Madhya Pradesh High Court

Northern Coal Fields Ltd vs M/S Madhucon Project Ltd on 17 May, 2021

Author: Vishal Dhagat

HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR



ARBITRATION APPEAL                             52/2013
NO.
Parties Name                  NORTHERN COAL FIELDS LIMITED

                              VS.

                              M/S MADHUCON PROJECT LTD.
Bench Constituted             Single Bench
Judgment delivered By         HON'BLE SHRI JUSTICE VISHAL DHAGAT
Whether       approved   for YES/NO
reporting
Name of counsel for parties For petitioner: Shri Greeshm Jain, Advocate.

                              For Respondent : Shri N. S. Ruprah, Advocate

Law laid down Significant paragraph number

(O R D E R ) 17/05/2021

Appellant has preferred this appeal under section 39 of

Arbitration and Conciliation Act, 1940 (hereinafter referred to as

the Act of 1940').

2. Respondent M/s Madhucon Project Ltd., had filed an

application under sections 14 and 17 of the Arbitration and

Conciliation Act, 1940. Appellant has invited tender for

construction of 120 "B" Type quarters in Nigahi Project.

Agreement was entered between appellant and respondent on

11.4.1991. Said work is to be completed with investment of

Rs.1,82,14,000/-. A dispute was raised by respondent that site

was not made available in time and there was no approach road

which resulted in delay in execution of work. Unnecessary

reductions were made from the running bills for which

respondent raised objection which resulted in dispute.

Sole Arbitrator Shri B. L. Agrawal was appointed to resolve

the dispute. Final award was passed on 20.2.1999 and copy of

the same was sent to the parties by Registered post. Same was

received by the parties on 23.2.1999. Sole Arbitrator passed an

award of Rs.14,37,317/- in favour of respondent M/s Madhucon

Project Ltd. It was further ordered to return security amount of

Rs.1,00,000/- to respondent, thus total award of Rs.15,37,317/-

was passed in favour of respondent. Respondent filed an

application to make the award rule of law.

3. Learned Court of First Additional District Judge, Sidhi in Civil

Suit No.2B/2002 made the award rule of law and passed a decree

in favour of respondent vide order dated 2.9.2003. It was

ordered that amount mentioned in award dated 20.2.1999 i.e.

amount of Rs.15,37,317/- shall be paid to respondent with

interest @ 12% per annum till date of decree and from date of

decree till actual payment @ 8% annual interest is to be paid to

respondent. Cost of Rs.2,500/- was also awarded.

4. Appellant has challenged the order dated 2.9.2003 passed

in Case No.2B/2002 on the ground that award has been passed

dehors the terms of agreement; learned Arbitrator has erred in

rejecting the counter claim filed by the appellant; contractor was

not entitled to get any damages for short supply and non-supply

of any material including cement; no cogent reasons have been

assigned by Arbitrator in passing the award; order passed by sole

Arbitrator was perverse; Court below ought to have seen that

quality clearing certificate was must before payment was made

and it was submitted that impugned order is patently illegal,

erroneous and contrary to law.

5. Learned counsel appearing for the respondent submitted

that appeal against order in setting aside or refused to set aside

Arbitration award has been provided in Section 39 of the Act of

1940. It is submitted that once a decree is passed as per an

award, no appeal shall lie from said decree except on the ground

that it is excess of or not in accordance with the award. Civil

Court can set aside the award on the ground that Arbitrator or

umpire has misconducted himself or the proceedings, award had

been made after issue of an order by the court superseding the

Arbitration or after arbitration proceedings have become invalid

under section 35, and award has been improperly procured or is

otherwise invalid. The appellate court can examine whether Civil

Court committed an error in not setting aside the award though

grounds mentioned in Section 30 was available to the Court for

setting aside the award. In view of the aforesaid provisions,

there is no merit in the appeal filed by the appellant and appeal

may be dismissed.

6. Heard the counsel for appellant as well as respondents.

7. Before coming to the arguments raised by the parties, it is

necessary to outline the scope of interference by this court in

arbitration appeal. Sections 30 and 39 of Arbitration Act 1940 is

quoted as under:-

"30. Grounds for setting aside award:- An award shall not be set aside except on one or more of the following grounds, namely:-

(a) that an arbitrator or umpire has misconducted himself or the proceedings,

(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;

(c) that an award has been improperly procured or is other- wise invalid.

39. Appealable orders. -(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order:- An order-

           (i)     superseding an arbitration;
           (ii)    on an award stated in the form of a special
                   case;
           (iii)     modifying or correcting an award;
           (iv)      filing or refusing to file an arbitration
                   agreement;
           (v)     staying or refusing to stay legal proceedings

where there is An arbitration agreement;

(vi) setting aside or refusing to set aside an award;

Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

8. This court is also required to see whether the principle of

natural justice is violated or not. Considering the aforesaid law,

the grounds raised by appellant and respondent was considered.

9. Learned court below, after considering the arbitration

award, has come to a conclusion that there was delay on part of

appellant in providing hurdle free approach road due to agitation

of villagers and there was no delay on part of contractor in

making construction, therefore, counterclaim of appellant has

rightly been rejected. It was also held that arbitrator has not

exceeded his jurisdiction in going beyond the agreement in

passing the award.

10. If Arbitrator has passed an award lumpsum without giving