TaxTMI 
TaxTMI 
2019 (12) TMI 170
X X X X Extracts X X X X
X X X X Extracts X X X X
....as the respondent in the said appeal is therefore before this Court claiming to be aggrieved by the said order. 2. The brief facts leading to the present situation is that the appellants herein are joint owners of the land measuring 14 Kanals and 3 Marlas (8560 Sq. yards) situate at village Sunet, Tehsil and District Ludhiana, State of Punjab. The respondent company through its representatives claiming to be wellversed with construction and development of properties approached the appellants for joint venture in constructing a residential-cum-commercial complex on the subject land. Accordingly, an agreement dated 14.12.1996 was entered into and among other terms agreed therein, the respondent had undertaken to complete the construction of the building consisting of at least six floors within three years from the date of obtaining the sanctioned plan from the Ludhiana Municipal Corporation. The project was required to be funded by the respondent and a sum of Rs. 45,00,000/( Rupees FortyFive Lakhs only) was to be deposited with the appellant as a guarantee for completion of the project. In that view, the appellants were expected to retain the same if the building is not completed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the claim as well as the counter claim was dismissed. The respondent herein claiming to be aggrieved by the same filed a petition under Section 34 of the Act, 1996 in the Court of the Additional District Judge, Ludhiana which was registered in Arbitration Case No. 3 dated 29.01.2010. The learned Additional District Judge through the order dated 13.09.2012 affirmed the award by dismissing the petition. It is in that view the respondent herein filed an appeal under Section 37 of the Act, 1996 before the High Court. The learned Single Judge of the High Court has arrived at the conclusion that the parties have not been granted appropriate opportunity by the learned arbitrator to tender evidence by examining witness and to cross-examine the witnesses, whose affidavits were filed. It is further held by the High Court that the learned Arbitrator has not considered the aspect relating to the extent to which the construction was put up and the amount that was expended by the respondent herein and no determination, in that regard has been made. The said observation was made after holding, though the time was not the essence of the contract but yet the long delay would not be justified. It wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on all aspects including the fact that the cancellation of the agreement was agreed between the parties. On the contention urged relating to the construction incurring an amount of Rs. 1,22,00,000/( Rupees One Crore Twenty Two Lakhs only) said to have been made by the respondent also a consideration has been made. In that circumstance when the contention was adverted to and a view was taken by the learned Arbitrator based on a finding of fact, the learned Single Judge was not justified in commenting that the said aspect had not been adverted to by the learned Arbitrator. It is therefore contended that the award is liable to be sustained and the order passed by the learned Single Judge be set aside. 8. Mr. Shibo Shankar Misra, learned counsel for the respondent in his attempt to sustain the order passed by the learned Single Judge contends that the respondent had raised twelve claims before the learned Arbitrator and each claim should have been decided separately. It is his case that the learned Arbitrator has proceeded to reject the claim only on the conclusion that time is the essence of the contract. Though the terms as contained in the agreement dated 14.12.1996 is not dispu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....07.1997. In that light the appellant had issued a notice dated 01.11.2001 and terminated the agreement, which had resulted in a dispute between the parties. In that background the matter was placed before the learned Arbitrator who had been appointed in a proceeding under Section 11 of the Act, 1996. A perusal of the award dated 30.01.2010 available at Annexure P-12 to the appeal papers would indicate that a detailed consideration has been made by the learned Arbitrator on all aspects of the matter. In that background when the petition under Section 34 of the Act, 1996 was filed before the learned Additional District Judge, the learned Additional District Judge in fact has also adverted to all aspects of the matter and since no ground for interference as contemplated under Section 34 of the Act, 1996 was made out, the learned Additional District Judge through his order dated 13.09.2012 has upheld the award. 10. In that backdrop when the learned Arbitrator and the learned Additional District Judge have arrived at a concurrent opinion, it is necessary for us to take note as to whether the learned Single Judge in an appeal filed under Section 37 of the Act, 1996 could have adverted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with subsection (2) and subsection (3). (2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that- (i) xxxxxxxxxxxxxxxx (ii) xxxxxxxxxxxxxxx (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or" (emphasis supplied) Therefore, in order to consider whether the challenge is sustainable on the ground available in law, at the outset it is necessary to examine whether the procedural lapse if any is committed by the learned Arbitrator in unilaterally denying the opportunity to the parties so as to make the award invalid and to set aside the same exercising the power under Section 34 or in an appeal under Section 37 of the Act, 1996. In this regard as noticed, Section 19 of the Act, 1996 provides that the Arbitral Tribunal is not bound by the Code of Civil Procedure or the Indian Evidence Act. Further, it provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rocedure the respondent is estopped from raising such contention before the learned Single Judge that the arbitrator mis-conducted himself by not permitting the parties to cross-examine the witness and also that the learned Arbitrator being more than 70 years of age and suffering from knee problem has pressurized the respondent to speed up the matter and the evidence was closed. It is rather intriguing for us to note that such contention has not only been permitted to be raised, but also accepted by the learned Single Judge to remand the matter, which is wholly unjustified. 14. We are of such opinion for the reason that the procedure to be followed in arbitration proceedings was settled by a separate order dated 28.11.2009 during the course of the proceedings before the learned Arbitrator. Thereafter the award was passed only on 13.01.2010. Though the respondent was represented by their learned counsel and the order dated 28.11.2009 was passed while recording the proceedings of that day, neither any application had been filed before the learned Arbitrator to recall the said order and provide opportunity to tender evidence or cross examine, nor was a challenge raised by initiatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....respondent that the sum of Rs. 1,22,00,000/spent by them has not been considered by the learned Arbitrator. In that regard the learned Single Judge has held that though the respondent herein would not be entitled to continue the project due to lapse of time the learned Arbitrator has not considered the right of the parties relating to the extent of the cost incurred for the existing construction and the manner in which it is to be dealt with. On this aspect, a perusal of the award passed by the learned Arbitrator would indicate that after having arrived at the conclusion that the respondent has committed the breach, the learned Arbitrator has also adverted to the said contention relating to the cost incurred for the extent of construction made, as claimed and has rejected the same. The consideration as made is as hereunder; "I may examine, at this stage the claimant's contention that construction worth about Rs. 1 crore 20 lacs has been done on the project. The claimant has primarily relied on the balance sheet of the Company for the relevant year in support of this argument. The balance sheet is Annexure-K at page 118-126 of the statement of Claim. In the schedule forming....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on 28.11.2009 with the consent of the parties. The learned Arbitrator has in fact recorded that none of them have come forward to render assistance in the proceedings. In such circumstance when the respondent herein, who were themselves the claimants before the learned Arbitrator have not conducted the matter in an appropriate manner by securing affidavit evidence of the erstwhile directors / shareholders, they cannot at this stage turn around and contend that the learned Arbitrator has misconducted himself. In any event the challenge to the award does not fall under any of the clauses of Section 34 of Act, 1996. In such circumstance the reliance placed by the learned Single Judge on a decision in the case of ONGC (supra) is highly misplaced. Therefore, the order dated 31.07.2015 passed by the learned Single Judges is not sustainable and the same is liable to be set aside. 18. During the course of hearing we had also made an endeavour to see that the parties amicably settle the matter by enabling the respondent herein to receive some amount towards the expended portion, also by not ignoring the loss suffered by the appellants due to delay. From the photographs produced before u....