2012(3) LAW HERALD (P&H) 2280
IN THE HIGH COURT OF PUNJAB AND HARYANA
Before
The Hon’ble Mr. Justice L.N. Mittal
Civil Revision No.5832 of 2008 (O&M)
State of Haryana
v.
M/s. Bridge & Roof Company (India) Limited & Anr.
{Decided on 04/07/2012}
(B)Arbitration Act, 1940, S.34--Objections--Award cannot be set aside on merits. (Para 7)
(C) Arbitration Act, 1940, S.34--Objections--Passing of award on the basis of 'no evidence' is misconduct within the meaning of Section 30 of the Act. (Para 7)
(D) Civil Procedure Code, 1908, S.34--Award--Future Interest--Future interest has to be awarded at such rate as the Court deems reasonable, without any fetters of upper or lower limits--Arbitration Act, 1940, S.29.
Section 34 CPC, which limits the future rate of interest to 6% per annum in the case of non-commercial transaction, is not applicable to this case because Section 29 of the Act specifically empowers the Court to award future interest at such rate as the Court deems reasonable, without fixing any lower or upper limit. (Para 12)
Mr. L.N. Mittal, J.: (Oral) - This is revision petition filed by State of Haryana (in short, the State) under Article 227 of the Constitution of India to assail judgment dated 27.03.2008 (Annexure II) passed by learned Additional District Judge, Karnal.
2. Respondent No.1-M/s. Bridge & Roof Company (India) Limited (A Govt. of India undertaking) (in short, the Company) executed work of the petitioner-State. There was dispute between the parties. The dispute was referred to respondent No.2-Arbitrator who gave award dated 26.11.1999 awarding Rs.61.37 lacs to be paid by petitioner to respondent No.1 less Rs.5.32 lacs awarded to the petitioner.
3. Respondent No.1 filed application for making the award as rule of the Court under Sections 14 and 17 of the Arbitration Act, 1940 (in short, the Act) along with interest @ 24% per annum whereas petitioner State filed objections under Section 30 of the Act for setting aside the award. Learned Additional Civil Judge (Senior Division), Karnal vide judgment dated 01.03.2007 dismissed the objection petition filed by State and allowed the application made by respondent No.1 and made the award as rule of the Court.
4. State of Haryana preferred appeal against judgment of the trial Court whereas respondent No.1 filed cross-objections in the said appeal claiming future interest on the awarded amount from the date of decree till recovery. Learned Additional District Judge, Karnal vide impugned judgment dated 27.03.2008 dismissed the appeal as well as the cross-objections. Feeling aggrieved, State has filed this revision petition.
5. Respondent No.1 has also filed CR No.2101 of 2010 claiming future interest on the awarded amount @ 24% per annum from the date of decree till recovery. The said revision petition shall also stand disposed of by this common order.
6. I have heard learned counsel for the parties and perused the case file.
7. Counsel for the petitioner-State contended that the award can be set aside even on merits under Section 30 of the Act. The contention cannot be accepted. The award can be set aside under Section 30 of the Act on limited grounds i.e. Arbitrator has misconducted himself or the proceedings or the award has been made after supersession of the arbitration proceedings or after the arbitration proceedings became invalid or the award has been improperly procured or is otherwise invalid. In the instant case, the petitioner- State filed objections under Section 30 of the Act to challenge the award mainly on merits. However, arbitration award cannot be challenged on merits. Counsel for petitioner-State relied on judgment of Hon’ble Supreme Court in case of State of Rajasthan and another versus Ferro Concrete Construction Private Limited, (2009) 12 Supreme Court cases 1. However, in that case, the award was not set aside on merits but it was held that if award is passed on ‘no evidence’, then it amounts to legal misconduct. In that case, award was passed only on the basis of claim statement without any evidence. Thus in that case, it was not laid down that Arbitrator’s award can be set aside on merits, rather it was laid down that passing of award on the basis of ‘no evidence’ is misconduct within the meaning of Section 30 of the Act. In the instant case, however, the award is not passed on ‘no evidence’. Consequently the judgment in the case of State of Rajasthan (supra) has no applicability to the instant case.
8. Both the courts below have discussed in detail the objections raised by the State and have arrived at concurrent finding against the State. There is no infirmity, much less illegality, perversity or jurisdictional error in impugned judgments of the Courts below in this regard so as to call for interference by this Court at the instance of State of Haryana by exercising power under Article 227 of the Constitution of India. Accordingly CR No. 5832 of 2008 filed by the State of Haryana is devoid of merit.
9. Now coming to CR No.2101 of 2010, counsel for the Comp
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