B.B.M. ENTERPRISES versus THE STATE OF WEST BENGAL AND ANR.
[2020] 6 S.C.R. 8, Supreme Court of India, 2020
Outcome: Disposed off
Segment: Ratio
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SUPREME COURT REPORTS
[2020] 6 S.C.R.
B.B.M. ENTERPRISES
v.
THE STATE OF WEST BENGAL AND ANR.
(Civil Appeal No. 2834 of 2020)
JULY 30, 2020
[R. F. NARIMAN, NAVIN SINHA AND
INDIRA BANERJEE, JJ.]
Arbitration and Conciliation Act, 1996:
s. 34 – Petition under – Filed after expiry of limitation period
of 120 days – Dismissed by District Judge – High Court setting
aside the order of District Judge remanded the matter – In second
round of litigation District Judge dismissed the petition – High Court
by impugned order again remanded the matter to be adjudicated
afresh – Appeal to Supreme Court – Held: District Judge had
disposed of the petition u/s. 34 giving adequate reasons – High
Court wrongly remanded the matter – Appeal disposed of.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2834
of 2020.
From the Judgment and Order dated 26.03.2019 of the High Court
at Calcutta in FMA No. 1298 of 2017.
With
Civil Appeal No. 2835 of 2020.
Saurav Agarwal, Priyankar Saha, Sarad Kumar Singhania,
Anshuman Chowdhury, Ms. Rashmi Singhania, Advs. for the Appellant.
Sidharth Luthra, Sr. Adv., Ms. Madhumita Bhattacharjee,
Ms. Srija Choudhury, Saifuddin Shams, Mohd. Shakeib Naru, Advs. for
the Respondents.
[2020] 6 S.C.R. 8
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The Judgment of the Court was delivered by
R.F. NARIMAN, J.
1. Leave granted.
2. We have heard learned counsel for the parties at great length.
3. Mr. Sidharth Luthra, learned Senior Advocate, appearing on
behalf 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 a
result of which we should not therefore disturb the judgment of the High
Court, which has merely remanded the matter and directed that the
matter be disposed of in six months.
4. This matter has a chequered history. The Award that was made
by the learned Arbitrator was on 16.09.2009. Five claims were made
before him amounting in all to Rs. 2,08,59,989. However, ultimately the
Award that was made in favour of the appellant herein was to the extent
of Rs. 1,38,44,430 plus 15% on a sum of Rs. 1,17,77,080 as pendente
lite interest plus Rs. 2,67,350 by way of costs without interest. If the
said amount, dehors costs, was not paid in four months, the interest
figure would become higher and would attract 18%.
5. When the Award was put into execution, the Executing Court
pointed out that by the date of its order dated 11.02.2010, the 120 day
period – beyond which no Award can be challenged – was already over
and therefore proceeded with the execution. It was only when an order
of 17.02.2010 was made directing the RBI to disburse the awarded
amount after
attaching the Government’s Bank Account, and the reply
of the RBI dated 20.02.2010 stating that adequate funds were not in
such account, that the matter was then remitted by the High Court by an
order 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 this
stage, therefore, the High Court set aside the Executing Court’s order
dated 17.02.2010. It is only after these proceedings that the respondent
woke up and filed a Section 34 petition challenging the Award on
02.04.2010.
6. In the first round of litigation, the Section 34 petition was
dismissed by the learned District Judge on 22.03.2012, stating that the
period of 120 days was over, and hence no foray into the merits would
B.B.M. ENTERPRISES v. STATE OF WEST
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be permissible at this stage. However, by an order dated 11.01.2013, the
Division Bench set aside this judgment and remanded the matter for a
fresh hearing.
7. The learned District Judge, in the second round, by an order
dated 22.12.2016, heard learned counsel for both parties and found as
follows:-
“A court must not substitute its interpretation as against the views
and interpretation of the arbitrator, the finding of the arbitrator
requires to be accepted without demur because court has no power
or jurisdiction to sit over the finding of fact arrived at by the
arbitrators. In the instant case, so far I could realize from the
argument as advanced by the Ld. Advocate of the petitioner and
also from the petition under Sec. 34 of Arbitration & Conciliation
Act and the photo copy of documents placed before the court
that the petitioner challenges the finding of facts but nothing is
oozing out from record that the impugned award is perverse either
on account of interpretation of law or any other collateral aspect
and consequent decision taken by the Arbitrator. The ground upon
which the award is challenged is an entirely factual issue; in no
way covered by any ground as enumerated in Sec. 34 of the
Arbitration and Conciliation Act. We cannot forget that since the
arbitrator is a judge appointed by the parties, the parties are bound
by his decision. His decision is final unless the reasons given by
him in arriving at his
decision are totally perverse or award is
based on wrong proposition of law. In this case the dispute arises
out of work contract, its execution and payment, i.e. Amount of
claim, that aspect totally comes within the jurisdiction of arbitrator
that very finding cannot be interfered in a proceeding under Sec.
34 of the Arbitration and Conciliation Act. In a case titled Union
of India vs. Kalinga Construction Company, reported in AIR 1971
SC 646 it has been categorically held by the Hon’ble Supreme
Court that it is not open to the court to re-examine and reappraise
the evidence considered by the arbitrator to hold that the conclusion
reached by the arbitrator is wrong. It is also settled principle that
award cannot be challenged on the ground arbitrator has arrived
at a wrong conclusion or has failed to properly appreciate the
facts and evidence. As per ratio of decision reported in 1994 (1)
Arbi. L.R. 45, AIR 2003 NOC 156 (Raj) and in consonance with
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the object of Arbitration & Conciliation Act jurisdiction of the court
has been fettered. In Narayan Prasad Lohia vs. N. Kunj Kumar
Lohia reported in (2002) 3 SCC 572, it has been held that one of
the objects of the said Act is to minimize the role of Courts in the
arbitration process. This has been find place in Sec. 5 of the
Arbitration & Conciliation Act and Sec. 5 of the Arbitration &
Conciliation Act speaks that Judicial authorities should not interfere
except where, so provided in the Act. It is the intention of the
legislature that there should be a minimum interference with the
award. It can only be challenged under Sec. 34 of the Arbitration
& Conciliation Act. Taking the risk of repetition I again mentioned
there is no valid ground in the petition under Sec. 34 of the
Arbitration & Conciliation Act for challenging the award. On
perusal of the award it has come to my notice that Ld. Arbitrator
has dealt with all the pleas/issues at the time of arbitration hearing
and there is nothing which may tantamount to any glaring
procedural defect or there is any manifest error on the point of
law 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 the
integrity of award or arbitrator was biased because Arbitrator
has the jurisdiction and authority to decide the question of
entitlement of contractor’s enhanced claim. I get
support of this
view 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 learned
District Judge’s order stating:
“Even assuming that the award was assailable on the basis of
unamended provisions of Section 34 of the Arbitration and
Conciliation Act, the Court would expect that there would be some
discussion on the merits of the objection on the award and not a
mechanical affirmation of the award by simply stating that the
award does not come within any of the grounds of challenge
enumerated in Section 34 of the Act. The learned Trial Judge did
not indicate the reason as to why the award is unassailable under
Section 34 of the Arbitration and Conciliation Act.”
Having so held, the matter was remanded to be disposed of in six
months. The stay that has been granted throughout the hearing would
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continue. A resume of these facts would show that the matter has gone
up and down already twice. We may only state that even though it does
not appear that, in the second round, the point of limitation was argued,
since a de novo hearing by the Division Bench was ordered on
11.01.2013, this point also stared at the Court like a sore thumb. We are
not satisfied that there is any answer to the limitation point. Even otherwise,
having perused the order of the learned District Judge, we are of the
view that adequate reasons were given to dispose of the Section 34
petition filed by the respondent. We do not agree with the High Court
that no reasons were given as a result of which a remand ought to be
ordered. Resultantly, therefore the impugned High Court judgment is set
aside and the judgment dated 22.12.2016 passed by the learned District
Judge 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 be
18% after the four months from the date of the Award expired. We
think the interest of justice requires that 18% be set aside and that the
respondent pay interest at the rate of 15%. Further, he prayed that six
months’ time be granted in order to pay the balance amount under the
Award. We think, in the circumstances of the case, a period of three
months is reasonable.
10. The appeals are disposed of accordingly.
Kalpana K. Tripathy
Appeals disposed of.