Kambli 1 ARBP606.08 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.606 OF 2008 WITH CHAMBER SUMMONS NO.1577 OF 2008 IN ARBITRATION PETITION NO.606 OF 2008 ... Hathway Cable & Datacom Pvt.Ltd. ...Petitioner v/s. N Jayalaxmi ...Respondent ... Mr.Snehal Shah i/b Thakore Jariwala & Associates for the Petitioner. Mr.Minoo Siodia with Mr.Nikhil Agarwal, and Mr.Kaushik N. Singh i/b Rustomji & Ginwala for the Respondent. ... CORAM: D.K.Deshmukh DATED: 17th March, 2011 P.C.: Admit. Heard finally by consent of parties. 2. By this Petition the Petitioner challenges the award made by the learned Arbitrator. The dispute between the parties was that the Respondent was running a Cable Network. There was Kambli 2 ARBP606.08 an agreement between the Petitioner and the Respondent for sale of that Cable Network. Admittedly, the total price agreed was Rs. 32,00,000/- (Rupees Thirty Two Lacs nly). Rs.8,00,000/- were paid and Rs.24,00,000/- were in balance. The agreement was entered into in the year 2002. Rs.8 lacs were also paid in the year 2002. The agreement was terminated by the Petitioner in the year 2005. According to the Petitioner, the agreement was terminated because after carrying out investigation the Petitioner found that the claim of the Respondent in relation to number of subscribers was not accepted. There was a counter claim made by the Respondent for payment of the balance amount of Rs.24 lacs on the ground that the Petitioner was not justified in terminating the contract and refusing to pay the amount of Rs.24 lacs. The learned Arbitrator has rejected the claim made by the Petitioner for refund of Rs.8 lacs, which were paid admittedly by the Petitioner to the Respondent, however, has allowed the counter claim and directed the Petitioner to pay an amount of Rs.24 lacs with interest to the Respondent. 3. The learned Counsel appearing for the Petitioner submits that the award made by the learned Arbitrator is unintelligible award. He submits that when the learned Arbitrator directs the Petitioner to pay an amount of Rs.24 lacs to the Kambli 3 ARBP606.08 Respondent, which was the balance amount of consideration, it was for the learned Arbitrator to hold that the Petitioner would be entitled to the Cable Network to which the contract relates. But in paragraph 18, the learned Arbitrator has recorded a finding that the Network is with the Respondent and the Respondent is running that Network, then it is not mentioned anywhere why the Petitioner is required to pay Rs.24 lacs to the Respondent. The learned Counsel submits that the learned Arbitrator has himself recorded a finding that an amount of Rs.5,75,000/- was paid by the Respondent to the Petitioner in the year 2004 in full and final settlement of the claim of the Petitioner. The learned Counsel submits that this finding suggests that there was a settlement in relation to the dispute between the parties and the Respondent paid to the Petitioner Rs. 5,75,000/- as refund of Rs.8,00,000/-, which was paid as earnest money by the Petitioner to the Respondent. The learned Counsel submits that if this finding is sustained, then it was for the learned Arbitrator to explain how the dispute survives after the Respondent making payment of Rs.5,75,000/- to the Petitioner and how the Respondent becomes entitled to a decree of specific performance of the contract which is settled between the parties by the Respondent paying to the Petitioner an amount of Rs.5,75,000/-. The learned Counsel submits that this conduct of the Respondent Kambli 4 ARBP606.08 was also relevant for considering whether the Respondent is entitled to a decree of specific performance of the contract. That has not been considered by the learned Arbitrator. He has recorded contradictory findings which are incapable of standing together. 4. The learned Counsel appearing for the Respondent, on the other hand, submits that Network was agreed to be transferred to the Petitioner for Rs.32 lacs. Rs.8 lacs were paid by the Petitioner in the year 2002 and the Network was taken over by the Petitioner and he was running it. He also transferred 400 connections to a third party. The learned Counsel submits that therefore the Petitioner was liable to pay the balance amount of consideration to the Petitioner. The learned Arbitrator, therefore, has rightly made the award for payment of Rs.24 lacs by the Petitioner to the Respondent. The learned Counsel, however, could not explain as to why according to the Respondent, the Respondent was entitled to retain Rs.8 lacs and was entitled to receive further amount of Rs.24 lacs, when the amount of Rs.5,75,000/- was paid by the Respondent to the Petitioner in the year 2004. 5. I have examined the record and the award in the light of these rival submissions and I must record that in spite of my best Kambli 5 ARBP606.08 efforts I was not able to reconcile the various findings recorded by the learned Arbitrator. The learned Arbitrator by the award directs the Petitioner to pay the amount of Rs.24 lacs to the Respondent. This amount is obviously the amount that was in balance to be paid as price of the Network, which is agreed to be Rs.32 lacs. Therefore, this amount could have been directed to be paid by the Petitioner to the Respondent in consideration of having taken over the Network of the Respondent. However, in paragraph 18, the learned Arbitrator observed, “ I have allowed the counter claim of the Respondent to the tune of Rs.1 lacs with interest at the rate of 9% p.a. from 1.5.2002. I have declined to grant any other counter claim on the ground that the BPT has failed and the Respondent has got back her Network with whatever number of subscribers.” The learned Arbitrator thus has recorded a clear finding that the BPT has failed. If BPT has failed, then it is not clear how the learned Arbitrator can make an order of specific performance of the same BPT. The learned Arbitrator has also recorded a finding that the Respondent has got back her Network. If the Network was with the Respondent, one fails to understand why the Petitioner is paying Rs.24 lacs to the Respondent and in consideration of what. It is clear from the award that this amount is not directed to be paid by way of damages. The learned Arbitrator has accepted the case Kambli 6 ARBP606.08 of the Respondent that the Respondent paid an amount of Rs. 5,75,000/- in two installments of Rs.1 lac and Rs.4.75 lacs in the year 2004 and he observes “It appears that the Respondent was any how made to pay back a sum of Rs. 1 lac on 31-8-2004. It is also a matter of record that the Respondent had paid back a total sum of Rs.5,75,000/- out of Rs. 8 lacs. It is also significant to note that having received back the amount of Rs.5,75,000/- the claimant is demanding Rs.7 lacs from the Respondent denying the receipt amount of Rs.5,75,000/-.” The learned Arbitrator has recorded a further finding, which reads as under:- “It is however possible that under pressure from the said Mr.Reddy, the Respondent appears to have paid Rs.4,75,000 and finally Rs. 1 lac on 31-8-2004 in “full and final” settlement with the Claimant. “ 6. Thus, the learned Arbitrator records a finding that the Respondent paid total amount of Rs.5,75,000/- towards refund of the amount of Rs.8 lacs which was received by the Respondent from the Petitioner as earnest money for transfer of the Cable Network. The learned Arbitrator, however, does not consider in the award anywhere if the Respondent had refunded Rs.5,75,000/- out of the amount of Rs.8 lacs, how can she claim specific performance of the same contract after returning major part of the earnest money Kambli 7 ARBP606.08 to the Petitioner. Really speaking this conduct of the Respondent of refunding of Rs.5,75,000/-, towards repayment of Rs.8 lacs paid by the Petitioner to the Respondent, will estop her from claiming specific performance of the agreement and further amount of Rs.24 lacs. To my mind, the award suffers from non-application of mind to the aspects which were relevant to be considered in view of the dispute between the parties. 7. In this view of the matter, therefore, in my opinion, the award has to be set aside. In the result, therefore, the petition succeeds and is allowed. The award impugned in the petition is set aside. 8. In view of order passed in Arbitration Petition, Chamber Summons No.1577 of 2008 does not survive for consideration. Disposed of as such. (D.K.Deshmukh, J.)