IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
K.M. Suresh Babu - Appellant
Versus
M/s. Sundaram Finance Limited, Chennai & Others - Respondent
O.P. No. 199 of 2014
Decided On : 05-03-2020
Arbitration and Conciliation Act - Challenge to Arbitral Award - Section 34
Fact of the Case:
The petitioner filed an Original Petition under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside an arbitral award dated 27.05.2013. The award was made by an Arbitral Tribunal constituted by a sole Arbitrator regarding a 'Hire Purchase agreement dated 06.02.1998 bearing HP Con.No.RP3347'. The petitioner contended that the arbitration claim of the first respondent company had become stale and time-barred.
Finding of the Court:
The Court found that the arbitration claim was time-barred and in conflict with the public policy of India. The Court emphasized the importance of expeditious disposal of such petitions and referred to the statutory expression in sub-section (6) of Section 34 of the Arbitration and Conciliation Act, which mandates that such petitions shall be disposed of expeditiously and within a period of one year from the date of service of notice.
Issues: The main issue was whether the arbitration claim was time-barred and in conflict with public policy.
Ratio Decidendi: The Court held that the arbitration claim was time-barred and in conflict with public policy, fitting into Section 34(2)(b)(ii) of the Arbitration and Conciliation Act.
Final Decision: The Court allowed the Original Petition and set aside the arbitral award, refraining from imposing costs in this case.
JUDGMENT
(Prayer: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the impugned award dated 27.05.2013 passed in Arbitration Case No.R/SF/32 of 2007 and served on the petitioner on 30.05.2013.)
1. Mr. Manoj Sreevalsan, learned counsel on record for petitioner is before this Court.
2. PREFATORY NOTE:
2(i) Instant 'Original Petition' ('OP' for the sake of brevity) has been filed under Section 34 of 'The Arbitration and Conciliation Act, 1996' (Act No.26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity and it has been filed assailing an arbitral award dated 27.05.2013 made by an Arbitral Tribunal constituted by a sole Arbitrator qua a 'Hire Purchase agreement dated 06.02.1998 bearing HP Con.No.RP3347' (hereinafter 'said contract' for the sake of brevity, clarity and convenience). One covenant in said contract is an arbitration clause and therefore, the same serves as 'arbitration agreement' between the parties being 'arbitration agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.
2(ii) Challenge to an arbitral award under Section 34 of A and C Act, going by the language in which Section 34 of A and C Act is couched, is by way of an 'application', but this Court is giving the nomenclature 'Original Petition' for such applications under Section 34 of A and C Act. Therefore, this Court will continue to refer to instant matter as 'OP'. A OP under Section 34 of A and C Act is neither an appeal nor a revision. It is not even a full-fledged judicial review, but it is a limited judicial review within the contours and confines of Section 34 of A and C Act. By 'contours and confines' of Section 34 of A and C Act, this Court refers to the 8 designated slots adumbrated in Section 34 of A and C Act. To be noted, 5 slots are adumbrated under Section 34(2)(a), two slots are adumbrated under Section 34(2)(b) and one slot figures under Section 34(2-A). This Court chooses to deploy the term 'slots' in preference to 'grounds' as instant OP (as mentioned earlier) is neither an appeal nor a revision and it is not even a full-fledged judicial review. To put it differently, it is a mere 'challenge to an award'. When it comes to 'challenge to an award', the principle is, if a petitioner/applicant is able to fit his case into any one or more of the eight slots snugly, the award will be dislodged or in other words set aside. If that not be so, the award will not be interfered with as 'minimum judicial interference' in 'Alternate Dispute Resolution' ('ADR') mechanism, which is the sublime philosophy and salutary principle underlying the scheme of A and C Act. In this context, this Court chooses to describe the eight slots adumbrated in Section 34 as eight pigeon holes. To be noted, some of these pigeon holes are even in the nature of keyholes and pinholes, as some of these slots have been circumscribed by limitations. An illustrative list is, (a) not entailing review on merits, (b) re-appreciation of evidence impermissible being made impermissible and (c) eliminating even erroneous application of law, from patent illegality slot i.e., sub-section (2-A) of Section 34. Therefore patent illegality slot is narrowed down in concentric circles by such circumscribing list in proviso making the slot a keyhole or may be a pinhole.
3. Having set out the scope and ambit of instant OP under Section 34 of A and C Act and having noticed that minimum judicial interference is one of the important pillars of ADR mechanism, this Court reminds itself that expeditious disposal of OPs under Section 34 is also another important facet of the matter. This facet of the matter finds statutory expression in sub-section (6) of Section 34 of A and C Act, which mandates that such OPs shall be disposed of expeditiously and in any event within a period of one year from the date on which notice under sub-section (5) is served on the party concerned. This sub-section (6)
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