1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD ARBITRATION APPEAL NO.23 OF 2009 The Executive Director, Godawari Marathwada Irrigation Development Corporation Aurangabad Through its Executive Engineer, Majalgaon Canal Division No. 7, Gangakhed, District Parbhani. .. Appellant Versus Shri. Manish s/o Dhanraj Parmar, Govt. Contractor, 8, Shubham, 44045, N-2, Cidco, Mahajan Colony, Behind Bhavani Petrol Pump, Aurangabad 431003. .. Respondent WITH CIVIL APPLICATION NO.12120 OF 2009 ... Mr. B.R. Surwase, Advocate for appellant. Mr. A.K. Gawali, Advocate for the respondent. ... CORAM : V.R. KINGAONKAR, J. DATE : 27TH NOVEMBER, 2009. PER COURT : Heard Counsel. 2. This is an Arbitration Appeal preferred 2 against the dismissal of the application under Section 34 of the Arbitration and Conciliation Act, 1996 by the learned District Judge, Parbhani in M.A. (RJE) No. 55/2008. 3. There is no dispute about the fact that the parties entered into an agreement when the works contract was given to the respondent by the appellant. The appellant had invited tenders from the competitive bidders for execution of the remaining Earth Work Structures Lining and Selective Lining of Kothala Branch Canal Km. 1 to 6, Distributory No. 9 Minors 4,5,6,7. The agreement admittedly consists of Arbitration Clause. There is no dispute about the fact that Arbitrator was appointed in accordance with the terms of the agreement and the Arbitrator followed due procedure as contemplated under the Arbitration and Conciliation Act, 1996. The Arbitrator rendered Arbitral Award ( Exhibit- C ). The Award was challenged by way of application under Section 34. The learned 3 District Judge repelled the objections raised by the appellant and confirmed the Award. 4. It is well settled that the Arbitration Appeal against the order passed by the District Judge in the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, is like the proceedings of the Second Appeal. For the Arbitral Award itself is the end product of trial held before the Arbitrator. Thereafter, the application under Section 34 is alike an appeal before the First Appellate Court. Needless to say, unless there is a substantial question of law involved and patent perversity or error is pointed out, the appeal cannot be entertained. 5. Mr. B.R. Surwase, learned Counsel for the appellant would submit that the impugned judgment deserves interference because excessive interest @ 18% p.a. was allowed by the sole Arbitrator without justification. He would 4 further submit that the right of the appellant to call witnesses for cross examination was curtailed and, therefore, prejudice was caused to the appellant. He pointed out that the application for calling of the witnesses for cross examination was turned down on two occasions. He further argued that in some cases there was no proper material before the Arbitrator to award charges for keeping vehicles idle for the period which is considered by the sole Arbitrator. Mr. B.R. Surwase further submits that the Arbitral Award is vitiated on grounds contemplated under Section 28 and 31 of the Arbitration and Conciliation Act, 1996. 6. So far as the objection to the procedure is concerned, it is significant to note that before commencement of the Arbitration Proceeding, with consent of Counsel of both sides, the Arbitrator had determined the manner of recording the evidence. It appears from the record that by consent of Counsel of both sides it was decided 5 that the parties would file their affidavits in support of rival contentions and file necessary documents. The learned District Judge, observed ; " He was told that procedure for conducting Arbitration Proceeding was decided by the Counsel of both the side and in that procedure there was no question of recording cross examination of the witnesses. The parties had agreed to prove their respective claims on the basis of the affidavits and the applicant was at liberty to file any affidavit. It was also brought to the notice of the Executive Engineer that the proceeding was approaching the flag end and the arbitrator cannot permit the applicant to raise any new ground at that stage". Thus, the arbitration procedure was settled by consent of the parties. There was no right of cross examination reserved by either party. The appellant could have filed counter affidavit and necessary documents to prove the contentions raised in respect of unsustainability of claim 6 put forth by the Contractor. 7. So far as the award of 18% p.a. interest is concerned, it was noticed that the interest was charged by the appellant for machinery advance. The learned District Judge noticed that it was on basis of parity that such rate of interest could be awarded in favour of the respondent. The learned District Judge had referred to Rajasthan Road Transport Corporation vs. Indag Rubber Ltd. 2006 AIR SCW 4564 and Rajasthan Road Transport Corporation vs. Indag Rubber Ltd. Reddy & Another AIR 2007 Supreme Court 817, in support of his conclusions. 8. In Bhagwati Oxygen Ltd. vs. Hindustan Copper Ltd. (A.I.R. 2005 SC 2071), the Apex Court consider the question of interest. It is observed in Para. 36, which reads as under: "36. The last question relates to payment of interest. 7 The Arbitrator awarded interest to BOL at the universal rate of eighteen per cent for all the three stages, pre-reference period, pendente lite and post award period. It is not disputed that in the arbitration agreement there is no provision for payment of interest. The learned single Judge as well as the Division Bench were right in observing that the Arbitrator, in the facts and circumstances, could have awarded interest. The Arbitrator had granted interest at the rate of eighteen per cent on the ground of loan so advanced by HCL to BOL at that rate". 9. Considering the said legal position and the fact that the appellant had charged interest @ 18% p.a. for advance lent to purchase machinery, it is difficult to say that excessive interest was awarded by the Arbitrator. The learned District Judge has duly considered the relevant aspects of the matter. The Arbitrator was nominated by the choice of the appellant. It is undisputed that the Arbitrator had good deal of experience and was expert in the field of 8 construction work. So, unless there is sufficient material to demonstrate that he acted in unfair manner and adopted immoral methods of dealing with the proceedings before him, the Arbitration Award is not vulnerable to challenge. The challenges put forth b y the appellant do not fall within the ambit of Section 34(2) of the Arbitration and Conciliation Act, 1996. No substantial question of law is involved in the present appeal. Under the circumstances, the appeal is dismissed. 10. In view of the dismissal of the present appeal, nothing survives in the Civil Application and the same is also dismissed. [ V.R. KINGAONKAR, J.] sut/NOV09/arb23.09