High Court of Punjab and HaryanaFAO-CARB/1/2020dismissed

Chief Engineer Haryana Power Generation Corporation Ltd And Another v. M/S Technology Products And Another

2023-04-1812 pages

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+,, 9$ ' 5) 6 " In fact, the learned counsel for the petitioner has miserably failed to substantiate any of his arguments. The impugned order (Annexure P-7) passed by the respondent-Council has not been found suffering from any patent illegality or perversity. Further, learned counsel for the petitioner could not point out any kind of prejudice, which might have been caused to the petitioner, by passing the impugned order, so as to warrant interference, at the hands of this Court, while exercising its writ jurisdiction under Articles 226/227 of the Constitution of India. No other argument was raised.

Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this Court is of the considered view that since the respondentCouncil committed no error of law, while passing the impugned order, the same deserves to be upheld. Instant writ petition is wholly misconceived, bereft of merit and without any substance, thus, it must fail. No case for interference has been made out." "

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6 C 01Determination of rules of procedure. (1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence."

Therefore, when Section 19 of the Arbitration Act excludes the applicability of Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872, this argument of the appellant has no legs to stand on. Moreover, once the dispute is raised by a party to the contract even in the written arguments, it would form the subject matter of the arbitration as 'any dispute' indicated in the arbitration clause between the parties. Once either of the parties has raised any dispute during the pendency of the arbitral

) proceedings and same is not contrary to the terms and conditions of the contract, the arbitrator is well within his rights to adjudicate the same. The Hon'ble Supreme Court in National Highway Authority of India vs. Transstroy (India) Limited, 2022 (3) RCR (Civil) 491, has held as under:- " While passing the impugned judgment and order, the High Court has lost sight of the aforesaid aspect, which ought to have been considered while considering the request on behalf of the NHAI to place on record its counter claim. Clauses 26.1 and 26.2 have to be interpreted in a pragmatic and practical manner, as they require that the parties must at first try to settle, resolve and even try conciliation but when the procedure under Clauses 26.1 and 26.

2 fails to yield desired result, in the form of settlement within the period specified in Clause 26.2, the Dispute can be resolved through arbitration in terms of Clause 26.3. Once any dispute, difference or controversy is notified under Clause 26.1, the entire subject matter including counter claim/set off would form subject matter of arbitration as "any dispute which is not resolved in Clauses 26.1 and 26.2".

11.

Learned Senior counsel has also assailed the imposition of interest by the arbitrator in the impugned award. It is a settled proposition of law that the award of interest is domain of the arbitrator and he can award compensation for damages in the shape of interest. The Hon'ble Supreme Court has dealt with the same issue in M/s Hyder Consulting (UK) Limited vs. Governor, State of Orissa, Thr. Chief Engineer, (2015) 2 Supreme Court Cases 189 and in para 21 of the judgment has held as follows :- " In the result, I am of the view that S.L. Arora's case is wrongly decided in that it holds that a sum directed to be paid

= by an Arbitral Tribunal and the reference to the Award on the substantive claim does not refer to interest pendente lite awarded on the "sum directed to be paid upon Award" and that in the absence of any provision of interest upon interest in the contract, the Arbitral Tribunal does not have the power to award interest upon interest, or compound interest either for the pre-award period or for the post-award period. Parliament has the undoubted power to legislate on the subject and provide that the Arbitral Tribunal may award interest on the sum directed to be paid by the Award, meaning a sum inclusive of principal sum adjudged and the interest, and this has been done by Parliament in plain language."

It was further held in para 31 that:- "

Coming now to the post-award interest, Section 31(7)(b) of the Act employs the words, "A sum directed to be paid by an arbitral award....". Clause (b) uses the words "arbitral award" and not the Arbitral Tribunal". The arbitral award, as held above, is made in respect of a "sum" which includes the interest. It is, therefore, obvious that what carries under Section 31(7) (b) of the Act is the "sum directed to be paid by an arbitral award" and not any other amount much less by or under the name "interest". In such situation, it cannot be said that what is being granted under Section 31(7)(b) of the Act is "interest on interest". Interest under clause (b) is granted on the "sum" directed to be paid by an arbitral award wherein the "sum" is nothing more than what is arrived at under clause (a). It was further held in para 32 that:- Therefore, in my view, the expression "grant of interest on interest" while exercising the power under Section 31(7) of the Act does not arise and, therefore, the Arbitral Tribunal is well

empowered to grant interest even in the absence of clause in the contract for grant of interest."

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%7 *& (! 6 12. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the

scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."

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* (! " Reasonableness of the reasons given for such award is not open to scrutiny by Courts. However, where reasons are such as no person of ordinary prudence will ever approve of them or are so outrageous in their defiance of logic that they shock the conscience of the Court, then it is an appropriate case to interfere with the award."

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" 255;0! / *& (! CA court does not sit in appeal over the award of an arbitral tribunal by re-assessing or re-appreciating the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act."

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