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2020 Supreme(Jhk) 628
IN THE HIGH COURT OF JHARKHAND AT RANCHI
ANIL KUMAR CHOUDHARY, J
The State of Jharkhand through the Executive Engineer, D.W. & Sanitation Department - Appellant
Versus
M/s Gitanjali Enterprises having its office at Industrial Area, Bokaro Steel City- Respondent
Arb. Appeal No. 09 of 2017
Decided On : 10-06-2020
For the Appellant : Mr. P.K. Bhattacharya, Adv.
For the Respondent: Mr. Shrestha Gautam, Adv.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 37 - Section 73 - Section 30(2) - Section 34 - Section 31 - Section 34(2-A) - Section 28(3) - Section 61 - Section 76(a) - Section 76 - Chief Engineer - Brief facts of this case is that there was a dispute between parties in respect of work done in terms of an agreement between them and as per terms of agreement between parties, matter was placed before sole arbitrator being Chief Engineer, departmental head of department concerned - During pendency of arbitration, parties to arbitration proceeding entered into a settlement and requested arbitrator to record settlement form of an arbitral award on agreed terms between parties to arbitration and same was not objected to by arbitral tribunal rather arbitral tribunal has consented for same and accordingly passed award in arbitration - In court below, it was agitated by appellant herein-who was also appellant before court below, that provisions which reads - When it appears to conciliator that there exist elements of a settlement which may be acceptable to parties, he shall formulate terms of a possible settlement and submit them to parties for their observations - After receiving observations of parties, conciliator may reformulate terms of a possible settlement in light of such observations –Held, This court is of considered view that settlement as envisaged, cannot be found fault with merely because a written settlement signed by parties has not been part of arbitral award - Thus it is crystal clear that is not required to be complied with, if a settlement is arrived at between parties to an agreement in an arbitration proceeding and award which is subject matter of challenge in this appeal is not bad for non-compliance - Point of determination is answered accordingly - Thus considering limited scope of interference in exercise of appellate power, as already been mentioned above, this court is of considered view that there is no illegality in impugned judgment passed by learned court below, in exercise of its power – Appeal Dismissed.
By the Court:-
1. Heard the parties through video conferencing.
2. This appeal has been preferred by the appellant under section 37 of the Arbitration and Conciliation Act, 1996 against the Judgment dated 08.02.2017 passed by the learned Civil Judge, (Sr. Division)- 1st, Dhanbad in Misc. (Arbitration) Case no. 14 of 2014 whereby and whereunder, learned court below has dismissed the Misc. Appeal filed under section 34 of the Arbitration and Conciliation Act, 1996 preferred before it, challenging the award by the sole arbitrator.
3. The brief facts of this case is that there was a dispute between the parties in respect of the work done in terms of an agreement between them and as per the terms of the agreement between the parties, the matter was placed before the sole arbitrator being the Chief Engineer, the departmental head of the department concerned. During pendency of the arbitration, the parties to the arbitration proceeding entered into a settlement and requested the arbitrator to record the settlement in the form of an arbitral award on agreed terms between the parties to the arbitration and the same was not objected to by the arbitral tribunal rather the arbitral tribunal has consented for the same and accordingly passed the award in the arbitration. In the court below, it was agitated by the appellant herein-who was also the appellant before the court below, that the provisions of section 73 of the Arbitration and Conciliation Act, 1996 which reads as under:
73. Settlement agreement.—(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties has not been complied with by the sole arbitrator before passing the award, hence, it was submitted before the court below that the award impugned before the court below was bad in law and the same be set aside. The court below in the impugned judgment observed that the settlement between the parties, was in terms of section 30 (2) of Arbitration and Conciliation Act, 1996 and hence, the provisions of section 73 of the Arbitration and Conciliation Act, 1996 was not attracted, hence, it dismissed the appeal.
4. It is submitted by Mr. P.K. Bhattacharya, learned counsel for the appellant that as no any settlement agreement in writing was arrived at during the arbitral proceeding between the parties to the arbitration, hence, learned court below failed to apply the ratio of the judgment of Hon’ble Supreme Court of India in the case of Mysore Cements Ltd vs. Svedala Barmac Ltd. reported in AIR 2003 SC 3493, in paragraph 16 of which, Hon’ble Supreme Court of India has held as under:
“16. If the Settlement Agreement comes into existence under Section 73 satisfying the requirements stated therein, it gets the status and effect of an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30 of the Act. The submission that when there was substantial compliance with the requirements of Section 73, as in the present case, when the parties have arrived at a Settlement Agreement like the parties before any Civil Court filing a compromise petition, there should be no impediment to take up execution based on such a compromise or agre
