Mr v. vs Gaikwad
Legal Reasoning
922-wp-2898-2024-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD922 ARBITRATION APPEAL NO. 21 OF 2009Gurunanak IndustriesKranti Chowk, AurangabadThrough Its PartnerMr. Khushbir Singh baantsinghAge : 71 Years, Occ : BusinessR/o Krnatichowk, Aurangabad...AppellantVERSUS1.Executive Engineer,Jaikwadi Irrigation DivisionNathnagar (North),Paithan, dist. Aurangabad2.Mr. V. V. Gaikwad (Learned Sole Arbitrator,Respondent No.2) Secretary,Water Resource Department,Mantralaya, Mumbai – 32...Respondents…Mr. M. D. Narwadkar (consent Obtained), Advocate for AppellantMr. S. B. Bhapkar, Advocate for Respondent Nos.1 & 2....WITHCIVIL APPLICATION NO. 10985 OF 2009 IN ARBA/21/2009Gurunanak IndustriesVERSUSExecutive Engineer Jaikwadi Irrigation Division Nathnagar And Anr WITHARBITRATION APPEAL NO. 24 OF 2009Gurunanak IndustriesNarwade 922-wp-2898-2024-2- Kranti Chowk, AurangabadThrough Its PartnerMr. Khushbir Singh baantsinghAge : 71 Years, Occ : BusinessR/o Krnatichowk, Aurangabad...AppellantVERSUS1.Executive Engineer,Jaikwadi Irrigation DivisionNathnagar (North),Paithan, dist. Aurangabad2.Mr. V. V. Gaikwad (Learned Sole Arbitrator,Respondent No.2) Secretary,Water Resource Department,Mantralaya, Mumbai – 32...Respondents…Mr. M. D. Narwadkar (consent Obtained), Advocate for AppellantMr. S. B. Bhapkar, Advocate for Respondent Nos.1 & 2.... CORAM :ROHIT W. JOSHI, J. DATED :27th JUNE 2025ORAL JUDGEMENT :- 1.The present appeals are taken up for final hearing at theadmission stage with consent of the parties.2.The present appellant is the original claimant who has lodged aclaim seeking compensation in relation to a construction contractentered into between the appellant and respondent no.1. The learnedArbitral Tribunal has partly allowed the claim vide award dated14.06.2005. The appellant and respondent no.1 both were dissatisfiedNarwade 922-wp-2898-2024-3- with the award. The appellant was aggrieved by disallowance ofcertain claims made before the learned Arbitral Tribunal andrespondent no.1 was aggrieved by certain claims being allowed.Accordingly, both sides preferred separate applications under Section34 of the Arbitration and Conciliation Act, 1996 (for short “the Act”)challenging the said award. 3.The learned Principal District Judge, Aurangabad has videjudgement and order dated 10.08.2009 rejected the application filedby the appellant being M.A.R.J.I No.297 of 2005 and has allowed theapplication filed by respondent no.1 being M.A.R.J.I.No.328 of 2005.The contractor has therefore preferred the present appeals underSection 37 of the Act challenging the judgment dated 10.08.2009passed by the learned Principal District Judge, Aurangabad.4.The learned Advocate for the appellant contends that in theproceedings before the learned District Judge both the partiescontended that the award passed by the learned Arbitral Tribunal wasliable to be quashed and set aside in view of Section 31 of the Act,since it is a non-speaking award and the agreement specificallyprovided that the award should be a speaking award. However, thelearned District Judge has recorded that he can himself re-appreciateNarwade 922-wp-2898-2024-4- the evidence and arrived at findings of fact in order to decide theclaim on merits and has accordingly ventured to undertake the saidexercise. On such exercise of jurisdiction the learned District Judge, asstated above, has rejected the application preferred by the appellantand has allowed the application preferred by respondent no.1, withthe result, the entire claim is rejected. The learned Counsel for theappellant contends that the learned District Judge has completelyerred in exercise of jurisdiction under Section 34 of the Act andtherefore the judgment passed by the learned District Judge is liableto be quashed and set aside on this count alone. 5.Per contra, the learned counsel for respondent contends thatconcurrent findings of fact should not be interfered in an appealunder Section 37 of the Act and that unless there is a specificapplication by either party, order of remand cannot be passed underSection 34(4) of the Act. He has placed reliance on judgments of thisCourt in the matter of Prabhubhai Jadhavji Rathod Vs. Union of Indiareported in 2008 (4) MHLJ 238 in support of first contention andjudgment of the Hon’ble Supreme Court in the matter of KinnariMullick and Ors. Vs. Ghanshyam Das Damani reported in (2018) 11SCC 328 in support of the second proposition.Narwade 922-wp-2898-2024-5- 6.Having heard the rival submissions as aforesaid, following pointarises for my consideration. (i)Has the learned Principal District Judge exercise thejurisdiction properly under Section 34 of the Arbitration andConciliation Act, 1996 ?(ii)What Order ?7.Perusal of Section 34 of the Act will demonstrate that the Courtexercising jurisdiction under Section 34 can interfere with an arbitralaward only under contingencies mentioned under Section 34(2) ofthe Act. The scope of jurisdiction of the Court is very limited. Re-appreciation of evidence like a First Appellate Court is clearly beyondthe scope of jurisdiction of a District Judge exercising jurisdictionunder Section 34 of the Act. A perusal of paragraph 20 of thejudgment will demonstrate that the learned District Judge hasaccepted the contention that it was obligatory on the part of learnedArbitral Tribunal to record reasons in support of the findings recordedin the award having regard to the mandate of Section 31 of the Act.However, having held that the learned Arbitral Tribunal had erred inpassing award without reasons, the learned District Judge hasventured to re-appreciate the evidence on record and to recordNarwade
Legal Reasoning
922-wp-2898-2024-6- independent findings on merits of rival claims.8.No fault can be found with the conclusion drawn by the learnedPrincipal District Judge that the award cannot be sustained if it is nota reasoned award. To this extent, the learned Principal District Judgeis right. However, I am afraid having held so, it was obligatory on thepart of the learned District Judge to remit the matter back to theArbitral Tribunal for deciding the matter again. The learned DistrictJudge could not have re-appreciated the evidence to record findingson merits. This exercise by the learned District Judge is clearly beyondhis jurisdiction under Section 34 of the Act. The learned DistrictJudge has placed reliance on decision of the Hon’ble Apex Court inthe matter of Steel Authority of India Vs. J. C. Budharaja reported in(1999) 8 SCC 122. As rightly pointed out by the learned Counsel forthe appellant the said decision pertains to Arbitration Act, 1940. Theratio of the said judgment is clearly inapplicable. The learned DistrictJudge has committed a jurisdictional error warranting interference atthe hands of this Court.9.As regards the judgment in the matter of Kinnari Mullick(supra) relied upon by the learned counsel for the respondent the saidNarwade 922-wp-2898-2024-7- judgment will not be applicable to an appeal under Section 37 wherethe matter is remitted back to the learned District Judge for decidingthe 34 objections fresh. The judgment deals with Section 34 (4) of theAct which speaks about opportunity to the Arbitral Tribunal to resumethe arbitration proceedings and take other action as is necessary toeliminate the grounds of challenge. This power is be exercised byDistrict Judge where it is of the opinion, either on its own or anapplication made by a party that any defect in the award is capable ofbeing cured. The Judgment is clearly inapplicable. 10.As regards the judgment in the matter of Prabhubhai JadhavjiRathod (supra), the said judgment is also inapplicable in as much asthe claim was decided by the Arbitral Tribunal on merits and theDistrict Judge deciding the application under Section 34 did not findany reason to interfere with the award. In this backdrop, this Courthas held that in exercise of appellate jurisdiction under Section 37,this Court should not normally interfere with concurrent findings bythe Arbitral Tribunal and the District Judge. In the present case, thejudgment delivered by the learned District Judge is being set aside onthe ground that it has exceeded its jurisdiction under Section 34 in re-appreciating the evidence and recording findings on merits for theNarwade
Decision
922-wp-2898-2024-8- first time. The said judgement is therefore clearly inapplicable.11.In view of the above, the appeal is partly allowed. Judgmentand order dated 10.08.2009 passed by the learned Principal DistrictJudge, Aurangabad in M.A.R.J.I No.297 of 2005 and M.A.R.J.I.No.328of 2005 is quashed and set aside. 12.The matter is remitted back to the learned Principal DistrictJude for deciding the cases afresh having regard to the statutorymandate of Section 34 of the Act, 1996.13.Party shall appear before the learned District Judge on14.07.2025 for which separate notice will not be issued.14.Court fee be refunded as per the Rules.15.Pending Civil Applications, if any, stand disposed of. [ROHIT W. JOSHI, J.]Narwade