IMPORTANT POINT
The main legal point established in the judgment is the limited scope of judicial interference with arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996, and the importance of adhering to the specified grounds for setting aside an award.

ORDER :

Per Shree Chandrashekhar, J.

M/s Bharat Sanchar Nigam Limited (in short, “BSNL”) has challenged the order passed in Commercial (Arbitration) Case No.54 of 2019 by which the objection taken by the BSNL to challenge the arbitral award dated 7th January 2019 through a petition under section 34 of the Arbitration and Conciliation Act, 1996 has been found without any substance.

2. Against the order dated 25th May 2022 passed by the Commercial Court at Ranchi, the present Commercial Appeal has been filed by the BSNL under section 13 (1-A) of the Commercial Courts Act, 2015.

3. The BSNL awarded the subject work to the claimant-company for the “Operation and Comprehensive Maintenance of Electro-Mechanical Service for USOF sites in Giridih and Koderma district under Cluster 26”. The work order dated 20th May 2009 was for Rs.51,85,104/-and the completion period was 24 months starting from 1st July 2009. However, the period for completion of the subject work under Master Agreement No.01A/USO/SLA/TEC/ RCH/2009-10 was extended till 30th April 2012.

4. Since a dispute had arisen between the parties in connection to the aforesaid contracts about payments made to the claimant-company and deductions by the BSNL on various counts, the claimant-company invoked Clause 25 of the Conditions of Contract on 8th June 2015 for appointment of the Arbitrator for resolving the dispute which had erupted between the parties, and the Sole Arbitrator was appointed by the Senior Chief Engineer (Electrical) of the BSNL vide Memorandum dated 26th October 2016. Pursuant to his appointment, the Arbitrator issued letter dated 26th November 2016 to both the parties for their no objection before proceeding further in the matter. Later on, after both the parties submitted their no objection to the appointment of the Sole Arbitrator notice dated 31th January 2017 was issued to them. Subsequently, the claimant-company unsuccessfully approached the High Court of Jharkhand in Arbitration Application No. 17 of 2017 to challenge the appointment of Sri Saurabh Tyagi as the Sole Arbitrator and his appointment was affirmed by the High Court, whereafter a fresh notice was given by the Sole Arbitrator to both the parties for submission of their claim and counter-claim.

5. The Arbitrator commenced the proceedings on 9th January 2018 by directing the parties to submit their respective statement of claim(s) and counter-claim(s). On 9th August 2018, the first hearing in respect of all five arbitration cases was held by the Sole Arbitrator at New Delhi. Thereafter, the arbitral proceedings were held on 24th August 2018 and 25th August 2018 and the BSNL was directed to furnish certain documents.

6. The Arbitrator has awarded Rs.31,31,083/-to the claimant-company on account of the claims found admissible and justifiable by him. The awarded sum carried simple interest @ 10% from three months after the date of completion of work for the amount due till 31st December 2018 and future interest on the awarded sum @ 10% from 1st May 2019 till the date of payment or the decree of a competent Court – the interest upto 31st December 2018 has been calculated at Rs.10,88,397/-.

7. By filing a petition under section 34 of the Arbitration and Conciliation Act 1996, the BSNL challenged the aforesaid award on the ground of procedural irregularity committed by the Sole Arbitrator inasmuch as without framing issues and affording an opportunity to the parties to examine witness the Sole Arbitrator has conducted the arbitral proceedings and made the award dated 7th January 2019.

8. The Presiding Officer of the Commercial Court at Ranchi has referred to the judgments in “Navodaya Mass Entertainment Limited v. J. M. Combines” (2015) 5 SCC 698 and “Associate Builders v. DDA” (2015) 3 SCC 49 to fortify his decision that the objections raised by the BSNL in the petition under section 34 of the Arbitration and Conciliation Act, 1996 do not fall under any of the grounds mentioned therein on which an arbitral awar