[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors. IN THE COURT OF SHRI [ENTITY], ADDL. DISTRICT JUDGE03, SOUTH DISTRICT, SAKET COURTS, NEW DELHI In the matter of ARB No. 56/2010 1. [ENTITY], House No. 30, Ram Nagar, Kansepur Road, Yamuna Nagar, Haryana. (Borrower) 2. [ENTITY], House No. 101, Rampura Colony, Yamuna Nagar, Haryana. (Guarantor) Petitioners Versus 1. M/s. [ENTITY], Plot No. 32 & [SECTION], 3rd Floor, Basant Lok, Vasant Vihar, New Delhi. (Lender) 2. Shri [ENTITY], 263, Balco Apartments, 58, I.P. Extension, Delhi110092. (not summoned, being Arbitrator) Respondents Petition Presented on : 05.06.2010 Date of Institution : 23.09.2010 Decision Reserved on : 16.05.2011 Date of Decision : 27.05.2011 ARB No. 56/2010 Page 1 of 20 [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors. JUDGMENT
(on application under [SECTION] of the [ACT])
1. (Introduction) - The petitioner no. 1 is borrower, the petitioner no. 2 is guarantor and the respondent no. 1 is lender. The petitioner no. 1 availed finance for purchase of commercial vehicle from the respondent no. 1 and the petitioner no. 2 stood guarantor, by executing hypothecationcum loan agreement. The agreement enumerates terms and conditions, its schedule reflects loan amount, fixed amount of interest and other covenants. This is admitted position of both sides. The petitioners have received copy of exparte award, which was received by them at the addresses as mentioned in the title of the case, since addresses of the parties are also undisputed.
2.1 (Respondent no. 1's case) - The respondent no. 1 by way of loan cumhypothecation agreement dated 20.3.2007 granted loan of Rs. 5,50,000/ (on which interest of Rs. 1,78,200/ was payable), was granted to petitioner no. 1 for purchase of commercial vehicle TATA 912 bearing registration No. HR 56 4408 (in brief the vehicle). The loan was repayable in 35 installments, the first installment was of Rs. 21,000/ and remaining installments were of Rs. 20,800/. However, the petitioner no. 1 paid Rs. 57,800/ only upto 30.09.2007.
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
2.2 The petitioners failed to adhere to terms and discipline of loan agreement, therefore, the respondent no. 1 issued recallcumdemand notice dated 02.07.2009 to the petitioners and terminated the agreement and entire amount was recalled, as per the terms of agreement, particularly [SECTION] and [SECTION]. The respondent also exercised option of reference to Sole Arbitrator by letter dated 23.07.2009 and made the following claims on 07.10.2009 (existing on 30.09.2008) on the basis of recall notice dated 02.07.2009 S. No. Particulars Amount (in Rs.)
1. Balance Outstanding 6,70,400/
2. Other Expenses 602/
3. OD of Delay Installment 84,662/
4. Less - EST Rebate & Other Expenses (27,055/) TOTAL AMOUNT 7,28,609/ In addition, the respondent / claimant claimed interest @ 36% per annum w.e.f 01.10.2008 and to repossess the vehicle and to dispose off the same.
2.3 By exparte award dated 15.02.2010, Ld. Sole Arbitrator allowed the claim of respondent no. 1 for Rs. 7,28,609/ along with interest [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
@ 18% per annum w.e.f 01.10.2008, besides to repossess the vehicle and to dispose off the same in the open market. Cost / expenses of proceedings of Rs. 9,325/ were also awarded in favour of the respondent no. 1 and against the petitioners.
2.4 Ld. Arbitrator in his award, concluded that notice of acceptance of reference was issued to the parties, notice was also issued on respondent's filing statement of claim and then notice was also issued to the petitioners regarding arbitration proceedings / evidence, however, for want of appearance of the petitioners, they were proceeded exparte. The exparte award was passed.
3.1 (Petitioners' Case) - The petitioners assail the award mainly on the grounds / on the point of want of service of process, the manner in which amount has been awarded by Ld. Arbitrator or claimed by the respondent, the interest and overdue charges requested and awarded; want of recall notice visavis the impugned award and the proceedings are misconduct, as the same are hit by the provisions enumerated in [SECTION] of the [ACT] and public policy. No rule of evidence or procedure was followed as per the established norms but the claim was allowed in consequence of connivance between the respondent no. 1 and the respondent no. 2. The petitioners filed detailed application.
3.2 The respondent no. 1 replied the application parawise and [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
the petitioners' contentions compiled in paragraph 3.1, above, have been opposed by the respondent no. 1. The respondent no. 1 contends that the petitioners were proceeded exparte after service of notices, the amount claimed was as per the terms of agreement, the interest and overdue charges were allowed as per agreement. There was recall notice prior to the lodging of the claim. There does not exist any fact or ground to infer that there was misconduct of the Arbitrator or anything is against the public policy.
3.3 However, the petitioners have reiterated their stand in the rejoinder.
3.4 The proceedings of Ld. Arbitrator have also been received and perused in the light of the contentions raised in the petition and in the reply visavis oral submissions of the parties. The issues being raised are taken one by one in paragraph 4 onwards.
4.1 Whether the petitioners' were served with the notices issued by Ld. Arbitrator ?
According to the petitioners, Ld. Arbitrator has concluded that the petitioners were served with the notices by concluding that notices were sent at the addresses of petitioners by prepaying postal charges, whereas the conclusion drawn are incorrect, since a little difference in [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
facts or additional facts, may make a law of difference in precedential value of a decision. The reports are manipulated reports. Why the petitioners will not accept the notices, if the same were sent to them ? When the copy of award could be received by the petitioners, why the notices would not be accepted by them. They are the respondents who connived in manipulating the report. As per [SECTION] of the [ACT], when notice is not given of appointment of an Arbitrator or of arbitration proceedings or when the applicant was otherwise unable to present his case before Arbitrator, the award can be set aside. Since, the petitioners have not received any notices personally or otherwise on any count from Ld. Arbitrator, therefore, they could not present their case and for want of service of notice, they were prevented in presenting their case. In fact, manipulation of report amounts to fraud. The Ld. Arbitrator failed to publish the notice by way of publication. The award is liable to be set aside. The petitioners rely upon [PRECEDENT] wherein it is held that expression 'fraud in making the award' was interpreted and held that the facts suppressed amounting to fraud and are within the ambit of public policy. The relevant and material facts, which ought to have been disclosed before arbitrator but concealed them, are act of fraud and are covered under the said expression. (It is supplemented that non service of process on the petitioner amounts to fraud in terms of [SECTION] of the [ACT]) .
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
4.2 Whereas, the respondent no. 1 opposed the contentions that Ld. Arbitrator had issued notices to the petitioners, firstly, when reference was accepted by him; secondly, when claim was lodged and then, when arbitration proceedings were conducted and lastly, when award was passed.
The respondent requested for reference by letter dated 23.07.2009 and information was given to the petitioners. It was 31.08.2009, when notices were directed and sent on 05.09.2009 for 07.10.2009 to the petitioners. The petitioners were served, however, both remained absent on 07.10.2010. Again, notice on statement of claim was directed for 1[SECTION]1.2009, speed post was sent on 22.10.2009 and petitioner no. 2 was served and it was reported on the envelope of petitioner no. 1 "gone out of station and family members refused to take the process". On 1[SECTION]1.2009, both the petitioners remained absent. Third notice of the proceedings for 08.01.2010 was sent by speed post on 2[SECTION]1.2009, the petitioner no. 1 refused the process and the registered article was not received back in respect of petitioner no. 2, it is deemed to be served. On 08.01.2010, both the petitioners remained absent. The publication of notices in the newspaper is not within the purview of Ld. Arbitrator, since provisions of [ACT] are not applicable. The petitioners themselves opted to abstain from the proceedings, they were rightly proceeded exparte. In terms of [SECTION] of [ACT] and presumption under [SECTION] of [ACT], mandates that when an article is sent by post, it is addressed properly by prepaying the charges, either it is not [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
received back within reasonable time or if an intimation is given to others or to members of the family, it is a service of notice, it does not require that the addressee be served personally as alleged. Ld. Counsel for respondent no. 1 further fortifies his contentions, while relying upon
(i) [PRECEDENT] - Service by post and presumption of service was discussed in reference to [SECTION] of [ACT], [SECTION] [ACT] and [SECTION] of the [ACT] that when article is sent by addressing properly prepaying and posting by registered post, unless contrary is proved, the letter would be considered to be delivered in the ordinary course of post. In the eventuality of ordinary post, summons is presumed to be served, even if it does not come back within 30 days and in the case of speed post, ordinarily service takes place within a few days. When a notice is received back with an endorsement that the parties have refused to accept, still then presumption can be raised as regards the valid service of notice.
(ii) Mayawati vs CIT, Delhi (CentralI) 2009 157 DLT 324 - [SECTION] of [ACT], qua meaning of service by post, was discussed and held that the section raises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgment due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected, it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more Further, when service is effected by refusal of postal communication, the addressee must be imputed with the knowledge of the contents thereof and presumption can be raised under [SECTION] of the [ACT] and [SECTION] of [ACT].
(iii) [PRECEDENT] - Notice, under [SECTION] of [ACT] sent by post was under consideration and held where the sender [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee, unless he proves that it was not really served and that he was not responsible for such nonservice. (Ld. Counsel for respondent supplements that the facts and presumptions are against the petitioner and there is no material on behalf of petitioner to disprove the facts against him.)
(iv) [PRECEDENT] - there is also presumption of delivery of article to the addressee under [SECTION] of [ACT]. Under the rules of the post office, the letter is to be delivered to the addressee or a person authorized by him. Such a person may either accept the letter or decline to accept it and the acceptance or refusal can be treated as a service on, and receipt by, the addressee. When, however, the postman is unable to deliver it on his first visit due to nonavailability of the addressee or a person authorized to receive it, the general practice is for the postman to attempt to deliver it on the next one or two days also before returning it to the sender. His responsibilities cannot be equated to those of a process server entrusted with the responsibilities of serving the summons of a court under order V of [ACT].
(v) [PRECEDENT] - notice sent under registered AD cover by arbitrator is a sufficient service for the purposes of [ACT], however, arbitrator has no power to order service of notice by means of publication (it is supplemented by Ld. Counsel for respondent that provisions of [ACT] are not applicable to the arbitration proceedings, in the present Act of 1996).
(vi) [PRECEDENT] the award was served by speed post and there is evidence of postal receipts for dispatch of award to the parties, presumption under [SECTION] of the [ACT] and under [SECTION] of [ACT] would be attractive. (Ld. Counsel supplements that the notice was also sent at the same address by Ld. Arbitrator, where the award was sent subsequently and service of both stand proved).
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
(vii) [PRECEDENT] - an exparte award was passed since the party stayed away from the arbitration proceedings despite notice and the said party was proved to have refused to accept the copy of award from the postman. Held it cannot be construed misconduct. The application was rejected.
(viii) [PRECEDENT] - held, that arbitrator may proceed in the absence of a party, if any of the party choses after but the Arbitrator has given him sufficient notice and proper opportunities for attending. If there was no intention of a party to appear inspite notice, there would be no prejudice in case an exparte award is passed against such party. (Ld. Counsel supplements that since respondents opted and avoided to participate in the proceedings, despite notice, there is no flaw in the impugned award).
4.3 (Findings on the point of service of process) - It is already held in paragraph 1, above, that the addresses of parties are not disputed. It is also matter of record of arbitration proceedings that reference letter dated 23.07.2009 was sent to the petitioners by registered post on 27.08.2009 for next date. It was 31.08.2009, when notices were directed and sent on 05.09.2009 for 07.10.2009 to the petitioners. The petitioners were served. On 07.10.2009, notice on statement of claim was directed for 1[SECTION]1.2009, speed post was sent on 22.10.2009 and petitioner no. 2 was served and it was reported on the envelope of petitioner no. 1 "gone out of station and refused by family members", the returned envelope is record of proceedings of Ld. Arbitrator. On 1[SECTION]1.2009, third notice of the proceedings for next date 08.01.2010 was sent by speed post on [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
2[SECTION]1.2009, the notice was not received back in respect of petitioner no.2; notice sent to petitioner no. 1 was received with report "refused", the returned envelope is matter of record. It has also been referred in paragraph 1, above, that award was sent and served upon the petitioners. Since the address is correct and notices were sent thrice, the petitioners remained absent and even notices were also served upon the petitioners and refusal of registered article amounts to service of notice. Hence, considering the factual position and the material on record, in the light of law laid down in various case laws, it is held that the petitioners were served , they could have appeared before Ld. Arbitrator, at any stage, thus, there is no flaw in the conclusion drawn or in the findings returned by the Ld. Arbitrator. In addition, there is no other circumstances brought by the petitioners to infer either the reports are manipulated or that they were not served with the notices. To that extent, there is no merit in the application and [SECTION] of the [ACT] are not attracted. Publication of process in the newspaper is subject matter of substituted service under [SECTION] [ACT] but does not extend to the proceedings under the [ACT].
5. The petitioners contend that the claim was lodged prior to the date of last installment became due, it was against the principle of natural justice and the agreement being relied by the respondent. The respondent no. 1 states contrarily.
Whereas, there is demandcumrecall notice dated 02.07.2009, [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
which was sent to the petitioners by speed post on 04.07.2009, therefore, there is compliance of clause [SECTION] "recall of loan by lender of loancum hypothecation agreement". To that extent the petition carries no merit, as the claim for entire amount can be lodged after recall notice and that was done by respondent no. 1. Hence, second objection to the extent of want of demandcumrecall notice stands disposed off against the petitioners.
[SECTION] The next serious objection raised is in respect of amount of claim. Firstly, much amount was repaid by the petitioner no. 1 to the respondent no. 1 but despite that an huge outstanding amount has been claimed and Ld. Arbitrator, in connivance of respondent no. 1 has made the award. As per statement of account, a sum of Rs. 84,662/ was shown of overdue of delay installment charges as per separate calculation sheet, besides other expenses of Rs. 602/, however, the same were not proved in evidence before Ld. Arbitrator. It means the award was passed without considering the material on record. Secondly, as per schedule appended with the agreement, there is fixed amount of interest of Rs. 1,78,200/. The respondents are not entitled to claim interest beyond the fixed amount of interest. Since, there is no agreed rate of interest, therefore, claiming of interest @ 36% per annum or award of interest @ 18% per annum is beyond the terms of agreement. It is not tenable, since Arbitrator has to adjudicate the dispute in terms of agreement. Since the claim was lodged prior to the last date of amount due, it is already included the fixed amount of interest but awarding the overdue amount and further interest [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
is in gross violation of agreement and principle of natural justice. To that extent, the award is hit by [SECTION] of the [ACT] being against public policy. During the course of arguments, while contending similar contentions, the petitioners rely upon [PRECEDENT], wherein that point of 'interest' under [SECTION] of the Act 1996 was under consideration and it was held that when agreement prohibits grant of interest, arbitral tribunal cannot award interest for prereference and pendentelite interest, since words "unless otherwise agreed by the parties" in [SECTION] of the Act clarifies that the arbitrator is bound by the terms of contract for award of 'interest'. {It is supplemented that the said agreement quantifies fixed amount of interest and there was no agreed rate of interest, the award of interest in percentage (%) is beyond the terms of agreement}.
6.2 Whereas, the respondent no. 1 admits that the agreement in its schedule specifies the loan amount, the tenure of the loan and interest amount but the schedule is also containing other covenant of delayed payment charges of 3% per month compounded monthly, which are in reference to other clauses of agreement, like [SECTION], [SECTION] and [SECTION]. The delayed payment charges are in fact interest but because of nomenclature, the petitioners cannot deny interest or to derive any benefit. 3% per month comes to 36% per annum and similar claim was lodged before Ld. Arbitrator, however, interest @ 18% per annum was [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
awarded. The [ACT] is not applicable to the arbitration proceedings, however, the parties are governed by the covenants between them and Ld. Arbitrator has considered the statutory provisions of law and the agreement. Neither there is over claim nor the interest or expenses awarded is beyond the agreement. The overdue payment on delayed payment were computed and claimed, which have also been considered in terms of delayed payment charges. The entire claim was lodged, since the loan was recalled by notice dated 02.07.2009. Neither there is any misconduct on the part of Ld. Arbitrator nor [SECTION] of the [ACT] is attracted. Respondent no. 1's counsel further derives his contentions from the following case law
1. [PRECEDENT] - there is no absolute bar for award of interest by way of damages and it would be permissible to do so if there is usage or contract, express or implied, or any provision of law to justify the award of such interest. Merely because in [SECTION] of the [ACT], the court is precluded from awarding interest on interest, does not mean that it is not permissible to award such interest under a contract or usage or under the statute. It is common knowledge that provision is made for the payment of compound interest in contracts for loans advanced by banks and financial institutions and the said contracts are enforced by courts. 'hence, it cannot be said that award of interest on interest, i.e. compound interest, is against the public policy of India. We are, therefore, unable to accept the contention that award of interest on interest, i.e. compound interest is contrary to public policy of India. (It is supplemented the [ACT] is not applicable to the agreement between the parties and secondly compounding of interest is permissible being not against public policy and the agreement covenants (No. 1.8 r/w schedule), as delayed payment charges.
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
2. [PRECEDENT] - held that [SECTION] of the Act gives a statutory right to the Arbitrator to award interest for all three periods of prereference, pendentlite and post Award and nowhere [SECTION] in any manner restricts the right of the Arbitrator to grant interest.
3. [PRECEDENT] - held, the parties are bound by the terms of agreement since the same are executed with open eyes. The interest @ 21% p.a. + penal rate of 3% at monthly basis in case on non payment after due date was held valid. (Ld. Counsel supplements the schedule appended with the agreement covenants the penal interest and it is binding on the petitioner).
4. [PRECEDENT] - held that plaintiff bank is fully entitled to claim penal interest on overdue installments. The court is not empowered to reopen the transaction between the parties on the ground that the rate of interest charged by the plaintiff bank in respect of the transaction is excessive. (Ld. Counsel explains that although the case was decided in 1991 but it still holds good law).
5. [PRECEDENT] [PRECEDENT] power of the court to allow interest was discussed and held that interest is to be awarded from the date mentioned in the notice (i.e. 01.04.1983) and not from the date of notice (i.e. 14.0[SECTION]984).
6.3(a) (Findings of such issues / objections) - In nutshell, there are three limbs of objections involved i.e the amount of overdue charges, other expenses and interest. There is no dispute that the petitioners paid last installment on 30.09.2007 and thereafter, no further payment was tendered till the last installment become due. Thus, it is to be seen [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
whether respondent was entitled to claim overdue charges. It is also a fact that in the statement of accounts, the overdue of delayed installment charges were calculated on a separate sheet, which were not placed on record. Simultaneously, the schedule appended with the agreement provides delayed payment charges and as per clause [SECTION] read with clause [SECTION], the lender is entitled to charge delayed payment charges. Therefore, statement of accounts reflecting OD of delayed payment are governed by delayed payment charges @ 3% per month. It will not give any benefit to the petitioners that calculated sheets were not placed on record. To the extent of amount of overdue of delayed installment, the petition carries no merit.
6.3(b) The another head is of other expenses of Rs. 602/ but there is no material on record to conclude that the respondent / lender was entitled to recover such expenses from the petitioners. For want of record or proof of other expenses, the award to that extent is beyond the agreement or the material / evidence produced before Ld. Arbitrator. The petition to that extent is allowed and amount of Rs. 602/ is to be reduced from the award amount.
6.3(c) It is repeated that the schedule appended with the agreement specifies interest amount of Rs. 1,78,200/. According to lender / respondent no. 1, on the eve of recall of loan amount, it was entitled not only the loan amount, the interest and other charges embodied in the [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
agreement. Therefore, the respondent claimed interest of 36% per annum and Ld. Arbitrator allowed as 18% per annum and the schedule prescribes "delayed payment charges 3% per month compounded monthly" and the claim was lodged along with the interest claimed under this column of delayed payment charges. The petitioners cannot derive any benefit of the term delayed payment charges, which is in fact nomenclature for interest. The lender's contention carries no weight for the following reasons
(i) the agreement in its letter and spirit has been defining the interest amount as a fixed amount separately from the other terms expressed either in the schedule or in the covenants of the agreement;
(ii) neither in the agreement nor in the schedule, the rate of interest has not been expressed in percentage, therefore, delayed payment charges 3% per month cannot be considered nomenclature for interest amount specified; the terms cannot be considered synonymously;
(iii) since it is the fixed interest amount and both the parties have consented by way of written agreement, therefore, the Ld. Arbitrator could not go beyond the defined covenants of the parties, in view of [SECTION] of the [ACT] and the law declared in Sree Kamachi Amman Constructions (Supra) applies to the situation in hand;
(iv) in recall notice dated 02.07.2009, the lender has not claimed any interest but sent the notice that the petitioners will be liable to pay the amount as per the terms and conditions of the agreement. To say, in the notice, there was no demand of interest @ 36% per annum and the agreement does not specify any such rate of interest of 36% per annum;
(v) in the claim lodged before the Ld. Arbitrator, the respondent / lender has not claimed delayed payment charges @ 3% per month but interest @ 36% per annum and nowhere in the claim or in the evidence, the respondent pleaded to interpret the delayed payment charges of 3% per month as interest and nor there is any finding or interpretation by Ld. Arbitrator that the delayed [ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
payment charges 3% per month mentioned in the schedule was being considered interest @ 36% per annum or the 18% per annum interest was awarded to this count. In fact, to construe delayed payment charges @ 3% per month as interest @ 36% per annum, first time in the arguments by lender before this Court; and
(vi) in view of the reasons (i) to (v), above, agreed fixed amount visavis no specified percentage/rate of interest and for want of plea or interpretation that the delayed payment charges are percentage of interest, the award of interest @ 18% per annum is hit by [SECTION] of the [ACT] as well as by the agreement between the parties. The interest awarded is beyond the scope of agreement. The respondent no. 1 / lender is not entitled for interest 18% per annum or the petitioners are liable to pay the same and to that extent, the award is beyond agreement. To that extent, petition under [SECTION] of the [ACT] is allowed. However, for such omissions / commissions, which can be segregated, the entire award is not required to be set aside.
7.1 The last limb of argument advanced by petitioners are that no procedure of evidence was followed or the proceedings are hit by principle of natural justice, it has been countered by lender / respondent that the petition under [SECTION] of the [ACT] is not to be considered as an appeal and the role of the Court is very limited like supervisory and there is no scope in the petition to set aside the impugned award. The respondent relies upon
1. [PRECEDENT] - it is not within the scope of court to reappraise the matter as if this were an appeal, when the arbitrators have applied their mind to the pleading, the evidence adduced before them and the terms of contract. Where two views are possible, the view taken by the arbitrator would prevail.
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
2. [PRECEDENT] - it is not within the jurisdiction of the court to sit over the arbitral award, since scope of its power is very limited. (Ld. Counsel explains that the petition does not satisfy the requirement of [SECTION] of the [ACT]).
3. [PRECEDENT] - in reference to [ACT] on [SECTION] and [SECTION] qua jurisdictional error of arbitrator was discussed that when award is in excess of jurisdiction of arbitrator then it is liable to be set aside but if the award is within jurisdiction, on the basis of construction of contract which the arbitrator was required to do, the court cannot set aside merely because another view was possible.
4. [PRECEDENT] - the scope for setting aside the award is very limited to the grounds available under the Act and not otherwise.
5. M/s. Kapoor Nilokheri Coop. Diary Farm Society Ltd. vs Union of India AIR 1973 SC 1[SECTION]8 - where an arbitrator is called upon to decide the effect of the agreement, he has really to decide a question of law, i.e. of interpreting the agreement and his decision is not open to challenge.
7.2 (Findings) - The contentions of petitioner carries no weight, firstly, as per [SECTION] of the [ACT], the provisions of the [ACT] are not to be followed by arbitral tribunal; secondly, the arbitration proceedings reflects the entire record tendered during the proceedings, which was examined by the Ld. Arbitrator. Thus, there is nothing on record to construe that procedure prescribed under the [ACT] or it is hit by the principle of natural justice. To that extent, petition carries no weight.
[ENTITY] & Ors. vs. M/s. [ENTITY] & Ors.
8. In view of detailed analytical discussion, conclusions and the reasons given in paragraphs 4 to 7, above, the petition is partly allowed to the extent that award of expenses of Rs. 602/ or interest @ 18% per annum w.e.f 01.10.2008 is beyond the agreement and the award, to that extent, is set aside. The rest of the award is confirmed.
Both the parties will bear their own costs.
File is consigned to record room.
Announced in the open Court ([ENTITY]) on 27th May, 2011 Additional District Judge-03, South District, Saket Courts, New Delhi