Gujarat High Court
Gujarat Industrial Development ... vs Graphite India Ltd on 21 April, 2023
Bench: Ashutosh Shastri
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2080 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI Sd/-
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE Sd/-
==================================================
1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
==================================================
GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (GIDC) LTD
Versus
GRAPHITE INDIA LTD.,
==================================================
Appearance:
MR. M. B. GANDHI, SENIOR ADVOCATE WITH MR RUTVIJ M
MR. S. N. SOPARKAR, SENIOR ADVOCATE WITH MR. UNMESH
SHUKLA, SENIOR ADVOCATE WITH MR.SHASHVATA U SHUKLA(8069)
==================================================
CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 21/04/2023
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI)
[1] By way of this First Appeal under Section 96 of Code of
Civil Procedure, 1908, the appellant - Gujarat Industrial
Development Corporation has challenged the legality and
validity of the judgment and order passed by the learned
District Civil Judge, Bharuch dated 26.03.2016 passed in Civil
Misc. Application No. 209 of 2014 under Section 34 of
Arbitration and Conciliation Act, 1996 (hereinafter referred as
to the "Act") by virtue of which judgment, an application of
present appellant came to be rejected.
[2] The facts which has given rise to filing of this appeal are
that the appellant - Gujarat Industrial Development Corporation
had invited a tender for providing and laying down 1200 mm dia
GRP water supply line from Angareshwar Intake Water Works to
GIDC Compound at Bhersam. The said invitation of tender was
in or around April, 2005. The Corporation had invited the
sealed tenders for such work in two separate sealed covers i.e.
technical bid and price bid. Since the rates were found to be
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
competitive of respondent, the same was accepted and an
agreement came to be executed with regard to the said work.
The terms and conditions of the contract also accepted by both
the sides i.e. appellant as well as respondent. The contract to
that effect was executed between the Executive Engineer, GIDC
and the opponent claimant herein. The said contract was also
having a specific clause with regard to the dispute relating to
contract how to be resolved and for that Clause-20 was in detail
mentioned indicating the procedure and terms of such
resolution.
[2.1] It is the case of the appellant that a work order was issued
in favour of respondent company on 18.10.2005 but from the
beginning appellant - corporation has found that the respondent
- claimant remained throughout negligent and the work
progress was also not satisfactory and it was found too poor.
[2.2] On account of such, the appellant had repeatedly served
notices but till the termination, no progress was found to be
satisfactory. The appellant had also drawn the attention of the
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
respondent that sufficient ROU is available for laying down
pipelines. But it is the matter of record that respondent could
not procure sufficient quantity of pipe at the site. The period
which was mentioned was requiring 82.44% progress in the
work but till that moment namely when corporation informed
about poor progress in the work only progress was made to the
extent of 18.43% (6175 ruit pipe) and this slow progress and
process was despite notices having been served which
ultimately compelled the corporation to terminate the contract
on 29.07.2006.
[2.3] It is the case of the appellant - corporation that despite
aforesaid situation, the respondent has submitted its final bid
and statement of demand for illegal termination and alleging
various breaches of GIDC and then claimed an amount of
Rs.14,41,42,629/-. The respondent issued notice for recovery of
the said amount on 15.05.2010 to the Deputy Executive
Engineer, Bharuch and not to the Executive Engineer and 30
days period was mentioned for such payment otherwise it was
informed that claimant would resort to arbitration for resolving
the dispute.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[2.4] It is the stand of the appellant - corporation that
immediately within four days of issuance of notice for recovery
without waiting for full tenure of the notice within a period of
four days only the arbitration clause was invoked without
waiting even for the response to the notice by present
corporation. In fact, it is the grievance of the appellant
corporation that without proper appreciation of noticing the
entire material, the Arbitration Proceedings have been carried
out mainly on the basis of notice.
[2.5] The respondent - claimant feeling aggrieved by the
termination of contract invoked Arbitration clause under
Section 102 of the Contract Agreement and referred the matter
to the Indian Council of Arbitration. The Arbitral Tribunal was
constituted and the appellant nominated Mr. Sanat Pandya as
an Arbitrator whereas respondent nominated Dr. Vandna Bhatt
as an Arbitrator and the ICA appointed Mr. Justice C.K.Thakkar
(former Judge Supreme Court of India) as a Presiding
Arbitrator. The Arbitral Tribunal had framed issues and
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
ultimately adjudicated the proceedings and finally the claim of
respondent was allowed against the GIDC to the extent of
Rs.9,02,16,045/- which the Arbitral Tribunal directed the
appellant - corporation to pay the same to the respondent. The
said amount was consisting of Rs.5,97,62,078/- with regard to
Claim No.1 i.e. work done but not paid form 20.11.2007 till the
date of award i.e. 20.04.2014 which means 2342 days which
works out Rs.4,60,15,163/- and the Arbitral Tribunal directed
the respondent to be paid with the said amount. The Arbitral
Tribunal in terms of the direction has further issued
consequential certain direction to make the payment and the
total payment which was directed to be paid comes to
Rs.13,62,31,208/-
[2.6] Feeling aggrieved and dissatisfied with the said award
passed by the Arbitral Tribunal, the appellant preferred Civil
Misc. Application under Section 34 of the Act which was
numbered as Civil Misc. Application No.209 of 2014 challenging
the order of Arbitral Tribunal by raising multiple contentions.
In the said application, both the parties have submitted their
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reply and rejoinder and completed respective pleadings and the
application was pending. By that time, the respondent herein
filed a Special Civil Application No.16206 of 2015 for seeking
expeditious disposal of aforesaid Civil Misc. Application No.209
of 2014 and as such by framing time schedule, this Court has
disposed of the petition by expediting the proceedings. The said
application then came up for consideration before the learned
2nd Additional District Judge, Bharuch who after hearing was
pleased to dismiss the application filed by present appellant by
giving a brief background and without entering into the real
controversy and without dealing with the contentions, the
application came to be disposed of. It is this order which of the
learned 2nd Additional District Judge, Bharuch dated 29.03.2016
is made the subject matter of present First Appeal under
Section 96 of the Code of Civil Procedure and read with the
provisions contained under the Act.
[3] The present appeal was entertained by the Division Bench
of this Court vide order dated 03.10.2016 and while admitting
the appeal in stay application i.e. Civil Application No.9284 of
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
2016 after hearing both the sides, the directions have been
issued, which the Court would like to reproduce hereunder:
"1. RULE. Shri Shashvata Shukla, learned advocate waives
service of notice of rule on behalf of the respondent -
original claimant.
2. In the facts and circumstances of the case and with the
consent of the learned advocates appearing on behalf of
the respective parties, the present application is taken up
for final hearing today.
3. The present application has been preferred by the
applicant herein - appellant - original opponent for an
appropriate interim order /relief to stay further execution
and implementation of the impugned judgment and award
passed by the learned Arbitral Tribunal confirmed by the
learned District Court.
4. Having heard learned Counsels appearing on behalf of
the respective parties and the controversy in the main
First Appeal and considering the fact that the judgment
and award declared by the learned Arbitral Tribunal,
confirmed by the learned District Court, can be said to be
a money decree, if further implementation and execution
of the impugned judgment and award is stayed on
condition that the applicant shall deposit the entire
amount, as awarded by the learned Arbitral Tribunal
together with interest and cost with the Registry of this
Court and on such deposit the original claimant is
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
permitted to withdraw 50% of the amount together with
proportionate interest and cost on furnishing the bank
guarantee to the satisfaction of the Registrar General of
this Court and the balance 50% of the amount together
with proportionate cost and interest is permitted to
withdrawn by the original claimant unconditionally, the
same shall be in the interest of both the parties and the
same shall meet the ends of justice at this stage. The
learned Counsels appearing on behalf of the respective
parties do not invite any further reasoned order while
passing the aforesaid interim order.
5. In view of the above, the present application is allowed.
Further execution, implementation and operation of the
impugned judgment and award passed by the learned
Arbitral Tribunal, confirmed by the learned District Court,
is hereby stayed during pendency and final disposal of the
main First Appeal on condition that the applicant shall
deposit the entire amount, as awarded by the learned
Arbitral Tribunal with cost and interest with the Registry
of this Court within a period of six weeks from today and
on such deposit the respondent - original claimant shall be
permitted to withdraw 50% of the amount so deposited
with proportionate cost and interest on furnishing the
bank guarantee to satisfaction of the Registrar General,
High Court, which shall be continued to be renewed till
final disposal of the main First Appeal and the balance
50% of the amount together with proportionate cost and
interest is permitted to be withdrawn by the respondent
unconditionally. However, the aforesaid shall be without
prejudice to the rights and contentions of the respective
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
parties in the main First Appeal.
6. With this, the present application is allowed. Rule is
made absolute accordingly to the aforesaid extent. In the
facts and circumstances of the case, there shall be no
order as to costs."
[4] Later on, it appears that amount has been deposited in
view of aforesaid order which fact is noticeable from the Office
note date 29.06.2022 and with this background of facts the main
appeal proceedings have come up for consideration before this
Court in which both the learned senior advocates, Mr. M. B.
Gandhi and Mr. S. N. Soparkar have placed their respective
submissions and after conclusion of their respective
submissions, the order kept reserved.
[5] Mr. M. B. Gandhi, learned senior advocate assisted by Mr.
Rutvij Bhatt, learned advocate appearing for the appellant -
corporation has vehemently contended that the award passed by
the learned Tribunal is not in consonance with the material on
record. A close perusal of sequence of events would indicate
that respondent who generated the claim to such an extent is
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
not entitled at all to claim. While passing the order by learned
2nd Additional District Judge a serious error is committed in
examining the documents and no proper evaluation is made
though the issues were framed but while concluding on the
same issues proper appreciation of the facts which are already
available on record is not undertaken. Learned Judge has
merely relied on the version of jurisdiction and disposed of the
application without assigning detailed reasons.
[5.1] Mr. Gandhi, learned senior advocate has further submitted
that learned Court below has failed to examine the award which
has passed contrary to law, facts and evidence and also the
award if to be looked into is not matching with the terms of the
contract. Even awarding also not in conformity with the
provisions of Act and the resultant effect is that the award is
clearly inflicted with a public policy, contrary to justice and
morality and as such the learned Judge has seriously erred in
exercising jurisdiction by not appreciating the aforesaid conflict,
which is visible on record.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[5.2] Mr. Gandhi, learned senior advocate has further submitted
that the time was not an essence of the contract which fact is
repeatedly mentioned in the documents and the respondent -
claimant was supposed to complete the work within the
stipulated period itself but this material aspect has been
completely not examined by the learned Judge by passing the
impugned order, even the award becomes unsustainable on this
issue if to be properly dealt with. Hence, such a serious error
which is crept in deserves to be corrected and for which the
Appellate Court has sufficient power to examine and deal with.
It has been further contended that the learned Arbitral Tribunal
itself has erred in law in coming to the conclusion that before
the contractual period the appellant has terminated the contract
itself but then Tribunal ought to have considered that the
respondent had completely failed to supply the material and has
merely progress the work to the extent only 18.43% as against
the requirement of 82.44%. The reason which has been
assigned by the respondent for low progress in the work is not
at all digestible in view of the fact that well in advance when it
was noticed about such conduct of respondent about proceeding
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
ahead with the awarded work, time and again, notices including
several reminders as well as warning letters were also issued by
appellant - corporation. Learned Tribunal failed to appreciate
then when the pipes are not manufactured how would the
claimant keep promise of laying down pipes in absence of
materials. These inter se correspondence which took place
between the parties, which is very much available on record, is
completely lost sight by the learned Tribunal and unfortunately
the learned Judge in an application has not considered these
aspects.
[5.3] Mr. Gandhi, learned senior advocate has further submitted
that the Arbtrial Tribunal has failed to properly examine the
issue of slow progress of work and issue pertaining to Right of
Use. The issue with regard to delay in liquidated damages is
also not properly examined by the learned Arbitral Tribunal and
as such this fact which is apparently having not even gone into
by the learned 2nd Additional District Judge, the order becomes
vulnerable, deserves to be corrected by setting aside the same.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[5.4] Mr. Gandhi, learned senior advocate has also submitted
that one material issue has not been gone into more particularly
when the Arbitral Tribunal committed an error in holding that
termination was pre-matured and relied upon on the version by
ignoring or clarifying as to how the Tribunal has not erred in
holding that GIDC is responsible merely exposing the issue of
jurisdiction has compassed the entire claim and as such these
material issues having not been gone into by the learned 2 nd
Additional Session Judge, the order apparently seen to be
laconic in nature. Hence, appropriate order requires to be
passed. Mr. Gandhi, learned senior advocate has further
submitted that Arbitral Tribunal has erred in considering the
claim of respondent for Hydra testing and thereby held that the
deduction were not as per the schedule of GWSSB rates and
ignored the provisions contained under the contract. The
Arbitral Tribunal has also specifically erred in coming to the
conclusion that there was a breach of contract and GIDC is
responsible to make the payment to respondent of
Rs.14,42,41,629/-. So, according to Mr. Gandhi, learned senior
advocate, over all error which is apparent has not been
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
examined nor dealt with by the learned 2nd Additional District
Judge.
[5.5] Mr. Gandhi, learned senior advocate has further submitted
that in fact the claim putforth was clearly time barred and
though there is no provision in the contract itself to award the
interest amount, the interest of exorbitant amount is awarded
and though the contract was containing the specific period of 11
months with a schedule prescribed attached with it, time was
surprisingly treated as not the essence of contract, which is a
clear error. A term is also specifically provided about the
liquidated damages to the extent of 1% but the said issue has
also not been properly gone into. On the basis of admitted
circumstances which are prevailing on record about strike in
the factory, non availability of material etc. and repeated
reminders sending warning to the complainant, the termination
was treated as pre-matured is clearly an error since terms of the
contract are specifically empowering appellant corporation to
terminate the contract. In fact a lame excuse was tried to be
made that site was not provided but in fact the site was very
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
much open and still the work was not done. Further fact has
also not been appreciated that once the claimant has accepted
an amount of Rs.6 crores around now were not entitled to raise
the claim by virtue of principle of estoppel as well.
[5.6] In summarized form, Mr. Gandhi, learned senior advocate
has submitted that the contentions which are specifically taken
before the Court below in Civil Misc. Application have not been
dealt with at all and the contention with regard to liquidated
damages point, though urged, not been touched at all. In
respect of ROU availability was not considered. Thus, these
facts material in nature have not been examined at all as is
clearly visible from the record. Certain admitted facts which
are prevailing and though pointed out have not been touched at
all and as such the points which have been canvassed having
not been dealt with is a ground for remand of the matter back
for re-examination and re-adjudication and as such Mr. Gandhi,
learned senior advocate has submitted that by setting aside the
order passed by the learned 2nd Additional District Judge, the
application deserves reconsideration afresh in the light of
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aforesaid situation, which is emerging from the record. Hence,
has requested to pass a suitable order in the interest of justice.
[5.7] To substantiate his claim, Mr. Gandhi, learned senior
advocate has drawn the attention to various documents
available from the record since the record of the case from the
beginning is made available by the office along with this appeal
and after drawing attention to various aspects, as indicated
above, a request is made to set aside the order with
consequential direction to re-examine.
[5.8] To substantiate his contentions, Mr. Gandhi, learned
senior advocate has placed reliance upon following decisions:-
(i) Associate Builders versus Delhi Development
Authority reported in (2015) 3 SCC 49.
(ii) Banarsi Das versus Seth Kanshi Ram and
Others reported in AIR 1963 SC 1165.
(iii) Swan Gold Mining Limited versus Hindustan
Copper Limited reported in (2015) 5 SCC 739.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
(iv) Oil and Natural Gas Corporation Limited
versus Western Geco International Limited reported in
(2014) 9 SCC 263.
(v) Oil & Natural Gas Corporation Ltd. versus Saw
Pipes Ltd. reported in (2003) 5 SCC 705.
(vi) Perry Kansagra versus Smriti Madan Kansagra
reported in (2019) 20 SCC 753.
(vii) Rajasthan State Mines & Minerals Ltd. versus
Eastern Engineering Enterprises and another reported
in AIR 1999 SC 3627.
(viii) Gujarat Industrial Development Corporation
(GIDC) Limited versus Graphite India Limited passed in
Civil Appeal Nos.4229-4230 of 2022 (Arising out of SLP
(Civil) Nos.9826-9827 of 2022) (Diary No.5983 of
2022).
(ix) Ramesh B. Desai & Ors. versus Bipin Vadilal
Mehta & Ors. reported in AIR 2006 SC 3672.
(x) Mohanlal versus State of Madhya Pradesh and
others reported in AIR 1980 Madhya Pradesh 1 Full
Bench.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
(xi) Rathnavathi and another versus Kavita
Ganashamdas reported in (2015) 5 SCC 223.
(xii) Himachal Pradesh Housing and Urban
Development Authority and another versus Ranjit
Singh Rana reported in (2012) 4 SCC 505.
(xiii) Hyder Consulting (UK) Limited versus
Governor, State of Orissa reported in (2015) 2 SCC
189.
(xiv) Sree Kamatchi Amman Constructions versus
Divisional Railway Manager (works), Palghat and
others reported in (2010) 8 SCC 767.
(xv) Chandradhoja Sahoo versus State of Orissa and
others reported in (2012) 13 SCC 419.
(xvi) Welspun Specialty Solutions Limited versus Oil
and Natural Gas Corporation Limited reported in
(2022) 2 SCC 382.
(xvii) D.S.Thimmappa versus Siddaramakka reported
in AIR 1996 SC 1960.
(xviii) M/s. China Cotton Exporters versus Beharilal
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
Ramcharan Cotton Mills Ltd. reported in AIR 1961 SCC
1295.
(xix) Sri Rathnavarmaraja versus Smt. Vimla
reported in AIR 1961 SCC 1299.
(xx) D.S.Thimmappa versus Siddaramakka reported
in AIR 1996 SC 1960.
(xxi) State of Bihar and others versus Samsuz Zoha
etc. reported in AIR 1996 SC 1961.
[5.9] By referring to a later part of the award passed by the
Arbitral Tribunal, Mr. Gandhi, learned senior advocate has
submitted that very surprisingly though the contract is not
providing a term for awarding interest the learned Tribunal has
awarded the interest in the manner which tentamounts to be
compounding interest. The claimant had claimed interest at the
rate of 2% per month from 29.07.2006 till the date of actual
payment and by considering Section 31(7)(b) of Act, the
Tribunal concluded that is granted maximum interest at rate of
18% per annum in the absence of any agreed rate as per the
agreement from date of award and by observing the said
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provision, the interest amount which has been awarded on
Claim No.1 i.e. work done and not paid for a period commencing
from 20.11.2007 till the date of award i.e. 20.04.2014 (2342
days) to the extent of Rs.5,97,62,078/- and worked out and then
at the rate of 12% towards the claim of interest an amount of
Rs.4,60,15,163/- is awarded by holing it that respondent is
entitled to claim such an exorbitant interest. If the figures
which are narrated and the conclusion reflecting in paragraph
37 of the award of Arbitral Tribunal, it clearly transpires that
practically tantamounts to be a compounding interest especially
when even there is no term of interest containing in the contract
and then by referring to paragraph 9 further amount has been
mentioned and ultimate direction is given directing the
appellant to pay the amount by holding that respondent is
entitled to claim said amount. This part is clearly in conflict
with the terms of the contract and as such this patent illegality
which has crept in deserves to be corrected. In substance, Mr.
Gandhi, learned senior advocate has submitted that a serious
error is committed even in respect of awarding of interest as
indicated above and by referring to the aforesaid issue has
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submitted that a perusal of the order impugned in the present
appeal ex facie is laconic and non dealing of the submission is a
good ground for setting aside and consequential re-
consideration which would meet the ends of justice and has
requested to entertain the appeal by considering his stand.
[5.10] Mr. Gandhi, learned senior advocate has further
submitted that question of giving interest does not arise
especially when there is no term contained in the contract itself
and as such by relying upon the decision delivered by Hon'ble
Apex Court, a contention is reiterated. A serious error is
committed also in view of the fact that interest has been
awarded as if it is a compound interest and as such by making
reference to the decision delivered by Hon'ble Apex Court, a
contention is raised that so far as that part of award is
concerned, the same is absolutely unsustainable and perverse to
the record. Mr. Gandhi, learned senior advocate has further
submitted that once the awarded amount is already deposited
the interest run will stop, the same has not been considered at
all and stoppage of interest accumulation is to be considered in
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view of the fact that pursuant to the order passed by the High
Court the amount was deposited in the year 2016 and further by
referring to an order dated 27.11.2019 passed in Civil
Application No.1 of 2018 has submitted that there would be no
interest moment the amount is deposited. It has been submitted
by virtue of series of decisions, it is trite law that if the exercise
of discretion is suffering from the vice of perversity it is always
open for the Court to correct or set and naught the said
irregularity which has taken place and here is the exact
situation where the Court can take cognizance of such serious
inadvertence. Apart from that the question of limitation is also
in a situation like this is a pure question of law, can be raised at
any point of time. Here in the instant case, the cause of action
arose somewhere in the month of July 2006 when the
termination took place whereas for the first time the notice
which has been issued by respondent is in November 2010 and
ex facie in view of the said issue also the award passed by
Arbitral Tribunal is unsustainable and that having not
considered by the Court below, the order impugned deserves to
be corrected.
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[5.11] Mr. Gandhi, learned senior advocate has further
pointed out that if there is a patent illegality or apparent
perversity then the same is also in the realm of public policy and
as such by referring to few decision delivered by Hon'ble Apex
Court since the award is contrary to law, based on material
irregularity and patent illegality being reflected keeping in view
of the principle underlying on public policy it is always open for
Appellate Court to examine and correct the error which has
been committed. Mr. M. B. Gandhi, learned senior advocate has
further submitted that on the issue of ROU, it is incorrect
thoroughly to conclude that appellant - GIDC did not provide the
site but finding recorded is outside the purview of contract itself
and this issue has also been not properly considered. By
referring to the conclusion on three major issues that work done
not paid, loss of profit and charging of interest, the view taken
by the Arbitral Tribunal cannot be said to be even a possible
view by virtue of relevant record exist on the file. So far as
liquidated damages are concerned, the said issue has also not
been gone into properly and in an ipse dixit manner the
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proceedings appears to have been disposed of. It is the
exclusive domain of GIDC which has retained its dominance to
terminate the contract at any time on the eventualities which
are spelt out in the contract and as such at what particular time,
the termination is to be effected or not the function of appellant
corporation and cannot be said to be a pre-matured has also in
any manner and therefore overall consideration of the award of
the Tribunal as well as the order passed under Section 34 of the
Act in Civil Misc. Application deserves to be quashed and set
aside. There is no law which can suggest that apparent
illegality can also be perpetuated looking to the circumscribed
jurisdiction howsoever it may be the apparent patent illegality
as well as in view of public policy, the award ought to have been
set aside. No other submissions have been made.
[6] As against this, Mr. S. N. Soparkar, learned senior
advocate assisted by Mr. Shashvata Shukla, learned advocate
appearing on behalf of the contesting opponent has vehemently
contended that neither any error is committed by Arbitral
Tribunal nor by the Court below keeping in view the scope
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contained under the relevant statute and no fault can be found
of the learned Additional District Judge, who dealt with Civil
Misc. Application precisely under Section 34 of the Act. The
scope of the Section 34 of the Act, jurisdiction is well defined by
catena of decisions. Hence, keeping those salutatory principle
propounded on the issue of jurisdiction under Section 34 of the
Act, the apparent well reasoned order passed by the Court
below may not be disturbed more particularly when the scope of
present appellate forum is also very very limited and
circumscribed even from Section 34 of the Act. Hence, it is
urged that the appeal being meritless, deserves to be dismissed.
[6.1] Apart from this, Mr. Soparkar, learned senior advocate has
submitted that the issue of limitation is not deserving to be
considered at this stage of the proceedings, it is mentioned that
this issue has never been canvassed either before the Arbitral
Tribunal or before the Court below under Section 34 of the Act.
The said is also not pleaded and not even raised in present First
Appeal memo itself and therefore, the issue which has not been
canvassed at all, the same cannot be allowed to be taken or
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agitated at this stage of the proceedings. Here is the case
where this issue of limitation cannot be said to be a neat
question of law because on the background of facts this
question of limitation even if to be considered, the same reflects
a combination of facts and law which can never be allowed to be
agitated in the absence of any pleadings and for this purpose,
Mr. Soparkar, learned senior advocate has made a reference to
the observations contained in paragraph 15 of a decision of
Hon'ble Apex Court reported in AIR 1963 SC 1165. Further a
reference is made to yet another decision delivered by Hon'ble
Apex Court reported in (2006) SC 3672 and thereby contended
that the issue of limitation, for the first time, in the absence of
pleadings or contentions not taken at three stages can never be
allowed to be agitated. Apart from that, even if it is to be
considered this claim put-forth by the respondent is well within
a period of limitation. A contract came to be terminated per-
maturely on 29.07.2006. The respondent raised a third RA Bill
which was paid on 20.11.2007 i.e. after the termination of
contract (page Nos.476-497) and as such by virtue of Section 19
of Limitation Act, the claim cannot be said to be barred by law
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of limitation. On the contrary, the appellant - corporation
actually paid in between an amount of Rs.1.12 crores on
25.06.2008 which can be seen from page 324 of paper book
compilation and on 23.07.2009, the notice for arbitration was
given by the opponent and immediately thereafter on
19.05.2010 a claim statement was already submitted so if these
sequence of events to be seen, the claim cannot be said to be
barred by limitation, it is well within the period of limitation and
as such, even in the absence of pleadings about limitation these
dates are clearly indicating that stand taken on the issue of
limitation is unsustainable, deserves no consideration.
[6.2] At this stage, Mr. Soparkar, learned senior advocate has
further submitted that the scope contained under appeal against
an order passed under Section 34 of the Act is very very
circumscribed and this appeal though mentioned as appeal
under Section 96 of the C.P.C. but virtually it is under Section
37 of the Act and scope of Section 37 is well defined by very
recent decision delivered by the Hon'ble Apex Court reported in
(2022) 4 SCC 116 and by referring to paragraphs 18, 22 and 23
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a contention is reiterated that when the Arbitral Tribunal has
passed an exhaustive award dealing with all contentions and
submissions which have been raised before it and the same
having been examined even under Civil Misc. Application filed
under Section 34 of the Act. Such well reasoned exercise of
discretion at two stages may not be disturbed in the interest of
justice more particularly when apart from error of law even an
error of fact also cannot be disturbed. A possible view in the
absence of any distinguishable material is impermissible to be
substituted or distributed. So when this be the scope under
lying under Section 37 of the Act, there is hardly any
justification made out by the appellant to call for any
interference. Even, the Court has gone to the extent that even
perversity if reflected to some extent cannot be interfered with.
So when this be the scope, the appellant - corporation has not
made out any such circumstance by virtue of which the exercise
undertaken by the Court below can be substituted.
[6.3] Mr. Soparkar, learned senior advocate has further
submitted that it appears from the submission of learned senior
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advocate appearing for the appellant - corporation that basically
what is aggrieved is relating to interest amount which has been
awarded, now this can well be considered by the Arbitral
Tribunal in view of certain reasons which are projected by him
hereunder. To explain this, a Chart in a tabular form is
submitted, which is taken on record after serving a copy to the
other side just to consider as to whether awarded interest is just
or not and since the same is placed without any resistance, the
Court deems it proper to reproduce the said Chart hereunder:-
"DETAILS OF AMOUNT OF INTEREST AWARDED
Sr.No Details of Claim Page Principal Interest Total
No. Amount (In (In Rs.) (In Rs.)
Rs.)
1. CLAIM NO.1 (Work 66-70 5,97,62,078 4,60,15,163 10,57,77,241
done and not paid) (Interest @
12% p.a.)
(a) Liquidated
Damages Deducted This is interest
from the bill by the pending
Respondent arbitration
[Rs.4,51,03,504.08] proceeding
Under
(b) Wrongful sec.31(7)(a)
deduction for not
carrying out
hydrotesting
[Rs.1,11,44,216.00]
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(c) Wrongful
deduction for non-
laying & joining of
pipe and not carrying
out hydrotesting i.e.
only supply of pipe
[Rs.35,14,321.00]
2. CLAIM NO.2 (Claims 70-73 3,04,53,967 Not Awarded 3,04,53,967
due to breach of
Contract)
Total 77 9,02,16,045 4,60,15,163 13,62,31,208
Re Post Award Interest : Under section 31(7)(b)
Date of Award 20-4-2014 & Upto 23-10-2015 Permissible
rate of Interest 18%
Tribunal has stated "In case the Respondent failed to
make the payment within 90 days from the date of the
award, the claimant shall be entitled to recover and the
respondent shall pay the future interest (simple) at the
rate of 15% p.a. on the awarded amount of Rs.9,02,16,045
(Rupees Nine Crore Two Lacs Sixteen Thousand Forty Five
Only) from the date of the award till the realisation of the
payment." [@ 79 of the Award]. So no interest awarded on
Rs.4,60,15,163 though it could have been added to the
Principal amount."
[6.4] In view of aforesaid particulars which are reflecting in the
Chart, by drawing attention to sub-section (7) of section 31 of
the Act, it has been submitted that the Arbitral Tribunal has all
the powers to consider the claim with regard to interest and as
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such it is ill-founded in the mouth of appellate corporation to
suggest that though there is a specific power in the statute but
if contract does not permit then as such the Arbitral Tribunal
has no jurisdiction to award. He further submitted that a
reasonable interest always can be awarded and there is no cap
on it. Here Clauses- (a) and (b) of sub-section(7) of Section 37
would clearly indicate that interest pending arbitration can also
be given. Here is the award which is passed on 20.04.2014 and
the amendment has taken place in Clause-(b) on 23.10.2015 so
this proceeding will govern by unamended provision and
unamended provision would clearly indicate that a sum directed
to be paid by an Arbitral award shall unless the award otherwise
directs carry the interest at the rate of 18% per annum from the
date of award to the date of payment and as such 18% interest
is in the mandatory form provided in unamended Clause-(b)
which exist prior to October, 2015. So instead of 18% interest,
only 12% interest has been awarded which cannot be said in any
way either impermissible or unreasonable and if we see the
interest post the award has been provided to the extent of only
15% and as such though the unamended provision has a
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mandatory form prescribed 18%, the Arbitral Tribunal has
awarded 12% and 15% respectively and as such it cannot be
said that charging of interest is either irregular or
impermissible in any form. By referring to certain judgments,
the learned senior advocate has tried to substantiate these
submissions. The judgments, which are reported in (2015) 2
SCC 189 (majority view) which deals with no unfairness on the
awarding of interest and (2012) 13 SCC 419 which is an aspect
of no case is made out for remand, has been relied. Since the
main contention about public policy has already been dealt with
and as such also, the order which is challenge cannot be said to
be erroneous in any manner.
[6.5] In respect of, time is the essence of contract or not the
learned senior advocate has referred to the judgments, which
are reported in AIR 1961 SC 1295, AIR 1996 SC 1960 and
(2022) 2 SCC 382 and by referring to certain observations made
in the relevant paragraphs, it has been contended that this issue
can be seen on facts to facts basis and there cannot be a blanket
proposition. Hence, keeping in view of the scope of Section 37
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of the Act, the said issue cannot be gone into as an attempt is
made by appellant. Further decisions have been referred to on
the issue of interest, which are reported in (2010) 8 SCC 767,
(2015) 2 SCC 189 and (2012) 4 SCC 505 and by referring to
these decisions which Mr. M. B. Gandhi, learned senior
advocate has also referred to, it has been contended that once
the payment is deposited, the interest stopped running can be
considered by executing court which has nothing to do with the
validity of award and as such these points would have been
raised had there been the proceedings relating to execution of
the award and as such on this issue, the award which has been
passed, cannot be set at naught.
[6.6] Further whether error of law is a ground for setting aside
the award or not the learned senior advocate has made a
reference to AIR 1980 MP page 1 and on the issue of limitation
which has never been pleaded nor raised, nor the contention
contained in memo of First Appeal, learned senior advocate has
made a reference to the decisions reported in (2015) 5 SCC 223
as well as AIR 1963 SC 1165.
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[6.7] Mr. Soparkar, learned senior advocate on the issue of
scope has made a reference to few decisions which are reported
in (2015) 3 SCC 49, (2015) 5 SCC 739, (2014) 9 SCC 263 and
(2003) 5 SCC 705 and by referring to these, it has been
contended that there is no scope for interference precisely
under Section 37 of the Act. The stand taken by mediation of
either of the party can never be gone into when the proceedings
are to be dealt with on merits in accordance with law and for
that purpose, a reference is made to the judgments reported in
(2019) 2 SCC 753 as well as AIR 1999 SC 3627 and then has
submitted that claim which has not been made cannot be
considered nor the stand which has been taken in mediation
deserves any consideration. On the contrary, at this stage, a
reference is made to Section 81 of the Act which has clearly
pointed out that party shall not rely on or introduce as evidence
in the judicial proceedings the views which were expressed or
suggestions which were made by party in a possible settlement
of dispute and as such the said submission appears to be
mischievous cannot be accepted. Hence, to summarize, learned
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senior advocate has submitted that there is neither any error of
jurisdiction nor the award or the order passed under Section 34
of the Act by the Court below is in conflict with public policy, no
case is made out by the appellant to interfere with.
[7] As against this, Mr. M. B. Gandhi, learned senior advocate
appearing on behalf of the appellant made a valiant attempt in
rejoinder practically to re-argue the matter to suggest the
remand of the matter. It has been further submitted that on
question of limitation even if point is not taken, the said issue of
limitation being pure question of law, can be raised at any point
time and for that he made a reference to Section 3 of the
Limitation Act. Further Mr. Gandhi, learned senior advocate
has submitted that rate of Fixed Deposits somewhere in the year
2014 was prevailing 9% and therefore it is always reasonable to
award the rate which was prevailing and that yardstick having
not been observed by the Arbitral Tribunal and having not
considered by the Court below, the issues raised in the appeal
deserves reconsideration. On the contrary, by virtue of
amendment which took place, an amount of Rs.3.04 crores was
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already deposited and as such even if remand order is passed,
the respondents are not going to be prejudice in any manner.
Hence, has submitted that the contentions which are taken and
not dealt with is a circumstance which is very relevant to
remand the proceedings back. Hence, has requested that by
setting aside the impugned order, the Civil Misc. Application
filed by present appellant deserves to be reconsidered. No
further submissions have been made.
[8] Having heard the learned senior advocates appearing for
the respective parties and having gone through the material on
record, before dealing with the rival submissions, we may first
of all observed our limitations which are prescribed by the
Hon'ble Apex Court while dealing with the proceedings under
Section 37 of the Act in appellate jurisdiction.
[9] We may first point out certain relevant provisions
contained under the Arbitration Act as well as the recent
pronouncement of Hon'ble Apex Court in respect of scope
underlying under Section 37 of the Act appeal which is akin to
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Section 96 of the Code of Civil Procedure. The Hon'ble Apex
Court in the case of Delhi Airport Metro Express Private
Limited versus Delhi Metro Rail Corporation Limited
reported in (2022) 1 SCC 131 propounded that scope
contained under an appeal against the order passed under
Section 34 of the Act is very very narrow and cannot be
exercised in a routine manner. Since we have considered the
said proposition and for empathetically submitted before us, we
deem it proper to quote relevant observations hereunder:
"27. For a better understanding of the role ascribed to
courts in reviewing arbitral awards while considering
applications filed under Section 34 of the 1996 Act, it
would be relevant to refer to a judgment of this Court in
Ssangyong Engineering and Construction Company
Limited v. National Highways Authority of India (NHAI)
wherein R.F. Nariman, J. has in clear terms delineated the
limited area for judicial interference, taking into account
the amendments brought about by the 2015 Amendment
Act. The relevant passages of the judgment in Ssangyong
(supra) are noted as under: -
"34. What is clear, therefore, is that the expression "public
policy of India", whether contained in Section 34 or in
Section 48, would now mean the "fundamental policy of
Indian law" as explained in paras 18 and 27 of Associate
Builders [Associate Builders v. DDA, (2015) 3 SCC 49:
(2015) 2 SCC (Civ) 204] i.e. the fundamental policy of
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Indian law would be relegated to "Renusagar"
understanding of this expression. This would necessarily
mean that Western Geco [ONGC v. Western Geco
International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ)
12] expansion has been done away with. In short, Western
Geco [ONGC v. Western Geco International Ltd., (2014) 9
SCC 263 : (2014) 5 SCC (Civ) 12] ,as explained in paras 28
and 29 of Associate Builders [Associate Builders v. DDA,
(2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , would no
longer obtain, as under the guise of interfering with an
award on the ground that the arbitrator has not adopted a
judicial approach, the Court's intervention would be on the
merits of the award, which cannot be permitted post
amendment. However, insofar as principles of natural
justice are concerned, as contained in Sections 18 and
34(2) (a)(iii) of the 1996 Act, these continue to be grounds
of challenge of an award, as is contained in para 30 of
Associate Builders [Associate Builders v. DDA, (2015) 3
SCC 49 : (2015) 2 SCC (Civ) 204] .
35. It is important to notice that the ground for
interference insofar as it concerns "interest of India" has
since been deleted, and therefore, no longer obtains.
Equally, the ground for interference on the basis that the
award is in conflict with justice or morality is now to be
understood as a conflict with the "most basic notions of
morality or justice". This again would be in line with paras
36 to 39 of Associate Builders [Associate Builders v. DDA,
(2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , as it is only
such arbitral awards that shock the conscience of the
court that can be set aside on this ground.
36. Thus, it is clear that public policy of India is now
constricted to mean firstly, that a domestic award is
contrary to the fundamental policy of Indian law, as
understood in paras 18 and 27 of Associate Builders
[Associate Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC
(Civ) 204], or secondly, that such award is against basic
notions of justice or morality as understood in paras 36 to
39 of Associate Builders [Associate Builders v. DDA,
(2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] . Explanation 2
to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)
(b)(ii) was added by the Amendment Act only so that
Western Geco [ONGC v. Western Geco International Ltd.,
(2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] ,as understood
in Associate Builders [Associate Builders v. DDA, (2015) 3
SCC 49 : (2015) 2 SCC (Civ) 204] , and paras 28 and 29 in
particular, is now done away with.
37. Insofar as domestic awards made in India are
concerned, an additional ground is now available under
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sub-section (2-A), added by the Amendment Act, 2015, to
Section 34. Here, there must be 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. In short, what is
not subsumed within "the fundamental policy of Indian
law", namely, the contravention of a statute not linked to
public policy or public interest, cannot be brought in by
the backdoor when it comes to setting aside an award on
the ground of patent illegality.
38. Secondly, it is also made clear that reappreciation of
evidence, which is what an appellate court is permitted to
do, cannot be permitted under the ground of patent
illegality appearing on the face of the award.
39. To elucidate, para 42.1 of Associate Builders
[Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2
SCC (Civ) 204] , namely, a mere contravention of the
substantive law of India, by itself, is no longer a ground
available to set aside an arbitral award. Para 42.2 of
Associate Builders [Associate Builders v. DDA, (2015) 3
SCC 49 : (2015) 2 SCC (Civ) 204] , however, would
remain, for if an arbitrator gives no reasons for an award
and contravenes Section 31(3) of the 1996 Act, that would
certainly amount to a patent illegality on the face of the
award.
40. The change made in Section 28(3) by the Amendment
Act really follows what is stated in paras 42.3 to 45 in
Associate Builders [Associate Builders v. DDA, (2015) 3
SCC 49 : (2015) 2 SCC (Civ) 204] , namely, that the
construction of the terms of a contract is primarily for an
arbitrator to decide, unless the arbitrator construes the
contract in a manner that no fair-minded or reasonable
person would; in short, that the arbitrator's view is not
even a possible view to take. Also, if the arbitrator
wanders outside the contract and deals with matters not
allotted to him, he commits an error of jurisdiction. This
ground of challenge will now fall within the new ground
added under Section 34(2-A).
41. What is important to note is that a decision which is
perverse, as understood in paras 31 and 32 of Associate
Builders [Associate Builders v. DDA, (2015) 3 SCC 49 :
(2015) 2 SCC (Civ) 204] , while no longer being a ground
for challenge under "public policy of India", would
certainly amount to a patent illegality appearing on the
face of the award. Thus, a finding based on no evidence at
all or an award which ignores vital evidence in arriving at
its decision would be perverse and liable to be set aside on
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the ground of patent illegality. Additionally, a finding
based on documents taken behind the back of the parties
by the arbitrator would also qualify as a decision based on
no evidence inasmuch as such decision is not based on
evidence led by the parties, and therefore, would also have
to be characterised as perverse."
28. This Court has in several other judgments interpreted
Section 34 of the 1996 Act to stress on the restraint to be
shown by courts while examining the validity of the
arbitral awards. The limited grounds available to courts for
annulment of arbitral awards are well known to legally
trained minds. However, the difficulty arises in applying
the well-established principles for interference to the facts
of each case that come up before the courts. There is a
disturbing tendency of courts setting aside arbitral
awards, after dissecting and reassessing factual aspects of
the cases to come to a conclusion that the award needs
intervention and thereafter, dubbing the award to be
vitiated by either perversity or patent illegality, apart from
the other grounds available for annulment of the award.
This approach would lead to corrosion of the object of the
1996 Act and the endeavours made to preserve this object,
which is minimal judicial interference with arbitral awards.
That apart, several judicial pronouncements of this Court
would become a dead letter if arbitral awards are set aside
by categorising them as perverse or patently illegal
without appreciating the contours of the said expressions."
[10] Further that the substantial issue which has been the
subject matter of controversy about awarding of interest
amount, we may observe that Section 31 of the Act which has
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prescribed the form and contents of the Arbitral award has
made a specific provision with regard to the payment being
made. Sub-section (7) since governing the field, we may deem it
proper to quote hereunder sub-section (7) of section 31:
"31(7) (a) Unless otherwise agreed by the parties, where
and in so far as an arbitral award is for the payment of
money, the arbitral tribunal may include in the sum for
which the award is made interest, at such rate as it 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.
(b) A sum directed to be paid by an arbitral award shall,
unless the award otherwise directs, carry interest at the
rate of two per cent. higher than the current rate of
interest prevalent on the date of award, from the date of
award to the date of payment."
[11] The aforesaid original Clause-(b) has been undergone a
change by virtue of Act No.3 of 2016 with effect from
23.10.2015 and therefore since here the original arbitration
proceedings were prior to this amendment and the award is
dated 20.04.2014 the earlier Clause-(b) would governed the
field and as such we deem it proper to quote the said original
Clause-(b) which was existing prior to 23.10.2015:
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"(b) A sum directed to be paid by an arbitral award shall,
unless the award otherwise directs, carry interest at the
rate of eighteen per centum per annum from the date of
the award to the date of payment"
[12] The aforementioned pre amended Clause-(b) was making
it mandatory that payment should carry the rate of 18% per
annum from the date of award to the date of payment and as
against the said 18% interest what has been awarded is less
which in our opinion cannot be said to be harsh or
disproportionate. On the contrary, considering the overall
situation, the learned Arbitral Tribunal has awarded reasonable
rate of interest and the said issue has been considered looking
to the situation which was prevailing on record. Since one of
the submission which was made with regard to some
commitment made before mediation but the said deliberation
would took place and which has not attained finality and
mediation having failed, we cannot considered the said
deliberation to strengthen submission made by learned senior
advocate appearing for the appellant and this is in view of
statutory provision contained under Section 81 of the Act which
reads as under:
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"81. Admissibility of evidence in other proceedings.--The
parties shall not rely on or introduce as evidence in
arbitral or judicial proceedings, whether or not such
proceedings relate to the dispute that is the subject of the
conciliation proceedings,--
(a) views expressed or suggestions made by the other
party in respect of a possible settlement of the dispute;
(b) dmissions made by the other party in the course of the
conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his
willingness to accept a proposal for settlement made by
the conciliator."
[13] So aforesaid provision is clearly indicating that the views
expressed and the suggestions made by the party in respect of
possible settlement of dispute cannot be relied upon or
introduced as an evidence either in arbitral or judicial
proceedings.
[14] In view of aforesaid proposition and the provision of law,
we may now proceed to examine the submission made by the
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appellant. Mr. M. B. Gandhi, learned senior advocate has tried
to persuade us to remand the proceedings back to the learned
District Judge as some of the points have not been dealt with.
However, a perusal of the order passed by the learned 2 nd
Additional District Judge, Bharuch while exercising jurisdiction
under Section 34 of the Act has dealt with what was required
looking to the scope contained under Section 34 of the Act.
Learned Court below has not only considered the scope
contained under Section 34 of the Act but has examined the
stand of the appellant in the context as to whether the award
passed by the learned Tribunal can said to be suffering from
patent illegality or a public policy is being violated, if the award
is allowed to be existed. So this material circumstances which
are required to be examined by the Court below appeared to
have been considered at length and not only that the order also
clearly suggest that the points canvassed by the appellant in
Section 34 of the Act proceedings have been dealt with and as
such looking to the scope propounded in respect of jurisdiction
under Section 34 of the Act is dealt with and as such we are not
impressed by the submission made by Mr. Gandhi, learned
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senior advocate and as such we are not inclined to accept the
submission that matter requires to be remanded back. If the
suggestion which has been made by learned senior advocate if
to be considered in the absence of any public policy being
violated or in the absence of any patent illegality being
projected, we may frustrate the object underlying in the
mechanism which has been provided under the Act of
arbitration. The efficacy of the object would be defeated if on
the hyper technicality in the absence of any aforesaid element,
would be loss if we may consider the request for remand and as
such we outrightly reject the same.
[15] At this stage, we may point out that not only the learned
court below while exercising jurisdiction under Section 34 of the
Act has considered and dealt with the submissions but also
come to a conclusion on the basis of analysis of fact and
proposition of law and as such the very exercise of jurisdiction is
not possible to be branded as perverse in any form. We deem it
proper to quote hereunder the relevant observations made by
the learned court below while passing the impugned order:-
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"14. First of all, for the sake of argument, if it is
considered that the dispute between the parties has been
agreed to be referred to the Tribunal under Clause 30 then
it is important to peruse 8 disputes as stated above for
which the disputes have to be referred to the Tribunal with
reference to present dispute between the parties. As I
have reproduced Clause 30, it is not required to again
reproduce 8 disputes enumerated in that Clause. I have
minutely perused and appreciated the said 8 disputes in
Clause 30 and also perused the disputes between the
parties. In the present case, for which the dispute has
been referred to the Council, this Court is of the firm
opinion that the present dispute between the parties is not
within the 8 disputes specified in Clause 30 on which the
Ld. Advocate for the applicant relied, therefore, also, there
is no substance in the argument of Ld. Advocate for the
applicant and matter can be referred to the Tribunal.
15. It is also important to note that the Gujarat Public
Works Contract Disputes Arbitration Tribunal Act, 1992,
provides to refer the disputes between the parties for
works contract and word "Works contract" has been
defined U/s.2(k) of the said Act which reads as under :
"Works contract" means a contract made by the State
Government or the public undertaking with any other
person for the execution of any of its works relating to
construction, repairs or maintenance of any building or
superstructure, dam, weir, canal, reservoir, tank, lake,
road, well, bridge, culvert, factory or work shop or of such
other work of the State Government or, as the case may
be, of the public undertaking, as the State Government
may, by notification in the Official Gazette specify, and
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includes-
(i) a contract made for the supply of goods relating to
the execution of any such works,
(ii) a contract made by the Central Stores Purchase
Organization of the State Government for the purchase or
sale of goods.
16. Here, the work tender was given to the opponent
for providing 1200 mm dia meter pipe and GRP Water
Supply Line from Angareshwar intake water words to
GIDC Compound at Bhersam, Dahej. I have gone through
the definition of work contract and it only includes the
work relating to construction, repairs or maintenance of
any building or superstructure, dam, weir, canal, reservoir,
tank, lake, road, well, bridge, culvert, factory or work shop
or of such other work of the State Government. Therefore,
the work which was handed over to the opponent in the
present case, does not fall within the definition of work
contract of the Act. Thus, when it does not fall within the
said definition, then in that circumstance, the matte cannot
be referred to the Tribunal.
17. Ld. Advocate for the applicant has also relied
section 21 of Arbitration Tribunal Gujarat State which
provides for Arbitration Act to cease to apply. But when
the work which was handed over to the applicant does not
fall within the definition of work contract then any of the
provision of Arbitration Tribunal Act Gujarat State, is not
applicable and therefore, this section 21 is also not
applicable. Thus, the jurisdiction of the Council does not
cease to apply and the matter cannot be referred to the
Tribunal.
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18. Now, it is also important to note that as
reproduced above Clause 102 of general condition of the
agreement and special condition of contract between the
parties, does not necessary to again reproduce those
Clauses and conditions as it is already been reproduced
above. But both the conditions i.e. 102 of general condition
and 31.0 of special condition specifically provides to refer
the dispute between the parties to the Council. Moreover,
1.1 and 30.0 of special condition has been incorporated to
remove any doubt with regard to Clause 30 of Form B-2 of
the contract on which Ld. Advocate for the applicant has
heavily relied. Clause 102 of general condition and special
condition of contract specifically provides that special
condition is to be read in conjunction with B-2 agreement
and general condition of contract on which Ld. Advocate
for the applied relied. Therefore, Clause 30 of Form B-2
can be read with in conjunction of special condition. It is
also specifically provided that special condition of contract
very clearly removes doubt, if any, with regard to Clause
30 of Form B-2 of the contract on which Ld Advocate for
the applicant has heavily relied on. Thus, when Clause 30
of Form B-2 has been supercedes by special condition of
contract then it can be said that it has no value and the
said condition cannot be taken into account or
consideration to refer the dispute between the parties to
the Tribunal and the dispute between the parties in the
present case, has to be referred to the Council and
therefore, there is no substance in the argument of learned
advocate for the applicant."
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[16] Since the aforesaid conclusion is not suffering from any
patent illegality or any perversity, in the absence thereof, we
are not inclined to disturb the possible view which has been
taken by the learned court below. Even while going through the
award which has been passed by learned Arbitral Tribunal also
an exhaustive award has been passed upon proper adjudication
of all the issues which have been raised and as such sitting in
jurisdiction under Section 37 of the Act over the decision of
Section 34 of the Act proceedings, we are not rather entitled to
appreciate or re-examine the contentions which have been dealt
with by the learned Arbitral Tribunal as well as by the Court
below. Hence, we do not inclined to examine the issue as if the
conclusion is suffering from any patent illegality.
[17] At this stage, we may also notice that claims which have
been raised before the learned Arbitral Tribunal, a specific
findings have been arrived at after dealing with all respective
submissions by both the parties and the conclusion arrived at on
each claim and as such while perusing the said conclusion
arrived at by the learned Tribunal also independent of Section
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34 of the Act proceedings, we are not in a position to examine
the issues or substitute the possible view which has been
arrived at by the learned Arbitral Tribunal. Hence, no case is
made out even for remand the proceedings back to the learned
court below.
[18] Mr. M. B. Gandhi, learned senior advocate has tried to
canvass the submission that time is the essence of the contract
and the learned Arbitral Tribunal has erroneously considered
the same to the contrary but a mere error even if the same
cannot be disturbed in view of the scope of Section 37 of the Act
which has been analyzed. Apart from that, even while perusing
the arbitral award also, the said issue has been considered at
length and such possible view when taken by the learned
Arbitral, it would not be just on our part to substitute the views
since said possible view is expressed by the learned Arbitral
Tribunal. Several authorities have been pointed out which may
deal with at an appropriate place in the present order but the
said issue with regard to time is the essence of contract is not
made out by the appellant successful enough to dislodge the
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finding or question the award passed by the learned Arbitral
Tribunal.
[19] From the submission of Mr. Gandhi, learned senior
advocate it has also been reflected that the substantial
grievance is revised with regard to awarding of interest and
according to Mr. Gandhi, learned senior advocate in the
absence of any term in the contract, such interest amount could
not have been awarded. Now to understand and examine this
issue, we may peruse the statutory provision stated about
dealing with such issue of awarding of interest. As said earlier,
sub-section (7) of section 31 of the Act has undergone a change
only after 23.10.2015 whereas here in the instant case, the
award is of 2014 undisputedly prior to the amendment and as
such the original Clause-(b) of sub-section (7) of section 31
would govern the field which indicates that "a sum directed to
be paid by an arbitral award shall, unless the award otherwise
directs, carry interest at the rate of 18% per annum from the
date of the award to the date of payment" so what is emerging is
that the award shall carry 18% interest till the payment whereas
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here a perusal of the award clearly indicates that instead of
mandatory awarding 18% interest the learned Arbitral Tribunal
has awarded a reasonable amount of interest as can be seen
apparently.
[20] In the context of this issue, an impression is tried to be
generated that a cumulative interest has been awarded but the
Chart which has been projected by learned senior advocate
appearing for the respondent indicates that such is not the case
and there is no embargo under the relevant provisions that
interest pending arbitration proceeding cannot be awarded. In
fact, the discretion is very much available by virtue of sub-
clause (a), sub-section 7 of section 31 and as such this issue
regarding interest when statutorily is permissible, in considered
opinion of this Court, the said issue cannot be a ground for
setting aside the entire arbitral award by exercising jurisdiction
under Section 37 of the Act and neither any perversity nor any
patent illegality nor any public policy is getting violated. Hence,
we are of the opinion that issue raised is not possible to be
accepted.
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[21] In addition to the Chart, which has been provided by Mr.
Soparkar, learned senior advocate to justify that there is no
irregularity in respect of in awarding of the interest and the
learned Arbitral Tribunal has analytically examined the said
issue and then after considering each head has come to the
conclusion that the interest amount deserves to be awarded and
the finding to that effect is clearly narrated in paragraph 36,
which we would like to reproduce hereunder:
"36. Issue No.11
Whether the Claimant is entitled to interest? If yes, at
what rate.
(A) CLAIMANT'S SUBMISSION:
i) The Learned Advocate submitted that the Claimant is
entitled to get interest both under Interest Act 1978 and
under section 31 (7) of the Arbitration and Conciliation Act
1996 and submitted that it has claim interest at 2% per
month on the amount claimed from 29/7/2006 till the date
of actual payment. Referring to Section 31 (7) (a) of the
Arbitration and Conciliation Act 1996, the-Learned
Advocate submitted that the Arbitral Tribunal is
empowered to grant interest on whole or any part of the
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
money for whole or part of the period between the date of
cause of action and the date of award. Referring to Section
31 (7) (b) of the Arbitration and Conciliation Act 1996, the
Learned Advocate submitted that the Arbitral Tribunal is
empowered to grant interest at 18% per annum from the
date of award til the date of payment.
(B) RESPONDENT'S SUBMISSION:
i) The Learned Advocate submitted that the Claimant is
not entitled to any claim therefore, the question of interest
on the claim amount does not arise. |
(C) ARBITRAL TRIBUNAL'S FINDING:.
i) The Claimant has claimed interest at the rate of 2% per
month from 29/7/2006 till the date of actual payment. The
Claimant has also referred to section 31(7) (b) of the
Arbitration Conciliation Act 1996, wherein the Arbitral
Tribunal is empowered to grant maximum interest 18% per
annum in absence of agreed rate as per agreement from
the date of award.
ii) In deciding this issue, the Arbitral Tribunal has
considered provision of section 31 (7) (a) (b) of the
Arbitration and Conciliation Act 1996. The terms and
conditions of the contract do not prohibit payment of
interest. Thus, the section 31 (7) (a) (b) becomes a guiding
parameter in awarding interest. It empowers the Arbitral
Tribunal for awarding reasonable rate of interest and the
period for which interest is to be granted i.e. the period
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between the date on which cause of action arose and the
award is made. In the present case, the Claimant is
involved in activities of business and thus involved
commercial transaction. In deciding the interest rate, the
Arbitral Tribunal has considered this aspect and prevailing
interest rate during the relevant period. Thus, the Arbitral
Tribunal considered 12% simple interest per annum as a
reasonable rate of interest to be paid by the Respondent
on claim No. 1 from date of final bit the date 20/11/2007
till the date of award.
iii)Accordingly, the interest on awarded amount
Rs.5.97,62,078.00 of claim no 1 work done and not paid for
the period 20/11/2007 till the date of award i.e. 20/4/2014
(2342 days) works out to be Rs.4,60,15,162.74
(Rs.5,97,62,078.00 x 12% x 2342/365). The Arbitral
Tribunal award Rs.4,60,15,163.00 towards the claim of
interest.
iv) The Claimant is entitled to a sum of Rs.4.60,15,163.00
from the Respondent against claim of interest."
Hence, on this substantial grievance which has been
voiced out about awarding of interest, we are of the opinion that
no case is made out to call for any interference.
[22] Yet another submission which has been tried to be
emphasized is the issue of limitation, the said issue of limitation
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has also been not deserving to be permitted in view of the fact
that issue of limitation in view of settled position of law is a mix
question of law and fact and here in this case, this issue has
neither been raised by the appellant before the Arbitral Tribunal
nor has been raised before Section 34 of the Act proceedings
and nor before the present first appeal by raising any specific
contention in the memo of appeal as well and as such when the
said issue throughout the proceeding has not been raised now
at the stage of final submission such issues of facts and law is
not possible to be entertained by this Court. Had there been a
case that such issue has been raised by the appellant before the
learned court below or before the Arbitral Tribunal, the said
issue if erroneously would have been considered probably this
Court might have considered as to whether the same has been
dealt with in the order under challenge but having not raised at
all in specific terms as stated above. Such issues of facts and
law cannot be permitted to be raised and as such we are of the
clear opinion that this point is also not available to the
appellant.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[23] With regard to the other contentions, which have been
raised by Mr. M. B. Gandhi, learned senior advocate, the same
are touching to the merit and facts which are outside the
purview of the jurisdiction of this Court especially when the
detailed arbitral award is passed and the learned court below
has also exercised jurisdiction under Section 34 of the Act with
proper application of mind and after assigning appropriate
reasons, the said possible view adopted cannot be set at naught
in present proceeding and as such we are of the view that no
case is made out by the appellant to call for any interference.
[24] In light of aforesaid overall conclusion now dealing with
the decisions which have been pointed out, we may try to
consider as to whether the same are applicable to this peculiar
background of facts or not. Mr. Gandhi, learned senior
advocate has first of all referred to the decision on the issue of
seeking remand for want of dealing with the each submissions
and for that a reference is made to a decision delivered by
Hon'ble Apex Court reported in (2012) 13 SCC 419. In this
case, in exercise of jurisdiction under Article 226 of the
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Constitution of India, the High Court did not deal with all issues
arising in the matter and answer only one of the issues and
thereby disposed of the petition and in that background, the
Hon'ble Apex Court has propounded the necessity for courts
whose orders are not final and appealable to decide lis on all
issues raised though in its comprehension it can be decided on a
single issue without going into other question raised. In this
peculiar background, the Hon'ble Apex Court has propounded
the proposition which in the present proceeding in considered
opinion of us is not applicable for the simple reason that the
Arbitral Tribunal has exhaustively passed an award which was
made the subject matter of challenge under Section 34 of the
Act proceedings before the learned District Court and learned
District Court keeping in view the peripheral jurisdiction of it,
has considered relevant issues namely the public policy, breach
of public policy and the patent illegality or perversity and from
that angle if we see the order passed by the court below, the
ratio laid down by Hon'ble Apex Court as indicated by learned
senior advocate appearing for the appellant may not be applied
as a straightjacket formula. It is settled position of law that if
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the facts are different even one additional fact would make a
world of difference in applying the ratio as a precedent and here
a perusal of decision of 2012, indicated above, is quite on a
different background of facts then what is on the hand of this
Court. Hence, in our considered opinion, this judgment is not of
any assistance to the appellant.
[25] In respect of an issue as to whether time is the essence of
contract or not, the said issue of facts and law has been taken
into consideration by the learned Tribunal while passing an
award and has come to a definite conclusion and as such, such
possible view cannot be set at naught sitting in jurisdiction
under Section 37 of the Act. A perusal of the decision delivered
by Hon'ble Apex Court reported in AIR 1961 SC 1295, it has
been observed that in a commercial contract ordinarily time is
the essence but then the same is depending upon the
background of facts. Here, the learned Arbitral Tribunal has
clearly concluded on the basis of critical analysis of terms of the
contract and the conduct of the parties that there is a merit in
the contentions raised by the claimant that time is not the
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
essence of the contract and thereby decided Issue No. 5 in
negative and while deciding this the learned Arbitral Tribunal
has considered the relevant clauses contained in the contract
document and after considering the various clauses including
the clause which relates to extension of time, has categorically
found that time is not the essence of the contract and this
finding on the issue is based upon a peculiar circumstances
which are existing in the terms of the contract and as such when
the facts are different, this proposition which has been made in
respect of peculiar background of fact that existed before
Hon'ble Apex Court, we are of the opinion that this decision is
not available or come to the rescue of the appellant.
[26] Yet another decision which has been brought before the
Court which is reported in AIR 1996 SC 1960, the said decision
was in respect of the specific relief act. The suit was filed for
the purpose of specific performance of the agreement and in the
context of such circumstances about the said agreement, it has
been observed by Hon'ble Apex Court that unless the deed of
agreement of sale stipulated a date for performance time is not
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
always the essence of the contract. So in our opinion that the
point of limitation is not made out and as such this decision is
also not in any way assist the case of the appellant.
[27] Yet another decision which has been brought on the issue
is a decision reported in (2022) 2 SCC 382 wherein also in
respect of performance of contract whether time is the essence
of contract or not, the Hon'ble Apex Court has propounded the
entirety of contract and the conduct of party is relevant and the
same can be culled out from the reading of entire contract as a
whole including the surrounding circumstances and merely
having an explicit clause may not be sufficient to make the time
of essence of the contract. So in the background of facts when
the learned Arbitral Tribunal on critical analysis of the terms of
the contract has come to a conclusion that the said finding
is not assailable or permitted to be reexamined in
proceedings under Section 37 of the Act and as such
challenge to the award on that count is impermissible and
as such this judgment is not any assistance to the appellant.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[28] Similar are the decisions tried to be projected but as
discussed above, the issue has been examined at length by
learned Arbitral Tribunal, the same cannot be a subject matter
of challenge either under Sections 34 and 37 of the Act unless it
is shown that public interest is being affected or there appears
to be any patent illegalities which are not visible in the present
case. Hence, the judgments cited on the issue are not of any
assistance to the appellant.
[29] In respect of the issue related to interest, the learned
senior advocate has referred to the decision to canvass the
submission that in the absence of any term in the contract, no
amount of interest can be awarded and for that, the decision
reported in (2010) 8 SCC 767 is placed for our consideration in
first point of time. While reading this judgment, we found that it
on the contrary not in favour of the appellant, the Court has on
the contrary propounded that where the Arbitral Tribunal has
exercised its discretion to refuse to award the interest for a
period pendente lite even if the principles on two cases which
are referred to the award of the Arbitrator could not be
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interfered with whereas here as discussed above, at length, a
statutory provision is investing a discretion in the learned
Arbitral Tribunal to consider the claim of interest either during
the period of pending arbitration or till the payment being made
after award and as such considering Section 31(7) of the Act
and the effect thereof would indicate that the learned Arbitral
Tribunal was justified to consider the interest claim made by the
claimant and as such the decision referred to is not of any
assistance to the appellant.
[30] Yet another decision which has been brought to our notice
is a decision reported in (2015) 2 SCC 189 to canvass the
submission that compounding interest cannot be awarded but
here as discussed above and the Chart clearly indicates that
there is no such compounding interest. On the contrary, the
prior to amendment the Tribunal was under an obligation to
award 18% interest instead of a reasonable amount of interest is
awarded. Hence, looking to sub-section (7) of Section 31 and
the effect thereof two clauses i.e. Clause - (a) and (b), we are of
the opinion that the decision is of no assistance to the appellant.
C/FA/2080/2016 CAV JUDGMENT DATED: 21/04/2023
[31] Similar are the proposition reflects in the decisions
reported in (2009) 12 SCC 324 and (2012) 4 SCC 505. While
considering the decision reported in (2012) 4 SCC 505, we have
noticed that the Hon'ble Apex Court in its jurisdiction available
modified the order of the High Court and directed the
concerned appellant to pay the amount of interest at 18% for
post award period from the date of award until 24.05.2001 and
declared that appellants are not liable to pay any interest on the
award amount by virtue of Section 37(1)(b) of the Act. Be that
as it may, this decision no doubt has propounded but looking to
the explanation which has been put-forth by the learned senior
advocate appearing for the respondent - claimant and clarified
by way of Chart and in consonance with the conclusion on the
interest reflecting in an award passed by learned Arbitral
Tribunal, we are of the view that this issue may be agitated at
the time when execution is taking place of the award but on this
issue, the entire award cannot be set at naught. Hence, we are
of the view that when the Arbitral Tribunal is empowered to
include the pre-award interest "in sum for which award is made"
at the time when execution may take place this factum of
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deposit of amount on 03.10.2016 may be taken into
consideration and necessary effect be given but this is not the
issue on which the award can be set aside under Section 37 of
the Act proceedings. Hence, the judgments cited on the issue
are not available to the appellant.
[32] Yet another issue based upon which an attempt is made to
challenge the award in this proceeding is the issue of limitation
by treating the same to be a pure question of law and can be
raised at any point of time and for that submission, Mr. M. B.
Gandhi, learned senior advocate has placed before us a decision
reported in AIR 2006 SC 3672 but as discussed above, this issue
of limitation has not been canvassed before the learned Arbitral
Tribunal and the appellant has throughout submitted to the
jurisdiction and allowed the entire award to be published after
proper adjudication and the issue has also not been raised
under Section 34 of the Act proceedings before the Court below
nor a point is taken in the memo of appeal. So at this stage
when the issue has not been agitated throughout, this issue of
limitation in the background of present facts is a mix question of
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law and fact and as such the judgments which have been cited
does not help out the appellant in any manner more particularly
when in the recent time also, the Hon'ble Apex Court has
observed that issue of limitation is a mix question of law and
fact and for that purpose, we may refer to a decision reported in
(2020) 1 SCC 260. Considering the aforesaid decision of recent
time, we are of the opinion that this issue is not possible to lean
in favour of the appellant. Apart from that, even perusal of
sequence of event that termination of contract has taken place
on 29.07.2006, third R. A. Bill was paid on 20.11.2007, a further
amount of Rs.1.12 crores has also been paid on 25.06.2008 and
having not paid the entire amount a notice for arbitration was
given on 23.07.2009 and the claim statement was then
submitted on 19.05.2010. So if this sequence of event would be
considered the issue of limitation is not possible to be accepted
in favour of appellant as tried to be raised. Hence, such issues
of facts and law since outside the purview of scope of Section 37
of the Act proceedings, we are of the opinion that the said issue
would not help in any manner to the appellant.
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[33] At this stage, as we have referred to the scope as
propounded by Hon'ble Apex Court reported in (2022) 4 SCC
116, we are of the opinion that the judgment cited by learned
senior advocate to support his submission on the issue of
limitation is of no avail. Same is the case with other decision as
well since without explaining the facts just the said decisions
were in a brief manner tendered on record without explaining
as to whether the facts are similar to the present controversy or
not when the issue of limitation has not been taken throughout
the proceeding except at the final stage, the decisions cited are
not possible to be applied in favour of the appellant. A valiant
attempt is made by Mr Gandhi, learned senior advocate to just
emphasis the issue of limitation but as said earlier, the said
issue being a mixed question of law and fact, we refrain
ourselves from examining as if we are entertaining original
proceedings. Hence, the decisions cited to that effect are of no
assistance to the appellant.
[34] At this stage, we may also refer to the decision which have
been cited on this issue by learned senior advocate appearing
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for the respondent - claimant, it has been propounded in a
decision reported in AIR 1963 SC 1165 wherein it has been
clearly propounded that plea of limitation involving mixed
question of law and fact, should not be allowed to be raised for
the first time in the argument and that is what exactly it is
happening on the case on hand. Since we have considered this
decision to dislodge the contention of the appellant, we deem it
proper to quote hereunder the relevant paragraph of the said
decision which reads as under:
"15. The High Court has overlooked the fact that even
upon the argument addressed before it on behalf of Kanshi
Rain, the question of limitation was not one purely of law
but was a mixed question of fact and law and, therefore, it
was not proper for it to allow it to be raised for the first
time in argument. We are satisfied that what the High
Court has done has caused prejudice to some of the parties
to the suit and on that ground alone, we would be justified
in setting aside its decision. If the High Court felt
overwhelmed by the provisions of s. 3 of the limitation Act,
it should at least have given an opportunity to the parties
which supported the decree of the trial court to meet the
plea of limitation by amending their pleadings. After
allowing the pleadings to be amended, the High Court
should have framed an issue and remitted it for a finding
to the trial Court. Instead of doing so, it has chosen to
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treat the pleading of one of the defendants as conclusive
not only on the question of fact but also on the question of
law and dismissed the suit. It is quite possible that had an
opportunity been given to the defendants, they could have
established, in addition to proving the dates on which the
summonses were served, that the suit was not barred by
time because of acknowledgment in the course of the
discussion, the High Court had said that it was not
suggested before it by anyone that the claim was not
barred by reason of acknowledgments. Apparently, no
such argument was advanced before it on behalf of the
plaintiff and the defendant Banarsi Das because the
counsel were apparently taken by surprise and had no
opportunity to obtain instructions on this aspect of the
case. We are clearly of opinion that the High Court was in
error in allowing the plea of limitation to be raised before
it particularly by defendants who had not even filed a
written statement in the case. We do not think that this
was a fit case for permitting an entirely new point to be
raised by a non-contesting party to the suit."
[35] Yet another decision which is reported in (2015) 5 SCC
223 the commencement of limitation period to be culled out
from the fixed date of performance, the limitation starts from
the date when the plaintiff had noticed of refusal of performance
etc. and the said issue of limitation can be raised from such
details which are being projected in the proceedings whereas
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here on the present case on hand, the issue of limitation has not
been raised and canvassed at all nor even raised in the memo of
appeal and it is only at the fag end of argument this issue is
tried to be canvassed and as such looking to the scope of appeal
under Section 37 of the Act, we refrain ourselves from
expressing any conclusion on this issue and the same can never
be a subject matter of Section 37 of the Act appeals as it
requires examination of facts and law. Hence, we are of the
opinion that on this issue of limitation no case is made out by
the appellant.
[36] So the overall consideration of the material on record
would lead to a situation that in Section 37 of the Act
proceedings, we may not examine or adjudicate the stand as if it
is the original proceedings and even if there is a perversity to
some extent, then also the same cannot be examined as held by
Hon'ble Apex Court in the case of UHL Power Company
Limited versus State of Himachal Pradesh reported in
(2022) 4 SCC 116. A conjoint effect of the aforesaid
discussion is that even if there is any patent illegality in the
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award or order involving public interest in any manner and as
such looking to the scope contained under Section 37 of the Act,
we are of the clear opinion that neither the award nor the order
passed under Section 34 of the Act by the court below deserve
to be interfered with in any form. Though, Mr. Gandhi, learned
senior advocate had made an attempt to argue as if it is
proceedings under Section 34 of the Act but then whatever
relevant circumstances to be examined in such proceedings
when the due application of mind is already made by the court
below just for the sake of remand of the proceedings, the matter
cannot be sent to reconsideration. On the contrary, recently,
the Hon'ble Apex Court has also propounded that remand of the
proceedings may not be made in a routine or casual manner and
as such, we may deem it proper to quote hereunder the relevant
observations contained in paragraph 25 in the case of
Nadakerappa Since Deceased by Lrs. and Others versus
Pillamma Since Deceased By Lrs. and Others reported in
2022 SCC OnLine SC 387:-
"25. The Division Bench, without assigning any cogent
reasons, has set aside the order of the learned Single
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Judge and has remanded the matter to the Land Tribunal.
It is settled law that the order of remand cannot be passed
as a matter of course. An order of remand cannot also be
passed for the mere purpose of remanding a proceeding to
the lower court or the Tribunal. An endeavour has to be
made by the Appellate Court to dispose of the case on
merits. Where both the sides have led oral and
documentary evidence, the Appellate Court has to decide
the appeal on merits instead of remanding the case to the
lower court or the Tribunal. We are of the view that, in the
instant case, the Division Bench has remanded the matter
without any justification."
[37] From the aforesaid proposition and in view of aforesaid
discussion even the alternative request which has been made to
remand the matter back to the Court below is also not possible
to be accepted by us and since no case is made out to call for
any interference, we hereby deem it proper to not to entertain
the appeal. Accordingly, the present First Appeal stands
dismissed.
Sd/-
(ASHUTOSH SHASTRI, J.)
Sd/-
(NISHA M. THAKORE, J.)
DHARMENDRA KUMAR
