Shri Gopal Singh Thakur vs Smt. Sarla Devi
2023 Latest Caselaw 13013 HP

    THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA




                                                                           .
                                                  FAO No.416 of 2009





                                                  Reserved on: 07.08.2023
                                                  Decided on:06.09.2023





    Shri Gopal Singh Thakur                                          ......Appellant

                                 versus

    Smt. Sarla Devi                                                 ......Respondent





    ____________________________________
    Coram:
    The Hon'ble Mr. Justice Rakesh Kainthla, J.

Whether approved for reporting?1 Yes.

____________________________________ For the appellant: Mr. Bhupender Gupta and Mr. Neeraj Gupta, Senior Advocates

with Ms. Rinki Kashmiri, Advocate.

For the respondent: Mr. G.D. Verma, Senior Advocate

with Mr. Sumit Sharma, Advocate.

Rakesh Kainthla, Judge

The present appeal is directed against the

judgment dated 09.07.2009, passed by learned District

Judge, Shimla, H.P. in Arbitration Case No.7-S/2 of 2007,

vide which the application filed by the appellant (claimant

Whether the reporters of Local Papers may be allowed to see the judgement? Yes.

before the learned arbitrator) was dismissed. (Parties shall

be hereinafter referred to in the same manner as they were

.

arrayed before the learned arbitrator for convenience).

2. Briefly stated, the facts giving rise to the present

appeal are that a civil suit was pending between the parties in

the Court of Learned Civil Judge (Senior Division), Shimla.

The matter reached before this Court in a CMPMO No. 18 of

2006. The matter was settled before this Court and it was

prayed that the same be referred to the arbitration of Shri

Raman Sethi, Advocate. This Court passed the following

order on 28.09.2006:-

".....The subject matter of the suit as also all disputes connected therewith between the parties are hereby referred to the arbitration of Shri Raman Sethi,

Advocate.

The petitioner Gopal Singh Thakur undertakes to file a statement of claims before the learned Arbitrator within two weeks from today. The

respondent Sarla Devi undertakes to file her defence to the statement of claims as well as her counterclaim within three weeks thereafter. Mr. Bawa undertakes to file a rejoinder thereto including a reply to the counterclaim within one week thereafter. The learned Arbitrator as well as the parties have agreed that the first sitting of the arbitration shall be held on 25th November, 2006 at 11.00 a.m. in the office chamber of

the learned Arbitrator. The learned Arbitrator shall ensure that keeping in view the prevailing estrangement between the parties and also the fact that the parties are neighbours and at one time they

.

had cordial relations, the arbitration proceedings are concluded very expeditiously. The learned Arbitrator shall not be influenced in the conduct and conclusion of the arbitration proceedings by the report of the

Local Commissioner appointed by this Court vide order dated 9th May 2006....."

3. Consequently, the claimant filed a claim before

the learned Arbitrator seeking partition of the plot known as

House No. 129 and 129/1, Krishna Nagar, Shimla, the land

underneath and adjacent to it as per the sale deed dated

19.11.1998. The parties claimed exclusive ownership of the

plot adjacent to the building comprised in Khasra No. 707

(old) corresponding to the new Khasra Nos. 1011, 1012, 1013

and 1016 and in the alternative, half share of the expenses

incurred by the claimant for providing a separate electricity

and water connection, exclusive ownership and user of the

passage commencing from the Southern side of the building

i.e. from Slaughterhouse towards the cart road.

4. The claim was opposed by the respondent. The

respondent also filed a counterclaim before the learned

Arbitrator seeking the removal of the iron gate put up by the

claimant on the passage and a restraint order to prevent the

.

claimant from causing any obstruction to the passage.

5. The claimant filed a rejoinder to the reply denying

the contents of the reply and affirming those of the claim. He

also filed a reply to the counterclaim filed by the respondent

denying the contents of the reply.

6. Learned Arbitral Tribunal framed the issues,

recorded the evidence and passed an Award on 1.12.2007. He

held that the dispute between the parties was regarding the

passage leading from Slaughterhouse towards the Cart Road.

The reference was regarding the injunction and not for

partition. The property regarding which the reference was

made cannot be reasonably or conveniently partitioned for

the benefit of both parties. The passage is easementary right

over a path, which cannot be partitioned. Claimant does not

have any specific right over the passage and his act of

installing Iron Gate to obstruct the use of the passage was

not justified. The claimant got a new electricity and water

connection in the year 1999. He never demanded the half

share and he was not entitled to the half share. The parties

have purchased the doubled-storeyed house no. 129 and

.

129/1 jointly. The parties had occupied the land underneath

or around the built-up structure for joint use and occupation.

The claimant does not have any exclusive right to use the

vacant land around the building as per the sale deed. The

claimant cannot debar the respondent -- a co-sharer from

the use of the joint land; hence, the claim filed by the

claimant was dismissed, whereas the counter-claim filed by

the respondent was allowed. The respondent was held

entitled to use the passage as it was being used by her before

the installation of the gates.

7. The appellant/applicant/claimant filed an

application under Section 34 of the Arbitration and

Conciliation Act before learned District Judge, Shimla

asserting that the learned Arbitrator erred in holding that the

land was incapable of partition. He had wrongly held that the

claim was for injunction and not for the partition. A specific

claim was made for the partition of the land. Learned

Arbitrator dealt with the dispute which did not fall within the

terms submitted to it. Therefore, it was prayed that the

application be allowed and the award passed by the learned

.

Arbitrator be set aside.

8. Learned District Judge held that the property was

purchased jointly by the parties vide sale deed dated

19.11.1998. The parties had entered into an agreement on

25.11.1998 regarding the use and enjoyment of the property

and referring any dispute between the parties to the

Arbitrator. The ground floor of the building was allotted to

the claimant and the first floor was allotted to the

respondent. The claimant did not provide any evidence to

show that this arrangement was final. The agreement

between the parties does not cover the dispute raised by the

claimant and this claim was rightly negated by the learned

Arbitrator. The passage was common between the parties

and the claimant was not entitled to block the same by

installing the gate and putting the lock. The claimant never

obtained any permission from the respondent and learned

Arbitrator had rightly ordered the removal of the gate. The

parties were entitled to obtain the electricity and water

connection in their names. There was no stipulation that the

respondent would give a half share to the applicant and the

.

learned Arbitrator had rightly declined the claim; hence, the

application preferred by the applicant/appellant/claimant

was dismissed.

9. Being aggrieved from the order passed by the

learned District Judge, the present appeal has been filed

asserting that the learned District Judge erred in not properly

formulating the points for determination. Learned District

Judge proceeded as he was deciding the appeal arising out of

the award passed by the Arbitral Tribunal. The learned

District Judge did not deal with the matter as per provisions

of Section 34 of the Arbitration and Conciliation Act. The

parties were not put to the issues and reasonable opportunity

to lead evidence was not afforded. Learned District Judge

erred in holding that no material was placed on record to

show the invalidity of the arbitral award. Learned District

Judge had only discussed Claims No. 1 to 4 and had not

discussed the other issues. The jurisdiction of the Arbitrator

was under challenge, as the learned Arbitrator had observed

that the partition of the property was beyond his jurisdiction.

Learned Arbitrator could not have determined the dispute by

.

splitting the same. Learned District Judge has no jurisdiction

to appreciate the matter as an Appellate Court; therefore, it

was prayed that the present appeal be allowed and the

judgment passed by the learned District Judge be set aside

10. I have heard Mr. Bhupender Gupta and Mr. Neeraj

Gupta, learned Senior Counsel assisted by Ms. Rinki Kashmir,

learned counsel for the appellant and Mr. G.D. Verma,

learned Senior Counsel assisted by Mr. Sumit Sharma,

learned counsel, for the respondent.

11. Mr. Bhupender Gupta, learned Senior Counsel for

the appellant/applicant/claimant submitted that the Arbitral

Tribunal erred in holding that he had no jurisdiction to

partition the property. This Court had specifically referred

the matter regarding the partition of the joint property to the

learned Arbitrator. Learned Arbitrator failed to exercise a

jurisdiction vested in him. Learned District Judge did not

consider this issue. The learned District Judge did not allow

the parties to lead evidence and decided the matter as if he

were sitting in an appeal over the award of a learned

Arbitrator. He further submitted that an application for

.

leading evidence has been filed on behalf of the applicant to

show that subsequent events have taken place and Municipal

Corporation constructed a staircase adjacent to the building

in dispute. The respondent has no right to invade the privacy

of the applicant by using the passage in front of his house;

therefore, he prayed that the application be allowed and the

additional evidence be brought on record, the judgment and

decree passed by the learned District Judge and the Award

passed by the learned Arbitrator be set aside.

12. Mr G.D. Verma, learned Senior Counsel for the

respondent submitted that the applicant/claimant had filed a

claim and the respondent filed a counter-claim before the

learned Arbitrator; therefore, two separate applications

should have been filed before the learned District Judge to set

aside the Award passed by learned Arbitrator. The

applicant/claimant only filed a single application, which was

not maintainable. The jurisdiction of the Court while sitting

in appeal over the order passed in an application under

Section 34 of the Arbitration and Conciliation Act is similar

to the jurisdiction exercised by the learned District Judge.

.

The Appellate Court cannot sit in appeal over the findings

recorded by the learned Arbitrator and can set aside the

Award only as per the provisions of Section 34 of the

Arbitration and Conciliation Act. There is no infirmity in the

award or the judgment passed by the learned District Judge.

13.

r to Hence, he prayed that the appeal be dismissed.

I have given considerable thought to the rival

submissions at the bar and have gone through the record

carefully.

14. It was submitted that the learned District Judge

erred in not allowing the applicant/claimant to lead evidence

to establish the invalidity of the Award. An application under

Order 41 Rule 27 CPC was also filed for leading additional

evidence. Section 19(1) of the Arbitration and Conciliation

Act reads that the Arbitral Tribunal shall not be bound by the

Code of Civil Procedure or the Indian Evidence Act. The

parties are free to agree to a procedure to be followed by the

Arbitral Tribunal. It was laid down by Hon'ble Delhi High

Court in Silor Associates v. Bharat Heavy Electrical Ltd., 2014

SCC OnLine Del 3407 = 2014 (213), DLT 312 that the

.

Arbitrations Tribunal is not bound by the Code of Civil

Procedure and can adopt a procedure as it deems

appropriate. It was held:-

"17. Section 19(1) of the Act, inter alia, provides that "The Arbitral Tribunal shall not be bound by the

Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872)". This means that the Tribunal is not bound by the rigour and strict provisions of the Code of Civil Procedure, 1908 (CPC),

or the Indian Evidence Act, 1872 (Evidence Act).

18. Section 19(2) states that subject to the provisions of Part I, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings. In the present case, the parties have

not agreed on any specific procedure to be followed by the Arbitral Tribunal in the conduct of its proceedings. Section 19(3) states that "failing any agreement

referred to in subsection (2), the Arbitral Tribunal may, subject to this part, conduct the proceedings in

the manner it considers appropriate"(emphasis supplied).

Therefore, the Arbitral Tribunal is free to devise its

own procedure, subject to the condition that such procedure should conform with the provisions of Part I of the Act. The procedure that the Tribunal may devise should meet the basic tenets of an adjudicatory process, namely, that the procedure should treat parties equally, and each party should be given a full opportunity to present its case (see Section 18). The procedure to be evolved by the Tribunal cannot be

such that it curtails the rights of the parties under Sections 13, 16, 17, 22, 23, 24, 25 & 26 of the Act or any of them.

.

19. There is nothing in the Act to contraindicate the

existence of jurisdiction/power in the tribunal to require the parties to produce documents, exhibits or other evidence, as the arbitral tribunal may determine.

The aforesaid provision has the effect of vesting the tribunal with much greater autonomy in the matter of regulating its procedure for the conduct of the arbitration proceedings, than that exercised by a civil court which, is bound by the rigour of the Code of Civil

Procedure (CPC) and the Indian Evidence Act. The scheme contained in Section 19 of the Act is not to denude the arbitral tribunal of its power to regulate its

procedure for the effective and expeditious conduct of the arbitration proceedings in a transparent and fair

manner. On the contrary, the legislative intent appears to vest the arbitral tribunal with autonomy and flexibility in the matter of conduct of its proceedings so as to expedite the proceedings and cut

the procedural wrangles witnessed in courts - which are governed by the CPC and the Evidence Act.

20. The procedure that the Tribunal may adopt for

conducting the proceedings need not be evolved by consensus of the parties. It is for the Tribunal to

devise its own procedure if the parties have themselves not evolved the procedure consensually under Section 19(2)."

15. Therefore, the provisions of Order 41 Rule 27

cannot be applied to the arbitration proceedings and the

application cannot be allowed on this short ground alone.

16. A grievance was raised that the learned District

Judge had not permitted the applicant to lead the evidence to

prove the validity of the Arbitral Award. This grievance is not

.

justified. It was laid down by the Hon'ble Supreme Court in

Alpine Housing Development Corpn. (P) Ltd. v. Ashok S.

Dhariwal, 2023 SCC OnLine SC 55= AIR 2023 SC 558 that the

Court can permit the applicant to lead evidence in the

proceeding under Section 34 2(a) in exceptional cases. The

issues are not required to be framed. Oral evidence is not to

be taken as this would defeat the purpose of the summary

proceedings. The party can bring the facts to the notice of

the Court by affidavits, which would not be allowed unless

absolutely necessary. It was held:

"6. The short question, which is posed for the

consideration of this Court is, whether the applicant can be permitted to adduce evidence to support the

ground relating to Public Policy in an application filed under Section 34 of the Arbitration & Conciliation Act, 1996? At the outset, it is required to be noted that in

the present case, the arbitration proceedings commenced and even the award was declared/passed by the arbitral tribunal in the year 1998, i.e., prior to section 34(2)(a) came to be amended vide Act 33/2019. Apart from the fact that it was conceded by the learned counsel appearing on behalf of the appellant before the High Court that the law prevailing prior to the amendment of Section 34(2)(a) by Act 33/2019

shall be applicable, even otherwise, we are of the opinion that the arbitration proceedings commenced and even the award was declared prior to the amendment of Section 34(2)(a) by Act 33/2019,

.

Section 34(2)(a) pre-amendment shall be applicable. The view which we are taking is because by amendment of section 34(2)(a) by Act 33/2019, there is a substantial change. Prior to the amendment of

section 34(2)(a), an arbitral award could be set aside by the Court if the party making an application 'furnishes proof' and the grounds set out in section 34(2)(a) and section 34(2)(b) are satisfied. However,

subsequent to the amendment of section 34(2)(a), the words 'furnishes proof' have been substituted by the words 'establishes on the basis of the record of the arbitral tribunal'. In that view of the matter, we hold

that in case of arbitration proceedings commenced

and concluded prior to the amendment of section 34(2)(a) by Act 33/2019, pre-amendment of section 34(2)(a) shall be applicable.

7. Now so far as the question, whether in an

application filed under section 34(2)(a) pre- amendment where the requirement is that the party making an application has to 'furnish proof', whether

such an applicant can be permitted to adduce evidence by way of affidavit or otherwise is concerned, few

decisions of this Court are required to be referred to.

(i) In the case of Fiza Developers (supra), the question that was posed by the Court was, whether issues as

contemplated under Order 14 Rule 1 CPC should be framed in applications under Section 34 of the Act. Answering the same, this Court observed and held in paragraphs 14, 17, 18, 21, 22, 24, 29 & 31 as under:

'14. In a summary proceeding, the respondent is given an opportunity to file his objections or written statement. Thereafter, the court will

permit the parties to file affidavits in proof of their respective stands, and if necessary permit cross-examination by the other side, before hearing arguments. Framing of issues in such

.

proceedings is not necessary. We hasten to add that when it is said issues are not necessary, it does not mean that evidence is not necessary.

XXXXXX

17. The scheme and provisions of the Act disclose two significant aspects relating to

courts vis-a-vis arbitration. The first is that there should be minimal interference by courts in matters relating to arbitration. Second, is the sense of urgency shown with reference to

arbitration matters brought to court, requiring

promptness in disposal.

18. Section 5 of the Act provides that notwithstanding anything contained in any other law for the time being in force, in matters

governed by Part I of the Act, no judicial authority shall intervene except where so provided in the Act.

XXXXXXX

21. We may therefore examine the question for consideration by bearing three factors in mind. The first is that the Act is a special enactment

and Section 34 provides for a special remedy. The second is that an arbitration award can be set aside only upon one of the grounds mentioned in sub-section (2) of Section 34 exists. The third is that proceedings under Section 34 are required to be dealt with expeditiously.

22. The scope of enquiry in a proceeding under Section 34 is restricted to consideration whether any one of the grounds mentioned in sub-section (2) of Section 34 exists for setting

.

aside the award. We may approvingly extract the analysis relating to 'grounds of challenge' from The Law & Practice of Arbitration and Conciliation by Shri O.P. Malhotra [1st Edn., p.

768, Para (I) 34-14]:

'Section 5 regulates court intervention in the arbitral process. It provides that notwithstanding anything contained in

any other law for the time being in force in India, in matters governed by Part I of this Act, the court will not intervene r except where so provided in this Part. Pursuant to this policy, Section 34

imposes certain restrictions on the right of the court to set aside an arbitral award. It provides, in all, seven grounds for setting aside an award. In other words, an

arbitral award can be set aside only if one or more of these seven grounds exist. The first five grounds have been set forth

in Section 34(2)( a). In order to successfully invoke any of these grounds,

a party has to plead and prove the existence of one or more of such grounds.

That is to say, the party challenging the

award has to discharge the burden of proof by adducing sufficient credible evidence to show the existence of any one of such grounds. The rest two grounds are contained in Section 34(2) (b) which provides that an award may be set aside by the court on its own initiative if the subject matter of the dispute is not

arbitrable or the impugned award is in conflict with the public policy of India.' The grounds for setting aside the award are

.

specific. Therefore, necessarily a petitioner who

files an application will have to plead the facts necessary to make out the ingredients of any of the grounds mentioned in sub-section (2) and

prove the same. Therefore, the only question that arises in an application under Section 34 of the Act is whether the award requires to be set aside on any of the specified grounds in sub- section (2) thereof. Sub-section (2) also clearly

places the burden of proof on the person who makes the application. Therefore, the question arising for adjudication as also the person on

whom the burden of proof is placed is statutorily specified. Therefore, the need for

issues is obviated.

XXXXXXXX

24. In other words, an application under Section

34 of the Act is a single issue proceeding, where the very fact that the application has been instituted under that particular provision

declares the issue involved. Any further exercise to frame issues will only delay the proceedings.

It is thus clear that issues need not be framed in applications under Section 34 of the Act. XXXXXXXX

29. In a regular civil suit, in the event of failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [vide Order 8 Rule 5(2) of the Code]. But in an application under Section 34, even if there is no contest, the court cannot, on the basis of the averments contained in the application, set aside the award. Whether there

is a contest or not, the applicant has to prove one of the grounds set out in Sections 34(2)( a) and (b). Even if the applicant does not rely upon the grounds under clause (b), the court, on its

.

own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in Section 34(2)(

b). It is perhaps in this sense, the High Court

has stated that the proceedings may not be adversarial. Be that as it may.

XXXXXXXX

31. Applications under Section 34 of the Act are summary proceedings with a provision for objections by the respondent-defendant, followed by an opportunity to the applicant to r 'prove' the existence of any ground under

Section 34(2). The applicant is permitted to file affidavits of his witnesses in proof. A corresponding opportunity is given to the respondent-defendant to place his evidence by

affidavit. Where the case so warrants, the court permits cross-examination of the persons swearing to the affidavit. Thereafter, the court hears arguments and/or receives written

submissions and decides the matter. This is of course the routine procedure. The court may

vary the said procedure, depending upon the facts of any particular case or the local rules. What is however clear is that framing of issues

as contemplated under Rule 1 of Order 14 of the Code is not an integral part of the process of a proceeding under Section 34 of the Act.'

(ii) The decision of this Court in the case of Fiza Developers (supra) has been subsequently considered by this Court in the case of Emkay Global (supra) and in paragraph 21, it is observed and held as under:

'21. It will thus be seen that speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act

.

to strengthen the aforesaid object. Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated. It is also

on the cards that if Bill No. 100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether. Given the current state of the law, we are of the

view that the two early Delhi High Court judgments [Sandeep Kumar v. Ashok Hans, 2004 SCC OnLine Del 106 : (2004) 3 Arb LR 306]: [Sial Bioenergie v. SBEC Systems, 2004 SCC OnLine

Del 863: AIR 2005 Del 95], cited by us

hereinabove, correctly reflect the position in law as to furnishing proof under Section 34(2)(

a). So does the Calcutta High Court judgment [WEB Techniques & Net Solutions (P) Ltd. v. Gati

Ltd., 2012 SCC OnLine Cal 4271]. We may hasten to add that if the procedure followed by the Punjab and Haryana High Court judgment

Punjab SIDC Ltd. v. Sunil K. Kansal, 2012 SCC OnLine P&H 19641 is to be adhered to, the time-

limit of one year would only be observed in most cases in the breach. We therefore overrule the said decision. We are constrained to observe

that Fiza Developers [Fiza Developers & Inter- Trade (P) Ltd. v. AMCI (India) (P) Ltd., (2009) 17 SCC 796 : (2011) 2 SCC (Civ) 637] was a step in the right direction as its ultimate ratio is that issues need not be struck at the stage of hearing a Section 34 application, which is a summary procedure. However, this judgment must now be read in the light of the amendment made in

Sections 34(5) and 34(6). So read, we clarify the legal position by stating that an application for setting aside an arbitral award will not ordinarily require anything beyond the record

.

that was before the arbitrator. However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)( a), they may be

brought to the notice of the Court by way of affidavits filed by both parties. Cross- examination of persons swearing to the affidavits should not be allowed unless

absolutely necessary, as the truth will emerge on a reading of the affidavits filed by both parties. We, therefore, set aside the judgment [Girdhar Sondhi v. Emkay Global Financial r Services Ltd., 2017 SCC OnLine Del 12758] of the

Delhi High Court and reinstate that of the learned Additional District Judge dated 22-9- 2016. The appeal is accordingly allowed with no order as to costs.'

(iii) The decision of this Court in the case of Fiza Developers (supra) again fell for consideration of this Court in the subsequent decision in the case of Canara

Nidhi (supra). After taking note of the observations made in paragraph 21 in Emkay Global (supra),

thereafter it is observed by this Court in the case of Canara Nidhi (supra) that the legal position is thus clarified that section 34 application will not ordinarily

require anything beyond the record that was before the arbitration and that cross-examination of persons swearing into the affidavits should not be allowed unless absolutely necessary.

8. The ratio of the aforesaid three decisions on the scope and ambit of section 34(2)(a) pre-amendment would be that applications under sections 34 of the Act are summary proceedings; an award can be set

aside only on the grounds set out in section 34(2)(a) and section 34(2) (b); speedy resolution of the arbitral disputes has been the reason for enactment of 1996 Act and continues to be a reason for adding

.

amendments to the said Act to strengthen the aforesaid object; therefore in the proceedings under section 34 of the Arbitration Act, the issues are not required to be framed, otherwise if the issues are to be

framed and oral evidence is taken in a summary proceedings, the said object will be defeated; an application for setting aside the arbitral award will not ordinarily require anything beyond the record that

was before the arbitrator, however, if there are matters not containing such records and the relevant determination to the issues arising under section 34(2)(a), they may be brought to the notice of the

Court by way of affidavits filed by both the parties' the

cross-examination of the persons swearing in to the affidavits should not be allowed unless absolutely necessary as the truth will emerge on the reading of the affidavits filed by both the parties. Therefore, in

an exceptional case being made out and if it is brought to the court on the matters not containing the record of the arbitrator that certain things are relevant to the

determination of the issues arising under section 34(2)(a), then the party who has assailed the award on

the grounds set out in section 34(2)(a) can be permitted to file an affidavit in the form of evidence. However, the same shall be allowed unless absolutely

necessary.

17. In the present case, the applicant has not asserted

in the application under Section 34 of the Arbitration and

Conciliation Act filed before the learned District Judge that

there was a failure of the public policy for which the evidence

was required to be led; therefore, no grievance can be made

by the applicant that opportunity of leading evidence was not

.

afforded to him.

18. The submission of Mr. G.D. Verma, learned Senior

Counsel for the respondent that the respondent had filed a

counter-claim and the applicant should have filed two

applications under Section 34 of the Arbitration and

Conciliation Act to set aside the Award proceeds on the basis

that the provisions of Code of Civil Procedure apply to the

arbitration proceedings. It has already been found out above

that provisions of CPC do not apply to the Arbitration

proceedings. Thus, the principle of res judicata cannot be

applied to the arbitral proceedings or the proceedings arising

therefrom and the submission that the application under

Section 34 of the Arbitration and Conciliation Act, would be

barred by the principle of res judicata, cannot be accepted.

19. Mr. Bhupender Gupta, learned Senior Counsel for

the applicant/claimant submitted that the learned District

Judge erred in deciding the application as if he was sitting in

appeal over the award of learned Arbitrator and the Court

while deciding the application under Section 34 of

Arbitration and Conciliation Act, cannot act as an Appellate

.

Court. This submission has some force. It was laid down by

the Hon'ble High Court in Himachal Pradesh Electricity Board

vs. SAB Industries 2019 (1) Him. L.R. (HC) 450 (HC) that the

scope of interference by the court with the award of the

arbitrator is limited. It cannot sit in appeal over the findings

r to recorded by the arbitrator. It was observed:

13. It is quite apparent from the aforesaid exposition of law that the scope of interference by the Court is

very limited while considering objections having been filed by the aggrieved party under S.34 of the Act. The award passed by the learned Arbitrator can be interfered with in case of fraud, bias or violation of

principles of natural justice. Interference, if any, on the ground of 'patent illegality is only permissible, if the same goes to the root of the case. Violation should

be so unfair and unreasonable as to shock the conscience of the Court. In the judgment referred

hereinabove, it has been held by the Hon'ble Apex Court that what is to be constituted as 'public policy is a matter dependent upon the transaction and nature

of the statute, but the same should be so unfair and unreasonable as to shock the conscience of the Court, as has been observed hereinabove.

14. Similarly, there can not be any dispute, as has been repeatedly held by the Hon'ble Apex Court as well as this Court that the court, while deciding objections, if any, filed by the aggrieved party under S.34 of the Act, against the Award passed by an Arbitrator, does not

sit in appeal over the findings returned by the learned Arbitrator and there can not be any reappraisal of evidence on the basis of which learned Arbitrator has passed the Award. Otherwise also, in terms of S. 34 of

.

the Act, objections, if any, filed by the aggrieved party can be considered by the Court if the Award is in any manner against the public policy, which certainly has to be liberally interpreted in view of the facts of the

case. (Emphasis supplied)

20. The scope of interference with the arbitration

award was exhaustively considered by the Hon'ble Supreme

Court in Delhi Airport Metro Express Private Ltd. vs. Delhi

Metro Rail Corporation (2022) 1 SCC 131 and it was held:

22. A cumulative reading of the UNCITRAL Model Law and Rules, the legislative intent with which the 1996 Act is made, Section 5 and Section 34 of the 1996 Act would make it clear that judicial interference with the

arbitral awards is limited to the grounds in Section 34. While deciding applications filed under Section 34 of the Act, courts are mandated to strictly act in

accordance with and within the confines of Section 34, refraining from appreciation or re-appreciation of

matters of fact as well as law. (See: Uttarakhand Purv Sainik Kalyan Nigam Limited, Vs. Northern Coal Field Limited., (2020) 2 SCC 455, Bhaven Construction

Through Authorised Signatory Premjibhai K. Shah v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. and Another, 2021 SCC OnLine SC 8 and Rashtriya Ispat Nigam Limited Vs. Dewan Chand Ram Saran, (2012) 5 SCC 306).

23. 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), (2019) 15 SCC 131 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 Section 48, would

now mean the "fundamental policy of Indian law" as explained in paras 18 and 27 of Associate Builders [Associate Builders Vs. DDA, (2015) 3 SCC 49: (2015) 2 SCC (Civ) 204] i.e. the

fundamental policy of Indian law would be

relegated to "Renusagar" understanding of this expression. This would necessarily mean that Western Geco [ONGC Vs. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5

SCC (Civ) 12] expansion has been done away with. In short, Western Geco [ONGC Vs. 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

Vs. 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 for the challenge of an award, as is

contained in para 30 of Associate Builders [Associate Builders Vs. 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 the "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 Vs. 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 the 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 Vs. 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 Vs. 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 Vs. 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 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 the 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 the 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 Vs. 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 Vs. 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 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 Vs. 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 Vs. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], r while no longer being a ground for challenge under "public policy of India ", would certainly

amount to 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 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

a decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse."

24. 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 the annulment of arbitral awards are well-known to legally trained minds. However, 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 to set 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

the 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.

25. Patent illegality should be illegality, which goes to

the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression 'patent illegality. Likewise, erroneous application of law cannot be categorised as

patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression 'patent illegality. What is

prohibited is for courts to re-appreciate evidence to conclude that the award suffers from patent illegality

appearing on the face of the award, as courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic

award under Section 34(2-A) on the ground of patent illegality is when the arbitrator takes a view, which is not even a possible one or interprets a clause in the contract in such a manner, which no fair-minded or reasonable person would, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not allotted to them. An arbitral award stating no reasons for its

findings would make itself susceptible to challenge on this account. The conclusions of the arbitrator, which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set

.

aside on the ground of patent illegality. Also, consideration of documents, which are not supplied to the other party is a facet of perversity falling within the expression 'patent illegality.

26. Section 34 (2) (b) refers to the other grounds on which a court can set aside an arbitral award. If a dispute which is not capable of settlement by arbitration is the subject matter of the award or if the

award is in conflict with the public policy of India, the award is liable to be set aside. Explanation (1), amended by the 2015 Amendment Act, clarified the

expression 'public policy of India' and its connotations for the purposes of reviewing arbitral

awards. It has been made clear that an award would be in conflict with the public policy of India only when it is induced or affected by fraud or corruption or is in violation of Section 75 or Section 81 of the 1996 Act, if

it is in contravention with the fundamental policy of Indian law or if it is in conflict with the most basic notions of morality or justice. In Ssangyong (supra),

this Court held that the meaning of the expression 'fundamental policy of Indian law' would be in

accordance with the understanding of this Court in Renusagar Power Co. Ltd. Vs. General Electric Co., 1994 Supp (1) SCC 644 In Renusagar (supra), this Court

observed that violation of the Foreign Exchange Regulation Act, 1973, a statute enacted for the 'national economic interest', and disregarding the superior courts in India would be antithetical to the fundamental policy of Indian law. Contravention of a statute not linked to public policy or public interest cannot be a ground to set at naught an arbitral award as being discordant with the fundamental policy of

Indian law and neither can it be brought within the confines of 'patent illegality as discussed above. In other words, contravention of a statute only if it is linked to public policy or public interest is cause for

.

setting aside the award as being at odds with the fundamental policy of Indian law. If an arbitral award shocks the conscience of the court, it can be set aside as being in conflict with the most basic notions of

justice. The ground of morality in this context has been interpreted by this Court to encompass awards involving elements of sexual morality, such as prostitution, or awards seeking to validate

agreements, which are not illegal but would not be enforced given the prevailing mores of the day. [Ssangyong (supra)]

21. It was laid down by the Hon'ble Supreme Court in

The Project Director National Highways no. 45E and 220,

National Highways Authority of India vs. M. Hakeem 2021 (9)

SCC 1 that an arbitration award cannot be challenged on

merits. It was observed:

21. It is settled law that a Section 34 proceeding does

not contain any challenge on the merits of the award. This has been decided in MMTC Ltd. vs. Vedanta Ltd., (2019) 4 SCC 163, at 167 as follows: -

14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section

34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the

exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section

.

34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.

22. Likewise, in Ssangyong Engg. & Construction Co. Ltd. vs. NHAI, (2019) 15 SCC 131, this Court under the caption "Section 34(2)(a) does not entail a challenge to an arbitral award on merits" referred to this Court's judgment in Renusagar Power Co. Ltd. vs.

General Electric Co., 1994 Supp (1) SCC 644, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 [the "New York

Convention"] and various other authorities to conclude that there could be no challenge on merits

under the grounds mentioned in Section 34 - (see paras 34 to 48). This Court also held, in Maharashtra State Electricity Distribution Co. Ltd. vs. Datar Switchgear Ltd., (2018) 3 SCC 133 (at 170), that the

court hearing a Section 34 petition does not sit in appeal (see para 51).

22. This position was reiterated in Rishabh Kumar

Secretary to the Govt. of India, NHAI 2021 LawSuit (Bom.)

1296, wherein it was observed:

14. The Hon'ble Supreme Court in Associate Builders (supra) has dealt with the aspect of public policy of India in detail. While considering the provisions of Section 34(2)(b)(ii) of the Act of 1996 before its amendment by Act No. 3 of 2016 reference was made to the decision in Renusagar Power Co. Ltd. v. General Electric Company 1994 Supp (1) SCC 644

wherein while construing the expression 'public policy' in the context of a foreign award, three heads namely (i) the fundamental policy of Indian Law, (ii) the interest of India and (iii) justice or morality were

.

enumerated. Thereafter in ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705 the aspect of patent illegality was added as a fourth head. Under the head of the fundamental policy of Indian law, it was clarified

in Associate Builders (supra) that disregarding the binding effect of the judgment of a superior Court would also be violative of the fundamental policy of Indian law. Certain relevant observations that are

required to be kept in mind are reproduced as under:--

"29. It is clear that the juristic principle of a "judicial approach" demands that a decision be

fair, reasonable and objective. On the obverse side,

anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective."

"31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of

explanation. It is settled law that where:

(i) a finding is based on no evidence, or

(ii) an Arbitral Tribunal takes into account something irrelevant to the decision which is

arrived at; or

(iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse."

"33. It must clearly be understood that when a Court is applying the "public policy" test to an arbitration award, it does not act as a Court of

appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of

.

evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be

held to be invalid on this score. Once it is found that the arbitrator's approach is not arbitrary or capricious, then he is the last word on facts." "34. It is with this very important caveat that

the two fundamental principles which form part of the fundamental policy of Indian Law (that the arbitrator must have a judicial approach and that he must not act perversely) are to be understood."

Patent Illegality "40. We now come to the fourth head of public policy namely, patent illegality. It must be remembered that under the explanation to section

34(2)(b), an award is said to be in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

This ground is perhaps the earliest ground on which courts in England set aside awards under

English law. Added to this ground (in 1802) is the ground that an arbitral award would be set aside if there were an error of law by the arbitrator. This is

explained by Denning, L.J.

in [R v. Northumberland Compensation Appeal Tribunal, exp Shaw., (All ER p. 130 D-E: KB p.351)] "Leaving now the statutory tribunals, I turn to the awards of the arbitrators. The Court of King's Bench never interfered by certiorari with the award of an arbitrator, because it was a private tribunal and not subject to the prerogative writs. If the

award was not made a rule of the Court, the only course available to an aggrieved party was to resist an action on the award or to file a bill in equity. If the award was made a rule of Court, a motion could

.

be made to the court to set it aside for misconduct of the arbitrator on the ground that it was procured by corruption or other undue means (see Statute 9 and 10 Will. III, C. 15). At one time an award could

not be upset on the ground of error of law by the arbitrator because that could not be said to be misconduct or undue means, but ultimately it was held in Kent v. Elstob, that an award could be set

aside for error of law on the face of it. This was regretted by Williams, J., in Hodgkinson v. Fernie, but is now well established."

41. This, in turn, led to the famous principle laid

down in Champsey Bhara Company v. Jivraj Balloo Spg. and Wvg. Co. Ltd., where the Privy Council referred to Hodgkinson and then laid down : (IA pp 330-32)

"The law on the subject has never been more clearly stated than by Williams, J. in the case of Hodgkinson v. Fernie [CB (NS) p.202: ER p.717].

"The law has for many years been settled, and

remains so at this day, that, where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted the

sole and final Judge of all questions both of law and of fact. ...... The only exceptions to that rule are cases where the award is the result of corruption or fraud, and one other, which though it is to be regretted, is now, I think firmly established viz. where the question of law necessarily arises on the face of the award or upon some paper accompanying and forming part of the award.

Though the propriety of this latter may very well be doubted, I think it may be considered as established."

.

"Now the regret expressed by Williams, J.

in Hodgkinson v. Fernie has been repeated by more than one learned Judge, and it is certainly not to be desired that the exception should be in any way

extended. An error in law on the face of the award means, in Their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment,

some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in a narrative a reference is made to a contention of one party that opens the

door to seeing first what that contention is, and

then going to the contract on which the parties' rights depend to see if that contention is sound. Here it is impossible to say, from what is shown on the face of the award, what mistake the arbitrators

made. The only way that the learned judges have arrived at finding what the mistake was is by saying: "Inasmuch as the Arbitrators awarded so

and so, and inasmuch as the letter shows that then buyer rejected the cotton, the arbitrators can only

have arrived at that result by totally misinterpreting Rule 52." But they were entitled to give their own interpretation to Rule 52 or any

other article, and the award will stand unless, on the face of it they have tied themselves down to some special legal proposition which then when examined, appears to be unsound. Upon this point, therefore, Their Lordships think that the judgment of Pratt, J. was right and the conclusion of the learned Judges of the Court of Appeal erroneous."

This judgment has been consistently followed in India to test awards under Section 30 of the Arbitration Act, 1940.

.

42. In the 1996 Act, this principle is substituted

by the 'patent illegality' principle which, in turn, contains three sub heads:

42.1(a) A contravention of the substantive law of

India would result in the death knell of an arbitral award. This must be understood in the sense that such illegality must go to the root of the matter and cannot be of a trivial nature. This again is a

really a contravention of Section 28(1)(a) of the Act, which reads as under:

"28. Rules applicable to the substance of the dispute.--(1) Where the place of arbitration is

situated in India,--

(a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time

being in force in India;"

42.2(b) A contravention of the Arbitration Act itself would be regarded as a patent illegality-for

example if an arbitrator gives no reasons for an award in contravention of section 31(3) of the Act,

such award will be liable to be set aside. 42.3(c) Equally, the third sub-head of patent

illegality is really a contravention of Section 28(3) of the Arbitration Act, which reads as under: "28. Rules applicable to the substance of the dispute.--

(1)-(2) ******** (3) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and

shall take into account the usages of the trade applicable to the transaction."

This last contravention must be understood

.

with a caveat. An arbitral tribunal must decide in

accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award

can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could

do."

15. To summarize what has been laid down in Associate Builders (supra), an award passed (a)

disregarding the binding effect of the judgment of a

superior Court (b) in the absence of a 'judicial approach' resulting in something arbitrary or whimsical (c) in breach of the 'audi alteram partem' principle (d) that is so perverse or irrational that no

reasonable person would have arrived at such conclusion is liable to be set aside. Perversity would include a finding based on no evidence, taking into account something irrelevant or ignoring vital

evidence could also result in the award being set aside being contrary to the fundamental policy of Indian

Law. On the aspect of patent illegality, an award that is so unfair or unreasonable that it shocks the conscience of the Court is also susceptible to

interference under Section 34(2) of the Act of 1996 as held in Centrotrade Minerals and Metals Inc. v. Hindustan Copper Limited [(2006) 11 SCC 245] and DDA v. R.S. Sharma & Company [(2008) 13 SCC 80]. Patent illegality should go to the root of the matter and it should not be a trivial illegality as observed in J.G. Engineers (P) Ltd. v. Union of India [(2011) 5 SCC 758].

16. On the other hand, the caution to be exercised under Section 34 of the Act of 1996 as laid down in Associate Builders (supra) is not to act as a Court of appeal and correct errors of fact. It has to be kept in

.

mind that the arbitrator is the ultimate master of the quality and quantity of evidence to be relied upon in the proceedings. An award could be based upon little evidence or evidence that does not measure up in

quality to a trained legal mind. Dissecting and re- assessing factual aspects of the case to come to a conclusion that the award needs intervention and thereafter dubbing the award to be vitiated by

perversity or patent illegality has to be avoided as observed in Delhi Airport Metro Express Pvt. Ltd. (supra). It is not enough that the Court thinks that the award is unjust on facts and then seeks to

substitute its view for that of the arbitrator to do what

it considers to be 'justice' as held in Sutlej Construction Limited (supra). The perversity in the award ought to be unpardonable as can be seen from the observations in Dyna Technologies Pvt.

Ltd. (supra) wherein the Hon'ble Supreme Court held that 'the Courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the

reasoning provided in the award is implied unless such award portrays perversity unpardonable under

Section 34 of the Arbitration Act."

17. We may in the passing refer to the observations in State of Rajasthan v. Basant Nahata [(2005) 12 SCC

77] wherein in the context of the words "public policy' referred to in Section 23 of the Indian Contract Act, 1872 it was held that what was opposed to public policy would be a matter depending upon the nature of the transaction. The pleadings of the parties and material brought on record would be relevant to enable a decision to be taken as to what was in the public good or public interest. In other words, the

importance of pleadings of the parties and the material brought on record in that context has material importance. This aspect has also been considered in McDermott International Inc. v. Burn

.

Standard Company Limited [(2006) 11 SCC 181] and Centrotrade Minerals and Metals Inc. v. Hindustan Copper Limited [(2006) 11 SCC 245]."

23. Similar is the judgment in Haryana Tourism Ltd. v.

Kandhari Beverages Ltd., (2022) 3 SCC 237, wherein it was

observed:

9. As per the settled position of law laid down by this Court in a catena of decisions, an award can be set

aside only if the award is against the public policy of

India. The award can be set aside under Sections 34/37 of the Arbitration Act, if the award is found to be contrary to, (a) fundamental policy of Indian Law; (b) the interest of India; or (c) justice or morality; or (d) if

it is patently illegal. None of the aforesaid exceptions shall be applicable to the facts of the case on hand. The High Court has entered into the merits of the claim and has decided the appeal under Section 37 of the

Arbitration Act as if the High Court were deciding the appeal against the judgment and decree passed by the

learned trial Court. Thus, the High Court has exercised the jurisdiction not vested in it under Section 37 of the Arbitration Act. The impugned judgment and order

passed by the High Court is hence not sustainable

24. This position was reiterated in UHL Power Co. Ltd.

v. State of H.P., (2022) 4 SCC 116 : (2022) 2 SCC (Civ) 401: 2022

SCC OnLine SC 19, wherein it was held:

15. As it is, the jurisdiction conferred on Courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an

.

Appellate Court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Limited v. Vedanta Limited (2019) 4 SCC 163, the reasons for vesting such a

limited jurisdiction on the High Court in the exercise of powers under Section 34 of the Arbitration Act have been explained in the following words:

"11. As far as Section 34 is concerned, the

position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited r ground provided under Section 34(2)(b) (ii) i.e. if the award is against the public policy of India.

As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the

fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality

in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law"

would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of

natural justice, and Wednesbury [Associated Provincial Picture Houses v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."

16. A similar view, as stated above, has been taken by this Court in K. Sugumar v. Hindustan Petroleum Corporation Ltd. (2020) 12 SCC 539, where it has been observed as follows:

.

"2. The contours of the power of the Court under Section 34 of the Act are too well established to require any reiteration. Even a

bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an alternate mechanism for dispute

resolution, they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the court should be r restricted to the bare minimum. Interference will be justified only in cases of commission of

misconduct by the arbitrator which can find manifestation in different forms including the exercise of legal perversity by the arbitrator."

17. It has also been held time and again by this Court that if there are two plausible interpretations of the terms and conditions of the contract, then no fault can be found if the learned Arbitrator proceeds to

accept one interpretation as against the other. In Dyna Technologies (P) Ltd. V. Crompton Greaves Ltd. (2019)

20 SCC 1, the limitations on the Court while exercising powers under Section 34 of the Arbitration Act have been highlighted thus:

"24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner unless the Court comes to a conclusion

that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its

.

approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party's autonomy to get

their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the

commercial wisdom behind opting for alternate dispute resolution would stand frustrated."

25. Therefore, in view of the binding precedents of

the Hon'ble Supreme Court and this Court, it is not

permissible for this Court to re-appreciate the evidence led

before the learned Arbitrator to determine whether his

conclusions are correct or not. The legislature has made the

Arbitrator a final Court on facts and the Court cannot re-

appreciate the evidence led before the Arbitrator unless there

is patent illegality.

26. The Hon'ble Supreme Court held in UHL Power

Co. Ltd. (supra) that the jurisdiction of an Appellate Court

under Section 37 of the Arbitration and Conciliation Act is

circumscribed. It was observed:

"16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an

.

appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC

(Civ) 293], the reasons for vesting such a limited jurisdiction on the High Court in the exercise of powers under Section 34 of the Arbitration Act have been explained in the following words : (SCC pp. 166-

67, para 11) "11. As far as Section 34 is concerned, the position is well-settled by now that the Court does

not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided

under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a

violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with

justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the

concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach,

compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."

17. A similar view, as stated above, has been taken by this Court in K. Sugumar v. Hindustan Petroleum Corpn. Ltd. [K. Sugumar v. Hindustan Petroleum Corpn. Ltd., (2020) 12 SCC 539], wherein it has been observed

.

as follows : (SCC p. 540, para 2) "2. The contours of the power of the Court under Section 34 of the Act are too well established

to require any reiteration. Even a bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an

alternate mechanism for dispute resolution, they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the

court should be restricted to the bare minimum. Interference will be justified only in cases of

commission of misconduct by the arbitrator which can find manifestation in different forms including the exercise of legal perversity by the arbitrator."

18. It has also been held time and again by this Court that if there are two plausible interpretations of the terms and conditions of the contract, then no fault can be found if the learned arbitrator proceeds to

accept one interpretation as against the other. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. [Dyna

Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1], the limitations on the Court while exercising powers under Section 34 of the Arbitration

Act has been highlighted thus : (SCC p. 12, para 24) "24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner unless the

Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral

.

award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the

party's autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then

the commercial wisdom behind opting for alternate dispute resolution would stand frustrated."

19. In Parsa Kente Collieries Ltd. v. Rajasthan Rajya

Vidyut Utpadan Nigam Ltd. [Parsa Kente Collieries

Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236 : (2019) 3 SCC (Civ) 552], adverting to the previous decisions of this Court in McDermott International Inc. v. Burn Standard Co.

Ltd. [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] and Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran [Rashtriya Ispat Nigam

Ltd. v. Dewan Chand Ram Saran, (2012) 5 SCC 306], wherein it has been observed that an Arbitral Tribunal

must decide in accordance with the terms of the contract, but if a term of the contract has been construed in a reasonable manner, then the award

ought not to be set aside on this ground, it has been held thus : (Parsa Kente Collieries case [Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236 : (2019) 3 SCC (Civ) 552], SCC pp. 244-45, para 9) "9.1. ... It is further observed and held that construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator

construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do. It is further observed by this Court in the aforesaid decision in para 33

.

that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the

arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. It is further

observed that thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score.

9.2. Similar is the view taken by this Court

in NHAI v. ITD Cementation India Ltd. [NHAI v. ITD Cementation India Ltd., (2015) 14 SCC 21 : (2016) 2 SCC (Civ) 716], SCC para 25 and SAIL v. Gupta Brother Steel Tubes Ltd. [SAIL v. Gupta Brother

Steel Tubes Ltd., (2009) 10 SCC 63 : (2009) 4 SCC (Civ) 16], SCC para 29."

(emphasis supplied)

20. In Dyna Technologies [Dyna Technologies (P)

Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1], the view taken above has been reiterated in the following words : (SCC p. 12, para 25)

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

perversity unpardonable under Section 34 of the Arbitration Act."

21. An identical line of reasoning has been adopted

.

in South East Asia Marine Engg. & Constructions Ltd.

(SEAMEC Ltd.) v. Oil India Ltd., (2020) 5 SCC 164 : (2020) 3 SCC (Civ) 1 and it has been held as follows : (SCC p. 172, paras 12-13)

"12. It is a settled position that a court can set aside the award only on the grounds provided in the Arbitration Act as interpreted by the courts. Recently, this Court in Dyna Technologies (P)

Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1 laid down the scope of such interference. This Court observed as follows : (SCC p. 12, para 24) '24. There is no dispute that Section 34 of the r Arbitration Act limits a challenge to an award

only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier

manner unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility

of alternative interpretation which may sustain the arbitral award. Section 34 is different in its

approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the

arbitral award and the party's autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.'

13. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. This Court in Dyna Technologies (P)

.

Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1 observed as under : (SCC p. 12, para 25) '25. Moreover, umpteen number of

judgments of this Court have categorically held that the Court should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The Courts need to be cautious and should defer to

the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity r unpardonable under Section 34 of the Arbitration Act.' " (emphasis supplied)

27. Therefore, this Court has to exercise a similar

jurisdiction as was being exercised by the learned District

Judge under Section 34 of the Arbitration and Conciliation

Act and it cannot re-appreciate the evidence and cannot

reach its independent conclusion ignoring the conclusion of

the Arbitrator unless they are perverse.

28. Mr. Bhupender Gupta, learned Senior Counsel,

submitted that the learned Arbitrator had failed to exercise

the jurisdiction vested in him by holding that he had no

power to partition the joint property or the passage, and the

property was incapable of partition being a right of

easement. This submission has some force. It is apparent

.

from the order passed by this Court that the subject matter of

the suit as well as all the disputes connected therewith

between the parties were referred to the Arbitration. Thus,

not only the subject matter of the suit but all the disputes

between the parties were referred to the learned Arbitrator.

It is undisputed that the parties had purchased the house and

the land jointly. A copy of the sale deed (Ext. C-6) reads that

the doubled-storeyed house, land underneath and around

the house along with all rights were sold to the purchasers

Sarla Devi and Gopal Singh in equal shares. Learned

Arbitrator also held that an Agreement (Ext.C-20) was

executed between the parties. This agreement reads that the

parties had jointly purchased one double-storeyed house

containing the ground floor and first floor along with the

right to use the land underneath and around the building

known as House No. 129 and 129/1. The parties had agreed to

partition the house. The ground floor would be allotted to

the first party, namely, Gopal Singh, whereas the first floor

would be allotted to a second party, namely, Sarla Devi. It

was further agreed that the land underneath and around the

.

building will remain common and in case any construction is

raised, both the parties will bear the expenses in equal shares

and the property will be used by the parties in equal shares.

In case of reconstruction or the construction of any other

storey over the building, the charges would be borne in equal

shares and both the parties will use the same in equal shares.

Any other term related to the property will be decided with

mutual consent.

29. This agreement as well as the sale deed shows the

joint nature of the land underneath and around the double-

storeyed house. Parties had divided the house by allotting

the ground floor to the claimant and the first floor to the

respondent, but they had not partitioned the land

underneath and around the double-storeyed house.

30. Even, the respondent had not understood the

agreement as a formal partition. It was stated in Para-1(iii)

of the reply that land underneath the building and the

remaining vacant land was agreed to be kept joint land. Had

there been any partition, parties would have agreed to raise

construction upon the vacant land and the land underneath

.

the existing structure. The built-up structure as well as the

land attached thereto including the underneath land

continued to be joint. It was reiterated in Para-14 that had

there been any partition of the property, the respondent

would not have permitted the applicant to raise construction

over the portion allotted to her. It was further stated in

Para-15 that the property continued to be joint and it was for

this reason that the parties had agreed to settle their dispute

with mutual agreement. Again it was stated in Para-16 that

the land and built-up structure in question continued to be

joint between the parties. These averments were reiterated

in subsequent paras.

31. Once, the parties had understood that the land

purchased by them was joint and the arrangement made by

them regarding the enjoyment did not amount to a formal

partition, there was no impediment in seeking the partition.

In fact, there was a dispute between the parties whether the

land remained joint or it was partitioned by way of an

agreement. The claimant claimed that the building was

partitioned by means of an agreement, whereas, the

.

respondent maintained that the land and the building

continued to be joint despite the execution of the agreement.

This dispute was referred to the Arbitrator and a statement

of the claimant was filed before him seeking partition of the

joint land. An incident of joint ownership is that any party

can seek a partition at any time if he/she wants to sever

his/her status. Therefore, the claim made by the claimant

before the learned Arbitrator regarding the partition of the

building, the land underneath and adjoining the same,

cannot be said to be bad and the learned Arbitrator erred in

refusing to exercise the jurisdiction vested in him to

partition the land.

32. The Learned District Judge held that the claimant

did not lead any evidence to prove that the ground floor was

allotted to him and the first floor was allotted to the

respondent, the agreement does not cover the dispute raised

by the claimant and it was rightly negated by the learned

Arbitrator. Learned District Judge did not appreciate that

even if, there was no evidence of the partition, the claimant

was entitled to partition of the joint land because of the

.

averments made by the respondent that the land and the

building were joint. If the arrangement proposed by the

parties was not fair or unacceptable, the Arbitrator was

bound to refer to another arrangement for partitioning the

land. Learned Arbitrator could not have refused to partition

the land on the ground that the arrangement proposed by the

parties was not established. Taken to the logical conclusion,

every suit for partition would fail in case the parties fail to

prove the arrangement entered between them. This is not

permissible. The disputes are referred to the adjudicating

authority when the parties are unable to resolve their dispute

and it is for the Adjudicating Authority to deal with the

dispute in a just and fair manner. It cannot refuse to exercise

the jurisdiction on the ground that one party has failed to

prove the arrangement alleged by him.

33. It was held in Indian Oil Corp. Ltd. v. Shree Ganesh

Petroleum, (2022) 4 SCC 463 : (2022) 2 SCC (Civ) 672: 2022

SCC OnLine SC 131 that where an Arbitrator had dealt with a

dispute not referred to it, the same is liable to be set aside.

Under Section 34 2(a) i(a), it was observed that :

.

"33. The arbitral award is liable to be set aside insofar as the same deals with disputes with regard to the lease agreement which are not contemplated by

the arbitration clause in the dealership agreement and/or in other words, do not fall within the terms of the submission to arbitration. The arbitral award is thus liable to be set aside under Section 34(2)(a)(iv) of the 1996 Act. The decision enhancing the lease rent is

patently beyond the scope of the submission to arbitration. Moreover, the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with the lease agreement dated 20-9-

2005."

34. It was further held that the Arbitral Tribunal is a

creature of contract and is bound to act in terms of the

contract where he failed to act in terms of the contract, it will

be patent illegality, justifying the Court to interfere with the

Award. It was observed that:

"43. An Arbitral Tribunal being a creature of contract, is bound to act in terms of the contract under which it

is constituted. An award can be said to be patently illegal where the Arbitral Tribunal has failed to act in terms of the contract or has ignored the specific terms of a contract.

44. However, a distinction has to be drawn between failure to act in terms of a contract and an erroneous interpretation of the terms of a contract. An Arbitral Tribunal is entitled to interpret the terms and

conditions of a contract while adjudicating a dispute. An error in the interpretation of a contract in a case where there is valid and lawful submission of arbitral disputes to an Arbitral Tribunal is an error within

.

jurisdiction.

45. The Court does not sit in appeal over the award made by an Arbitral Tribunal. The Court does not

ordinarily interfere with the interpretation made by the Arbitral Tribunal of a contractual provision unless such interpretation is patently unreasonable or perverse. Where a contractual provision is ambiguous or is capable of being interpreted in more ways than

one, the Court cannot interfere with the arbitral award, only because the Court is of the opinion that another possible interpretation would have been a

better one.

46. In Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], this Court held that an award ignoring the terms of a contract would not be in the public interest. In the instant case,

the award in respect of the lease rent and the lease term is in patent disregard of the terms and conditions of the lease agreement and thus against public policy. Furthermore, in Associate

Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] the jurisdiction of the Arbitral

Tribunal to adjudicate a dispute itself was not in issue. The Court was dealing with the circumstances in which a court could look into the merits of an award.

47. In this case, as observed above, the impugned award insofar as it pertains to lease rent and lease period is patently beyond the scope of the competence of the arbitrator appointed in terms of the dealership agreement by the Director (Marketing) of the appellant."

35. In the present case, the jurisdiction was vested in

the learned Arbitrator by the mutual arrangement made

between the parties before this Court vide which the parties

.

agreed to refer the dispute in the suit as well as all the

disputes connected therewith between the parties. Since the

dispute regarding the enjoyment of the land was pending

between the parties and one of the parties had sought

partition of the land; therefore, the Arbitrator has the

jurisdiction to hear the question of partition but he refused

to do so by saying that the dispute was regarding the

injunction and not regarding the partition. This was a failure

to exercise a jurisdiction vested in the learned Arbitrator

which amounts to a patent illegality. Thus, the award is

liable to be set aside on this ground alone.

36. It was laid down by Hon'ble Supreme Court in

Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328

: (2018) 5 SCC (Civ) 106: 2017 SCC OnLine SC 528 that the

Court cannot remit the matter to Arbitral Tribunal after

setting it aside merits. It was observed:-

"14. In this backdrop, the question which arises is: whether the highlighted portion in the operative part

of the impugned judgment of the Division Bench can be sustained in law? For that, we may advert to Section 34(4) of the Act which is the repository of

.

power invested in the Court. The same reads thus:

"34. (4) On receipt of an application under sub- section (1), the court may, where it is appropriate and it is so requested by a party, adjourn the

proceedings for a period of time determined by it in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal

will eliminate the grounds for setting aside the arbitral award."

15. On a bare reading of this provision, it is amply

clear that the Court can defer the hearing of the application filed under Section 34 for setting aside the

award on a written request made by a party to the arbitration proceedings to facilitate the Arbitral Tribunal by resuming the arbitral proceedings or to

take such other action as in the opinion of the Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. The quintessence for exercising power under this provision is that the arbitral award

has not been set aside. Further, the challenge to the said award has been set up under Section 34 about the

deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such

measures which can eliminate the grounds for setting aside the arbitral award. No power has been invested by Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section (4) of Section 34. This legal position has been expounded in McDermott International Inc. [McDermott International Inc. v. Burn Standard

Co. Ltd., (2006) 11 SCC 181] In para 8 of the said decision, the Court observed thus : (Bhaskar Industrial case [Bhaskar Industrial Development Ltd. v. South

.

Western Railway, 2016 SCC OnLine Kar 8330], SCC

OnLine Kar).

"8. ... Parliament has not conferred any power of remand to the Court to remit the matter to the

Arbitral Tribunal except to adjourn the proceedings as provided under sub-section (4) of Section 34 of the Act. The object of sub-section (4) of Section 34 of the Act is to give an opportunity to the Arbitral

Tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award." (emphasis supplied)

37. Therefore, the Court cannot refer the matter to

the same Arbitrator; however, it will be open for the parties

to seek an appointment of a fresh Arbitrator if deemed

proper by them.

38. The Learned District Judge failed to notice that

the learned Arbitrator had not exercised the jurisdiction

vested in him, hence the judgment passed by the Learned

District Judge upholding the arbitral award cannot be

sustained.

Final Order:

39. In view of the above, the present appeal is

allowed. The judgment passed by the learned District Judge

upholding the award passed by the learned Arbitrator as well

.

as the Award passed by the learned Arbitrator are set aside.

Accordingly, the appeal stands disposed of, so

also the pending application(s), if any.

(Rakesh Kainthla) Judge 6th September, 2023 (Karan)