I N THE HI GH COURT OF PUNJAB 8 HARYANA AT CHANDI v. Pet it ioners

Shri Onkar Mal Mit t al Chairm an and ManagingDirect or Jubilee Finance Privat e Lim it ed lerein referredas t he claim ant 9Havingundert akent o eit her t hem selves or t hrought heir associat esor noininee 900I oof it was set t led bet ween t he t he aforesaidshare holdingin t he com pany would be sold Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh as well as t he claim ant Onkar Mal Mit t allt hat t he shares Rs1850 per fullypaidup equit yshareofRs101 each JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 451 0 Civil Revision Noe 3156 of2008 Civil Revision Noe 5412 of2008 4 An agreem entdat ed 92 1982 was execut ed t he m ode of paym entoft he purchasem oney as also t he asset s and liabilit ies of t he com pany The claim ant was requiredt o pay t he sale pricein inst alm ent s and t he t lrstinst alm entof 113 oft he priceofRs1296 by t he claim antt o t he by 93 1982 lacswas t o be paid a sum of Rs65 lacs was paidas t he first inst alm enton 93982and som e ainount m 0 C C5 X Z a I 08 I W t l was paidlat er on 21A1982 was also execut ed But on 30A982 However I at eron a t he agreem entdat ed cancelled t he above agreem ent sand agreedt o sell t he above equit yt o one OP Tanej a As such a disput earose bet weent he part ies 258986 part iesent ered int o an rest and it was agreedt hat t he wit hdrawall t he civil as well as crim inallit igat ionI t was agreedt hat t he set t lingt he ent ire lit igat ionat as well as t he claim ant would am ountofRsA8 lacs shallbe repaidt o Onkar Mal Mit t al by t he balance of RsA3 lacs was t o be paidby t he suit ableinst alm ent sofRs90 lacseach 1987 in t he m ont h The t ot al ainount was t o be paidbyAugust1987 As regardst heint erest on t he default edam ount t he m at t er was t o be referredt o t he arbit rat or The relevantclauses paym entas in t he agreem entare as under 1 lI 4it t al has paid t ot al sum ofabout Rs 91 lacninet v one lakhs t o t he Corporat iont owards t hepurchasePriceof t he t he shares of t he Corporat ionhas sharesof t hefacevalue of about R4800 Oort yeightlakhs t o Mit t al andlor his Againstt he sam e nom lnee ret urned t o Mit t al The said am ount of Rs91 lakhs shall be by t he andlor nom inees as st at ed Shri Mit t al m ay get t he sharesheld byhis nom t nees t ransferredin his nam e beforehandingover t ransferdeeds dulyexecut edbyt he Transferorst o t he t he share scripsand blank share Corporat ion The sum ofaboutRsA8 lakhs will be repaidbyFebrualy Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 1987 in m ont hlyinst alm ent sofaboutR90 t he dat ehereof against lakhs we JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document byMit t al andlor hls 452 0 CiviI Revision Noe3156 of2008 Si Civil Revision Noe 5412 of2008 a5 nom inees t o t he andlor it s nom ineesshares of t he of t he facevalue which have been previously byt he Corporat iont o t hem bI The balance of about 43 lakhs will be paid by t he Corporat iont o Mit t al in suit ableinst alm ent sof Rs7 lakhs each m ont h t he t ot al paym ent t o be m ade by August1987 As regardst hereferringt he m at t er t o t he arbit rat orclause 8 has which reads as under 8 Shri Onkar Mall Mit t al has vide his let t er dat ed 5 August1986 claim ed int erest on t he am ount of Rs 91 lakhs am orox paid bv him lhisassociat es t o PSI DC from t he dat e of Pavm ent t o t he dat e of fuU and fnal Davm ent which lS disput edand not byt he Corporat ionThe part ies agree t hat t he said in respectof t he am ount of RsA3 lakhsonlyforwhich sharescould not be t ransferredby t he t o Shri Mit t al andlor his associat esshall be referredt o t he sole arbit rat or of a m ut uallyagreedret ired Judgeof t he Delhi OR Pzm j abcOHaryanaHigh Court for decision as per t he agreem ent sdat edt he 9 Februaryand 2I SI The provisionsof Arbit rat ion Act 1940 shall April 1982 applym ut at isand I nut andisand t he decision oft heArbit rat or t n t his regardshall be bindingon bot h t he part iesA panelof t hree nam es shall be subm it t edbyt he Corporat ionand out of t he said be appoint edas Sole Arbit rat or as select ed byShri Mit t al The Panelofnam esshall be subm it t edlat est byt he 15 Oct ober 1986 11 The Arbit rat or at ler upon t he issue as involvedin t he agreem entwit h regardt o int erest concludedt hat t he cause of act ion accrued t o t he claim ant on 2591986 init iat ed on The reference was 03 2001 and decided on 3152002 The am ount claim ed in t he 1 0 C 5 I Z C I 08 10 2 m I t1 1 L pet it ionwas RsA662 I acs as such t he rat e of int erest as set t led vide dat ed2591986 was 18I oper annum t herefore while JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 453 0 1 Civil Revision Noe 3156 of2008 8 CiviI Revision No 5412 of2008 m 6 t he int ereston t he principalam ount awarded int erest 120I oper annum it com es t o Rs1 24287641 and for t he periodwhen t he arbit rat ion were pending1e 382001 t o 313 2002 which com es t o RsA138321e He also awardedfut ureint erest on t he principalam ount 10I oper annum t ill realizat ion When t he award was referredt o t he civil court for m akingit a m Q 0 C 1 C5 I Z 08 cJ0 3 Qm rule of t he court which it was t he t o be sold t o t he claim ant t he priceof t he sharesat it also adm iued t he paym entof am ount ofRsl also adm it t edt he agreem ent sdat ed 92 1982 and 931982 and also t he lacs by t he claim ant st o t he The I t was also adm it t edt hat as per clausesix oft he agreem entdat ed21A1982 shareswere t o be t ransferredif agreem entdat ed21A1982 t he claim antm akes t he paym entin t im e ot herwiset he claim ant would pay int erest 1950I oon t hedelayedpaym entThe also avenedt hat againstt he paym entalreadym ade t he shares had t o be t ransfened on 231982 Any way while levelingsom e claim ant it was adm it t edby t he on t he partof t he t hat t he earlier was cancelled on 30A1984 While aboutt he lit igat ion I t was also st at ed by t he bet weent he part iesit was also adm it t edt hat t he agreem entdat ed 258986 was ent eredint o regardt o paym entof t he principalam ount lS st ill pendingbeforet he court which is t he subj ectm at t er of t he disput ein of awardingint erest over t his am ount does not anse Thought herewasno t hat t he m at t er in Therefore quest ion clausein t he agreem entfor paym entof iint erest for t he reference periodyet t he leam edArbit rat or awarded t he sam e at t he lee 18I oper annum lt was also averredt hat sincet herewas an inj unct ionregardingt he t ransferof sharest o t he claim ant passedbyt he Delhi HighCourt in Novem ber 1982 t hereforet he shares could not be t ransferred As such t he claim ant is not ent it led t o any int erest The obj ect ionswere dulyrefut ed by t he lt l t heir replyand he addedt hat t he obiect iont oet it ionwas t im e barred While t heirclaim t heypressedhardfor accept ingt he arbit rat ion awardand m akingt he sam e as rule oft he court Duringt he pendencyof t he Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh before t he Lower JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 454 1 0 Civil Revision Noe 3156 of2008 8t Civil Revision Noe5412 of2008 7 Court OnkarMal Mit t al died and now Varun Mit t al and ot hers wereim pleadedas his legalheirs From t he fram ed t he part iest he followinglssues were 1 2 Whet her t he award dat ed 3132002 lS liable t o be set asideas prayedfor20PP Whet hert hedelayin filingt he t o be condonedas prayedfor20PP pet it ionis liable Relief 3 Bot h t he part iesled evidence vide order dat ed 31 3002 civili Judgewhile holdingt hat t he obj ect ionpet it ionwast lm e barreddecided issueNo againstt he pet it ionerHowever it also reAlsedt o set aside t he award and orderedt he sam e t o m ake it rule of t he court The appealpreferredagainstt he said order was part lyaccept edI t reversedt he findingsret urned byt he Civil Judgeon issue Nol and condoned t he delay filingt he obj ect ionpet it ionand m odiOed t he findingson issue No l was liable t o pay onlya sum of while holdingt hat t he appellant Rsl150 lacs as int erest on t he principalam ount ofRsA3 lacs from 253 1982 t o 259 1986 However it declinedt o grant pendent elit e and fut ureint erestt o t he St ill disesat isfiedt he 6PSI DCIhas revision so also t he while Snding com e up in in t hej udgm ent m r 0 C43 C5 Z Ct I 08 CQ 7 Om preferreda reVlSion pet it ionfor set t ingaside t he order passedby t he Appellat eCourt and t o rest ore t he orderpassedbyt heCivil court Now t he basic quest ionst o be resolved bet weent he part iesare 11 fut ure pendent eI it eand int erestand as t o at whatrat e iil whet herSect ion 5 oft he Lim it at ion Act could be appliedt o condonet he delayin arbit rat ion The Addit ional Dist rict Judge had set aside t he findingswit h regardt o delayin filingt he obj ect ionpet it ionWhile delving deepint o t he argum ent sraised by t he rival part iesan opinioncould be form edt hat t he delaywhich occurred in t llingt he obj ect ionpet it ioncould not be condonedbyapplyingThe Lim it at ion Act 1963 however t heperiod for 61ingt heobj ect ioncould be ext ended But t he presentcase is not Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 0 1 C 0 C C5 I Z 2 r I 08 QO 4 7 V2z 455 1Civil Revision No Civil Revision Noe 3156 of2008 8c 5412 of2008 ext enSI 8 Oll of t he periodfor ft lingt he obj ect ionshowever t he pet it ioners 10 t riedt o m akeout t he case for condonat ionof delayI n t he presentcase t he award was passedon 313002 and it was Oled in t he court on 662002 for m akingt he sam e rule of t he court Not ice of t he award was issuedt o t he and he was requiredt o flle obj ect ionpet it ionwit hin 30 daysfrom received on 13 62002 t herefore t he t he dat e of not ice Nt ice pet it ionerwas bound t o file pet it ionby1372002 or at t he best by 1632002 6duet o vacat ionsin t he civil court s from 1562002 t o 1530021 t he pet it ionwas filed on 193002 As such t he obj ect ion pet it ionwas cert ainlybeyondlim it at ion The Appellat eCourt condonedt he delayfor t he reasons bestknown t o it and t hat t oo againstobit er dict agiven byt he ApexCourt in case Union of I ndia vs Mls PopularConst ruct ion Coe 200ll RCCivill 124 0 AI R 2001 SC 4010 wherein it was observed t hatt he provisionsof Sect ion 50ft he Lim it at ionAct were not applicablet o t he applicat ion t heaward under Sect ion34 oft he Act t herefore t he pet it ionnot ent ert ained Even in t he Nat ional Alum inium filed wit hin t he periodst ipulat edcould not be delivered by t he ApexCourt ln case Coe Lt de vs Mls Presest eel Fabricat ions P9Lt de 2004 RCR illio 51SCid not m ake any observat ion of Sect ion 5 of t he Lim it at ionAct t oo The Coun had allowed t he beneflt of Sect ion 14 of t heLilnit at ionAct The net result would be t hat t o Sect ion 14 of t he Lim it at ion Act does not givepowert o t he court condonet he delaybut onlyperm it sext ensionof lim it at ion t he st at ut e by givingt he benefit t o t he part ybonalde rem edyin t he COU Therefore in view of t he aut horit at ivepronouncem ent t he 1 of Suprem eCoun in Union of I ndia VSa Mls PopularConst ruct ionCoe supral it would not be unsafe t o hold t hat t heAppellat eCourt fell in error while upset t ingt he findingsret urnedbyt he t rial court on issueNo I e I n order t o decide t hequest ionof int erest I againneed t o m ake out t he conclusions from t he agreem entas reached bet ween t he part ieson 251986 i9The agreem entwas ent ered int o bet ween t he part ieswit h regardt o paym entofam ount even in t he I ightoft he order of JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 456 0 Civil Revision Noe 3156 of2008 Si 4 Civil Revision Noe 5412 of2008 e9 inj unct ionpassedby t he Delhi HighCourt in t he m ont hof Novem ber 1982 iiI Onkar Mal Mit t al had paida sum of Rsl lacs t o t he beingt he priceof t he shares of t he com pany iioOut of t his am ount a sum of RsA8 I acs was t o be paidby t C 0 C C5 I C 08 CQ 0m t he each t o t he claiinantby in m ont hlyinst alm ent sofabout Rs790 lacs 1987 wit h effectfroin t he dat e hereof againstret ransfer by t he claim antandlor his nom inee t o t he andlor it s nom inee share of t he com pany of t he previouslyt ransferredbyt he face value which have been t o t heclaim ant 6ivI Thebalanceam ount of RsA3 lacs was t o be paidby t he t o t heclaim ant in suit ableinst alm ent sofRs70 lacs each m ont hand t he t ot al paym entwast o be m ade by August1987 No int erestwas payablein case ofno fault of paym entof 18I o was payableon t he default edam ount for t he default edperiod inst alm ent However int erest vlThe part ieshad also agreedt hat wit h regardt o paym entof lacs for which shares could not be int erest on RsA3 t ransferred by t he t o t he 1 Or his associat e m at t er be referred t o t he arbit rat or The be t ransferred adm it t edt hat t he sharecould not t he t he of t he order inj unct ionpassedby t he Delhi HighCourt passedin Novem ber 1982 againstt he t ransfer of shares Thus lll t he light of t hat order t he who could not wit hholdt he am ount ent eredint o an agreem ent for ret um of t he m oney t herefore t he quest iont o be raised by t he is t hat t heyare not liable t o pay int erest on t he am ount for t he legaldisabilit ywhich st ood in t heir way againstt he t ransferoft he shares is ofno relevanceand appearst o be device const ruct edbyt hemt o avoid t heir liabilit y I t m ay furt herbe not iced t hat t he agreem entwas ent eredint o only JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 457 0 CiviI Revision No 3156 of2008 82 L Civil Revision Noe5412 of2008 V W V aft er t he order of inj unct ionwas passedj ust t o purchasepeace by t he and t o resolve t he disput eI t is also adm it t edt hat RsA8 lacs were ret um edbyt he wit h t he operat ionof t he which were paidt o it for t ransferof shares order Thoughdue t o 111 t he Corporat ioncould not t ransfer t he sharesbut was not lt l any way debarredfrom ret um ingt he m oney t o t he rightt o wit h hold t he m oney Thus it inust be held t hat Oll grantof and it hadno 1 CL 0 C C5 I 1 Z t I c41 Ll inj unct ionand in view of m oney t he agreem entdat ed 251 986 non ret urn of would am ount t o wrongly t he m oney due in favour of and againstt he pet it ionerSincet he am ount of RsA3 lacs t he not belongt o t he pet it ionert heycould not be const rued t o be t he propert yof t he I n any way t he order of t he t o ret um t he m oney The t he order passedby t he Delhi HighCourt in it s t o avoid t he such t he argum entt hat t he wit h regardt o paym entofint erest As t o wit hholdt he had bonaefldereason am ount wit h t hem ind oft his court for which t heyare alsonot ent it ledt o pay int erest doesnot weigh and also doesnot sound t o t he fundam ent allegal principlesof ret urn of am ount payablet o t he credit orswho have genuine lacs however t he part ieshad m ut uallyset t led t he paym entof RsA8 lacs t herefore t he disput ewit h regardt o lnt erest over referredt o t he The pet it ionerwas boundt o pay Rsl am ount was t he arbit rat or As such t he is est oppedt o say t hat it was not bound t o pay even RsA3 lacs for which t he sharescould not be t ransferred The arbit rat orwhile t he m at t er on t he basisoft he passeda det ailed and elaborat eaward grant ingpreference t he t ure lnt erest is also not I t in disput et hat pendent elit e and cam e int o beingfor prom ot ingt he indust rial est ablishm ent s and t o advancet hem loans on int erest t herefore it was a com m ercial est ablishm entest ablishedunder a st at ut e The Corporat ionit self has also beenchargingint erest 195I o from it s debt ors Even in t he presentcase wast o be paidint erest at 1984t he 30 t he rat e of 195I o on t he delayedpaym ent Sim ilariyit had agreedvide Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document J 458 0 Civil Revision Noe 3156 of2008 82 Civil Revision Noe 5412 of 2008 9 11 dat ed25A1986 t o ret um t heam ount alongwit h int erest perannum for t he default edperiodI t is also not lll disput et hatt he am ount ofRsA3 lacs has not so far beenpaidt o t he d I t is also well set t led by now t hat t he Arbit rat oris t he sole j udgeof t he qualit yand quant it yof t he evidenceand it will not be for t he court t o open it self t he t ask of beinga j udgeon t he evidencebeforet he and well Arbit rat or Here not onlyt he arbit rat or passeda well reasoned award but t he obj ect ionsas dism issed raised before t he civil court were by a det ailed I S also set t led Norm allyt he award givenbyt he arbit rat or is not on m erit s as well as t he issue of lim it at ion t o be int erfered wit h and t he court cannot sit in appealt o t he validit y oft he awardbut t he int erferencein t he award byt he lim it ed ext ent when t he arbit rat or has exceededit s j urisdict ionor act ed coun is t o t he beyond m isconduct ed and also beyondt he scopeof t he arbit rat ion he has t he t hereis any error apparenton t he face of t he record Here in t his case t he arbit rat oris not an ordinaryperson but of t he rank oft he FI ighCourt Judgealive oft he real issues expertin t he legal field and t hereis reasonablenessof t he reasonsgivenby him for passing such award t hereforet he sam elS not open t o t hescrut inybyt he court sas not hingis indicat edfrom t he awardt hat no person of ordinary would ever approve all t he reasons assignedbyhim or his opinion1S 111 defiance of t he logict hat t heyshock t he conscience of t he court also observed in case KV Moham m ed Zakir VS RegionalSport sCent re I t was 2009 Recent ApexJudge07AJI 304 SC whereinit was observedas 1 0 0 C0 C5 X Z 08 a r r under l 1 Lm 1 1 1 I Ve have heard t he learned counselfor t he part iesand we have perusedt he award is a det ail as it The award nlnS int o considerable awarcl While dealingwit h t hispart 1195 121and No oft heclaim t he arbit rat or in 5 0 31of t he award had givent he det ailedreasons We are of t he view t hat t heset t ledposit ionoflaw is t hat t he court should not subst it ut e it s own t he view t aken by t he arbit rat orwhile dealingwit h t heproceedingsfor set t ingaside t he award I t is equallywell set t led t hat where t he arbit rat or JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 459 Civil Revision Noe3156 of2008 84 Civil Revision Noe5412 of2008 e12 act s wit hin j urisdict iont he reasonableness bj l t he arbit rat or lS not open t o t he scrut inyfor t he However if t he reasons are such as no person of ordinary prudencecan ever approve of t hem or if t he reasons are so out rageousI n t heir cf7anceof logict hat t heyshock t he consclence of t he court t henit is a differentsit uat ion And ln an appropnat ecase t hecourt m ay int erfereHowever degree ofsuchunreasonablenessm ust begreat ert han t he st andard in a cert iorari I n t he inst ant 11 Lower Court t he arbit rat ionaward was confirm ed byt he I n such a sit uat ion t he Appellat eCourt could not have int erferedwit h t he award on t he Oim sygroundsThe ApexCourt in t he Federat ion Lt d vseMls Three sim ilar sit uat ion in case UPe Circles 20049 RCCiviO 546 obseed as under l 41 I n any view of t he m at t er t heArbit rat orhad considered t he ent ire m at erial on record and t he rival subm issionsof t he part iesand t hen cam e t o t he conclusionoffact which was accept edby t he court s below it lS not open t o t his court t o int erferewit h such conclusions unt il and unlessit is m alest t hat such conclusions are perverseor arbit rary That apart we are oft heVlew t hat t his would not be a groundforset t ing aside t he award under t heArbit rat ion Act 1940 I t was observedin case Mls Ravindra Kum ar Gupt a 6f Recent ApexJudgm ent02AJ 646 Com panyvse Union ofI ndia 2009 as under l l he High Court while exam iningobj ect ionst o t he award under Sect ion 30 of t he Act 1940 cannot reppreciat e t he evidenceled by t he part iesbeforearbit rat or t o subst it ut eit s own opinionwit h t hat ofarbit rat orWherearbit rat or had duly scrut inized and evaluat ed t he evidence and had given t he award wit h elaborat e reasons t he sam e cannot be said t o be perverseor based on no evidence t o warrant t heHighCourt Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 0 C0 C5 I Z 2 r Q I 06 00 e e7 r CL 460 Civil Revision Noe3156 of2008 Civil Revision Noe5412 of2008 13e I n t he aforesaidcase t he ApexCourt had set asidet he order of t heHighCourt disallowingt heclaim awardedbyt hearbit rat or The scope of int erferencebyt heAppellat eCourt is very lim it ed in nat ure I t was not requiredt o t he evidence but it has exceededhis while sit t ingover t he evidenceand t he sam e 111 it s own way Thought he Appellat eCourt adm it t ed t hat t he failed t o pay t he am ount of RsA3 lacs as per t erm s and 1 a 1 condit ions of t he set t lem entdat ed259 1986 However t he 0 0 Z C5 I r4 Z r e I ot j CQ r not m ade any such disabilit ywhich observedt hat t ransferof shares before t he arbit rat or about t he legal it not t o m ake t he paym entI t was also right ly was never agreedt o bet weent he paniesbut it was onlyt he paym entof RsA3 lacs in inst alm ent swhich was agreedbut it s partoft he cont ract did not 8ilfill t he Be t hat it m ay any wit h regardt o paym entof RsA3 lacs is t o decide but t he agreem entdulyadm it t edbyt he t hatCorporat ionadm it t edit s liabilit yt o pay RsA3 lacs The onlydisput e on som e differentpointbut t he sam e is not for t his court speaksfor it self wit h regardt o paym entof int erestfor which t he m at t erwas referredt o As such t he arbit rat or was cert ainlywell wit hin lt s t he arbit rat or j urisdict ion t o award int erestas per t enns oft he agreem entdat ed 2581986 The arbit rat or appears t o have conduct ed det ailed exerClSe t o j ust ifyt he grantof int erest t o t he t hat t he am ount paidt o t he However t he has adm iued is lyingwit h t he aft er July 1982 and t he was boundt o ret urn t hisam ount Sim ilar were m ade by t he Appellat eCourt in The dat es of paym entof t he am ount byt he N036 of t he are not disput edand t he default com m it t edby t he pet it ioneralso st ands proved t herefore t he were cert ainlyent it led t o int erest Now com ingt o t he quest ionof int erest I shall againreit erat e clause 11 b of t he agreem entwit h regardt o ret urn oft he m oney which 1S as under l b9 Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh The balance of about 43 lakhs will be paid by t he t o Mit t al in suit able inst alm ent sof Rs90 JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 461 Civil Revision No 3156 of2008 Civil Revision No 5412 of2008 14 lakhs each m ont h t he t ot al paym ent t o be m ade by August 1987 inst alm ent sm ent ionedherein above however in The part iesherebyagree t hat 110lnt erest shall be payableon case of any delaylll paym entof inst alm ent t he sam e shall be payablewit h int erest 18I o per t he default ed am ount inst alm entwas due on 27A 1982 and t hereaft er t he default edperiod The Srst no inst alm ent 1 was paidbyt he and as such t he ent ireperiodt hereaft erbecom es 0 C eZ C5 X Z I 06 0 2 4 r 1 default edperiodm ay be preference lit e or fut ureperiod As regardst he argum entt hat t he disput ewas wit h regardt o paym entofint erest onlyfor t he periodOom 21 1982 t o 2591986t he sam edoes not find m ent ion in clause 80f t heagreem entrat her t he disput e was referred t o t he Arbit rat orwit h regardt o claim of int erest from t he dat e of paym entby t he am ount t o t he t o t he dat e of full and Onal ret urn of t he As such it was t he Appellat eCourt t o hold t hat t he disput ewas onlywit h regardt o int erest from 1982 t o 1986 The ent it lem entoft he person who has part edwit h t he m oneyand rem aineddeprivedof it s lnt o circulat ion for his business and ent it ledt o int erestt hereupon againstt he personwho it and put t o lt s The use get t ingbenefit sout of it bringing purposes was cert ainly wit hheld of int erest m ay be res int egraon account of various lit e or t ure 1S now no m ore deliveredbyt he ApexCourt As regardst he powers of t he Arbit rat or t o award int erest t he ApexCourt in case TePeGeorgevse St at eofKeralaand anot her AI R 2001 Suprem eCourt 816 t he t he VarlOUS t akg st ock of different HighCourt s and t heApexCourt observedas under 1 9 The next quest ionis whet her t heHighCourt was rightin set t ingaside t he award of t he I nt erest from t he dat e of he This Court has held I n t he case of JagdishRai and Award Brot hers v Union ofI ndiareport edI n 19919 Arbi LR 696 1999 AI RSCW 940 AI R 1999 SC 1258 1 1999 All LJ 9769 t hat t heaward ofint erestoughtt o be grant edin aU cases when t here is a decree ofm oneyunless t here are st rongreasons t o JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 462 0 Civil Revision Noe3156 of2008 0 Civil Revision Noe5412 of2008 15 1 decline t he sam e1 t hecase ofMI sJagdishRai 8 Brot hers v 1999 AI R Union oflndia report edin 199992 JT SC 268 SCW 940 AI R 1999 SC 1258 1 1999All LJ 976 t his Court has held t hat t hereare fourst agesofgrantofilnt erest vlZe 611 from t he st ageof accrual of case of act ion t ill fllingof t he t he arbit rat ion 29 duringpendencyof 1 C 0 CA Z C X Z I ot j r S a 1 proceedingsbeforearbit rat or bet weendat e ofawardand dat e oft hedecreeand arisingfromt he fut ure lnt erest arising int erest dat e of decreet ill realizat ion of t he award The power oft heCourt t o grant int erest lromdat eof decree lS I n t he case ofHindust anConst ruct ionCo Lt d Ve not in doubt St at eofJam m uand Kashm ir report edin AI R 1992 SC 2192 1992 AI R SCW 2647 t his Court has held t hat t heArbit rat oris Court t o award int erestfromt he dat e of t he Award This has held inhe case I rrigat ion Governm ent ofOrissav GC Roy report edln 1992 lI SCC t he 508 arbit rat or AI R 1992 SC 732 t hat 1992 AI R SCW 389 in t he case has power t o grant lnt erest pendent elit eecent ly EngineerDhenkanalMinor I rrigat ion Division Orissa v NC Budharaj ead byLRs 2001 AI R SCW 2559t his Court has 2001 611JT SC 486 held t hat arbit rat or can award int erestfor t he preference report edI n law laid down bv t his Cozirt int erest can period Thus as per be awarded at all four st ages The reasoninggiven bv t he High Court t hat t he int erest cannot be awarded bv t he arbit rat or is t hus fallaciousand cannot be sust ained I n our Vlew t he direct ion t o pay lnt erest fromt he dat e of Award cannot befault edThe t o t he ext ent t hat it disallowst he int erest lromt hedat e oft heAward is set aside 71 The crux of t he j udgm entis t hat t he Arbit rat or could award lnt erest for all t he four st ages1e 19 from t he st ageofaccrual of cause of act ioll t ill fillingof t he arbit rat ion 29duringpendencyoft he before t he Arbit rat or 63 fut ureint erestarisingbet weendat eof award and dat eof t he decreeand 649int erestarisingfrom dat e of decreet iI l Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 463 0 Civil Revision Noe3156 of2008 Civil Revision Noe5412 of2008 realizat ionoft he am ount 16 Sim ilarly while sit t ingt o decide t he ent it lem entof t o receive int erest t he ApexCourt in case St at e ofOrissaVSe t he 11 BN Agarwallaet c AI R 1997Suprem eCourt 925 observedasunder l The arbit rat or has t he j urisdict iont o award int erest in cases which arose aft ert he I nt erest Act 1978 has becom eapplicableWit h regardt o t hosecases pert ainingt o periodpriort o t he oft heI nt erestAct 1978 int he absence of any subst ant ive I aw arbit rat or has Cont ract or usage t he no j urisdict iont o award int erest For t he periodduringwhich t he arbit rat ionproceedingswere pending t he arbit rat or has t hepower t o award int erest The power of t he arbit rat ort o award int erestfor t hepost wardperiodalso 8XlSt s 17 becam e Cert ainlyt he presentdisput earose aft er t he I nt erestAct 1978 I t m ay hlrt herbe observedt hat t he agreem entdoesnot in any way prohibitt he t o seek int erestand rat e of int erest1S t o award int erest in disput eDelhi HighCourt even went perannum t o t he cont ract or on t hegroundof wrongful paym entin t he case of GS Kalra VS New Delhi MunicipalCom m it t ee and anot her AI R 1999 e int erestawardedbyt he Arbit rat orwas only10I oper annum which cannot be said t o be excessiveor Delhi 355 Anyway oft he 18I o 1 0 0 Z C5 I Z t I CO w2 11 exorbit antwarrant ingint erference I t is well set t ledby now t hat t he court shouldnot int erfere in t he rat e of int erestwhere it is st ipulat edbet weent he I t has also been observedln case Pure Helium I ndia P Lt de l4 200398 SCC 593 t he arbit rat orsaward for paym entof m oneywit h int erest 18I o per annum byt he I t also needsnot ice t hatApexCourt hasbeenexercisingcert ain discret ionwit h regardt o rat e of int erest while exercisingpowersunder J Art icle 142oft he Const it ut ion ofI ndia but t hose cases m ay be bet weent he privat epart ieswhere hugeint erestwit h t he passageof longyears m ay have t he effect ed part yand led int o dist ress but here t he part y which has been UsI ngt he am ount for earningint erest cannot be said t o be at loss so as t o earn discret ionof t he court I t is well set t ledt hat discret ion t o be used 1S JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 464 1 0 Civil Revision Noe 3156 of2008 0 Civil Revision Noe 5412 of 2008 17 onlyj udicialdiscret ion and not arbit raryand it should be used only in riot ers robbers favour of exploit edand not t n favour of t he dacoit sblackm arket ersor econom ic offenders While t he case from anot her anglet he beingt he com m ercial est ablishm entwas m oney for profltand lnt erest 18I o per annum or above The com pany also in t he aforesaidagreem enthad direct edt he t o pay t he am ount along wit h int erest 193I o perannum if t he inst alm ent is delayedI t m ay filrt her be observedt hatunder Sect ion 21A oft he BankingRegulat ionAct rat eof int erestchargedbybanking not subj ectt o t he scrut iny Sect ion 211 by t he COUt t he BankingRegulat ionAct st at est hat anyt hingcont ained in t he UsuriousLoans Act 1918 or any ot her law relat ingt o indebt edness in force in any St at e a t ransact lon Court on bet weent he bankingcom pany and it s debt or shall not be reopenedby any t he groundt hat t he rat e chargedby t he bankingcom pany lll Thus byt hat analogywhyt he respectof sucht ransact ion is excessive court should int erferewit h t he rat e as agreedbet weent he com pany and it s credit ors andt he cannot be t o chargeint erestagainst t he ThoughI am not 111favour of awardingint erest on t he int erest yet I would say t hat Arbit rat or was quit ej ust ifiedand reasonable while awardingint erest preeference 18I o per annum 1I o perannum and fut ureint erest 10I oper annum lit e The scope of inquiryin a under Sect ion34 of t he Act is rest rict edt o considerat ionwhet herany one oft he groundsm ent ioned in subect ion 20fSect ion 34 oft he Act exist s for set t ingaside t he award We m ay approvinglyext ract t he analysisrelat ingt o Grounds of Challenge from t he Law Pract ice of Arbit rat ion and Conciliat ion by Shri OP Malhot ra First Edit ion Page768 Para 1934141 r 0 0 C X Z I 08 CQ C V7 4 r1 1 J l int ervent ion in arbit ral process Sect ion5 regulat escourt providest hat lawfort he t im e beinginforcein I ndia in m at t ers governedby anyt hingcont a1nedin any ot her I t JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 465 L0 Civil Revision Noe3156 of 2008 8i sCivil Revision Noe 5412 of2008 18e 1 t r 0 0 C5 I 2 I ot j QO S7 c CL Pursuant t he court will not Part I of t his Act providedin t his Part im posescert ain rest rict ions on t he rightof t he court asidean arbit ral awarcl int ervene exceptwhere t o t his policySect ion I t providesin all seven groundsfor set t ingan award I n ot her words an arbit ral ward can be set aside onlyif one or m ore of t hese seven groundsexist s The I n I lrstfiwegroundshave been set fort hin sect ion 34 order t o invokeany of t hesegroundsa part y has t o set t o im pleadand prove t he exist ence of one groundsThat is t o say t hepart y or m ore of such t he award has t o credible t he burdenofproofbyadducing evidence t o show t heexist enceofanyone ofsuchgrounds 1 The rest t wo groundsare cont ained in sect ion 34 21 09 which providest hat an award m ay be set aside byt he court on it s init iat ive if t he subj ectm at t er of t he disput elS not arbit rableor t he im pugnedaward is in conflictwit h t hepublic policyofI ndiaI l The groundsfor set t ingaside t he award specific Thereforenecessarilya pet it ionerwhoj 7lesan applicat ionwill have t o pleadt hefact snecessaryt o m ake out t he any oft hegroundsm ent ionedin sulsect iol29 and prove t he sam e t he onlyquest iont hat arises in an under Sect ion 34 oft heAct is whet hert he award requirest o be aside on any of t he speciI iedgroundsin suI sect ion t hereofSubvsect ion 9 also clearlyplacest he burden ofproof t he person who m akes t he applicat ion Thereforet he as also t he personon whom quest ionarisingfor t he burden of proof lS placedln specifled t he needforissues is obviat ed Fram ingofissueslS necessaryonlywhere cerent law are afflrm edbyone part y and are denied byt he t o ident i61t he ot her and it is t hereforenecessaryfort he court t ypesof m ot erial proposit ions Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh lSSUS and specifyt he part y on whom t he burden t o prove t he sam e lies When t his exercise has alreadybeen done by t he JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document 466 6 01 Civil Civil Revision Noa3156 of2008 S Revision Noe5412 of2008 9 1 f 0 0 22 C X Z I 06 r10 st at ut e t here is no t he I ssues I n ot herwords under Sect ion34 of t he At where t he very factt hat t he ls a singlelsSUe has been inst it ut ed under t hat part icularprovisionleclarest he issue involvecl Anyfurt herexercise t o fram elSSUS will onlydelay t he I t is t husclear t hat issues need not befram ed in applicat ionsunder Sect ion 34 oft heAct Havingperusedt he arbit rat ionagreeinentas welI as t he award not hing could be elicit ed t o infer if any such groundwas available t o t he t he awardbyfilingt he obj ect ionpet it ionAny way pet it ionert o Since t he m at t er was while m akingt he sam e as rule oft he court arbit rarinessor perversit yin discussed and decided by t he civil court t hereforein t he absenceofany t he order t he Appellat eCourt should have hesit at edt o int erferewit h t hesam e However t he fact t hat t he Appellat eCourt has exceededit s j urisdict ionand upsett he findingsret um edbyt he Arbit rat or by view of it s own opinion evidenceand by t he set t led of law t herefore int erferenceat m y end has becom e inevit able t he revlSlOn pet it ionNo412 of 2008 filed by sansany m erit and is t he Punj abSt at e I ndust rial herebydism issed However while set t ingasidet he findingson issueNo and m odifyingt he findingson lssue No l ret urnedbyt he Appellat eCourt videorderdat ed303008 t he revision pet it ionNo l 56 of2008 prefened by t he passedby t he Civil JudgeJr Division9 is accept edand t he order dat ed 1462007 is rest oredwit h t he m odificat ion t hat t he int erest would be payableon RsA3 lacs 1e principal am ountonly A phot ocopy of t his order be placedon t he file of connect ed January122010 deepak 1 Gupt a Suruchi 2012.12.20 15: 35 True Scanned Copy Of The Original PHHC,Chandigarh 4 144 C 4 r 9 C l 9 11 L 4 4 4 C 1 Judge 1r 1 1 4 1 I l JOYTI RANI 2016.03.28 16:23 I attest to the accuracy and integrity of this document