SUPREME COURT OF INDIA
R. Banumathi, Indu Malhotra, Aniruddha Bose, JJ.
PATEL ENGINEERING LTD. – Petitioner
VERSUS
NORTH EASTERN ELECTRIC POWER CORPORATION LTD. (NEEPCO) – Respondent
Special Leave Petition (C) NOS. 3584-85 of 2020 (Arising out of SLP(C) D. No. 577 of 2020) with Special Leave Petition (C) Nos. 3438-3439 of 2020 (Arising Out of SLP(C) D No. 593 of 2020) and Special Leave Petition (C) Nos. 3434-3435 of 2020 (Arising Out of SLP(C) D. No.595 of 2020)
Decided on : 22-05-2020
Arbitration and Conciliation Act, 1996 – Sections 34 and 37 – Constitution of India – Article 137 – Review of arbitral award – Present case arises out of a domestic award between two Indian entities – Ground of patent illegality is a ground available under statute for setting aside a domestic award, if decision of Arbitrator is found to be perverse, or, so irrational that no reasonable person would have arrived at the same; or, construction of contract is such that no fair or reasonable person would take; or, that view of Arbitrator is not even a possible view – While dealing with appeal under Section 37 of Act, High Court has considered matter at length and held that while interpreting terms of contract, no reasonable person could have arrived at a different conclusion and that awards passed by Arbitrator suffer from vice of irrationality and perversity – It is now not open to re-open the matter by filing a review petition on same grounds which have been rightly dismissed by High Court – Special Leave Petitions dismissed. (Paras 22, 27, 28 and 29)
Facts of the Case:
Present special leave petitions arise out of the impugned order dated 10.10.2019 passed by the High Court of Meghalaya at Shillong in and by which the High Court declined to entertain the review petitions filed by the petitioner seeking review of the judgment and order dated 26.02.2019 in Arbitration Appeal Nos.3, 4 and 5 of 2018 on the ground that no ground for review is made out and that there is a delay in filing the application for review.
Findings of the Court:
Ground of patent illegality is a ground available under the statute for setting aside a domestic award, if the decision of the arbitrator is found to be perverse, or, so irrational that no reasonable person would have arrived at the same; or, the construction of the contract is such that no fair or reasonable person would take; or, that the view of the arbitrator is not even a possible view.
Result : Special Leave Petitions dismissed.
ORDER
1. These special leave petitions arise out of the impugned order dated 10.10.2019 passed by the High Court of Meghalaya at Shillong in and by which the High Court declined to entertain the review petitions filed by the petitioner seeking review of the judgment and order dated 26.02.2019 in Arbitration Appeal Nos.3, 4 and 5 of 2018 on the ground that no ground for review is made out and that there is a delay in filing the application for review.
2. We have heard Mr. Harish Salve and Mr. Neeraj Kishan Kaul, learned Senior counsel appearing on behalf of the petitioner. On behalf of the respondent, we have heard Mr. Tushar Mehta, learned Solicitor General and Mr. Huzeffa Ahmadi, learned Senior counsel at some length, even at the time of the admission.
3. The learned sole arbitrator has passed the arbitral award dated 29.03.2016 in respect of Package-I holding as follows:-
"Based on my findings above, I have no hesitation in coming to the considered finding that the contract itself provides rate(s) for payment of extra lead in item Nos.2.7 and 3.4 of the BOO for surface and underground structures respectively. Admittedly material had been transported from a lead much longer than that envisaged at the time of award of work in favour of the claimant. It is also an admitted case of the parties that the claimant is entitled to extra payment for the extra lead. The only point at issue is whether Clause 33(ii)(a) or Clause 33(iii) would be applicable for working out the rate payable for transportation. In view of my findings, I have no hesitation in holding that the payment of extra lead is to be determined in accordance with Clause 33(ii)(a) for the item which has deviated being already available in the contract.
I, therefore, answer the reference as follows:
The rate for extra lead for transportation of sand and boulders from Government approved quarries to the work site for package-I works under KaHEP shall be decided in terms of Clause 33(ii)(a) of Part-III, Volume-I, Conditions of Contract of Book-II of Contract Agreement No.NEEPCO/ED/QP/C&P/R/C/KaHEP/560 of 2004-05 dated 17.12.2004."
Similar Declaratory Arbitral Awards dated 29.03.2016 were passed by the learned sole arbitrator in respect of the other two Arbitral References in respect of contracts pertaining to Package-I I and Package-III of the project.
4. Respondent-North Eastern Electric Power Corporation Ltd. (NEEPCO) filed three applications under Section 34 of the Arbitration and Conciliation Act, 1996 before the Additional Deputy Commissioner (Judicial), Shillong challenging the three arbitral awards dated 29.03.2016 in respect of Packages-I, II and III. The Additional Deputy Commissioner (Judicial) vide common judgment dated 27.04.2018 rejected the applications under Section 34 of the Act and upheld all the three arbitral awards. The respondent NEEPCO filed three appeals under Section 37 of the Act before the High Court in Arbitration Appeal No(s).3, 4 and 5 of 2018. By the common judgment dated 26.02.2019, the High Court allowed the respondents appeals and set aside the common judgment dated 27.04.2018 passed by the Additional Deputy Commissioner (Judicial).
5. Aggrieved by the common judgment dated 26.02.2019, the petitioner preferred special leave petitions before the Supreme Court in SLP (C) Nos. 13629-13631 of 2019. After hearing both the parties, the Supreme Court vide order dated 19.07.2019 dismissed all the three SLPs filed by the petitioner holding that the Court is not inclined to interfere in the matters.
6. After dismissal of the SLPs, the petitioner filed review petitions before the High Court on the ground that the judgment of the High Court dated 26.02.2019 suffers from error apparent on the face of the record as it had not taken into consideration the amendments made to Arbitration and Conciliation Act, 1996 by Amendment Act of 2015. The said review petitions came to be dismissed by the High Court vide the impugned orders.
7. We heard the matter at some length
Durga Shankar Mehta v. Thakur Raghuraj Singh and Others (1955) 1 SCR 267 – Referred [Para 8]
Shanker Motiram Nale v. Shiolalsing Gannusing Rajput (1994) 2 SCC 753 – Referred [Para 8]
Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705 – Relied [Para 13]
Associate Builders v. Delhi Development Authority (2015) 3 SCC 49
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