M/S Spicejet Limited vs M/S Travel2Agent.Com & Ors
2025 Latest Caselaw 4243 Del

Delhi High Court

M/S Spicejet Limited vs M/S Travel2Agent.Com & Ors on 22 April, 2025

Author: Navin Chawla

Bench: Navin Chawla

                  $~78
                  *      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                           Date of decision: 22.04.2025
                  +      FAO(OS) (COMM) 53/2025
                         M/S SPICEJET LIMITED                            .....Appellant
                                        Through:        Mr.Samrat Nigam, Sr. Adv.
                                                        with Mr.Amit Punj, Ms.Arpita
                                                        Rawat, Advs.
                                            versus
                         M/S TRAVEL2AGENT.COM & ORS.     .....Respondents
                                       Through: Nemo
                         CORAM:
                         HON'BLE MR. JUSTICE NAVIN CHAWLA
                         HON'BLE MS. JUSTICE RENU BHATNAGAR

                  NAVIN CHAWLA, J. (ORAL)

CM APPL. 20091/2025 (Exemption)

1. Allowed, subject to all just exceptions.

2. For the reasons stated in the application, the delay of 6 days in re-filing is condoned.

3. The application stands disposed of.

FAO(OS) (COMM) 53/2025 & CM APPLs. 20089-90/2025

4. This appeal has been filed by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'A&C Act'), challenging the Order dated 29.10.2024 passed by the learned Single Judge of this Court in OMP(COMM) 132/2016, tilted M/s Spicejet Limited v. M/s Travel2Agent.Com & Ors., partially allowing the petition filed by the appellant herein under Section 34 of the A&C Act, upholding the Arbitral Award dated 31.10.2012 passed

by the learned Sole Arbitrator to the limited extent that it concludes that the appellant was in breach of the Agreement between the parties and awards the quantum of expenditure/compensation, however, at the same time, sets aside the award of damages of Rs.5 lac against the appellant and in favour of the respondent.

5. The learned senior counsel for the appellant submits that the learned Arbitral Tribunal as also the learned Single Judge have failed to appreciate that the respondents did not make any investment only for the purpose of Agreement and under the Agreement dated 25.11.2006 executed between the parties herein. He submits that the evidence of investment made by the respondents was all prior to the date of signing of the Agreement and therefore, it cannot be said that this investment was made only because of the Agreement entered into between the parties, which admittedly never took off. The learned senior counsel for the appellant submits that the respondents were already in the business of operating as a travel agent, which is also borne out from the Agreement itself. Therefore, the entire expenses, if any, incurred by the respondents could not have been awarded to it treating the same as having been incurred for the Agreement in question.

6. He further challenges the award of Interest by the learned Arbitral Tribunal at the rate of 12% p.a. in favour of the respondents, stating that it is highly exorbitant.

7. We have considered the submissions made by the learned senior counsel for the appellant, however, find no merit in the same.

8. At the outset, we remind ourselves of the limited jurisdiction

that we exercise under Section 37 of the A&C Act, which cannot in any case, go beyond the scope of the jurisdiction of Section 34 of the A&C Act. In the exercise of such power, there cannot be a re- appreciation of the evidence led by the parties before the learned Arbitral Tribunal.

9. The scope of interference in terms of an Appeal under Sections 34 and 37 of the A&C Act has been highlighted by the Apex Court in Larsen Air Conditioning and Refrigeration Company v. Union of India & Ors., (2023) 15 SCC 472. The same reads as under:

"15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality i.e. that "illegality must go to the root of the matter and cannot be of a trivial nature"; and that the Tribunal "must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground" [ref : Associate Builders [para 42]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34."

10. In Konkan Railway Corporation Limited vs Chenab Bridge Project Undertaking, (2023) 9 SCC 85, the Supreme Court reiterated the principle of law as under:

"18. At the outset, we may state that the jurisdiction of the court under Section 37 of the Act, as clarified by this Court in MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ)

293] , is akin to the jurisdiction of the court under Section 34 of the Act. [Id, SCC p. 167, para 14:"14. As far as interference with an order made under Section 34, as per Section 37, 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."] Scope of interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act.

19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. [UHL Power Co. Ltd. v. State of H.P., (2022) 4 SCC 116, para 15 : (2022) 2 SCC (Civ) 401. See also : Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1, paras 24, 25.] It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal. [Ibid; SsangyongEngg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC (Civ) 213; ParsaKente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236, para 11.1 :

(2019) 3 SCC (Civ) 552] In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] , this Court held: (Dyna Technologies case [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] , SCC p. 12, paras 24-

25)

24. There is no dispute that Section 34

of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award.

Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.

25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."

11. In the present case, the learned Arbitral Tribunal, as upheld by the learned Single Judge, has found the appellant to be in breach of the Agreement between the parties. The Arbitral Tribunal, based on the

evidence led and witnesses adduced before it, has awarded Rs.29,30,937/- in favour of the respondents towards the expenditure incurred by the respondents. Except stating that this expenditure was prior to entering into the said Agreement, no other material has been brought by the appellant to our notice, to make us believe that this finding of the learned Arbitral Tribunal is perverse or liable to be interfered with by this Court. We, therefore, find no merit in the above submission of the appellant.

12. As far as the award of Interest is concerned, we find the same to be reasonable as the contract between the parties is commercial in nature. Accordingly, we find no merits in the same.

13. We may herein note that the appeal is also barred by limitation as there is a delay of 88 days in filing the same. The only explanation given by the appellant in this regard is that the appellant was trying to amicably resolve the dispute with the respondents. We do not find the same to be a sufficient explanation to condone such delay.

14. Therefore, the appeal is dismissed both on delay and also on merits. The pending applications are also disposed of as infructuous.

NAVIN CHAWLA, J

RENU BHATNAGAR, J APRIL 22, 2025/Arya/DG Click here to check corrigendum, if any