The court cannot modify an arbitral award under Section 34 of the J&K Arbitration and Conciliation Act; it can only set aside or uphold the award based on specified grounds.

JUDGEMENT

1. These two arbitration appeals are directed against judgement/order dated 18th December 2019 passed by Additional District Judge, Srinagar (“court below” for short) and for setting-aside the same on the grounds made mention of therein.

2. I have heard learned counsel for parties and considered the matter.

3. As record would tend to show that an Award dated 28th December 2014 was passed by Arbitral Tribunal comprising of three arbitrators, namely, Shri R.P. Indoria; Shri J.S. Katoch; and Shri N.N.Singhal. By virtue of the said Award, appellant-Government of J&K was directed to pay Rs.78,92,73,307/- to claimants/respondents along with interest @ 12% per annum from 9th May 2012 upto the date of Award.

4. Against aforesaid Award, an application under Section 34 of J&K Arbitration and Conciliation Act, 1997 (for short “the Act”) was filed by Government of J&K through Chief Engineer, Mughal Road Project, J&K (appellant in AA no.07/2020) before the court below, which in terms of impugned judgement/order has modified the Arbitral Tribunal’s award.

5. While taking into consideration submissions of learned senior counsel for parties, an issue has come up as to whether the court below in an application under Section 34 of J&K Arbitration Act can modify an Award. Answer thereto is in negative.

6. The law about modifying an Award has been settled by the Supreme Court in a catena of cases; some of which are: National Highways Authority of India v. M. Hakeen and another, (2021) 9 SCC 1; Dakshin Haryana Bijli Vitran Nigam Limited v. Navigant Technologies Private Limited, (2021) 7 SCC 667; National Highways Authority of India v. Sri P. Nagaraju @ Cheluvaiah & another, 2022 LiveLaw (SC) 584; M/s Larsen Air Conditioning and Refrigeration Company v. Union of India and others, 2023 LiveLaw (SC) 631; Civil Appeal No.8067 of 2019 titled as S. V. Samudram v. State of Karnataka dated 4th January 2024. It has been expounded that even if an error is found in the award, it would not be possible for the Court entertaining the petition under Section 34 or for the appellate court under Section 37 of the Act, to modify the award. Holding further that any court under Section 34 would have no jurisdiction to modify the arbitral award, which at best, given the same to be in conflict with the grounds specified under Section 34 would be wholly unsustainable in law and any attempt to “modify an award” under Section 34 would amount to “crossing the Lakshman Rekha”. It has also been held that where the court sets-aside an award passed by arbitral tribunal, the underlying disputes would require to be decided afresh in an appropriate proceeding. Under Section 34, the court may either dismiss objections filed, and uphold the award, or set-aside the award if the grounds contained in Subsections (2) and (2-A) of Section 34 are made out. There is no power to modify an arbitral award. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired.

7. The Supreme Court in ONGC Ltd v. Saw Pipes Ltd, (2003) 5 SCC 705 while construing the expression “the public policy of India” contained in Section 34(2)(b)(ii) of the Arbitration Act, 1996, held that “public policy of India” is required to be given wider meaning and that the concept of public policy connotes some matter which concerned public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgement/decision is likely to adversely affect the administration of justice. Hence, the award could be set-aside if it is patently illegally and the result would be that award could be set-aside if it is contrary to fundamental policy of Indian law, or the interest of In