Arbitration Petition No. 533 of 2006 · The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK ARBA No. 8 of 2011 (From the judgment dated 17.05.2011 passed by the Learned District Judge, Khurda, in Arbitration Petition No.533/2006 arising out of award dated 15.12.2004 passed by the sole arbitrator) Orissa State Housing Board, Bhubaneswar <. Appellant(s) -versus- M/s. Winners Security Services (O) Pvt. Ltd., Bhubaneswar. <. Respondent(s) Advocates appeared in the case: For Appellant(s) For Respondent(s) : : Mr. Dayananda Mohapatra, Adv. Mr. M.R. Pradhan, Adv. -versus- Mr. Avijit Pal, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-29.11.2023 DATE OF JUDGMENT:-22.12.2023 Dr. S.K. Panigrahi, J. 1. This Appeal under Section 37(1)(b) of the Arbitration and Conciliation Act/ 1996 (“A&C Act”) has been filed against the order dated 17.05.2011 passed by the District Judge, Khurda in Arbitration Petition No.533 of 2006 rejecting the application under Section 34 of the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 1 Arbitration and Conciliation Act to set aside the award dated 15.12.2004 passed by the sole arbitrator on the ground that the judgment and award are illegal, bad in law due to non-application of mind, perverse and contrary to the settled position of law. I. FACTUAL MATRIX OF THE CASE: 2. M/s. Winners Security and Pvt. Ltd. (Hereinafter the “Respondent”) is a Private Company, involved in the business of rendering Security Services to various Government Establishments, Corporations and Private Establishments on requisition. As per the requisition received from Orissa State Housing Board ("Appellant/OSHB”), the Respondent had provided Security Services at its various work sites periodically. 3. The Respondent claims to have engaged security guards in different divisions and claims to have raised bills to the respective Junior Engineers; they used to forward the bill to the Project Engineers. The Project Engineers sometime released Ad-hoc payments. 4. It is averred by the Respondent/claimant Company that such practice as to submission of bills for providing security personnel to the Board and payments made to the company by the Board continued up to August, 1995. On 6th June, 1995 the above procedure was changed vide order of the Chairman of the Board, pursuant to which, on 28.8.1995, a circular was issued by the Board authorising payments to be made centrally by the Finance and Accounts Division of the Board. According to the changed procedure, the Junior Engineers after receiving the bills prepared by the Respondent/claimant Company Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 2 would send the same to the respective Project Engineers and the Project Engineers in their turn were sending the same to the Central Office of the Board for payment. 5. It is the case of the Respondent/Claimant Company that on account of such part payments made by the Board from time to time, there remained an accumulated arrear up to December, 1995 amounting to Rs.37,00,000/-. Such huge arrears adversely affected the Respondent/Claimant Company financially. 6. Despite several requests made by the Claimant Company for payment of the balance outstanding dues payable to it, when no money was released by the Appellants, the Claimant Company faced difficulty in making payments of salary and wages to its workmen and it also failed to deposit the E.P.F. and E.S. I. contributions. Nonetheless, the Respondent/Claimant Company went on pay the security staff engaged, every month towards their salary even though the Appellants did not get its bill passed every month in time. 7. Following the dispute over the unpaid bills, the a sequence of events took place as mentioned herein below: . 17/02/1996: . The Respondent filed a Writ Petition in the Orissa High Court vide OJC No. 1120 of 1996 seeking direction for OSHB for the payment of outstanding arrears to the Respondent-Company. 0. 17/05/1996: 1. This Court directed the OSHB to pay Rs.7,50,000/- and, to settle the entitlement of the Respondent-Company by July 1996 of the respondent in relation to the bills Signature Not Verified
Legal Reasoning
Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 3 submitted by the Respondent-Company. 2. 27/05/1996: 3. OSHB paid Rs.7,50,000/- to the Respondent-Company but did not comply with the other entitlement(s) of the Respondent-Company. 4. 12/08/1996: 5. Respondent-Company filed OJMC No. 399/96 alleging contempt against OSHB for not complying with the direction of this Court.
Legal Reasoning
6. 15/08/1996: 7. This Court appointed Mr. S.P. Mishra Addl. Govt Advocate as Court Commissioner to furnish report and direct both the parties to furnish their accounts for the period of April 1990 to March 1997. 8. 12/10/1996: 9. Mr. S.P. Mishra AGA and Court Commissioner after scrutinising and verification submitted its report. As per the report the Respondent-Company is entitled to receive Rs.22,75,450/- 0. 23/02/1999: 1. The Respondent-Company filed WP(C). No. 2476 of 1995 seeking intervention of this High Court not to take coercive action against the Respondent-Company by statutory authority( EPF and ECI) 2. 3. The High Court by the said order directed OSHB to pay Rs.4,00,000/- by 15/5/1999 to the Respondent-Company. 4. 12/05/1999: 5. OSHB paid Rs.4,00,000 to the Respondent-Company. 6. 12/02/1999: 7. The appellant paid Rs. 2 lakhs to the respondent company-ad hoc payment. 8. 2000: 9. That out of the admitted claim of Rs.22,75,450/-, OSHB in favour of the released a sum of Rs.6,00,000 Respondent-Company leaving a balance amount of Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 4 Rs.16,75,450 and the disputed amount of Rs.30,89,290/-. 8. On 30.04.2002, both the Appellant and Respondent agreed to appoint an Arbitral Tribunal. Consequently, the Sole Arbitrator was appointed before whom both the parties put forth their claims. The respondent- claimant examined four witnesses and exhibited 373 documents. The appellant-respondent did not examine any witness and exhibited 11 documents. Pursuant to which the Sole Arbitrator vide the Award dated 15.12.2004 held that the Respondent-claimant was entitled to Rs.34,49,105.40 and pendelite interest of Rs. 35,61,598.83 and future interest at the rate of 12% per annum from the date of Award till payment. Therefore on the date of the Award, the claimant was entitled to receive from the appellant a sum of Rs.70,10,703/- and cost of Rs.4,88,000/-. In total Rs.74,98,703/- became due on the date of the Award. 9. In 2006, the Appellant filed a Petition under Section 34 of the Arbitration and Conciliation Act, 1996 vide ARBP NO.533/2006 before the District Judge, Khurda to set aside the arbitral award passed by the Learned Arbitrator on various grounds but the said petition was dismissed. 10. Aggrieved by the order dated 17.05.2011 passed by the District Judge, Khurda; the Appellant State has preferred this appeal. II. APPELLANT’S SUBMISSIONS: 11. The counsel for the Appellant assails the judgment of the District Judge mainly on the ground that the impugned order of the District Judge Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 5 suffers from non-appreciation of materials on record and incorrect application of law for he failed to take relevant materials into consideration while deciding the matter and based its reasoning on irrelevant considerations. The counsel for the Appellants has raised their submissions under the following heads: 12. Provision of Limitation not considered: It is submitted that the Arbitrator failed to appreciate the claims under different bills are barred by limitation. Each and every bill is an independent one and so are the money claims. Before examining the propriety of the bill and payment thereof, the Arbitrator could have examined the concerned bill, instead of referring to the Joint Inspection Report and as such the Arbitrator having failed to act upon the statutory mandate of law, the Award is vitiated and as such is liable to be set aside. 13. The respondent is not entitled to 238 numbers of bills, the receipt of which is not proved: It is then submitted that in Para-26(a) of the Award, the Arbitrator quantified the number of bills covering the period from 1990-91 to 1997-98. The Board admitted to have received 3418 numbers of bills. During Joint Inspection, 138 numbers of bills amounting to Rs.5,28,298.90/- (Rupees Five Lakhs Twenty Eight Thousand Two Hundred Ninety Eight and Ninety Paise Only) were shown as traced out; but 238 bills of Rs. 8,12,949.05/- (Rupees Eight Lakhs Twelve Thousand Nine Hundred Forty Nine and Five Paise Only) could not be traced out. It is alleged that the Arbitrator justified payment of 238 bills without any cogent evidence. It is admitted that, Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 6 those bills were not traced out during Joint Inspection. The Respondent/Claimant did not refer to/ rely upon any receipt of such bills by the concerned Authority except proving their registers. It is submitted that the Arbitrator failed to appreciate that these bills were raised by the Respondent/Claimant which forms foundation of sanction and disbursement and its submission cannot be inferred in absence of any specific proof of receipt of those bills by the competent Authority of the Board. 14. It is argued that the existence of the bills has not been sufficiently established; either submission of the bills is to be proved exclusively or otherwise such claim should be rejected. It is submitted that the Arbitrator exceeded with reasoning contrary to economic and accounting policy and also the policy of sanction and disbursement, which never compromises payment of the bill in absence of the original. It is well settled in the accounting principle that/ “the bills submitted are to be accepted; but cannot be substituted or presumed.” The Arbitrator has erroneously presumed the Board to have received the bills in Ext. 121 to 358 and allowed the claim. Here is a case which is contrary to the settled accounting process and the Arbitrator put his seal without application of mind. 15. Against deductions under Recovery of theft of being missing for an amount of Rs.11,21,212.00/- and security deposits: It is submitted that the Arbitrator referred to Clause-V of the agreement and held that, the Board had not given any opportunity to the claimant, company and Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 7 failed to establish that there were loss or missing of articles by commission of theft and/or burglary and even no attempt was made on behalf of the Board, who determine the value of the articles said to have been lost. It is submitted that the aforesaid contention of the Arbitrator is found contrary to the claim of the Claimant who has never disputed about such deduction occasioned because of loss. 16. It is then submitted that the Arbitrator held the claimant entitled to receive the security amount; but failed to appreciate that the objective of the security is to retain the same till settlement made. 17. On recovery of EPF amount and penalty: The Appellant has submitted to have paid EPF dues of Rs.13,03,912.90/- through attachment by EPF Authority. It is also submitted that the Joint verification report also referred to deduction of the said amount from the bills due and there after arrived at the amounts due to be paid to the Respondent/Claimant to the tune of Rs.15,19,862.05 18. The Arbitrator dealt with the claim of the Claimant in paragraph 34 and 35 of the Judgment and held that it is the responsibility of the Respondent/Claimant to clear the EPF dues and in case of any penalty for default shall also be its responsibility. The Arbitrator referred to the amounts paid by the Board and it adjustment towards 287 bills pertaining to the period under dispute but did not award such claim to the Appellant-Board or adjusted the said amounts against the amounts due to the claimant. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 8 19. In one hand, the learned Arbitrator has taken into consideration the total number of bills, i.e., 3546 including 287 bills referred to in paragraph 34 of the Award while quantifying the total amounts due under the bills. However, the Arbitrator failed to appreciate the amounts paid by the Appellant - Board towards EPF due and penalty and in the process the EPF amounts paid by the Board could not be recovered, though it is very much due to the Board. 20. It is also submitted that the Appellant-Board agitated this point of non- consideration of its Counter claim in the Arbitration Petition No. 533 of 2006 but the District Judge did not consider the same. 21. Claim of the interest: It is submitted that the arbitration clause was not part of the agreement. The Board appointed the Arbitrator for settlement of the dues claimed by the Appellant. The cause of action for adjudication by the Arbitrator arose on and from the said date. As referred to in Section 31(7)(a) of A&C Act, 1996. Moreover, it is argued that That-apart, the agreement does not specify any payment of interest over the amount claimed that to at such higher rate of 12%. 22. It is then submitted that the reference is for settlement of the dues to the claimant. Any Award of interest for the period under dispute from 1991 till 1998 and that to with effect from 01.04.1997 is not sustainable. In absence of any specific condition to the contrary in the order of reference made to the arbitrator, any award of interest is not sustainable. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 9 23. It is also argued that such award of interest cannot be made before the cause of action which arose on appointment of arbitrator on 30.04.2002. 24. Thus, in view of the aforesaid, it is submitted that the award should be set aside. III. RESPONDENT’S SUBMISSIONS: 25. Per contra, learned counsel for the Respondent submitted that the allegations and submissions of the Appellant are not only misleading but also not sustainable. The allegation that the Arbitrator has misconceived the facts and passed an order without any evidence is not correct at all. The sole arbitrator has fairly dealt with the claims of the parties and also given due consideration to the objections of the OSHB/Appellant and for which few claims of the Respondent/Claimant has been rejected with appropriate reasons. 26. Next, it is submitted that the OSHB admitted to have received 3418 nos. of bills during the period 1990-1991 to 1997-1998 against the company’s claim of submission of 3656 nos. of bills. Thus there was dispute regarding non-receipt of 238 bills only. But at the time of verification, out of the said 238 bills, the representative of both sides could trace out 138 bills to have been received by the OSHB. Therefore, it is argued that the other 100 bills have been suppressed by the OSHB authority, since the submission of said bills, reflected in the bill despatch register, have been proved by the Respondent/claimant along with the copies of missing/untraced bills. Hence, it is submitted that Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 10 the Respondent is entitled to the payment of the bills admitted to have been received even if some of the bills are untraceable/missing. 27. It is submitted that due to failure of the Board in paying the dues of the company (the opp. party) regularly, writ was filed before this Court and this Court appointed Sri S.P. Mishra as pleader Commissioner. On getting his (Pleader Commissioner’s) report, this Court, vide order No. 7 dated 05.05.1999 passed in O.J.C. No. 2476 of 1999, directed the OSHB ( the present petitioner) to pay an amount of Rs.4 lakhs to the Respondent company. It is therefore submitted that the OSHB is in regular defaulter in paying the bills submitted by the Respondent Company towards service rendered by it and not paying the salary of the security staff supplied by the opposite party company. 28. It is submitted that the Arbitrator is justified in holding that the company (the present opp. party) is entitled to receive Rs.34,49,105.04/- against the bills submitted by it. Accordingly since the bills amount is due within the period dated 01.04.1997 and amount of interest till the date of award is also required to be paid by the OSHB. It is argued that the interest is neither undue nor illegal as the amount due till 1997 has not been paid in full till date. Hence, amount of interest by the Arbitrator is justified. 29. It is then submitted that the point of objection, raised in the petition before the District Judge, challenging the validity of award on the plea that sufficient opportunity was not given and certain claims was time barred is not justified. In this context, the District Court held that the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 11 Appellant has never raised the question of limitation before arbitrator at any point of time, hence he cannot raise it, subsequently in any proceeding /appeal and the law is well settled on this issue. Again from the body of award as well as from the order sheet of the arbitrator it goes to prove that ample of opportunities was given to the OSHB and its plea has been given due consideration. Hence, it is submitted that the plea of not providing ample opportunity is not tenable in the eye of law and has been rightly rejected by the District judge, Khurda. 30. It is submitted that the OSHB, by non-payment of the dues awarded till date and dragging the Respondent to different courts by challenging the award & decision of the arbitrator, has tried to delay the legitimate claim of the Respondent, thus, the 12% Interest on the entire amount of Rs.70,10,703/- till the date of its payment is justified. Also, the decision of the Respondent company of not withdrawing the security staff supplied to safe guard the projects of the Appellant even without getting genuine payments is justified for it was done only with the interest to safe guard the property meant for the public use. 31. On the challenge of limitation, the counsel for the Respondent seconded the District Judge Judgement where it was held that if the plea of limitation is not taken before the Arbitrator, it cannot be taken before the Appellate Court. 32. Next, it is submitted that the Arbitrator was appointed by the Appellant to arbitrate all the disputes concerning claim of the Respondent Company pending finalisation of OJC No.2476 of 1999. In Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 12 the said OJC, the Respondent had stated about a huge accumulation of
Decision
arrears in the writ petition regarding non-payment of dues form 1990- 91. The claim of Respondent for the period year 1991-1993 was also part of the dispute, hence, the arbitrator has rightly decided that it cannot be said to be time barred. 33. It is also submitted that in the Appellant’s letter to the sole Arbitrator, there was no mention of any particular dispute to be resolved. Therefore, it is argued that the arbitrator has rightfully considered the dispute in its entirety. Again, on receipt of the copy of the claim filed before the Arbitrator, the OSHB filed its counter before the Arbitrator but did not raise any objection the claim of the claimant with respect to the bills for the year 1991- 1994 neither did they take the plea of the limitation. 34. Finally, it is submitted that the arbitration appeal is not maintainable in fact as well as law and liable to be dismissed, as the Sole Arbitrator has passed the award with reasonable finding and within the scope of contract and the District Judge has also considered the application within the parameter of Section 34(2) of the Act and passed order leaving no room for interference by this Court under Section 37 of the Act. IV. ISSUES FOR CONSIDERATION: 35. This Court has heard the counsels for both the parties at length, and also perused the material available on record. I only have a solitary issue for the adjudication of the dispute at hand: Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 13 V. ISSUE A: WHETHER THE ORDER OF THE DISTRICT JUDGE WARRANTS ANY INTERFERENCE KEEPING IN MIND THE LIMITATIONS OF THIS COURT’S POWERS UNDER SECTION 37 OF THE A&C ACT? 36. It is well recognized in Arbitration jurisprudence that the scope of interference by the Courts in arbitration proceedings and arbitral awards is narrow and that the Courts ought to be cautious and circumspect in interfering with any award which is passed by an arbitral tribunal which has been appointed pursuant to an agreement between the parties to the dispute. The exceptions of the aforementioned rule finds place in Section 34 of the A&C Act wherein certain instances have been outlined where the Courts can interfere with any award passed by arbitral tribunals and set it aside. This court would also examine the award with the aforesaid restrictive mandate of law. 37. The proviso to Section 34(2A) makes it aptly clear that awards cannot be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. Further, Explanation 2 of Section 34(2)(b) makes it clear that “for the avoidance of doubt/ the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.” 38. To elucidate upon the aforesaid terms and concepts as contained in Section 34, one must refer to the judgment of the Supreme Court in MMTC Ltd. v. Vedanta Ltd., the reasons for vesting such a limited Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 14 jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act have been explained in the following words : “11. As far as Section 34 is concerned/ the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. (CA)] Wednesbury Corpn., reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.” (1948) 1 KB 223 39. For a better understanding of the role ascribed to Courts in reviewing arbitral awards while considering applications filed under Section 34 of the 1996 Act, it would be relevant to refer to a judgment of the Supreme Court in Ssangyong Engg. & Construction Co. Ltd. v. NHAI,1 wherein R.F. Nariman, J. has in clear terms delineated the limited area 1 (2019) 15 SCC 131 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 15 for judicial interference, taking into account the amendments brought about by the 2015 Amendment Act: in Section 48, would now mean “34. What is clear, therefore, is that the expression “public policy of India”/ whether contained in Section 34 or the “fundamental policy of Indian law” as explained in paragraphs 18 and 27 of Associate Builders (supra), i.e., the fundamental policy of Indian law would be relegated to the “Renusagar” understanding of this expression. This would necessarily mean that the Western Geco (supra) expansion has been done away with. In short, Western Geco (supra), as explained in paragraphs 28 and 29 of Associate Builders (supra), would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court’s intervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as contained in Sections 18 and 34(2)(a)(iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in paragraph 30 of Associate Builders (supra). 35. It is important to notice that the ground for interference insofar as it concerns “interest of India” has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. This again would be in line with paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 16 36. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders (supra), or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders (supra). Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco (supra), as understood in Associate Builders (supra), and paragraphs 28 and 29 in particular, is now done away with. 37. Insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within “the fundamental policy of Indian law”/ namely/ the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality. it is also made clear 38. Secondly, that re- appreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 17 39. To elucidate, paragraph 42.1 of Associate Builders (supra), namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award. 40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (supra), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short/ that the arbitrator’s view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2A). 41. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of Associate Builders (supra), while no longer being a ground for challenge under “public policy of India”/ would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 18 inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse.” (Emphasis supplied) 40. A similar view, as stated above, has been taken by the Delhi High Court in K. Sugumar v. Hindustan Petroleum Corpn. Ltd., wherein it has been observed as follows: “2. The contours of the power of the Court under Section 34 of the Act are too well established to require any reiteration. Even a bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an alternate mechanism for dispute resolution, they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by find manifestation in different forms including exercise of legal perversity by the arbitrator.” the arbitrator which can 41. In short, the court must scrutinize three questions: first, the arbitrator had to adopt a judicial approach; second, the principles of natural justice had to be upheld; third, the decision must not have been egregious, or rather, perverse. 42. Now, in the judgment dated 17.05.2011 passed by the Learned District Judge, Khurda, he has held that the there is no scope for the courts to interfere with the findings of the sole Arbitrator and the supporting reasons assigned by him. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 19 43. Now, in regards to the first claim of the Appellant, it is submitted that the Arbitrator ought to have appreciated different bills against their individual limitations. Each and every bill is an independent one and so are the money claims. 44. The main issue at hand is determining whether the Court should interfere at the ‘admissibility’ of the substantive claims by the Arbitrator. Here/ it is pertinent to note that the issue of ‘admissibility’ of substantive claims is different from the ‘jurisdictional’ issues of arbitral tribunal. It is settled that the admissibility issues come under the jurisdiction of the arbitral tribunal in which the court ought not to interfere under Section 34/37 of the A&C Act. For better clarity over the purported issue, the Supreme Court decision in BSNL v. M/s Nortel India Pvt. Ltd2 is particularly helpful. The relevant paragraphs are produced herein below: “38. Limitation is normally a mixed question of fact and law, and would lie within the domain of the arbitral tribunal. There is, however, a distinction between jurisdictional and admissibility issues. An issue of ‘jurisdiction’ pertains to the power and authority of the arbitrators to hear and decide a case. Jurisdictional the competence of the arbitrator or tribunal to hear a dispute, such as lack of consent, or a dispute falling outside the scope of the arbitration agreement. Issues with respect to the existence, scope and validity of the arbitration agreement are invariably regarded as jurisdictional issues, since these issues pertain to the jurisdiction of the tribunal. include objections issues to 2 (2021) 5 SCC 738 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 20 39. Admissibility issues however relate to procedural requirements, such as a breach of pre-arbitration requirements, for instance, a mandatory requirement for mediation before the commencement of arbitration, or a challenge to a claim or a part of the claim being either time-barred, or prohibited, until some pre- condition has been fulfilled. Admissibility relates to the nature of the claim or the circumstances connected therewith. An admissibility issue is not a challenge to the jurisdiction of the arbitrator to decide the claim. 40. The issue of limitation, in essence, goes to the maintainability or admissibility of the claim, which is to be decided by the arbitral tribunal. For instance, a challenge that a claim is time-barred, or prohibited until some pre- condition is fulfilled, is a challenge to the admissibility of that claim, and not a challenge to the jurisdiction of the arbitrator to decide the claim itself. 41. In Swisbourgh Diamond Mines (Pty) Ltd. & Ors. v. Kingdom of Lesotho, the Singapore Court of Appeal distinguished and “admissibility” in paragraphs 207 and 208/ which read as : “jurisdiction” between “207. Jurisdiction is commonly defined to refer to the “power of the tribunal to hear a case”/ whereas admissibility refers to “whether it is appropriate for the tribunal to hear it”: Waste Management, Inc. v. United Mexican States, ICSID Case No. ARB (AF) / 98 / 2, Dissenting Opinion of Keith Highet ( 8 May 2000) at [58]. To this, Zachary Douglas adds clarity to this discussion by referring to “jurisdiction” as a concept that deals with “the existence of [the\ adjudicative power” of an arbitral tribunal/ and to “admissibility” as a concept dealing with “the exercise of that power” Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 21 endeavour. hair-splitting and the suitability of the claim brought pursuant to that power for adjudication:[Zachary Douglas, The Press, 2009] at paras 291 and 310. 208. The between distinction conceptual jurisdiction and admissibility is not merely an exercise in linguistic hygiene pursuant to a pedantic This distinction has significant practical import in investment treaty arbitration because a decision of the tribunal in respect of jurisdiction is reviewable by the supervisory courts at the seat of the arbitration (for non-ICSID arbitrations) or before an ICSID ad hoc committee pursuant to Art 52 of the ICSID Convention (for ICSID arbitrations,) whereas a decision of the tribunal on admissibility is not reviewable 0 see Jan Paulsson/ “Jurisdiction and Admissibility” in Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in honour of Robert Briner (Gerald Aksen et al, eds) (ICC Publishing, 2005) at p 601, Douglas at para 307, Waibel at p 1277, paras 257 and 257 and 258, Hanno Wehland/ “Jurisdiction and Admissibility in Proceedings under the ICSID Convention and the ICSID Additional Facility Rules” in ICSID Convention after 50 Tears : Unsettled Issues (Crina Baltag, ed) (Kluwer Law International, 2016) at pp 233-234/ and Chin Leng at p 124.” 42. The judgment in Lesotho (supra) was followed by in BBA & Ors. v. BAZ & Anr., wherein the Court of Appeal held that statutory time bars go towards admissibility. The Court held that the “tribunal versus for purposes of claim” test should be applied distinguishing whether an towards jurisdiction or admissibility. The “tribunal versus issue goes Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 22 claim” test asks whether the objection is targeted at the tribunal (in the sense that the claim should not be arbitrated due to a defect in or omission to consent to arbitration), or at the claim (in that the claim itself is defective and should not be raised at all). Applying the “tribunal versus claim” test/ a plea of statutory time bar goes towards admissibility as it attacks the claim. It makes no difference whether the applicable statute of limitations is classified as substantive (extinguishing the claim) or procedural (barring the remedy) in the private international law sense. 43. The issue of limitation which concerns the “admissibility” of the claim/ must be decided by the arbitral tribunal either as a preliminary issue, or at the final stage after evidence is led by the parties.” 45. Rarely as a demurrer, may the court interfere at Section 34 or 37 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably “non-arbitrable” and to cut off the deadwood. However, the court should not interfere if there are clear arguments about whether it can be resolved through arbitration. This happens when a quick decision wouldn’t be enough, when there are disagreements about the facts, or when one party is purposely causing delays or disruptions in the arbitration process. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 23 46. The submission of the Appellant vis-a-vis limitation of individual bills is one such issue which, in my opinion, lies strictly in the domain of the Sole Arbitrator. The arbitrator admitted the claims as well as pronounced the award against the dispute. The interference of the court at this stage is not at all warranted and any such step shall be ill- conceived. To reiterate the stance taken by the Supreme Court in Associate Builders v. Delhi Development Authority:3 “A court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or re-appreciating the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. Therefore, in the absence of any ground under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at.” 47. In light of the aforesaid discussion, the decision of the Sole Arbitrator cannot be faulted on the grounds appealed by the Appellant. Ergo, this Court feels that no interference is needed due to claims of expiry of limitation. 48. Next, the counsel for the Appellant argued against alleged that the Arbitrator justified payment of 238 bills without any cogent evidence. The Arbitrator has erroneously presumed the Board to have received the bills in Ext. 121 to 358 and allowed the claim. 49. In this regard, the justifications provided by the Sole Arbitrator have to be examined in light of the submissions of the Appellant. In Para 27 of 3 (2015) 3 SCC 49 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 24 Page 34 of the Arbitral Award, the Arbitrator has examined the issue at appropriate length. The same is reproduced below: in its counter amounting “27. First, I take up the claim under item (a) above relating to the 238 bills amounting to Rs.8,12,949.05/- which could not be traced out during the joint verification at the Board’s Office and Divisions though the Claimant Company emphatically submits that the said bills numbering 238 had been submitted to the Board like the 3418 bills which admittedly were received by the Board. In this connection my attention is drawn to the fact that during joint verification, 138 number of bills which had not been shown by the respondent to Rs.5,28,295.90/- could be traced out and this shows that the Board’s records are not in order and the same cannot be said to reflect the correct position. The Claimant Company has proved the Office Copies of the said 238 bills marked as Ext.8.121 to 358 in this proceeding and in support of the same it has proved entries in its original Billing Register marked Exts. 359 to 368. On behalf of the Claimant Company its Chairman C.W.2, its Managing Director C.W. 1, its Director C.W.3 and its Senior Assistant-cum-P.A. C.W.4 were examined. The Managing Director of the Claimant Company Sri S.B. Misra proved the Office copies of the bills which were submitted by the Company under his signature. He also proved the Office copies of some bills which were submitted under the signature of other Directors. He stated about the practice and procedure adopted in regard to submission of bills and receipt of payments. He seems very candid in making the statement that besides the bills which have been filed, proved and exhibited on behalf of the Claimant Company in this proceeding, they would not submit any other bills as additional documents. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 25 Though he was cross-examined at great length; I have not been able to find any material discrepancy in his evidence so as to discard the same as unacceptable. In the same way, a Director of the Claimant Company, Sri B. B. Patnaik, examined as CW 3 in this proceeding, has proved the Office copies of the bills submitted to the Board under his signature. He was also cross- examined at a great length on the aforesaid question and I have not been able to find any significant deficiency in his evidence to discard the same as unworthy of credit. 28. In this connection, my attention is drawn to the fact that the 238 untraced bills relate to one or two months of a year, sandwiched between the 3418 bills which were admittedly received by the Board. C.W.2 has categorically stated in paragraph 14 of his examination-in-chief submitted by affidavit that the aforesaid 238 numbers of bills relate to a few months in between the remaining months of a year which have been paid-by the Board. For instance, according to him, for the post phase-I, Chandrasekharpur under Division No.1 of the Board, all the bills for the whole year have been paid except for July, 1993. All the bills of 1994, for the same site have been paid except for February, 1994. According to him, all the aforesaid 238 bills said to be missing are of the above nature. He further stated that the sites in question were guarded by the Claimant Company’s Security men for the whole year without any interruption and as such, why there should be no bill for a month or two in a year? The statement of in this regard appears to be plausible, C.W.2 particularly, in absence of any evidence from the side of respondent Board that during the aforesaid period, some other security agency was employed to guard the sites. Though C.W.2 was cross- examined at length on Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 26 behalf of the respondent Board, no suggestion was made to him that for the billing period relating to the 238 missing bills, the Claimant Company did not provide security at the sites in question. In the circumstance, on the basis of the evidence on record I would hold that the Claimant Company did submit the disputed 238 bills for render- security services to the Board at the respective sit in question and as such, the Claimant Company is entitled to receive from the Board an amount of Rs.8,12,949.05 towards payment of those 238 bills under Exts. 121- 358.” 50. From a simple perusal of the aforementioned excerpt, it is apparent that the arbitrator has considered the facts of the case, the contentions of both the parties and other documentary and oral evidence on record to take a decision. The arbitrator has clearly mentioned that the irregularity is bizarre given the copies of the bill and register entries presented by the Respondent/Claimant. Plus, the arbitrator has noted that the Appellant Company has not submitted any cogent evidence to back their submissions. Ergo, it cannot be said that the Arbitrator has awarded this claim based on arbitrary grounds or dumbfounded assumptions. The reasons stated in the award by the Arbitrator are satisfactory and thus, this court shall not interfere against the decision of the arbitrator. 51. In its next submission, the Appellants have submitted that the Arbitrator wrongfully disapproved the deductions made by the Appellant from the money due to the Respondent/Claimant on counts Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 27 of theft recovery and security deposit which is contrary to its own findings and evidence on record. However, it is discernible in the Arbitral Award that the Arbitrator has put sufficient effort in coming to the impugned conclusion. I shall securitize the same in the next paragraphs. 52. The arbitrator has dealt with the issue on page 39 of the arbitral award and held that the Appellant failed to furnish any substantial proof to back their claims. Moreover, the Arbitrator noted that even no attempt was made on behalf of the Appellant Board to reasonably determine the value of the so called lost articles. The relevant excerpt is reproduced below: “... I perused the agreement marked Ext.1 executed in August, 1990. It contains a term making the Claimant Company responsible for providing security against theft, losses etc. in the buildings/houses as specified in the schedule annexed thereto and there is a schedule given at the foot of the agreement. This agreement also contains a clause that in the event of any loss occurring to the Board due to burglary, theft etc., shall be borne by the Claimant Company. The other agreement I picked up is Ext.61 which also contains similar terms including the term as to a joint inquiry to be conducted by the representatives of both parties in the event of any loss occurring due to negligence in duty by the security personnel provided by the Claimant Company. In this agreement, Ext.61, the schedule mentions the number of MIG, LIG and EWS houses- total, 179 houses and no specific items. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 28 In this connection, on behalf of the Claimant Company, reference is made to the evidence of its Chairman, C.W.2, who stated that the respondent Board has not provided any evidence, whatsoever, as to missing of any of their properties or theft of the same, either before making deductions from the billed amount or after. The Board gave no opportunity to the Claimant Company, at least, to explain that no liability could be fixed on it on account of the so called missing or theft of any articles. In this connection, my attention was drawn to copies of documents, which were filed by the Board’s representative on 15.11.2003. These documents were allowed to be filed and were accepted with objections from the side of the Claimant Company. These documents were, however, not marked as exhibits, since originals of the same were not produced and proved in this proceeding on behalf of the respondent Board. I may repeat that despite opportunities given to the Board to examine its witnesses, it did not. However, being required, the Chairman of the Claimant Company responded to the contents of the aforesaid documents in his additional Affidavit filed on 6.2.2004 as his further examination-in-chief. He supplied explanation to all the letters. On a perusal of the same, together with the statements he made in course of his cross-examination by the Board’s representative, I accept the contention of the Claimant Company and hold that the deductions made from the Claimant Company’s bills towards loss or missing of articles in the houses of the Board, are arbitrary, unreasonable and illegal. No genuine attempt appears to have been made on behalf of the Board to establish that in fact there were loss or missing of articles by commission of theft, or burglary and even no attempt was made on behalf of the Board to reasonably determine the value of the Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 29 articles said to have been lost. The Claimant Company does not appear to have been inquiry conducted to associated with any determine the loss or the value of the so called lost properties. There was no whisper throughout the proceeding that any case of theft, burglary and consequential loss caused to the Board was ever reported to Police. Under such circumstance, the unilateral action of the Board in making recovery of such huge amount from the bills submitted by the Claimant Company for providing security services rather seems to be without any foundation, whimsical and as such, unsustainable. Under such circumstance, -the of Rs.11,21,212.00/- is held to be illegal. The Claimant Company is entitled to receive the said amount from the Board.” (Emphasis supplied) aforesaid recovery amount the of 53. Following the conclusion in the above issue, the Arbitrator in para 32 on Page 43, also disapproved the suspension of the security amount by the Appellant: “The Claimant Company has urged that there could be no valid reason for keeping withheld the aforesaid security deposit after termination of the contract between the parties. The Board has not assigned any valid reason justifying keeping of the above amount withheld. As held earlier, theft, burglary or missing of properties which had been kept in charge of the Claimant Company have not been established. In the circumstance, keeping the aforesaid amount withheld appears to be totally unreasonable, unjustified and illegal. The Claimant Company is entitled to receive the said amount from the Board.” Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 30 54. It is clear from the above mentioned excerpts that the submissions of the appellant do not hold water. The Sole Arbitrator has proficiently taken note of the contentions of the both parties and the other evidence concerning the issue to hold that the Appellant did not put any effort in proving any instance of theft, burglary, etc. nor took any steps to substantiate their claims in the arbitral proceedings. In the light of the conclusion of the above issue, the withholding of the amount against losses of theft, burglary, etc. and the following withholding of security amount has been rightly set aside by the Arbitrator. I cannot find any reason to interfere with the conclusion and award of the Arbitrator. 55. For the next argument, the Appellant has submitted that the Arbitrator refused to entertain the claim of the Respondent/Claimant against the deduction made by the Appellant for the payment made to the RPF Commissioner on behalf of the Respondent/Claimant. However, the Appellant is aggrieved because the Arbitrator refused to award that amount in favour of the Appellant-Board or adjust the said amounts against the amounts due to the Appellant. 56. In the arbitral award, the Arbitrator has noted that the issue concerns the labour laws of the state and therefore opined that the claim for reimbursement of the penalty for non-performance of a statutory duty falls within the domain of the present arbitral proceeding. I do not find any perversity or arbitrariness in the above conclusion. The aggrieved party in the above issue is free to approach any suitable forum for dispute redressal. Anyway, Section 37 of 1996 Act leaves narrower Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 31 scope for review of award by the appellate court. While the older Act enabled the Court to modify an award, a power which was consciously omitted by Parliament while enacting the 1996 Act, hinting towards exclusion of power to modify an award, as iterated in NHAI v. M. Hakeem.4 Ergo, the court cannot interfere with such conclusion. 57. Next, it is submitted that the interest awarded by the Arbitrator is illegal for the agreement does not talk about grant of any interest. 58. The Appellant has challenged the power of the arbitrator to award interest on a claim for the pre-reference period. Here, it is pertinent to refer Section 31(7)(a) of the A&C Act which reads as under: “31.(7)(a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the Arbitral Tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.” 59. The above mentioned section lucidly mentions that the contract between the parties has been given the deciding factor and is to be looked at carefully to discern the powers of the arbitrator. If there is any bar contained in the arbitration clause of the contract on awarding of interest, it operates accordingly. However, in the present case there is no mention of such bar on interest in the purported contract. Thus, the 4 (2021) 9 SCC 1 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 32 Arbitrator may award interest for the pre-reference period, at such rate as it deems reasonable, on the whole or any part of the award money. 60. In the case of Jaiprakash Associates Ltd. v. Tehri Hydro Development Corporation India Ltd,5 the Supreme Court reaffirmed the contractual bar on the arbitrator to award interest but also observed: jurisdiction “…As a sequitur, the arbitrator would be within his to award pre-reference or pendente lite interest even if agreement between the parties was silent as to whether interest is to be awarded or not. … This proposition is predicated on the principle that an arbitrator is the creature of an agreement and he is supposed to act and make his award in accordance with the general law of the land and the agreement.” (Emphasis supplied) 61. It is obvious, in absence of any contractual provision to the contrary, that the arbitrator’s decision to award interest cannot be faulted or interfered with. 62. Now, for the final argument, the Appellant is aggrieved because the Arbitrator has burdened the Appellant to bear the complete cost of the arbitration proceedings and pay to the Respondent Company the amount accrued by them towards the same. However, it is trite in law that the arbitrator has the discretion to apportion the costs (including arbitrators’ fees and expenses) between the parties in terms of section 31(8) and section 31A of the Arbitration Act. The Arbitrator also has 5 2019 SCC OnLine SC 143 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 33 the power in terms of Section 38(2) of the A&C Act to direct the erring party to pay the share of the deposit of the non-erring party. Law over this issue is settled and no elaborate discussion is needed, in my opinion, at this juncture of the proceedings when the fault of the Appellant is more or less established. VI. CONCLUSION 63. In light of the above discussion for interference in an arbitral award by a court in exercise of its jurisdiction under Section 34 of the 1996 Act, I must conclude here that this court’s interference in this dispute is unwarranted and unnecessary. 64. In view of the law laid down by the Apex Court that scope of judicial scrutiny and interference by an appellate court under Section 37 of the Act is even more restrictive then Section 34 of the Act and that in entertaining appeals under Section 37 of the Act, the Court is not actually sitting as a Court of appeal, this Court does not find that the impugned arbitral award, as confirmed by the District Judge, is so perverse or suffers from patent illegality which requires interference. The Appellant’s contention that the impugned award is patently illegal does not fall within the scope of concept of patent illegality. 65. The District Judge has rightly held that the decision of the Sole arbitrator to draw an inference from the material placed before it cannot be faulted. It is not as if the Arbitrator has taken a view which is not even possible, or interpreted the contract in a manner which no fair Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 34 minded or reasonable person could have or based their decision off of no evidence at all. 66. In view of the above, the Appellant is directed to pay the prescribed amount in the arbitral award same along with interest at the rate of 12% per annum and initiate payment under the heads mentioned in the award. 67. The challenge in ARBA No.8 of 2011 is hereby dismissed. ( Dr. S.K. Panigrahi ) Judge Orissa High Court, Cuttack, Dated the 22nd Dec,. 2023/ Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 31-Jan-2024 17:58:35 pg. 35