount altogether.

25. It is next submitted by learned senior counsel for the

claimant/respondent no. 1 that the claim of interest on the principal

amount of refund is severable into two different components - interest

from the date of cause of action till initiation of the arbitral proceeding

and interest payable from commencement from the arbitral proceeding

till recovery. It is argued that theoretically, the arbitral award may be

passed on the very same date as the filing of the pleadings. The time

taken by the Arbitral Tribunal in hearing the matter and passing the

award cannot be a relevant consideration for calculation of interest.

Thus, the interest regime as contemplated in Section 31(7) of the 1996

Act is applicable for the pre-arbitral proceeding period as well. In fact,

Section 31(7)(a) of the 1996 Act empowers the learned Arbitrator to

grant interest for the whole or any part of the period between the date

on which the cause of action arose and the date on which the award is

made. It is contended that since the learned Arbitrator has awarded

refund of the principal amount, the cause of action for interest would

also commence not from the date of the award but from the date of the

payment of such principal amount by the claimant, which was the

cause of action for the refund as well.

26. Thus, it is argued that the respondents ought to have been granted

interest not from the commencement of the arbitral proceeding but

from the date of payment of the principal amount.

27. Upon hearing learned counsel for the parties, the Court comes to the

following conclusions:

28. The first limb of challenge by the respondents/petitioners is that the

Arbitral Tribunal acted with patent illegality in directing refund of the

consideration of Rs. 19.92 Cr. (Approx.) to the claimant. The claimant

has raised an objection to the effect that the respondents/petitioners

consistently gave out before the Tribunal as well as this Court, in

connection with an application under Section 9 of the 1996 Act, that it

was ready and willing to refund the said amount to the claimant.

29. A careful perusal of the impugned award shows that before the

Tribunal, the respondents/petitioners have all along argued that they

are agreeable to refund the amount of consideration to the claimant.

However, subsequently, learned senior counsel for the respondents

before the Tribunal resiled from such position and argued that since

there was no prayer by the claimant for such refund, the Tribunal

cannot refund the said amount.

30. Thus, despite having agreed before the Tribunal to refund the entire

amount of consideration without interest, the only ground on which

the claim of refund was contested was that no relief to that effect was

sought by the claimant in its pleadings.

31. On principle, however, the respondents/petitioners admit that the

consideration amount was paid by the claimant to them and that they

had no qualms to refund the same, otherwise than the technical

objection that relief to that extent was not sought in the pleadings.

32. What is more clinching on the count of admission by the

respondents/petitioners is that, in a post-award application under

Section 9 of the 1996 Act filed by the claimant, the respondents took

out an application for modification, in Paragraph No. 6 of which it was

categorically admitted that the respondents/petitioners accept the

portion of the award dated June 29, 2023 directing payment of the

principal sum of Rs.19,92,30,500/- to the claimant and intend to pay

the sum at the earliest. It was also stated that the

respondents/petitioners intend to challenge the portion of the award

whereby interest was granted on such sum.

33. Thus, from their own conduct all through and even post-award, the

respondents/present petitioners have unambiguously given out that

they accept the portion of the award directing refund of the principal

amount and do not intend to challenge the refund of the principal

sum but would restrict their challenge only to the interest component

of the same.

34. Before this Court, the respondents/petitioners have taken a specious

plea that Section 22(2) of the 1963 Act stipulates that no relief shall

be granted by the Court unless it has been specifically claimed.

35. However, the proviso thereto dilutes the said restriction by

empowering the Court to allow the plaintiff to amend the plaint for

introducing such relief.

36. Thus, the bar contemplated in Section 22(2) is not absolute and the

court is empowered at any point of time to allow an amendment to get

over the technical bar of no relief being claimed.

37. Thus, seen in proper perspective, the bar cannot be said to be

absolute. The power of the court to permit amendment to incorporate

the relief and grant the same, even if not sought in the original

pleading, has been vested by the statute itself.

38. In the present case, there was no occasion or necessity to amend the

pleading, since both parties have addressed the issue at length before

the Arbitral Tribunal. Not only that, the respondents/petitioners, by

their specific admission and expression of willingness, have entitled

the claimant to get the refund of the entire principal sum. In view of

the acceptance of the right of the claimant to get such refund, there

arose no further occasion for the claimant to seek an amendment to

its pleading or for the Tribunal to allow the same. Hence, the claimant

acted on the basis of the impression given by the respondents, that

they conceded to payment of the principal consideration amount, by

not seeking any further amendment to the pleading despite having

argued for such refund before the Tribunal.

39. Hence, the doctrine of Estoppel is fully attracted, since the

respondents, by their very stand that they are agreeable to refund the

entire principal consideration, prompted the claimant to act in such a

manner so as to not seek any further amendment, which if sought,

could easily have been allowed by the Tribunal under the proviso to

Section 22(2 of the 1963 Act.

40. Hence, the respondents/petitioners are barred by the principle of

Estoppel from challenging the part of the award whereby refund was

directed in respect of the principal amount of consideration admittedly

paid by the claimant to the respondents.

41. Another limb of the argument on such count advanced by the

respondents/petitioners is that, having held that the claimant placed

reliance on a doctored document, the claimant could not claim a

refund on the basis of the same.

42. However, the claim of refund stands on a different footing than

specific performance. Whereas the relief for specific performance was

based entirely on the SPA, the claimant's version of which was

disbelieved by the Tribunal, the claim of refund stood on the footing of

admitted payment of consideration by the claimant to the

respondents. The position might have been otherwise if the Tribunal

allowed a claim of damages in the alternative of specific performance,

since such relief would then be based on the agreement. However, the

claim for refund of the consideration amount was based on the

admitted fact that the amount was paid by the claimant and not a

relief based on the veracity of the agreement.

43. Hence, the mere fact that the Tribunal had disbelieved the copy of the

SPA furnished by the claimant could not have deterred the Tribunal

from granting the relief of refund, which was not based on the

agreement but on the payment having admittedly been made and the

subsequent refusal of the relief of specific performance, which entitled

the claimant to a refund of the consideration amount.

44. Also, the learned Arbitral Tribunal was justified in observing that the

respondents could not be permitted to reap the benefit of unjust

enrichment, being permitted to retain the amount of consideration

paid to them despite specific performance having been refused.

45. The Tribunal divorced the claim of specific performance and/or

damages based on breach of the agreement (which were refused) from

the direction to refund the consideration amount which stood on a

different footing. I find such distinction to be perfectly justified,

calling for no interference by the court.

46. As such, the component of the arbitral award whereby the principal

sum of Rs.19,92,30,500/- was directed to be refunded by the

respondents/petitioners to the claimant/respondent no. 1 cannot be

interfered with.

47. Learned senior counsel appearing for the respondents/petitioners

cites S.P. Chengalvaraya Naidu (dead) by LRs. (supra) to argue that a

litigant who approaches the court is bound to produce all documents

executed by him and if he withholds vital document in order to gain

advantage then he would be held guilty of playing fraud on the court

as well as on the opposite party. A case based on falsehood deprives

the person relying on such falsehood from approaching the court.

48. Again in Dalip Singh (supra), the Supreme Court highlighted the new

creed of unscrupulous litigants who do not hesitate to take shelter of

falsehood, misrepresentation and suppression of facts in court

proceedings.

49. A careful perusal of the impugned award, however, shows that the

Arbitral Tribunal did not take the production of an incorrect version of

the SPA by the claimant to the level of deliberate and willful fraud on

the Tribunal so that it would vitiate the entire claim. Insofar as the

claims directly based on the said document, such as specific

performance of contract and/or damages for breach of the contract,

those were refused by the Arbitral Tribunal. In Paragraph No. 92 of

the award, the Tribunal held that the claimant has not led the

foundational evidence for introducing the photocopy which was the

secondary evidence for the SPA, for which it was held that the copy of

SPA filed by the claimant (CD-1) cannot be relied upon as secondary

evidence of the original SPA. Lack of explanation on the part of Mr.

Sarda, a signatory to the SPA, regarding his absence when

amendments when allegedly carried out in the agreement, was the

basis of the Tribunal's disbelief of the said document. Discrepancies

were pointed out by the Tribunal in the document. It was also held

that a person who comes with a claim for specific performance of a

contract by disclosing a contract which is incorrect and suspicious

and differs from the original is not entitled to an order for specific

performance.

50. However, the refusal to grant specific performance was not solely

based on such finding. In Paragraph No. 109 of the award, the

Tribunal held that apart from the incorrectness of the claimant's

version of the SPA, the delay in making the claim was also a

determinant of such refusal. The Tribunal held that the subject

property is fairly close to the office of the claimant and was being

developed since 2014. A huge property in the heart of Calcutta was

demolished and advertisements were inserted, which came in the

public domain; thus, the claimant could not dispute before the

Tribunal that it was aware of construction going on in the property

since 2014. Yet, the claimant initiated arbitration only in 2019. Such

delay was another ground for refusal of specific performance.

51. Thirdly, the Tribunal held that the claimant had not paid its 36

percent share of Rs. 82 Cr., taking into account share consideration

price and loan amount, and that its payment of Rs. 19.92 Cr. was not

sufficient to discharge its 36 per cent obligation. In such view as well,

it was held that the claimant is not entitled to specific performance.

52. Hence, the refusal to grant specific performance of the SPA was not

based solely on the incorrectness of the copy of the SPA furnished by

the claimant but was based on other grounds as well.

53. Thus, the judgements cited on fraud and the effect thereof are not

germane in the present context.

54. The Tribunal, in fact, elaborately discussed that there is no provision

in the SPA for forfeiture or confiscation of the consideration amount

and that arguments were elaborately advanced by both sides on the

question of refund of money; as such, neither of the parties were

taken by surprise, to necessitate introduction by amendment of the

relief of refund in specific terms.

55. Hence, there cannot be any scope of interference with the direction of

the Tribunal for the respondents to refund the consideration money to

the claimant.

56. The other limb of argument of the respondents/petitioners is that the

language of Section 34 of the 1996 Act mandates the court, if satisfied

that the award is vitiated by patent illegality or fraud, to set aside the

same. It is argued that even if the respondents/petitioners had

conceded to refunding the principal sum, there cannot be any

Estoppel against the statute and, as such, this Court ought to set

aside the relevant portion of the award even if the

respondents/petitioners had conceded to the refund of the principal.

57. However interesting might such argument be at the first blush, the

same is not tenable in the eye of law. Section 34 of the 1996 Act

merely provides a gateway for the court to interfere with an arbitral

award. However, the key to such gateway lies in an application being

made by the aggrieved party. Section 34(1), in no uncertain terms,

provides that recourse to a court against an arbitral award may be

made only by an application for setting aside such award in

accordance with sub-sections (2) and (3) of the said Section. Thus,

filing of an application by the aggrieved party is a pre-requisite and a

sine qua non for conferring jurisdiction on the court under Section 34.

As such, it is optional for the aggrieved party to file or not to file the

application to invoke such power of the court. As such, the aggrieved

party definitely has a conscious right to relinquish its grievance by not

filing such application. Thus, the right of challenge under Section 34

is waivable at the instance of the aggrieved party and consequently the

concept of Estoppel against the law cannot be applied in the present

context, as it is entirely on the aggrieved party to elect as to whether

or not to file a challenge under the said provision.

58. Thus, since the respondents/petitioners have elected repeatedly, even

post-award, to relinquish such right in respect of the refund of the

consideration amount, they cannot now resile and argue the principle

of Estoppel against the law to turn back and assail such portion of the

award.

59. The propositions laid down in Ssangyong Engg. & Construction Co. Ltd.

(supra) and Associate Builders (supra) are well-settled. The contours

of interference under Section 34 on the ground of contravention of

basic notions of morality or justice are circumscribed by the notion of

the award being "shocking to the conscience of the court". The

infraction has to be of fundamental notions or principles of justice to

satisfy the high ground of "shocking to the conscience of the court".

The concept of morality was discussed threadbare in Associate

Builders (supra). The conclusion arrived at by the Supreme Court was

that an award can be said to be against justice only when it shocks

the conscience of the court and basic notions of morality.

60. Insofar as the grant of interest by the Tribunal in the impugned award

is concerned, the interest component goes hand-in-hand with the

direction to refund of the consideration price to the claimant. Section

31 of the 1996 Act empowers the Arbitral Tribunal to include interest

on the sum for which the award is made at such rate as the Tribunal

deems reasonable, on the whole or any part of the money for the

whole or any part of the period between the date on which the cause

of action arose and the date on which the award is made. Section

31(7)(a) is vividly clear on such aspect.

61. Thus, it is well within the discretion of the Tribunal to grant interest

on any sum awarded to the claimant. Therefore there is no illegality

in the Tribunal granting such interest in the present case, as the

consideration amount was directed to be refunded well within the

confines of law and the agreement between the parties and the

associated consequential relief of interest cannot be said to be illegal

or beyond the powers of the Tribunal.

62. The further question which arises is whether the cause of action

should be deemed to have arisen for the purpose of interest from the

date of the award.

63. Such argument cannot be accepted at all. The entitlement of the

claimant to interest goes hand-in-hand with the entitlement to get a

refund of the consideration amount. The causes of action of the two

reliefs cannot be dissociated as such. The interest component cannot

be segregated from the main awarded amount, since the entitlement of

the refund arose on the date when the claimant became entitled to the

consideration amount itself. Rather, the Tribunal has been lenient on

the respondents/petitioners by awarding interest not from the date of

the cause of action but from the date of the initiation of the arbitral

proceeding. Such lenience was also within the discretion of the

Tribunal; hence, there cannot be any interference on such count.

64. The basis of the petitioner's argument that cause of action for interest

arose from the date of the award is its stand that no relief of refund

was claimed at any point of time, nor was any interest claimed on

such amount. However, the issue of the petitioner's liability to refund

the consideration amount has been discussed above threadbare, as

was done by the Tribunal itself. Having held that the petitioner is

liable to refund of the entire amount, despite no relief being

specifically included in that regard in the Statement of Claim, there

cannot be any justifiable reason to hold that only the interest

component can be segregated and its cause of action held to have

arisen with the award.

65. Thus, there is no basis for such argument of the petitioner. Once

having held that the claimant is entitled to the refund of the principal

consideration, interest thereon becomes a necessary corollary.

66. The petitioners cite Batliboi Environmental Engineers Ltd. (supra) for

the argument that computation of damages should not be whimsical

and absurd, resulting in a windfall and bounty for one party.

However, neither the refund of the consideration admittedly paid, nor

interest thereon, can be held to be a bounty or a windfall but comes

well within the contractual and statutory rights of the claimant to

obtain.

67. Insofar as the challenge of the claimant/respondent no. 1 is

concerned, regarding interest not being granted from the date of the

cause of action till the commencement of the arbitral proceeding, the

same was within the discretion of the Tribunal. Section 5 of the 1996

Act precludes the court from interfering in any manner with an

arbitral proceeding or award except so far as provided in the 1996 Act.

Section 34 of the said Act does not empower the court to substitute its

own view or notions of discretion in place of that exercised by the

Arbitrator. There was no patent illegality on the part of the Arbitrator

in granting interest from the date of the commencement of arbitration

and not from the date when the amount became due. Sufficient

reasons have been afforded for such non-grant and the same cannot

be interfered with by this Court only on the ground that the said

component of interest could have been granted by the Tribunal.

68. In Project Director (supra) as well as S.V. Samudram (supra), the

Supreme Court has reiterated that the Section 34 court can at best set

aside an award if the requirements of Section 34 are satisfied, but

cannot modify the same, supplanting its own view in place of the

Arbitrator which would be impermissible, being completely de hors the

jurisdiction under Section 34.

69. It has been held by the Supreme Court time and again that the power

under Section 34 to set aside the award does not include the power to

modify the same. Seen from such perspective as well, there is no

scope of allowing the challenge of the claimant/respondent to the

extent of grant of interest from the date when the claimant became

entitled to the refund of consideration, which would have the effect of

modifying the award by tinkering with the discretion exercised by the

Arbitral Tribunal.

70. Hence, the challenge preferred by the claimant/respondent to non-

grant of such additional interest between the period from when the

refund became due till the date of commencement of the arbitration is

also refused.

71. Accordingly, AP-COM No. 388 of 2024(Old Case No. AP 777 of 2023)

with AP-COM No. 389 of 2024 (Old Case No. AP 783 of 2023) are

dismissed on contest without, however, any order as to costs.

72. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )