Madras High Court
Gopal Krishan Rathi vs Dr.R.Palani on 20 January, 2025
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
OSA(CAD) No.141 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.01.2025
CORAM :
THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
O.S.A.(CAD) No.141 of 2023
Gopal Krishan Rathi .. Appellant
Vs
Dr.R.Palani .. Respondent
Prayer: Appeal under Clause 15 of the Letters Patent read with Order
XXXVI Rule 9 of the Original Side Rules and Section 37 of the Arbitration
and Conciliation Act, 1996 and Section 13(1A) of the Commercial Courts
Act, 2015 to set aside the impugned order dated 26.04.2023 passed in
Arb.OP (Comm.Div) No.36 of 2022.
For Appellant : Mr.Jayesh B.Dolia
Senior Counsel
for M/s.Aiyar and Dolia
For Respondent : Mr.Muralikumaran
Senior Counsel
for Mr.R.Gopinath
for M/s.Mc Gan Law Firm
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OSA(CAD) No.141 of 2023
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
This appeal impugns an order dated 26.4.2023 passed by a learned
Single Judge rejecting the original petition filed by appellant under Section
34 of the Arbitration and Conciliation Act, 1996 (the said Act) to set aside
the award dated 21.7.2021 passed by a Sole Arbitrator. Various grounds
were raised before the learned Single Judge and after considering the
submissions of the parties, the learned Single Judge was pleased to reject
the challenge to the award. It is that order which is in appeal before us.
2. Shri Dolia raised two grounds of challenge to the award: (a) that
no personal hearing was granted by the learned Arbitrator, though it was
sought for by appellant; and (b) that all documents of appellant were not
considered in the award.
3. On the first ground that no personal hearing was granted, though
in the petition filed under Section 34 of the said Act almost 31 grounds
were raised, this was not one of the grounds. Moreover, Shri Dolia, to a
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specific query posed by us, was candid that this ground was not raised
before the learned Single Judge. Therefore, in our view, this cannot be
raised now at the stage of appeal under Section 37 of the said Act, appellant
having accepted the position.
4. As regards the non-consideration of all documents filed by
appellant, the learned Single Judge has considered the submissions and
given his findings. We find no perversity in the findings given by the
learned Single Judge.
Moreover, in our view, the learned Arbitrator has considered all the
28 documents. Paragraph 3 of the award dated 21.7.2021 contains the list
of 28 documents filed by appellant. The Arbitrator has also stated that all
documents filed by both parties, as stated in the award, were taken on
record and issues were decided. The Arbitrator has also dealt with the
documents and culled out the relevant documents which required
consideration. In paragraph 8 of the award, the Arbitrator has observed
“The documents and emails produced by the respondent in an endeavour to
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shift the liability to third persons to this dispute or to treat the amount in
dispute as investment fails as those documents and emails do not have any
material to deny or disprove the loan which is the subject matter of this
dispute.”
Paragraphs 9 and 10 of the award read as under:
“9. Analysing the documents produced by the respondent as well as the
claimant would show and prove that the clause 3 of the subject MOU dated
28th August 2015 between parties pertain to adjustments of rentals and cost
of equipment's in lieu of interest and it would not per se fix any percentage
of interest portion for the borrowings hence the said amount Rs.7,40,000/-
per month mentioned therein cannot be taken as interest portion in total.
However the same clause also mentions that there was an element of interest
agreed between parties though the percentage was not seen evidently fixed.
Therefore the amount of 7,40,000/- per month cannot be accepted as
interest and that leaves this tribunal to decide on the question of interest.
10. Upon plain reading of clause 1 of the said MOU as well as reading the
same in the light of the documents submitted by the respondent, I am able to
see that it is not an investment as claimed by the respondent but only a loan
as admitted and signed by both parties to the MOU.”
5. This also indicates that the learned Arbitrator has analyzed the
documents submitted by appellant and has given his findings.
6. It is trite that an award cannot have any specific format. As every
judge writes his/her judgment in a particular style, the learned Arbitrators
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also write in different styles. The Apex Court in Dyna Technologies (P) Ltd
v. Crompton Greaves Ltd1 emphatically held as under:
“29. There is no gainsaying that arbitration proceedings are not
per se comparable to judicial proceedings before the Court. A
party under Indian Arbitration Law can opt for an arbitration before
any person, even those who do not have prior legal experience as
well. In this regard, we need to understand that the intention of the
legislature to provide for a default rule, should be given rational
meaning in light of commercial wisdom inherent in the choice of
arbitration.
...
34. The mandate under Section 31(3) of the Arbitration Act is to
have reasoning which is intelligible and adequate and, which can in
appropriate cases be even implied by the courts from a fair reading of
the award and documents referred to thereunder, if the need be.
The aforesaid provision does not require an elaborate judgment
to be passed by the arbitrators having regard to the speedy
resolution of dispute.
35. When we consider the requirement of a reasoned order, three
characteristics of a reasoned order can be fathomed. They are:
proper, intelligible and adequate. If the reasonings in the order are
improper, they reveal a flaw in the decision-making process. If the
challenge to an award is based on impropriety or perversity in the
reasoning, then it can be challenged strictly on the grounds provided
under Section 34 of the Arbitration Act. If the challenge to an award
is based on the ground that the same is unintelligible, the same
would be equivalent of providing no reasons at all. Coming to the
last aspect concerning the challenge on adequacy of reasons, the
Court while exercising jurisdiction under Section 34 has to adjudicate
the validity of such an award based on the degree of particularity of
reasoning required having regard to the nature of issues falling for
consideration. The degree of particularity cannot be stated in a
precise manner as the same would depend on the complexity of the
issue. Even if the Court comes to a conclusion that there were
gaps in the reasoning for the conclusions reached by the
Tribunal, the Court needs to have regard to the documents
submitted by the parties and the contentions raised before the
Tribunal so that awards with inadequate reasons are not set aside
1 (2019) 20 SCC 1
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in casual and cavalier manner. On the other hand, ordinarily
unintelligible awards are to be set aside, subject to party autonomy
to do away with the reasoned award. Therefore, the courts are
required to be careful while distinguishing between inadequacy or
reasons in an award and unintelligible awards.”
[emphasis supplied]
7. The reasoning given in the award, in our considered view, is
proper, intelligible and adequate. We find nothing wrong in the method
this award has been written. One thing is certain that the documents
submitted by appellant have been considered and the learned Arbitrator has
applied his mind to the contents thereof and the submissions of appellant
based on those documents.
For the foregoing reasons, appeal is dismissed. There shall be no
order as to costs.
(K.R.SHRIRAM, C.J.) (SENTHILKUMAR RAMAMOORTHY,J.)
20.01.2025
Index : Yes
NC : Yes
sasi
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THE HON'BLE CHIEF JUSTICE
AND
SENTHILKUMAR RAMAMOORTHY,J.
(sasi)
20.01.2025
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