AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 322
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.... The further case of the appellant is that under the Agreement, the appellant was expected to receive wheat on behalf of the 1st respondent from FCI godown at Thoothukudi and transport it by trucks to Thoothukudi Port which involves loading the goods into vessels at the specified loading rates. According to the appellant, it is the duty and responsibility of the 1st respondent to supply goods as well as to arrange for vessels. 3. In the course of fulfilling the terms of Contract, the appellant had to hire godowns for storage of goods and according to the appellant, the activity of providing for storage godowns to store goods was not contemplated under the Agreement and it did not fall within the scope of the work agreed under the Agreement. However, the appellant took it as an additional work and hired godowns on behalf of the 1st respondent. Initially, when the appellant raised bills for such storage rental charges during February/March, 2001, the 1st respondent paid for it. However, subsequently, the 1st respondent declined to pay such storage rental charges. 4. The further case of the appellant is that the appellant entered into a similar Contract with the 1st respondent C....
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.... with Arbitration O.P. No. 127 of 2006, if necessary. (d) It is made clear that the finding recorded both by the District Court and by this Court that there exist grounds for setting aside the award, is only a prima facie finding and not a conclusive finding. Therefore the Arbitrator and the District Court (while resuming the proceedings in the main O.P.) shall consider the matter, uninfluenced by any finding recorded here or in the District Court. 7. Pursuant to the above order, the Arbitrator heard the parties to the limited extent of remand made by this Court and by an additional Award dated 24.04.2009, re-affirmed the earlier Award dated 16.03.2006 and dismissed the claim made by the appellant. 8. The matter was again taken up by the District Court and after hearing the arguments of both the sides, the impugned order dated 04.08.2010 was passed, dismissing the petition filed under Section 34 of the Act. Aggrieved by the same, the present appeal has been filed before this Court. 9. The learned counsel for the appellant mainly focused his arguments on the terms of Agreement and submitted that the activity of providing storage godowns to store goods was not even ....
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....nd Others vs. Vikas Majdoor Kamdar Sahkari Mandli Limited reported in 2007 13 SCC 544. (e) Venkatesh Construction Company vs. Karnataka Vidyuth Karkhane Limited reported in 2016 4 SCC 119. (f) Mahanagar Telephone Nigam Limited vs. Tata Communication Limited reported in 2019 5 SCC 341. (g) Oil & Natural Gas Corporation Limited vs. Saw Pipes Limited reported in 2003 5 SCC 705. (h) Delhi Development Authority vs. R.S. Sharma and Company, New Delhi reported in 2008 13 SCC 80. (i) ONGC Limited vs. Garware Shipping Corporation Limited reported in 2007 13 SCC 434. 13. Per contra, the learned counsel for the 1st respondent Company submitted that Clause 2 read with Clause 6 makes it abundantly clear that the entire responsibility of handling, protection, loss/damages, transit shed and temporary storage of goods before loading the goods into the vessel at the port, is the sole responsibility of the Handling Agent and that is the reason why when the rates were fixed, each item was taken into consideration and the total rate was fixed as per the Annexure. In view of the same, appellant does not have any right to claim for the storage charges or t....
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....the Apex Court in this regard. 18. The Apex Court in UHL Power Company Limited vs. State of Himachal Pradesh reported in 2022 4 SCC 116 has held as follows: 16. As it is, the jurisdiction conferred on Courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an Appellate Court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Limited v. Vedanta Limited (2019) 4 SCC 163 CIVIL APPEAL NO. 10341 OF 2011, the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act has 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 pol....
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.... to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated." 19. In Parsa Kente Collieries Limited v. Rajasthan Rajya Vidyut Utpadan Nigam Limited, adverting to the previous decisions of this Court in McDermott International Inc. v. Burn Standard Co. Ltd. And Others and Rashtriya Ispat Nigam Ltd. V. Dewan Chand Ram Saran, wherein it has been observed that an Arbitral Tribunal must decide in accordance with the terms of the contract, but if a term of the contract has been construed in a reasonable manner, then the award ought not to be set aside on this ground, it has been held thus:....
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....r as interpreted by various Courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 13. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. This Court in Dyna Technologies [Dyna (2020) 5 SCC 164 CIVIL APPEAL NO. 10341 OF 2011 Technologies (P) Ltd. V. Crompton Greaves Ltd., (2019) 20 SCC 1] observed as under: (SCC p. 12, para 25) ....
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....ection 34 of the Act. This Court must keep in mind the caution expressed by the Apex Court in Mc Dermott International Inc., vs. Burn Standard Co. Ltd., and Others reported in 2006 11 SCC 181, wherein it has been held that the supervisory role of the Court in arbitration proceedings has been kept at a minimum level and this is because the parties to the Agreement make a conscious decision to exclude the Courts' jurisdiction by opting for arbitration as the parties prefer the expediency and finality offered by it. 22. The relevant clauses in the Cargo Handling Agreement and the Annexure are extracted hereunder: 2. DUTIES & RESPONSIBILITIES OF THE HANDLING AGENT 2.1 The HANDLING AGENT shall make arrangements to receive/take delivery of Goods on behalf of MMTC from nominated Godowns of FCI and co-ordinate all activities after receipt of delivery order including identification of stocks with inspection agencies/buyers representative. The Handling Agent will ensure only identified approved goods are transported and loaded, 2.2 The HANDLING AGENT shall arrange transportation of goods from FCI's Depots nominated by MMTC after weighment. The weighment ....
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.... 2.7 It shall be the sole responsibility of the HANDLING AGENT to protect the consignment from damages during transportation, stocking and loading into the ship. The HANDLING AGENT shall maintain a proper account of quantity loaded from each FCI Depot. 2.8 At the time of shipment, the HANDLING AGENT shall arrange transportation of Goods from FCI Depot after pre-inspection survey and weighment to port/wharf for effecting shipments. 2.9 The HANDLING AGENT shall arrange sufficient labour/trucks, etc., at their own cost for loading of Goods into rake/ship in time. 2.10 The HANDLING AGENT shall make all arrangements to bring back the Goods rejected by surveyor to MMTC's godown for temporary storage/without any charges. 2.11 The HANDLING AGENT shall arrange for temporary storage of Goods (in godown at port before loading into the vessel, if need be 2.12 The HANDLING AGENT shall arrange for inspection of vessels' hatches/holds by the surveyor and undertake fumigation prior to loading of vessel. They shall also obtain certificates to this effect to the satisfaction of MMTC 2.13 The HANDLING AGENT shall take-up stevedorin....
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....d Goods recovered from spillage and shifting of same to warehouse wharf/port The HANDLING AGENT shall maintain a separate record for such retrieved Goods. 6.4 The HANDLING AGENT shall be responsible to provide the facility of transit shed at their cost and expense 6.5 In case of demurrage and/or extra wharlage due to non-achievement of the guaranteed rate of loading, the same shall be to the account of the HANDLING AGENT. 6.6 All pre-shipment/shipment inspection charges shall be payable by MMTC. 6.7. All losses including demurrage, detention arising out of the delay in rake unloading/vessel loading would be to the account of the HANDLING AGENT. 6.8 The consolidated rates agreed with the Handling Agent shall be in force during the pendency of the agreement. There shall be no escalation or de-escalation of the consolidated rates agreed for whatsoever reason. 6.9 MMTC shall provide all requisite documents in time to comply and fulfill all statutory formalities. ANNEXURE S.No. Activity Cost/MT 1 Loading of SGS pre-inspected and approved cargo at FCI warehouse. Rs.11/- ....
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....bsp; Service Tax at actuals ie.5% Rs.1.25/- Wastage 0.5% of value of cargo Rs.25/- 23. According to the learned counsel for the appellant, the storage of goods before the same is loaded into the vessel, is outside the scope of the agreement. Hence, when the appellant undertook to handle the storage of the goods, it is an additional work done by the appellant to the benefit of the 1st respondent Company and hence, the appellant must be properly compensated. Since, the storage is beyond the scope of the Agreement, the provisions of Contract Act will apply as provided under Clause 16 of the Agreement and by virtue of the same, Section 70 of the Contract Act will come into operation and the appellant is entitled for restitution of the storage charges borne by the appellant. 24. While dealing with the above issue, the Arbitrator has held that the consolidated rate as fixed under the Annexure will not be subject to any escalation and considering the Clauses in the Agreement, there is no scope for the claimant to make any new claim under any head for whatsoever reason. This finding was rendered by the Arbitrator by taking into cons....
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....rall understanding of Clauses 2, 6 and the Annexure to the Agreement. The Handling Agent was expected to arrange for temporary storage of goods and provide the facility for transit shed at their cost and expense. The appellant has interpreted the same as if the transit shed is a temporary arrangement which cannot go beyond 30 days. Whereas, the 1st respondent has interpreted it to the effect that the transit shed is an intermediary process between unloading the goods from FCI godown and loading the same in the port and there is no time period fixed under the Agreement. Therefore, it was contended that the interpretation given by the appellant that whatever period exceeded thirty days will not be covered under the Agreement, is beyond the scope of the Agreement and such an interpretation has been made to suit the convenience of the appellant. 27. The Arbitrator has come to a conclusion that there were deliberations between the parties before the rates were fixed and that is the reason why Clauses 2.15, 6.1 and 6.8 were incorporated in the Agreement and hence, there is no scope for the appellant to claim compensation beyond what has been fixed under the Agreement. The Arbitrator h....