Jharkhand High Court
Trf Limited vs Shiva Shakti Engineering ... on 17 August, 2023
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Commercial Appeal No. 09 of 2020
TRF Limited, a Company incorporated under the Companies Act, 1956, having
its registered office at 11, Station Road, Burma Mines, Jamshedpur, P.O. and
P.S. Burma Mines, District East Singhbhum, through its Authorized Signatory,
namely Pankaj Kumar Choubey, aged about 33 years, Son of Shri Ramawatar
Choubey, resident of 7, Namda, Golmuri, Jamshedpur, P.O. and P.S. Golmuri,
District East Singhbhum-831003 (Jharkhand) ...... Appellant
Versus
Shiva Shakti Engineering Construction through its Managing Director, having tis
office at Plot No. F-4/1, Chandaka Industrial Estate, Patia, P.O. and P.S. Patia,
District Bhubneshwar (Odisha)-751024 ... ... Respondent
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CORAM: HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
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For the Appellant : Mr. Sumeet Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Mrs. Aanya, Advocate
Mr. Prakash Narayan, Advocate
For the Respondent : None
---
ORDER
17th August 2023
Per, Shree Chandrashekhar, J
This Commercial Appeal has been filed by the TRF Limited (in
short, Company) under section 13(1-A) of the Commercial Courts Act, 2015 to
challenge the order passed in Arbitration Case No.4 of 2019 passed by the
Commercial Court, East Singhbhum, at Jamshedpur.
2. This Commercial Appeal was filed on 10th June 2020 and taken up
for hearing on 30th September 2020, when notice was directed to be issued to
Shiva Shakti Engineering Construction (in short, claimant). The proceedings in
this appeal indicate that on the request of the Company it was granted
permission to serve dasti summons and an affidavit affirming service of
dasti summons upon the claimant has been filed. This appeal was taken up on
27th June 2023 but on that day also no one appeared for the claimant.
3. Therefore, by an order dated 24th July 2023, the Registry was
directed to transmit a copy of the order to the claimant at the address disclosed in
the present appeal.
4. Notwithstanding that, no one appears on behalf of the claimant.
Constrained, we have heard this appeal in absence of the claimant.
2 Commercial Appeal No. 09 of 2020
5. The challenge laid by the Company to the order dated 16th January
2020 passed in Arbitration Case No.4 of 2019 is confined to a limited issue in
law that; whether or not the Arbitrator could have made the award beyond the
reference?
6. Briefly stated, for "Erection and Commission of RMHS- (Package-
A)" the work was awarded by Tata Steel Limited to TRF Limited (hereinafter
referred to as the 'Company') on 3rd December 2012 which, in turn, invited
quotations from other agencies for completing the subject work. The Company
has pleaded that the subject work for a value of Rs.4,96,06,800/- was allotted to
the claimant and MOM dated 16th April 2013 was issued. Raising a dispute, the
claimant invoked Clause 15 and the learned Arbitrator was requested by both
parties to enter upon the reference. The subject work could not be completed in
time and according to the Company the blame squarely lies on the claimant. The
claimant has referred to amendments in the purchase order on different dates
starting from 17th December 2013 to 8th March 2016 by which the scope of work
was gradually and substantially reduced. According to the Company, the
purchase order was reduced to Rs.1,28,90,574.60 because the claimant was not
able to perform and it had to engage another agency to finish the remaining 75%
work. The learned Arbitrator issued notice to both the parties and they filed their
respective claims and counter-claims.
7. The claimant raised claims under 4 heads viz. (i) Rs.93,00,844/- for
unpaid bills against the work executed (ii) Rs.11,42,867/- for idle manpower and
machinery (iii) Rs.25,43,152/- as loss of profit and (iv) interest @ 2% over and
above SBI PLR per annum over the claim nos.1, 2 & 3.
8. For a better appreciation of the dispute before the learned
Arbitrator, we would extract the claims made by the claimant under the
following 4 heads which are recorded in paragraph no.13 of the award, as under:
The claimant having executed the work meeting to the conditions of the
purchase order and having raised the bill against the work so executed is
entitled for Rs. 93,00,844/- pertaining to unpaid bills as per abstract of payment
over and above Rs. 11,42,567/- as idling cost and as Rs. 75,00,000/- towards
cost of machineries forcibly detained.
Claim No. 2 - Compensation for idling of manpower and machinery
The claimant has raised bill for idling of manpower of Rs. 11,42,867/- and the
same has been duly certified by the representative as per the annexure marked
to Exhibit-C-12. The said expenditure having been incurred is reimbursable to
the claimant as per the grounds of substantiation noted below.
Claim No. 3 - Loss of opportunity to earn profit.
The claimant agreed to contracted price of Rs. 4,96,06,800/- with firmed mind
set to earn profit of 8% as it has been deriving from execution of similar
3 Commercial Appeal No. 09 of 2020
project in the past. Unfortunately, in spite of it being an mobilized state with
manpower and machinery, the respondent for its own choice/benefit
convenience did not allow the claimant to execute the work as per purchase
order and MOM and stopped the work even without serving a contractual, legal
and customary notice of termination assigning, the reasons of termination, if
any. Resultantly, the claimant having executed work for Rs. 1,78,17,393/- in
the one hand incurred substantial infructuous expenditure and in the other hand
lost the opportunity of deriving profit @ 8% from executing the unexecuted
value of work which is amounting to Rs. 3,17,89,407/- and @ 8% interest
amounting to Rs. 25,43,152/-. The opportunity to earn the above amount of
profit being lost for none of the default of the claimant this amount is required
to be compensated to the claimant.
Claim No. 4 - Interest
The since the bill for last payment was made on December 2014 and thereafter
the work, the amount was not allowed to execute the work claimed under claim
no. 1, 2 and 3 remained below with the exchequer of Respondent and the
claimant met the expenditure availing finance from different sources, it is
entitled for interest @ SBIPLR+2% p.a. from 1.1.2015 to actual date of release
which the claimant for the time being has updated it till July, 2017."
9. The learned Arbitrator adjudicated the claim no.1 raised by the
claimant for payment of Rs.93,00,844/- in paragraph no.47 of the award. The
learned Arbitrator took note of the statement of defence of the Company
whereunder a stand was taken that the outstanding balance amount of
Rs.47,61,482/- has been wrongly shown against the bills for RA-8, RA-9, RA-1,
2 and 3 and EW-2. As regards RA-8 and RA-9, the learned Arbitrator held that
those were not valid bills for payment. The learned Arbitrator further took note
of the fact that the claim for extra work and alignment were not applicable.
Finally, the claim no.1 has been rejected by the learned Arbitrator.
10. The learned Arbitrator has dealt with claim no.1 in the following
manner:
"57. Much have been argued on behalf of the claimant and the respondent-TRF
in support of their respective claims and counter claims which have already
been discussed in the foregoing paragraphs.
Firstly, the claims of the claimant are taken up for consideration. The
claimant has presented the actual compilation of the amount payable to the
claimant giving effect to all the bills as reflected at page 202 and 205 of the
State of Defence in a table which has been incorporated in paragraph 52 of this
Award.
The claimant has mentioned the following items being their claims against the
respondent-TRF:-
Amount payable as admitted by respondent- Rs. 1,18,81,917.00
TRF
Less: Amount paid to the claimant Rs. 76,14,273.00
Net Amount payable Rs. 42,67,644.00
Add:- (i) Amount payable on account of RA- Rs. 13,65,825.00
1 kept as deduction & hold
(ii) Amount payable on account of RA-2 kept
as deduction & hold
Rs. 13,65,707.00
Rs. 69,99,176.00
Add: Amount not paid in EW-2, Unloading Rs. 26,49,359.00
4 Commercial Appeal No. 09 of 2020
bill, RW-1, IR-2 & IR-1
Amount payable to claimant- Rs. 96,48,535.00
Less: - Amount claimed under Claim No. 1 Rs. 93,00,844.00
Different of amount payable but not Rs. 3,47,691.00
N.B.:- (i) Claim for idled charges of Rs. 12,84,114/- not included since
the same amount is claimed under Claim No. 2.
(ii) Proof of submitting R/A Bill No. and R/A Bill No. 9 are available at
page 51 and 52 respectively of State of Claim
58. From perusal of the State of Defence of the respondent-TRF at page 205
(Chart), outstanding balance of the claimant has been shown Rs. 47,61,482/-.
Such amount has been shown after not taking into consideration of the bills of
the claimant with regard to RA-8 (Placement), RA-9 (Placement), RA-1, 2 and
3 (Alignment) and EW-2 (extra work).
The respondent-TRF though in its State of Defence has shown the bills
related to RA-8 and RA-9 not being received, later on it was clarified that
though such bills were presented, but it were not in consonance with the
protocol requirements, hence not considered. The clause no.7 of the original
Minutes of Meeting provided the procedure for presentation of bills which is
mandatory in nature and the claimant had consented to follow such procedure.
The provisions provided that each bill should be signed by the representatives
of Tata Steel Limited, M.N. Dastur & Co., TRF Ltd and the claimant.
Admittedly, the RA-8 and RA-9 bills did not bear the signatures of all the said
parties to protocol. The respondent-TRF has given the logic that such bills
were bogus since not signed by all the members of protocol but admittedly bills
were signed by the claimants and the representative of the respondent-TRF.
Yet, it were not the valid bills for payment, produced in contravention of
Clause 7 of Minutes of Meeting under a valid contract and therefore, R/A Bill
Nos.8 and 9 have rightly not been considered.
59. Similar is the case with EW.2 (extra work), RA-3 (alignment), RW-1, IR- 2
and IR-1 (unloading) whereunder the claimant has claimed a sum of
Rs.26,49,359/-, RA-3 Bill has not been considered by the respondent-TRF on
the ground that welding, which was the essential part of alignment under the
contract, the claimant did not execute such welding part after alignment of
machineries, as such the respondent-TRF declined for payment due to breach
of contract.
As regards bills related to EW-2 (extra work), RW-1, IR-2 and IR- 1, its
payments have been denied by the respondent-TRF on the ground of not being
applicable. It is not a fact that the respondent-TRF has accepted such bills at
page 205 of the State of Defence being the pending bills. Therefore, the above
bills are not payable in view of the argument of the respondent, otherwise also,
the said bills since did not follow the protocol requirement, were not
considered. I find substance in the submission and therefore, no claim is made
out under such head in favour of the claimant."
11. The claim no.2 was in respect of the compensation for idle
manpower and machinery to the tune of Rs.11,42,867/- which has been rejected.
The claim no.3 was made on account of anticipated profit which was also not
accepted by the learned Arbitrator.
12. The claim nos.2 and 3 have been dealt with by the learned
Arbitrator as under:
"60. With regard to Claim No.2 i.e. the idling charges, the claimant stated that
it had mobilized the men, machineries and tools to the worksite, but no work
front was provided since ground work for raising construction was not
completed by the agency. The claimant was in readiness and preparedness for
5 Commercial Appeal No. 09 of 2020
execution of assigned contract work. The claimant further stated that since the
respondent-TRF went on reducing the scope of work unilaterally, the claimant
having no work, had to remain idle and hence, made his claim for a sum of
Rs.11,42,857/- against the respondent- TRF.
Much has been argued on behalf of the respondent-TRF against the claimant
as to how the latter adopted a lethargic approach and considerably delayed the
work by not fulfilling the mandatory provision of law under the Contract
Labour Act, Provident Fund, Workmen's Compensation Act, etc and last, not
the least, connection of electricity to be obtained from the respondent-TRF.
The claimant presented first bill RA-1 at much later stage, though there was
direction to start the work immediately after signing of the original Minutes of
Meeting on 16.04.2013 and purchase order on 22.04.2013. Much have been
argued on behalf of the parties on this issue and to my view, the scope of the
work of the claimant was reduced to 25% of the total work order for the fault
of the claimant itself and in this manner, the claimant failed to prove its claim
of Rs.11,42,567/- being the compensation towards idling of their men &
machineries. The claimant has claimed loss of profit @8% of the remaining
work worth Rs.3,17,89,407/- which was given to other agency, which amounts
to Rs.25,43,152/-. Admittedly, claimant's work was reduced to 25% of the total
work worth Rs.4,96,06,800/- and thereby was prevented which incurred loss of
opportunity to earn profit being lost for none of the default of the claimant.
Much has been argued on behalf of both the parties and Arbitral Tribunal
comes to conclusion that owing to own fault of the claimant, 75% work was
taken away and for that, the claimant cannot be compensated under the head
"loss of opportunity to earn profit" and it is decided against the claimant.
Clause 31 of the Minutes of Meeting clearly indicates that, "if progress of work
is inadequate, TRF reserves the right to add other vendors at M/s Shiva Shakti's
risk and cost."
13. As noticed above, claim no.4 was for grant of interest over the sums
awarded under claim nos.1, 2 and 3. Therefore, once the claim nos.1, 2 and 3
stood rejected, the learned Arbitrator could not have dealt with the issue
regarding the award of interest. A glance at the arbitral award dated 21st October
2018 would however reflect that misconstruing his own reference as formulated
under the claim no.4, the learned Arbitrator proceeded to grant interest over a
sum of Rs.47,61,482/- which, in fact, is the amount claimed by the Company, a
reference of which has been made in the statement of defence vide Exhibit 16.
14. Mrs. Shilpi Sandil Gadodia, the learned counsel for the appellant
has contended that the order passed by the Commercial Court at Jamshedpur
ignores the fundamental defect in the award dated 21st October 2018 inasmuch
as the arbitral award travels beyond the reference and issues framed himself by
the learned Arbitrator. The learned counsel for the appellant seeks support from
clause (iv) to sub-section (2) of section 34 of the Arbitration and Conciliation
Act, 1996 (in short, AC Act) which specifically provides that the arbitral award
may be set aside if it deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration.
6 Commercial Appeal No. 09 of 2020
15. From pleadings of the parties and the claims raised by the claimant,
it can be easily ascertained that jurisdiction of the Arbitrator and the matter
referred before him were confined to the claims as aforesaid. This is the law
declared by the Hon'ble Supreme Court that where the agreement or reference to
arbitration requires specific disputes to be referred to the Arbitrator such specific
reference shall decide the Arbitrator's jurisdiction and he cannot travel beyond
the reference nor entertain any additional claims or counter-claims which are not
part of the dispute. This is also well established that where the arbitral Tribunal
renders an award and decides the matters beyond the scope of the contract or
beyond the dispute referred for arbitration the arbitral award shall be held
beyond the scope of submission to arbitration. Clause (iv) of sub-section (2) to
section 34 of the AC Act provides that the arbitral award can be set aside if it
deals with the dispute not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of
the submission to arbitration.
16. Section 34(2)(a)(iv) of the AC Act reads as under:
"(2) An arbitral award may be set aside by the Court only if--
...............................................................................................
(iv) the arbitral award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, only that part of the arbitral award
which contains decisions on matters not submitted to arbitration may be set
aside; or"
17. Now this is not in the realm of any doubt that an arbitral award can
be set aside on the grounds provided under sub-section (2) to section 34. In
"M.S.K. Projects (I) (JV) Ltd. V. State of Rajasthan" (2011) 10 SCC 573 the
Hon'ble Supreme Court has held as under:
"15. The issue regarding the jurisdiction of the Arbitral Tribunal to decide an
issue not referred to is no more res integra. It is a settled legal proposition that
special tribunals like Arbitral Tribunals and Labour Courts get jurisdiction to
proceed with the case only from the reference made to them. Thus, it is not
permissible for such tribunals/authorities to travel beyond the terms of
reference. Powers cannot be exercised by the Tribunal so as to enlarge
materially the scope of reference itself. If the dispute is within the scope of the
arbitration clause, it is no part of the province of the court to enter into the
merits of the dispute on the issue not referred to it. If the award goes beyond
the reference or there is an error apparent on the face of the award it would
certainly be open to the court to interfere with such an award. (Vide Grid
Corpn. of Orissa td. v. Balasore Technical School and DDA v. R.S. Sharma
and Co.)"
7 Commercial Appeal No. 09 of 2020
18. In "Ssangyong Engineering & Construction Co. Ltd. v. NHAI"
(2019) 15 SCC 131 clause (iv) of sub-section (2) to section 34 of the AC Act has
been expounded by the Hon'ble Supreme Court as under:
"68. A conspectus of the above authorities would show that where an Arbitral
Tribunal has rendered an award which decides matters either beyond the scope
of the arbitration agreement or beyond the disputes referred to the Arbitral
Tribunal, as understood in Praveen Enterprises, the arbitral award could be said
to have dealt with decisions on matters beyond the scope of submission to
arbitration.
69. We therefore hold, following the aforesaid authorities, that in the guise of
misinterpretation of the contract, and consequent "errors of jurisdiction", it is
not possible to state that the arbitral award would be beyond the scope of
submission to arbitration if otherwise the aforesaid misinterpretation (which
would include going beyond the terms of the contract), could be said to have
been fairly comprehended as "disputes" within the arbitration agreement, or
which were referred to the decision of the arbitrators as understood by the
authorities above. If an arbitrator is alleged to have wandered outside the
contract and dealt with matters not allotted to him, this would be a
jurisdictional error which could be corrected on the ground of "patent
illegality", which, as we have seen, would not apply to international
commercial arbitrations that are decided under Part II of the 1996 Act. To bring
in by the backdoor grounds relatable to Section 28(3) of the 1996 Act to be
matters beyond the scope of submission to arbitration under Section
34(2)(a)(iv) would not be permissible as this ground must be construed
narrowly and so construed, must refer only to matters which are beyond the
arbitration agreement or beyond the reference to the Arbitral Tribunal."
19. Mrs. Shilpi Sandil Gadodia, the learned counsel for the appellant
has submitted that in view of the patent illegality in the arbitral award dated 21st
October 2018 the rejected portion of the counter-claim is liable to be returned to
the learned Arbitrator for a fresh decision. To corroborate this submission, the
learned counsel for the Company has referred to the judgment passed in "NHAI
v. M. Hakeem" (2021) 9 SCC 1.
20. In "M. Hakeem" the Hon'ble Supreme Court held that the powers
to set aside award under section 34 of the AC Act do not include a power to
modify the award. It has been further held that the Court is given the limited
judicial interference on extremely limited grounds not dealing with the merits of
an award and this "limited remedy" under section 34 is co-terminous with the
"limited right", namely, either to set aside an award or remand the matter under
the circumstances mentioned in section 34 of the AC Act. In our opinion,
"Hakeem" does not lay down a law that the rejected claim(s) can be referred to
the Arbitrator for a fresh determination.
21. The Company raised claims under seven heads by filing a counter-
claim seeking award of Rs.29,19,27,036/- with interest @ 18% per annum over
the total claim from the due date of payment till the actual date of payment. The
counter-claims under seven heads included the claim for expenses and incidental
8 Commercial Appeal No. 09 of 2020
costs incurred for the remaining work, loss of goodwill, loss of profit, liquidated
damages and prolongation of work period. The learned Arbitrator partly allowed
the claim for loss of goodwill to the tune of Rs.10 crores and partly allowed the
claim of Rs.94,46,696/- towards additional expenses and incidental costs with
18% interest per annum; the costs as per actuals. The claimant, a partnership
firm, was carrying on business in infrastructural development. It was awarded a
contract for Rs.4,96,06,800/- by the Company for mechanical erection of its
conveyor and other related structural equipments. Under the contract, there was
a provision for liquidated damages to be levied @ 5% per week for maximum of
5% of the contract value in case of delay attributable to the contractor. The case
set up by the claimant is that it had mobilized manpower and machinery but site
was not made available between May 2013 to November 2013. A further
grievance raised by the claimant is that the Company started making deductions
from the running bills and/or did not make payment of the bills for longer
periods, though it executed extra work under the instructions of the Field
Engineer. According to the claimant, till 29th September 2016 it continued to
write letters and making requests for payment but no response came from the
Company. Constrained, the claimant gave a notice for appointment of an
Arbitrator for resolution of the dispute between the parties.
22. The counter-claims raised by the appellant has been dealt with by
the learned Arbitrator in the following manner:
Sl. Particulars Amount (In Rs.) Remarks of the
No. learned Arbitrator
1 Claim on account of additional overhead Rs.94,46,696/- Partly allowed
and other incidental cost and expenses for
getting such remaining worm done by
other agencies which is 25% of the
balance job (25% of Rs. 3,77,86,784/-)
amounting to Rs. 94,46,696/-
2 The claim for an amount of Rs. 2.00 Rs.2,00,00,000.00 Rejected
Crores claimed on account of cost
incurred by the Respondent due to
prolongation of period of work by the
claimant.
3 Claim on account of imposition of Rs.24,80,340.00 Rejected
Liquidated Damages as per the letter of
Intent/Purchase Order terms.
4 Claim on account of loss of goodwill. Rs.10,00,00,000.00 Partly Allowed
5 Claim on account of loss of profit due to Rs.16,00,00,000.00 Rejected
loss of further orders from Tata Steel
Total Rs.29,19,27,036.00
6 Claim on interest @ 18% per annum on Allowed
the total claims from the due date of
9 Commercial Appeal No. 09 of 2020
payment till the actual date of payment.
7 Claim towards cost. As per actual. Allowed
23. The award made in favor of the claimant for interest over a sum of
Rs.46,61,462/- is no doubt beyond the reference and, thus, perverse but the
disallowed claims under counter-claim of the Company cannot be sent back to
the Arbitrator. This is within the scope of judicial intervention as envisaged
under section 34 of the AC Act that a part of the award which is severable can be
saved. While setting aside the other portions which fall under the sweep of sub-
section (2), in no eventuality the disallowed claims in the claim petition or
counter-claim can be remitted back to the learned Arbitrator for a fresh
consideration. In "Kinnari Mullick v. Ghanshyam Das Damani" (2018) 11 SCC
328 the Hon'ble Supreme Court held that the award can be sent back to the
Arbitrator only under the circumstances mentioned in section 34(4) of the AC
Act, which provides as under:
"(i) there is a written request made by a party to the arbitration proceedings,
(ii) the arbitral award has not already been set aside and
(iii) the challenge to the award has been set up under S. 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."
24. The learned Arbitrator has extensively dealt with the claims raised
by the Company and disallowed the claim nos.2, 3 and 5 by recording sufficient
reasons. The Commercial Court could not have re-appreciated the evidence or
interfered with the findings recorded by the learned Arbitrator on these claims.
This is well settled a law that in section 34 petition the Court cannot by
appreciating the materials go into the merits of the matter and form a different
opinion. This is also a well-settled position in law that the powers under section
13(1-A) of the Commercial Courts Act, 2015 cannot be wider than section 34 of
the AC Act. In "MMTC Ltd. v. Vedanta Ltd." (2019) 4 SCC 163 the Hon'ble
Supreme Court has observed as under:
"12. It is only if one of these conditions is met that the Court may interfere
with an arbitral award in terms of Section 34(2)(b)(ii), but such interference
does not entail a review of the merits of the dispute, and is limited to situations
where the findings of the arbitrator are arbitrary, capricious or perverse, or
when the conscience of the Court is shocked, or when the illegality is not
trivial but goes to the root of the matter. An arbitral award may not be
interfered with if the view taken by the arbitrator is a possible view based on
facts. (See Associate Builders v. DDA. Also see ONGC Ltd. v. Saw Pipes Ltd.;
Hindustan Zinc Ltd. v. Friends Coal Carbonisation; and McDermott
International Inc. v. Burn Standard Co. Ltd. )
10 Commercial Appeal No. 09 of 2020
13. It is relevant to note that after the 2015 Amendment to Section 34, the
above position stands somewhat modified. Pursuant to the insertion of
Explanation 1 to Section 34(2), the scope of contravention of Indian public
policy has been modified to the extent that it now means fraud or corruption in
the making of the award, violation of Section 75 or Section 81 of the Act,
contravention of the fundamental policy of Indian law, and conflict with the
most basic notions of justice or morality. Additionally, sub-section (2-A) has
been inserted in Section 34, which provides that in case of domestic
arbitrations, violation of Indian public policy also includes patent illegality
appearing on the face of the award. The proviso to the same states that an
award shall not be set aside merely on the ground of an erroneous application
of the law or by reappreciation of evidence.
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."
25. Having regard to the aforesaid discussions, the order dated
16th January 2020 passed in Arbitration Case No.4 of 2019 is set aside to the
extent the arbitral award dated 21st October 2018 in respect of the award of
interest to the claimant over a sum of Rs.47,61,482/- was affirmed by the
Commercial Court. Consequently, the aforesaid portion of the award as indicated
in paragraph 61 of the arbitral award dated 21st October 2018 is quashed.
However, as regards adjudication of the counter-claim raised by the Company
the award is affirmed and the order passed in Arbitration Case No.4 of 2019 is
approved to that extent.
(Shree Chandrashekhar, J.)
(Anubha Rawat Choudhary, J.)
Binit/Mukul
