Delhi High Court
Guru Gobind Singh Indraprastha ... vs Engineering India Ltd on 26 March, 2021
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) (COMM) 46/2021 & CM APPLs.10323-10325/2021 AND
10760/2021
GURU GOBIND SINGH
INDRAPRASTHA UNIVERSITY ..... Appellant
Through: Mr. Mukul Talwar, Senior Advocate
with Ms. Anita Sahani, Advocate.
versus
ENGINEERING INDIA LTD ..... Respondent
Through: Mr. Uday Gupta, Advocate.
% Date of Decision: 26th March, 2021
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MS. JUSTICE ASHA MENON
JUDGMENT
MANMOHAN, J (Oral):
1. Present appeal has been filed challenging the order dated 13th March
2020 passed by the learned Single Judge.
2. Learned senior counsel for the Appellant submits that the learned
Single Judge instead of granting a similar rate of interest @ 12% per
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By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
annum to the Appellant, has asked it to re-agitate the matter as per law
despite appreciating that both the Appellant and the Respondent were to be
treated on the same footing. He points out that Section 34 of the Arbitration
and Conciliation Act, 1996 allows this Court to correct the Award atleast to
the extent of directing that same rate of interest shall be granted to both the
Respondent and the Appellant.
3. He submits that in the alternate, even if the learned Single Judge felt
compelled to direct the Appellant/Counter Claimant to re-agitate its claim
for interest, then in that case, the same direction ought to have been issued
to the Respondent as well, and the amount of interest of Rs. 74.12 lakhs
ought to have been disallowed, and both the parties should have been
permitted to re-agitate the matter before a freshly appointed arbitral
tribunal.
4. Learned senior counsel for the appellant also contends that there is a
calculation error in computing the external development charges by the
Arbitrator inasmuch as the factum of the claimant completing only 41.9%
work was not taken into account.
5. Issue notice. Mr. Uday Gutpa, Advocate accepts notice on behalf of
the Respondent. He submits that as far as interference with an order made
under Section 34, as per Section 37 of Arbitration and Conciliation Act is
concerned, it cannot be disputed that such interference under Section 37
cannot travel beyond the restrictions laid down under Section 34. In other
words, the Court cannot undertake an independent assessment of the merits
of the award, and must only ascertain that the exercise of power by the
Court under Section 34 has not exceeded the scope of the provision.
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By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
6. He further submits that as the counter-claim is in the nature of
damages, the appellant is not entitled to any interest on the same. In the
alternative, without prejudice to his rights and contentions, he would
submit that if at all the appellant is held entitled to any interest then the
same ought to be calculated from 26th October, 2015 when the original
counter-claim was replaced with the amended counter-claim and not from
19th May, 2011. In support of his submission, he relies upon a judgment of
the Supreme Court in State of Goa vs. Praveen Enterprises, AIR 2011 SC
3814 wherein it has been held as under:-
"17. As far as counter-claims are concerned, there is no room
for ambiguity in regard to the relevant date for determining the
limitation. Section 3(2)(b) of the Limitation Act, 1963 provides
that in regard to a counterclaim in suits, the date on which the
counterclaim is made in court shall be deemed to be the date of
institution of the counterclaim. As the Limitation Act, 1963 is
made applicable to arbitrations, in the case of a counter-claim
by a respondent in an arbitral proceeding, the date on which
the counter-claim is made before the arbitrator will be the date
of "institution" insofar as counterclaim is concerned. There is,
therefore, no need to provide a date of "commencement" as in
the case of claims of a claimant. Section 21 of the Act is
therefore not relevant for counter-claims. There is however one
exception. Where the respondent against whom a claim is made,
had also made a claim against the claimant and sought
arbitration by serving a notice to the claimant but subsequently
raises that claim as a counter-claim in the arbitration
proceedings initiated by the claimant, instead of filing a
separate application under Section 11 of the Act, the limitation
for such counter-claim should be computed, as on the date of
service of notice of such claim on the claimant and not on the
date of filing of the counter-claim."
7. Having heard learned counsel for the parties, this Court is of the view
that findings of fact as well as of law of the arbitrator/Arbitral Tribunal are
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By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
ordinarily not amenable to interference either under Section 34 or Section
37 of the Act. The scope of interference is only where the finding of the
tribunal is either contrary to the terms of the contract between the parties,
or, ex facie, perverse. The Arbitrator/Tribunal is the final arbiter on facts as
well as in law, and even errors, factual or legal, which stop short of
perversity, do not merit interference under Sections 34 or 37 of the Act. It
has also been repeatedly held that while entertaining appeals under Section
37 of the Act, the Court is not actually sitting as a Court of Appeal over the
award of the Arbitral Tribunal and therefore, the Court would not re-
appreciate or re-assess the evidence [see: 2018 SCC OnLine Del 8367,
'M/s. L.G. Electronics India (P) Ltd v. Dinesh Kalra'].
8. Keeping in view the aforesaid mandate of law and concurrent findings
of the fact, this Court is in agreement with the submission of the learned
counsel for the respondent that this Court, in the present appeal, cannot
examine the contention of the appellant qua any calculation error in
computing the external development charges on the basis that the factum of
the claimant completing only 41.9% work was not taken into account by
the Arbitrator.
9. However, this Court is of the view that as the learned Single Judge in
the impugned order has held that the appellant is entitled to interest on the
counter-claim, which is in the nature of damages, it ought to have applied
the same yardstick with regard to the rate of interest to both the parties.
This Court is further of the view that the appellant is entitled to interest
from the date it filed its counter claim namely 19 th May, 2011. On 26th
October, 2015, the appellant had only amended its counter claim and that
too by reducing the amount claimed from Rs.6.93 crores to Rs. 6.46 crores.
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By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
It is pertinent to mention that the Arbitrator had only awarded
Rs.45,50,046/- against the aforesaid counter-claim.
10. The judgment of the Apex Court in State of Goa (supra) is
inapplicable to the facts of the present case as the said judgment deals with
the issue of limitation of a counter claim and not with regard to rate of
interest that has to be paid on the counter-claim.
11. Further, this Court is of the view that if the matter is remanded to an
arbitrator for fresh adjudication with regard to rate of interest, it would
promote and not curtail litigation--an „end‟ which the Arbitration and
Conciliation Act, 1996 seeks to discourage. In fact, this Court is of the
opinion that if the argument of learned senior counsel for the appellant with
regard to rate of interest is accepted, it would be in consonance with one of
the objectives of the Arbitration and Conciliation Act, 1996, namely,
finality of arbitration awards.
12. This Court is of the view that if the argument of learned senior
counsel for the appellant with regard to rate of interest is accepted, it would
promote one of the „cherished goals‟ of arbitration, namely, finality of
arbitration awards.
13. Accordingly, the impugned order of the learned Single Judge is
modified to the extent that the appellant shall also be entitled to the same
rate of interest as awarded by the Arbitrator to the respondent on the
counter-claim, namely, simple interest @ 12% per annum from 19th May,
2011 till the date of award and @ 16% from the date of the award to the
date of payment.
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By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
14. With the aforesaid modification, the award and impugned order of the
learned Single Judge are upheld and the present appeal and pending
applications stand disposed of.
MANMOHAN, J
ASHA MENON, J
MARCH 26, 2021
js
Signature Not Verified
By:MANJEET KAUR
Signing Date:26.03.2021
20:06:44
