The Court's interference in proceedings under Section 37 of the Arbitration Act is narrow, and the Court does not sit as a Court of Appeal or re-appreciate and re-assess the evidence unless there is a patent illegality or perversity.

JUDGMENT :

TARA VITASTA GANJU, J.

F.A.O. (OS) (COMM) No. 126/2021 and C.M. APPL. No. 33734/2021 [Application filed on behalf of the Appellant seeking interim relief] and C.M. APPL. No. 39310/2021 [Application filed on behalf of Appellant seeking clarification/modification of order dated 28.09.2021]

1. The present Appeal under Section 13 of the Commercial Courts Act, 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 [hereinafter called “the Arbitration Act”] has been filed by the Appellant impugning the Judgment dated 23.06.2021 passed by the learned Single Judge in O.M.P. (COMM.) No. 71/2019 [hereinafter called “Impugned Judgment”], whereby the learned Single Judge has upheld the Arbitral Award dated 13.04.2016 [hereinafter called “Arbitral Award”], and dismissed the Petition filed by Appellant [hereinafter called “PRAGYA”] under Section 34 of the Arbitration Act.

2. The Respondent [hereinafter called “CFL”] had filed a claim in the sum of Rs. 2,65,54,292/- along with interest against the PRAGYA for failure to make payment under a Distributorship Agreement between the parties. The Arbitral Tribunal passed the Arbitral Award directing PRAGYA to pay a sum of Rs. 38,77,423/- along with future interest at the rate of 12.25% per annum from 13.05.2016 till the date of payment (in case of failure by PRAGYA to pay the awarded amount to CFL within one month).

3. By the Impugned Judgment, the learned Single Judge upheld the Arbitral Award and dismissed the Petition under Section 34 of the Arbitration Act filed by PRAGYA.

4. CFL had also filed a separate Petition under Section 34 of the Arbitration Act challenging the Arbitral Award by way of OMP (COMM.) No. 350/2016. The challenge in that Petition was limited to the extent of award of pre-reference and pendente lite interest on the amounts awarded in favour of CFL. The learned Single Judge of this Court, in OMP (COMM.) No. 350/2016 has on 25.05.2017 allowed the Petition filed by CFL and the Arbitral Award was set aside to the extent of rejection of CFL's claim for pre-reference and pendente lite interest. CFL was granted interest at the rate of 12.25% per annum from the date of invoices till the date of the Arbitral Award by the Judgment dated 25.05.2017. This Court was informed on 28.09.2021 that neither party has challenged this Judgment.

5. Briefly, disputes arose between CFL and PRAGYA in relation to noncompliance of a non-exclusive Distributorship Agreement dated 01.04.2005 entered into between CFL and PRAGYA for supply of Manganese Zinc Soft Ferrites to PRAGYA [hereinafter called “the Agreement”]. Under the Agreement, PRAGYA placed purchase orders on CFL for the supply of Manganese Zinc Soft Ferrites. The parties had also entered into Annual Agreements for the years 2007, 2008 and 2009.

5.1 It is CFL's case that it supplied goods to PRAGYA against various purchase orders over the period from 25.04.2009 to 10.06.2009, and raised invoices in terms of the Agreement. CFL claimed that PRAGYA failed and neglected to make payment in a sum aggregating to Rs. 54,14,934/- against the goods supplied.

5.2 PRAGYA issued 9 cheques totalling to Rs. 33,19,514/- as follows:

5.3 The aforesaid cheques were, however, dishonoured upon presentation. While PRAGYA claimed that the cheques were issued as security for any payment due, CFL claimed that the cheques were issued by