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Judgment
Virender Singh, Judge
AppellantUrmila Kumari has filed the present application under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’), against the judgment dated 20.03.2015, passed by the Court of learned District Judge, Mandi, District Mandi, H.P. (hereinafter referred to as ‘the learned District Judge).
By way of the judgment dated 20.03.2015, passed in Petition No. 04/2009, titled as ‘Urmila Kumari Versus H.P. State Forest Corporation’ learned District Judge, has dismissed the objections filed under Section 34 of the Act, preferred by the present appellant, against the award dated 30.01.2009.
For the sake of convenience, the parties to the present lis, are, hereinafter referred to, in the same manner, as were, referred to, by the learned District Judge.
Brief facts, leading to the filing of the present appeal, before this Court, as borne out from the record, may be summed up, as under:
Managing Director, HP State Forest Corporation Ltd. Shimla, vide order dated 06.08.2007, has appointed the Director (North) HPSFC Ltd., Dharamshala, as Arbitrator, with respect to the claim in respect of shortfall of resin in Lot No. 9/2006 (Suket) of FWD, Sundernagar. Thereafter, the Arbitrator has passed the award on 30.01.2009, by granting the following relief:
“Keeping in view, the above discussion, the relief of Rs. 7,91,559/ is given to Nonclaimant and the claim of the claimant is restricted to Rs. 5,07,517/. Therefore, it is ordered that the said amount of Rs. 5,07,517/ be deposited by Nonclaimant with the claimant within 90 days from the date of Award.”
Aggrieved from the said award, the present appellantobjector has preferred the objections before the learned District Judge, on the ground that the counter claim, which was duly supported with documentary, as well as, oral evidence has not been appreciated by the Arbitrator and the genuine claim of the objector has wrongly been dismissed.
In addition to this, the award has also been assailed on the ground that the entire claim of the claimant should have been rejected. Findings are stated to be self contradictory. According to the appellant, the rebate on account of adverse climatic condition has wrongly been given to the nonclaimant at the rate of 10%, whereas, it should have been for the entire target.
These objections were considered and rejected by the learned District Judge, vide award dated 20.03.2015.
Aggrieved from the said judgment, present appeal has been preferred by the nonclaimant, before this Court, assailing the award, which has been upheld by the learned District Judge, on the ground that it is the case of the nonclaimant before the Arbitrator that very short time has been given to her, because the agreement was executed on 13.04.2006 and the target has to be achieved on or before 31.12.2006 (less than eight months’ time was given). The said time is stated to be not reasonable.
Highlighting the weather condition of the area, it is the further case of the nonclaimant that labour was not available during the rainy season and no work of extraction of resin can be done during that period.
According to the nonclaimant, less than four months have been given to complete the awarded work. Highlighting the fact that it has been proved on record that 6000 new trees were marked and from the new trees, there is possibility of extraction of less resin, it is the case of the appellant/nonclaimant that marking of 6000 new trees was not in the agreement dated 13.04.2006. On that score, the award is stated to be bad in the eyes of law. According to her, as per climate condition, rebate of 50% should have been given to the nonclaimant.
On the basis of above facts, Sh. Lokesh Thakur, Advocate, vice Mr. G.R. Palsra, Advocate, for the appellant/ nonclaimant, has prayed that the judgment passed by the learned District Judge and the award passed by the Arbitrator may kindly be set aside.
Per contra, Mr. D.S. Kainthla, Advocate, appearing for the respondent, has pointed out that the Arbitrator has passed the award, on the basis of the contentions, so raised and the learned District Judge, has rightly dismissed the objections, filed by the nonclaimant and this Court under Section 37 of the Act, cannot re appreciate those findings.
The nonclaimant is before this Court, under Section 37 of the Act. It is no longer resintegra that the scope of the Appellate Court, exercising jurisdiction under Section 37 of the Act, to review the findings is limited, if the award has been upheld under Section 34 of the Act. While holding so, the view of this Court is being guided by the decision of Hon’ble Supreme Court in Konkan Railway Corporation Ltd. Vs. Chenab Bridge Project Undertaking, 2023 (9) SCC 85. Relevant paras 19 & 25, of the judgment, is reproduced, as under:
“19.Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. It is wellsettled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal. In Dyna Technologies Private Limited v. Crompton Greaves Limited (2019) 20 SCC 1, this Court held:
“24.There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.
25.Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.”
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25.The principle of interpretation of contracts adopted by the Division Bench of the High Court that when two constructions are possible, then courts must prefer the one which gives effect and voice to all clauses, does not have absolute application. The said interpretation is subject to the jurisdiction which a court is called upon to exercise. While exercising jurisdiction under Section 37 of the Act, the Court is concerned about the jurisdiction that the Section 34 Court exercised while considering the challenge to the Arbitral Award. The jurisdiction under Section 34 of the Act is exercised only to see if the Arbitral Tribunal’s view is perverse or manifestly arbitrary. Accordingly, the question of reinterpreting the contract on an alternative view does not arise. If this is the principle applicable to exercise of jurisdiction under Section 34 of the Act, a Division Bench exercising jurisdiction under Section 37 of the Act cannot reverse an Award, much less the decision of a Single Judge, on the ground that they have not given effect and voice to all clauses of the contract. This is where the Division Bench of the High Court committed an error, in reinterpreting a contractual clause while exercising jurisdiction under Section 37 of the Act. In any event, the decision in Radha Sundar Dutta (supra), relied on by the High Court was decided in 1959, and it pertains to proceedings arising under the Village Chaukidari Act, 1870 and Bengal Patni Taluks Regulation of 1819. Reliance on this judgment particularly for interfering with the concurrent interpretations of the contractual clause by the Arbitral Tribunal and Single Judge under Section 34 of the Act is not justified.”
In a recent decision in Bombay Slum Redevelopment Corporation Pvt. Ltd. Vs. Samir Barain Bhojwani, (2024) 7 SCC 218, the Hon’ble Supreme Court has again reiterated that supervisory role of the Courts is very restricted in dealing with appeals under Section 37 of the Act. The scope of interference in a petition under Section 34 of the Act is very narrow, and whereas, jurisdiction under Section 37 of the Act is narrower. Relevant para 26 of the judgment, is reproduced, as under:
“26.The jurisdiction of the appellate court dealing with an appeal under Section 37 against the judgment in a petition under Section 34 is more constrained than the jurisdiction of the Court dealing with a petition under Section 34. It is the duty of the appellate court to consider whether Section 34 Court has remained confined to the grounds of challenge that are available in a petition under Section 34. The ultimate function of the appellate court under Section 37 is to decide whether the jurisdiction under Section 34 has been exercised rightly or wrongly. While doing so, the appellate court can exercise the same power and jurisdiction that Section 34 Court possesses with the same constraints.”
Being guided by the above decisions, now this Court would proceed further with the contentions so raised by the nonclaimant, before this Court.
The nonclaimant, in her affidavit, has taken a plea that after the award of the work, when the labourers were deputed in the forest and the work was duly started, as per the terms and conditions of the agreement, then, it was found that most of the trees were in dilapidated conditions and dried & diseased trees. The matter was reported to the claimant well within time, whereas, in the present appeal, she has taken plea that on the spot, there were 6000 trees, which were new trees and according to her, being new trees there was possibility of extraction of less resin. Meaning thereby, whatsoever, stand taken in the appeal is not taken before the learned Arbitrator. The learned Arbitrator has considered all the contentions, while deciding issue No. 4 and while exercising the power under Section 37 of the Act, this Court cannot reappreciate the evidence/findings like an appellate Court.
Learned counsel appearing for the non claimant, could not point out any patent illegality in the award passed by the learned Arbitrator. As such, there is no occasion for this Court to differ with the findings, so recorded by the learned District Judge, while considering the appeal under Section 34 of the Act.
Consequently, the present appeal is dismissed.
Record be sent back.