The court reaffirmed that an arbitrator's award is not subject to re-evaluation for evidence sufficiency under Section 34 of the Arbitration and Conciliation Act, emphasizing the limits of judicial interference.

JUDGMENT

Vibhu Bakhru, J. These are cross appeals under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereafter the `A&C Act') impugning an order dated 17.08.2020 (hereafter the `impugned order') passed by the learned Additional Commercial Judge. By the impugned order, the learned Court allowed the application filed by Scholastic India Pvt. Ltd. [the appellant in FAO (COMM) 112/2022, hereafter referred to as `Scholastic'] under Section 34 of the A&C Act impugning an arbitral award dated 05.09.2017 (hereafter the `impugned award').

2. The disputes between the parties arise in connection with a Lease Deed dated 08.03.2013 (hereafter the `Lease Deed') in respect of a property bearing "Killa No. 6/1, admeasuring 6 kanals 9 marlas, falling in rectangle No. 24, Khewat Khata No. 1821209, situated at Village Gopalpur, District Gurgaon, Haryana alongwith built up structure admeasuring 25,000 sq. ft" (hereafter the `premises').

3. In terms of the Lease Deed, Smt. Kanta Batra [the Appellant in FAO (COMM) 71/2021 and hereafter referred to as the `Lessor'] had leased the premises to Scholastic for a period of three years commencing from 01.03.2013 till 28.02.2016. In terms of Clause 5(b) of the Lease Deed, Scholastic had deposited a sum of Rs.15,00,000/- as interest free security deposit. A fire broke out in the said premises on 18.08.2014, which caused damage to the premises. The Lessor commenced the repairs to the premises in October 2014. She also informed Scholastic that the construction would be completed by 01.01.2015. The reconstruction/repairs were completed on 08.03.2015. Scholastic did not resume possession of the premises and claims that the Lease Deed stood terminated.

The Disputes

4. The Lessor claimed that the lease was not terminated in accordance with the agreed terms. In any event, Scholastic was not entitled to terminate the lease during the lock-in period. Accordingly, she claimed lease rentals quantified at Rs.44,49,450/-, which includes service tax as well as expenditure incurred on the air-cooling unit. In addition, the Lessor claimed an amount of Rs.1,09,58,054/- on account of expenditure incurred in repairs of the said premises. The said claim is premised on the basis that fire had broken out on account of negligence on the part of Scholastic to maintain its electrical installation (computers).

5. Scholastic disputed the claims. It claimed that the incident of fire on 18.08.2014 was a force majeure event and resulted in termination of the lease. It denied that it was liable to pay any lease rentals as claimed. Scholastic also disputed that it was responsible for the incident of fire or to reimburse any amount incurred by the Lessor in repairs to the premises. Scholastic claimed that it was entitled to a refund of the security deposit of Rs.15,00,000/- along with interest at the rate of 14% per annum. It also claimed expenses incurred due to fire quantified at Rs.7,57,882/-.

The Impugned Award

6. In view of the aforesaid disputes, the Arbitral Tribunal struck the following issues:

"13. On pleadings of parties following issues were settled:

I. Whether there was termination of the contract as per the agreement Ex. R-3?