Union Of India vs M/S Arctic India
2010 Latest Caselaw 3520 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     FAO(OS) No.115/2006

UNION OF INDIA                   .....Appellant through
                                 Mr.A.K. Bhardwaj, Adv.

                  versus

M/S ARCTIC INDIA                 .....Respondent through
                                 Mr. Ravi Verma &
                                 Mr. Sarojanand Jha, Adv.

                  WITH

      FAO(OS)431/2010 & CM Nos.11295-96/2010

FOOD CORPORATION OF INDIA        ..... Appellant through
                                 Mr.K.A. Dewan, Adv.

                  versus

BRAHMA RICE&GENERAL MILLS ....Respondent through
                          None

                  WITH

      FAO(OS)358/2010 & CM No.9472/2010

DHRUMESH GOPAL SHAH              ..... Appellant through
                                 Mr. Neeraj Malhotra with
                                 Mr. Nishant Kumar, Advs.

                  versus

RELIGARE FINVEST LIMITED         ....Respondent through
                                 None

%                           Date of Decision : July 29, 2010




FAO(OS)115.2006                                       Page 1 of 23
       CORAM:
*     HON'BLE MR. JUSTICE VIKRAMAJIT SEN
      HON'BLE MS. JUSTICE MUKTA GUPTA
      1. Whether reporters of local papers may be
         allowed to see the Judgment?                   No
      2. To be referred to the Reporter or not?         Yes
      3. Whether the Judgment should be reported
         in the Digest?                                 Yes

VIKRAMAJIT SEN, J.

1. These Appeals pertain to the scope of interference of

Courts in the Award pursuant to filing of Objections under

Section 34 of the Arbitration and Conciliation Act, 1996 (A&C

Act for short). While answering this legal nodus, we must not

lose sight of the fact that Parliament had carried out widespread

amendments to the law, principally with a view to remedy

protracted litigation. Arbitration was conceived as an adjunct to

law Court in the process of dispute resolution. Rampant

interference in Awards had virtually emasculated this objective,

thus necessitating a legal regime. The endeavour of Parliament

was to impart finality to arbitral Awards which has been sought

to be achieved by circumscribing and curtailing challenges to

the Award by confining it to cases where the arbitral verdict

manifestly is in conflict with the public policy of India.

2. In the nascent stages of arbitration, when it was still to be

ubiquitously accepted as an alternative forum for dispute

resolution, Courts exercised supervision on these proceedings.

Arbitration, as an alternative dispute resolution mechanism, has

now developed into a robust institution, capable of effectively

and expeditiously deciding disputes, especially because of

specialized knowledge of the Arbitral Tribunals. With this

metamorphosis, the superintendence of the Courts has

expectedly and exponentially waned. Initially, jural interference

was allowed wide amplitude by the Supreme Court, leading to a

proliferation in the grounds on which Awards could be assailed.

Whilst initially Awards were susceptible to being set aside if all

questions raised were not discussed in the Award, with the

passage of time the fiction that all points had been duly

considered and rejected came to be adopted to insulate Awards

from jural censure. Similarly, whilst it was earlier accepted that

Awards should contain reasons in clear terms, it was

subsequently opined that if the trend/chain of thought was

discernible, the Award was impregnable to attack. Most

significantly, their Lordships have gone to the extent of

enunciating that judicial interference is not called for even in

those instances where the arbitrator may have committed an

error of fact. The following passage from Union of India -vs-

Rallia Ram, AIR 1963 SC 1685, even though in the context of

the repealed Arbitration Act, 1940 („Arbitration Act‟ for short),

is worthy of reproduction:-

An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute submitted to him is ordinarily not liable to be challenge on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite, or where the objection to the legality of the award is apparent on the face of the award. The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in

the manner provided by the arbitration agreement. But it is now firmly established that an award is bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous.

Acknowledging that the Arbitrator is the final judge of

facts, the Apex Court in State of Orissa -vs- Kalinga

Construction Co. (P) Ltd., 1970 (2) SCC 861 held that the High

Court erred in considering the matter as a Court of Appeal by

re-evaluating the evidence.

3. In Hindustan Iron Co. -vs- K. Shashikant & Co., AIR

1987 SC 81, the Court held that the Award of the Arbitrator

ought not to be set aside for the reason that, in the opinion of

the Court, the Arbitrator reached wrong conclusions or failed

to appreciate some facts. That this was a well settled

proposition of law was reiterated in the decision of the Apex

Court in Coimbatore District Podu Thozillar Sangam -vs-

Balasubramania Foundary, AIR 1987 SC 2045. It was opined

that it is only an error of law and not a mistake of fact

committed by the arbitrator, which is justiciable in the

application/objection before the Court. If there is no legal

proposition in the Award, which is erroneous and the alleged

mistakes are in the nature of errors of fact, the Award is not

amenable to corrections of the Court provided the Award is

made fairly, after giving adequate opportunity to the parties to

articulate their grievances in the manner provided by the

arbitration agreement. Similar views were again expressed in

Indian Oil Corporation Ltd. -vs- Indian Carbon Ltd., (1988) 3

SCC 36; Jawahar Lal Wadhwa -vs- Haripada Chakroberty,

(1989) 1 SCC 76; Puri Construction Pvt. Ltd. -vs- Union of

India, (1989) 1 SCC 411; M/s. Sudarsan Trading Co. -vs-

Government of Kerala, (1989) 2 SCC 30; Food Corporation of

India -vs- Joginderpal Mohinderpal , AIR 1989 SC 1263 where

even a plausible view taken by the Arbitrator was held not to

be open to Court interference. In Municipal Corporation of

Delhi -vs- M/s. Jagan Nath Ashok Kumar, AIR 1987 SC 2316,

the Court held that if the reasons appear per se to be not

unreasonable and irrational, the Court ought not to reappreciate

the evidence. In Hind Builders -vs- Union of India, AIR 1990 SC

1340 the Court cautioned that where two views were possible, it

could not be predicated that there was an error apparent on the

face of the Award. In Bijendra Nath Srivastava -vs- Mayank

Srivastava, AIR 1994 SC 2562, the view was expressed that the

reasonableness of reasons given by the arbitrator was not open

to challenge and that the proper approach would be for the

Court to support the Award. Similarly, in Hindustan

Construction Co. Ltd. -vs- Governor of Orissa, AIR 1995 SC

2189, it was repeated that the Court cannot reappreciate the

material on the record. In Trustees of the Port of Madras -vs-

Engineering Constructions Corporation Ltd., (1995) 5 SCC 531,

the decision of a Division Bench of the High Court of Madras,

which reversed the Award on a question of fact and not a

question of law, was set aside by the Supreme Court. After

considering its previous decisions, the Apex Court in B.V.

Radha Krishna -vs- Sponge Iron India Ltd., (1997) 4 SCC 693

again held that the Court could not substitute its own view in

place of that of the Arbitrator. In Army Welfare Housing

Organisation -vs- Gautam Construction & Fisheries Ltd., (1998)

7 SCC 290, the Court declined to vary an Award for the reason

that without reappreciating evidence it would not be possible to

fault the quantum awarded towards anticipated expenses. The

A&C Act has given statutory expression to the judicial view

that Courts' interference in arbitration matters is to be

eschewed.

4. The interpretation or construction of a contract or a

contractual clause is also the province of the Arbitrator to whom

a dispute is referred for final determination by the parties. The

construction imparted by the Arbitral Tribunal to a contract or a

contractual clause should remain impervious to another view

which may happen to be proffered by the Judge. Once there is

no dispute as to the existence of a contract, the interpretation of

clauses thereof is a matter for the Arbitral Tribunal to expound

upon. Suffice it is to mention Sudarsan Trading Co. v. Govt. of

Kerala, (1989) 2 SCC 38; Tarapore & Co. -vs- Cochin Shipyard

Ltd. (1984) 2 SCC 680 and Numaligarh Refinery Ltd. -vs-

Daelim Industrial Co. Ltd., (2007) 8 SCC 466 in reference to this

settled position of law.

5. The Apex Court lamented two decades ago, on the

procedural delays that has suffocated the system spreading

even to the disposal of disputes by the channel of Arbitration, in

the following passage in Guru Nanak Foundation -vs- Rattan

Singh and Sons, AIR 1981 SC 2075:-

Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes, avoiding procedural claptrap and this led them to Arbitration Act, 1940 ("Act" for short). However, the way in which the proceedings under the Act are conducted and without exception challenged in courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal

forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts been clothed with 'legalese' of unforeseeable complexity.

6. In Olympus Superstructures Pvt. Ltd. -vs- Meena Vijay

Khetan, (1999) 5 SCC 651, it has been observed that Section 34

of the A&C Act is based on Article 34 of the UNCITRAL MODEL

LAW and that the scope of the provisions of setting aside the

Award is far less than what was envisaged and permissible

under Section 30 or 33 of the Arbitration Act. In Sundaram

Finance Ltd. -vs- NEPC India Ltd., AIR 1999 SC 565, the Apex

Court has enunciated the law in these words:-

The 1996 Act is very different from the Arbitration Act, 1940. The provisions of this Act have, therefore, to be interpreted and construed independently and in fact reference to 1940 Act may actually lead to misconception. In other words, the provisions of 1996 Act have to be interpreted being uninfluenced by the principles underlying the 1940 Act. In order to get help in construing these provisions it is very relevant to refer to the UNCITRAL MODEL LAW rather than 1940 Act.

7. The departure made by the 1996 Act from the Act of 1940

vis-à-vis grounds for setting aside the Award are highlighted by

the Hon‟ble Supreme Court in McDermott International Inc. -vs-

Burn Standard Co. Ltd., (2006) 11 SCC 181 in these words:-

51. After the 1996 Act came into force, under Section 16 of the Act the party questioning the jurisdiction of the arbitrator has an obligation to raise the said question before the arbitrator. Such a question of jurisdiction could be raised if it is beyond the scope of his authority. It was required to be raised during arbitration proceedings or soon after initiation thereof. The jurisdictional question is required to be determined as a preliminary ground. A decision taken thereupon by the arbitrator would be the subject-matter of challenge under Section 34 of the Act. In the event the arbitrator opined that he had no jurisdiction in relation thereto an appeal there against was provided for under Section 37 of the Act.

52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court‟s jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it.

8. In light of our analysis of these precedents, it can be

conclusively held that the provisions of the A&C Act are

intended to confine to a narrow point, objections that can be

raised in Court where an Arbitral Award is assailed. To widen

the scope of Section 34 would be ignoring and setting at

nought the legislative intent, which perhaps was itself a

response to the judicial lament extracted above. Section 34 is

not a panacea for remedying any defect which the parties

allege. Therefore, the Courts exercising their powers have to be

extremely circumspect in admitting Objections under Section

34. The effect of admitting a petition under Section 34 has the

automatic effect of staying of the execution of the Award and

this defeats the entire purpose of the arbitration regime which

is sought to be established and promoted as an alternate to the

curial legal set up. This fact has been reflected upon by the

Supreme Court in the case of National Aluminum Company -vs-

Presteel and Fabrication Pvt. Ltd., (2004) 1 SCC 540.

9. It is oftentimes argued that their Lordships have restored

the law to the position prevailing in the Arbitration Act in ONGC

-vs- Saw Pipes, (2003) 5 SCC 705 : AIR 2003 SC 2629. This,

however, is too wide a generalization. So far as violation of

statutory proceedings is concerned, the Arbitral Tribunal must

remain within the parameters drawn by the statute, and if it

ventures beyond those boundaries, jural interference under

Section 34 of the A&C Act would be justifiable. The other

avenue available for being traversed is if the Award shocks the

conscience of the Judge. It is an unjustifiable misconstruction

that the Saw Pipes enjoins the Court to look into the merits of

the case as if it possessed and, therefore, was expected to

exercise appellate jurisdiction. These observations have been

necessitated also because of the fact that the learned Single

Judge has, in the impugned Judgment in FAO(OS) 115/2006,

needlessly and avoidably gone threadbare into the factual

matrix that was presented to the Court even though towards the

end of the impugned Order a Reference has been made to Food

Corporation of India -vs- Joginderpal Mohinderpal, AIR 1989 SC

1263, Puri Construction Pvt. Ltd. -vs- Union of India, AIR 1989

SC 777, Gujarat Water Supply & Sewerage Board -vs- Unique

Erectors (Gujarat) Pvt. Ltd., AIR 1989 SC 973, Hind Builders

-vs- Union of India, AIR 1990 SC 1340 as well as Sudarshan

Trading -vs- Govt. of Kerala, AIR 1989 SC 890, all of which dealt

with the regime set into place by the Arbitration Act. We

reiterate that the intention of the Parliament in enacting the

A&C Act is to combat and change the jural approach away from

conducting an appellate scrutiny of Awards by the Court.

FAO(OS) 115/2006

10. This Appeal assails the Judgment of the learned Single

Judge dated 8.11.2005, dismissing the Objections of the

Appellant/Union of India filed under Section 34 of the A&C Act

in respect of the Award dated 23.1.2001. There are, thus,

concurrent findings against the Union of India which,

regrettably, continues to adhere to its practice of pointlessly

litigating to the very end, in utter disregard to public statements

made by the Hon‟ble Union Law Minister as well as the learned

Attorney General of India decrying this attitude. Both the

adversaries before us had filed Claims before the Sole

Arbitrator. The subject contract was for providing central air-

conditioning to the technical as well as administrative buildings

of the Appellant/Union of India in the Delhi Cantonment. The

value of the Contract was `1,41,96,000/-. It appears that the

plant supplied by the Respondent did not fully and formally

complied with all the specifications, as appears to have been

immediately pointed out by the Appellant/Union of India. The

fact remains that the air-conditioning plant was not rejected by

the Appellant/Union of India and has been used and enjoyed by

it for several years. The Respondent had raised a claim for

`17,13,388.10/- as the balance outstanding amount and has

been awarded only `2,61,725/- together with `20,000/- against

the claim of `4,75,350/-; costs were not awarded; and interest at

the rate of twelve per cent with effect from 1.1.1999 and fifteen

per cent after the date of the Award was allowed. The

Respondent has reconciled itself to the Arbitral Award.

However, the Appellant/Union of India has assailed the Award

before the learned Single Judge and with obduracy, which is the

characteristic of the Union of India, has carried the matter

further in Appeal before us.

11. The learned Arbitrator, despite noting the timely

Objections raised by the Appellant vis-à-vis the non-conformity

of microprocessor control unit with the catalogue/agreed

specifications, had looked into the facts of the case and returned

a finding that the Union of India was entitled only for a sum of

`1,80,000/-. So far as the claim for `50,00,000/- was concerned,

the learned Arbitrator as well as the learned Single Judge have

noticed the complete absence of documentary or any other

evidence in support of the Appellant‟s Claim.

12. The impugned Arbitral Award is not contrary to the public

policy prevailing in India. The Findings are cogent and thus no

interference is called for under Section 34 of the A&C Act.

13. Finally, it is clear that the dispute, in large measure, is

governed by the Sale of Goods Act, 1930 („Goods Act‟ for short).

The Appellant ought not to have accepted the delivery of air-

conditioning plant if it was of the view that there was a

substantial and material deviation from specifications.

Section 26 of the Goods Act stipulates that once property is

transferred to the buyer, the risk is transferred to it. Section 32

of the Goods Act further clarifies that delivery of goods and

payment of price are concurrent conditions. Section 37 of the

Goods Act is extremely important as it ordains that where the

seller delivers to the buyer a quantity of goods, less or different

to that which has been contracted for, the buyer may reject

them, but if the buyer accepts the goods so delivered, he shall

pay for them at the contract rate. Indubitably, if the air-

conditioning plant was defective, the Appellant had the right to

claim damages. This is what has been done by it and there are

concurrent findings in favour of damages awarded in this

regard.

14. The Appeal is devoid of all merits and is dismissed with

costs of `20,000/-. Consequently, the Respondent is released

from the obligation to keep alive the Bank Guarantee issued by

the Bank of India, Bangalore.

FAO(OS)431/2010

15. This Appeal arises from the Order of the learned Single

Judge dated 19.1.2010, dismissing the Objections filed by the

Appellant against the Award dated 23.5.2002 of the learned

Arbitrator. The dispute between the parties concerned an

alleged breach of an agreement regarding storage and milling of

paddy. As per the said Agreement, the Respondents Brahma

Rice & General Mills were to lift and mill about 3000 metric

tons of paddy as per Appellant‟s (Food Corporation of India)

Terms and Conditions. The Appellant alleges that out of the

total quantity agreed to be milled, 143 metric tons of fine paddy

and 322 metric tons of common paddy was not milled as per

Agreement and the same deteriorated in quality and had to be

sold at a much lower price.

16. The Claim aggregating `28,65,105/- raised by the

Appellant before the learned Arbitrator was under the following

main heads:-

1. Cost of paddy against which no rice was delivered by the Respondent.

2. The penalty to pay one and a half times the economic cost of the shortfall in the recovery of rice in terms of Clause g(i) of the Agreement.

3. The cost of unmilled paddy which got deteriorated in quality because the miller did not lift the requisite paddy from FCI‟s godown.

After considering the Claim of both the sides and on the reading

of the sundry clauses of the Agreement between them, the

learned Arbitrator came to a conclusion that the case was not

that of "shortage" or "shortfall" as the balance quantity was

never even lifted by the Respondent/Miller. Thus, it was a

simplicitor case of breach of contract on account of the Miller‟s

default. In the light of these findings, the learned Arbitrator

held that the Miller is liable under Clause 5 of the Storage

Agreement dated 20.5.1996 which reads thus - "entire paddy

will be milled by the party failing which work will be got done at

their risk and cost" and Clause M(2) of the Milling Agreement

which reads thus - "If the Miller fails or neglects to complete the

lifting of paddy by the time stipulated in clause G(3), penalty

shall be recovered from him at the rate of Rs.2/- per quintal on

stocks which remained un-lifted by the stipulated date".

17. The learned Arbitrator also opined that the penalty of

Rupees two per quintal was a genuine pre-estimate.

18. As regards the Clause under which the Appellant had

claimed compensation, which stipulates that the compensation

has to be paid at the penal rate of one and a half times the

economic cost of the short supply of paddy, the learned

Arbitrator has held, after considering in detail the purpose,

intent and import of the Clauses, that Clauses O(iii) and g(i)

stipulate penalties and not genuine pre-estimation of damages

and thus cannot be invoked in calculating the actual damage in

the present case. The learned Arbitrator holds that these

Clauses are in the nature of threat being held over the Miller in

terrorem to secure the performance of the contract. Secondly,

the learned Arbitrator has also rejected the Claim on the finding

that the case was not that of "shortage" and "shortfall" as, in

fact, the balance quantity was never lifted by the Respondents.

It was thus concluded by the learned Arbitrator that the case

was of failure and neglect to mill the balance paddy by the

Respondents which, according to the learned Arbitrator,

attracted Clause 5 of the Shortage Agreement dated 20.5.1996

and Clause M(2) of Milling Agreement as noted earlier.

19. The learned Single Judge, on perusing the Award and

considering the arguments on both the sides, observed that the

learned Arbitrator had rightly held that the liability of the

Respondents was only to pay the liquidated damages at the rate

of Rupees two per quintal and that the Respondent was not

responsible for the deterioration of the paddy, for which

damages due to the inaction of FCI could not be laid at the door

of the Miller. It is further held by the learned Single Judge that

there cannot be any interference in the interpretation imparted

by the learned Arbitrator to the various Clauses of the Contract

unless the same is perverse.

20. The decision of the learned Single Judge is in line with our

own analysis of law, and various Supreme Court decisions

discussed earlier which hold that Courts, while exercising their

power under Section 34 of A&C Act, should abjure from

interfering with the interpretation imparted by the Arbitral

Tribunal even if another view was favoured by the Court.

21. The learned Arbitrator has given categorical findings after

looking into the evidence on record and considering the

arguments of both the parties that the matter is not that of

"shortfall" and "shortages" and that compensation that is

payable by the Respondents is only on account of paddy which,

if neglected or omitted to lift and mill for this, the Arbitrator has

awarded the compensation at the rate of Rupees two per quintal

as provided under the Contract itself. These findings, being

findings of fact, cannot be traversed by us even if the same are

incorrect.

22. We find no error in the impugned Judgment of the learned

Single Judge in opining that the Award was impervious to

challenge under Section 34 of A&C Act. The Appeal is devoid of

merit and has needlessly exhausted a large part of judicial time

in view of the law settled by the Supreme Court on several

occasions and is dismissed with costs of `20,000/-. All pending

applications are also dismissed.

FAO(OS) No.358/2010

23. This Appeal impugns the Judgment of the learned Single

Judge dated 6.4.2010, dismissing the Objections of the Appellant

filed under Section 34 of A&C Act. The said Objections were

filed against the Award of the learned Arbitrator dated

30.4.2009 wherein the Arbitrator had awarded `19,45,940.85/-

along with fifteen per cent interest with effect from 9.4.2008 till

the date of realization and `1,75,000/- towards arbitration cost

in favour of the Claimant.

24. The dispute has arisen between the parties from the

breach of a Loan Agreement dated 12.6.2006 between them.

The learned Arbitrator, at the very outset, noted that the

Respondent neither appeared himself nor was represented

through an advocate despite ample opportunities granted to

parties on several hearings. However, the Respondent raised his

defense by way of correspondence from time to time and the

same were taken on record in the interest of justice. The

learned Arbitrator held that the relevant documents evidencing

the existence and validity of Loan Agreement between the

parties were duly proved by the Claimant, though there was no

cross-examination by the Respondent despite opportunities

granted.

25. The case of the Respondent before the Arbitral Tribunal

was that the Respondent/Claimant is engaged in the business of

granting loans against securities. The Appellant had entered

into an Agreement with the Respondent/Claimant wherein it was

stipulated that the Appellant was required to maintain adequate

margin at all the times vis-à-vis the loan amount in the form of

Securities acceptable to the Claimant. The Claimant/Respondent

alleged that the Appellant failed to maintain the said margin

which was required under the Loan Agreement. The Claimant

was constrained to invoke Clause 3.3 of the Agreement whereby

the Claimant was empowered to dispose of the securities

deposited with it and transfer the proceeds to the Borrower

Account for liquidation. The said Securities fetched an amount

of `9,63,739,31/-, leaving a balance of `19,45,940.85/-

outstanding. This amount was claimed by the

Claimant/Respondent through various letters which, according

to the Claimant, were not replied to by the Appellant.

26. The Arbitrator notes that though the Appellant had raised

defences by means of correspondence, however, no evidence

was adduced on their behalf. The learned Arbitrator records

that:-

10. The Respondent did not file any Affidavit in support of its defence. None of the documents produced were duly proved by Respondent. The evidence of Respondent was closed by my separate order dated 17.04.2009 which was maintained by order dated 30.04.2009. It was clearly held that Respondent did not file its Affidavit by way of evidence on 16.04.2009 and there is no explanation for the delay either. Respondent was also not present on 16.04.2009. No arguments were addressed.

27. Before the learned Single Judge, by means of Objections

filed under Section 34 of A&C Act, the Appellant for the first

time raised contentious issues regarding an erroneous entry in

the Statement of Accounts and that the Securities, being sold by

the Respondent, were at a lower price to its own sister concern.

After noting these Objections, the learned Single Judge has held

that the scope of interference by Court under Section 34(2) of

A&C Act, being extremely limited, he could not traverse these

issues. He, however, after perusing the record and evidence

available before the learned Arbitrator, observed that the Loan

Agreement dated 10.6.2006 is not denied by the Appellant and

as regards Clause 3.3 of this Agreement, the Securities were

sold at the prevalent market rates. The argument of error in the

Account Statement is said to have not been raised in the

Objection Petition filed by the Appellant and in light of the fact

that no plausible explanation was forthcoming from the

Appellant for his non-appearance before the Arbitral Tribunal

and raising these grounds before the Tribunal, the explanation

of Respondent/Claimant was taken as correct.

28. We find no error in the approach of the learned Single

Judge. Section 34 of the A&C Act does not allow the Courts to

enter into the factual arena and reanalyze the evidence

available on record and alter the factual findings of the Arbitral

Tribunal. The opportunity of adducing and appreciating

evidence rests with the Arbitral Tribunal. The findings of fact

that follow in light of this evidence recorded by the Arbitral

Tribunal is final and to be taken as correct by the Courts unless

perverse.

29. By his non-participation in the arbitral proceedings, the

Appellant ran the fatal risk of losing out on the opportunity to

prove his case and disproving the Respondent‟s case. This

fatality cannot be cured by any curial proceedings available in

A&C Act.

30. The Appeal is without merit. Appeal as well as the pending

application is hereby dismissed.

                                          ( VIKRAMAJIT SEN )
                                                JUDGE



                                          ( MUKTA GUPTA )
July 29, 2010                                  JUDGE
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