B.B.M. ENTERPRISES versus THE STATE OF WEST BENGAL AND ANR. on 30 July 2020

1. Leave granted.

2. We have heard learned counsel for the parties at great length.

3. Mr. Sidharth Luthra, learned Senior Advocate, appearing onbehalf of the respondent, painstakingly took us through the records,including the Award, in order to point out various deficiencies which,according to him, fell within the parameters of a Section 34 petition as aresult of which we should not therefore disturb the judgment of the HighCourt, which has merely remanded the matter and directed that thematter be disposed of in six months.

4. This matter has a chequered history. The Award that was madeby the learned Arbitrator was on 16.09.2009. Five claims were madebefore him amounting in all to Rs. 2,08,59,989. However, ultimately theAward that was made in favour of the appellant herein was to the extentof Rs. 1,38,44,430 plus 15% on a sum of Rs. 1,17,77,080 as pendentelite interest plus Rs. 2,67,350 by way of costs without interest. If thesaid amount, dehors costs, was not paid in four months, the interestfigure would become higher and would attract 18%.

5. When the Award was put into execution, the Executing Courtpointed out that by the date of its order dated 11.02.2010, the 120 dayperiod – beyond which no Award can be challenged – was already overand therefore proceeded with the execution. It was only when an orderof 17.02.2010 was made directing the RBI to disburse the awardedamount after attaching the Government’s Bank Account, and the replyof the RBI dated 20.02.2010 stating that adequate funds were not insuch account, that the matter was then remitted by the High Court by anorder dated 24.02.2010 stating that the Government was willing to deposit,at that point of time, 50% of the decretal dues in two weeks. At thisstage, therefore, the High Court set aside the Executing Court’s orderdated 17.02.2010. It is only after these proceedings that the respondentwoke up and filed a Section 34 petition challenging the Award on02.04.2010.

6. In the first round of litigation, the Section 34 petition wasdismissed by the learned District Judge on 22.03.2012, stating that theperiod of 120 days was over, and hence no foray into the merits would B

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Abe permissible at this stage. However, by an order dated 11.01.2013, theDivision Bench set aside this judgment and remanded the matter for afresh hearing.

7. The learned District Judge, in the second round, by an orderdated 22.12.2016, heard learned counsel for both parties and found asBfollows:-

“A court must not substitute its interpretation as against the viewsand interpretation of the arbitrator, the finding of the arbitratorrequires to be accepted without demur because court has no poweror jurisdiction to sit over the finding of fact arrived at by thearbitrators. In the instant case, so far I could realize from theargument as advanced by the Ld. Advocate of the petitioner andalso from the petition under Sec. 34 of Arbitration & ConciliationAct and the photo copy of documents placed before the courtthat the petitioner challenges the finding of facts but nothing isoozing out from record that the impugned award is perverse eitheron account of interpretation of law or any other collateral aspectand consequent decision taken by the Arbitrator. The ground uponwhich the award is challenged is an entirely factual issue; in noway covered by any ground as enumerated in Sec. 34 of theArbitration and Conciliation Act. We cannot forget that since thearbitrator is a judge appointed by the parties, the parties are boundby his decision. His decision is final unless the reasons given byhim in arriving at his decision are totally perverse or award isbased on wrong proposition of law. In this case the dispute arisesout of work contract, its execution and payment, i.e. Amount ofclaim, that aspect totally comes within the jurisdiction of arbitratorthat very finding cannot be interfered in a proceeding under Sec.34 of the Arbitration and Conciliation Act. In a case titled Unionof India vs. Kalinga Construction Company, reported in AIR 1971SC 646 it has been categorically held by the Hon’ble SupremeCourt that it is not open to the court to re-examine and reappraisethe evidence considered by the arbitrator to hold that the conclusionreached by the arbitrator is wrong. It is also settled principle thataward cannot be challenged on the ground arbitrator has arrivedat a wrong conclusion or has failed to properly appreciate thefacts and evidence. As per ratio of decision reported in 1994 (1)Arbi. L.R. 45, AIR 2003 NOC 156 (Raj) and in consonance with C

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the object of Arbitration & Conciliation Act jurisdiction of the courthas been fettered. In Narayan Prasad Lohia vs. N. Kunj KumarLohia reported in (2002) 3 SCC 572, it has been held that one ofthe objects of the said Act is to minimize the role of Courts in thearbitration process. This has been find place in Sec. 5 of theArbitration & Conciliation Act and Sec. 5 of the Arbitration &Conciliation Act speaks that Judicial authorities should not interfereexcept where, so provided in the Act. It is the intention of thelegislature that there should be a minimum interference with theaward. It can only be challenged under Sec. 34 of the Arbitration& Conciliation Act. Taking the risk of repetition I again mentionedthere is no valid ground in the petition under Sec. 34 of theArbitration & Conciliation Act for challenging the award. Onperusal of the award it has come to my notice that Ld. Arbitratorhas dealt with all the pleas/issues at the time of arbitration hearingand there is nothing which may tantamount to any glaringprocedural defect or there is any manifest error on the point oflaw or any miscarriage of justice had been taken place. Ld.Arbitrator has given a detailed, speaking and well reasoned award.Therefore, there is no iota of evidence to cast doubt about theintegrity of award or arbitrator was biased because Arbitratorhas the jurisdiction and authority to decide the question ofentitlement of contractor’s enhanced claim. I get support of thisview from the decision reported in 2003 (2) Arbi L.R. 280 (DB).So, award requires no interference.”

8. The impugned order dated 01.03.2019 set aside the learnedDistrict Judge’s order stating:

“Even assuming that the award was assailable on the basis ofunamended provisions of Section 34 of the Arbitration andConciliation Act, the Court would expect that there would be somediscussion on the merits of the objection on the award and not amechanical affirmation of the award by simply stating that theaward does not come within any of the grounds of challengeenumerated in Section 34 of the Act. The learned Trial Judge didnot indicate the reason as to why the award is unassailable underSection 34 of the Arbitration and Conciliation Act.”

Having so held, the matter was remanded to be disposed of in sixmonths. The stay that has been granted throughout the hearing would AB

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SUPREME COURT REPORTS

Acontinue. A resume of these facts would show that the matter has goneup and down already twice. We may only state that even though it doesnot appear that, in the second round, the point of limitation was argued,since a de novo hearing by the Division Bench was ordered on11.01.2013, this point also stared at the Court like a sore thumb. We arenot satisfied that there is any answer to the limitation point. Even otherwise,Bhaving perused the order of the learned District Judge, we are of theview that adequate reasons were given to dispose of the Section 34petition filed by the respondent. We do not agree with the High Courtthat no reasons were given as a result of which a remand ought to beordered. Resultantly, therefore the impugned High Court judgment is setCaside and the judgment dated 22.12.2016 passed by the learned DistrictJudge is affirmed.

9. At the fag end, Mr. Sidharth Luthra, learned Senior Advocate,made a fervent appeal to reduce the rate of interest which would be18% after the four months from the date of the Award expired. WeDthink the interest of justice requires that 18% be set aside and that therespondent pay interest at the rate of 15%. Further, he prayed that sixmonths’ time be granted in order to pay the balance amount under theAward. We think, in the circumstances of the case, a period of threemonths is reasonable.

E10. The appeals are disposed of accordingly.

Kalpana K. Tripathy

Appeals disposed of.

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