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2022 Supreme(MP) 225

IN THE HIGH COURT OF MADHYA PRADESH
Sujoy Paul and Prakash Chandra Gupta, JJ.
State of Madhya Pradesh (The) v. M/S SMEC International
Pvt. Ltd.
Arbitration Appeals No. 47 of 2022 and 46 of 2022 (Jabalpur); Decided on 15.9.2022

Advocates:
Amit Seth, Deputy Advocate General with Ankit Agrawal,
Government Advocate for appellant/State; K. K. Sharma with Jai Shukla for respondent.

Headnote:

(1) Arbitration and Conciliation Act, 1996 -- S. 34 (3) -- limitation -- objection u/s. 34 (3) dismissed -- no more open to Court to take a different view -- later finding that application u/s. 34 is barred by limitation is certainly perverse -- cannot sustain judicial scrutiny. [Para 24

(2) Arbitration and Conciliation Act, 1996 -- S. 34 (3) -- jurisdiction -- even without formal pleading, being purely a legal plea, this aspect can be raised -- appellant is entitled to raise ground of jurisdiction even if it is not taken u/s. 34 -- if Court finds that award is in respect of subject-matter incapable of arbitration by operation of law, it is duty bound to set aside award. (2009) 17 SCC 796 and (2018) 16 SCC 758 followed. (2022) 2 MPLJ 425 relied on. 2006 (2) Arb.LR 498 (SC), 2015 (1) JLJ 100 (SC), 2017 (3) JLJ 66 (FB), (2022) 2 SCC 275, (2015) 3 SCC 49, (2018) 3 SCC 133, (2019) 15 SCC 131, (2019) 4 SCC 163 and AIR 1988 SC 1531 referred to. [Paras 26 & 32

(3) Arbitration and Conciliation Act, 1996 -- S. 34 -- award -- lack of reasons -- minimum expectation was that Court will assign adequate reasons as to why grounds taken by applicant did not suit it -- Court directly reached ‘conclusion’ without assigning any ‘reason’ therefor -- whether grounds taken in application u/s. 34 fulfil conditions or not, should have been considered by assigning justifiable reasons -- reasons are heartbeat of conclusion -- Court below has not dealt with rival contentions of parties by assigning minimum justifiable reasons -- matter remanded to hear parties and decide matter afresh in accordance with law. (2010) 9 SCC 496 and (1983) 2 SCC 305 followed. A.A. No. 1 of 2012 decided on 22.4.2016 (Gwalior Bench) relied on. [Paras 28, 30, 31 & 34

¼1½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 34 ¼3½ && ifjlhek && /kkjk 34 ¼3½ ds v/khu vkifÙk [kkfjt && fQj U;k;ky; fHkUu n`f"Vdks.k ugha viuk ldrk && ijorhZ fu"d"kZ fd /kkjk 34 ds v/khu vkosnu ifjlhek ls oftZr gS] fuf'pr :i ls foi;ZLr gS && U;kf;d laoh{kk esa fLFkj ugha jg ldrkA ¼iSjk 5

¼2½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 34 ¼3½ && vf/kdkfjrk && vkSipkfjd vfHkopu ds fcuk Hkh] fo'kq)r% fof/kd vfHkokd~ gksus ds dkj.k] ;g igyw m}sfyr fd;k tk ldrk gS && /kkjk 34 ds v/khu vf/kdkfjrk dk vk/kkj ugha fy;k x;k gks rc Hkh vihykFkhZ mls m}sfyr djus dk gdnkj gS && ;fn U;k;ky; dk fu"d"kZ gS fd iapkV ,slh fo"k;oLrq ls lacaf/kr gS tks fof/k ds izorZu ls eè;LFkrk ;ksX; ugha] rks og iapkV vikLr djus ds fy, drZO;kc) gSA ¼2009½17 ,l lh lh 796 rFkk ¼2018½16 ,l lh lh 758 vuqlfjrA ¼2022½2 ,e ih ,y ts 425 voyafcrA 2006¼2½ vkfcZ- ,y vkj 498 ¼,l lh½] 2015 ¼1½ ts ,y ts 100 ¼mPpre U;k-½ 2017¼3½ ts ,y ts 66 ¼iw.kZ U;k;ihB½] ¼2022½2 ,l lh lh 275] ¼2015½3 ,l lh lh 49] ¼2018½3 ,l lh lh 133] ¼2019½15 ,l lh lh 131] ¼2019½4 ,l lh lh 163 rFkk , vkb vkj 1988 ,l lh 1531 fufnZ"VA¼iSjk 26 ,oa 32

¼3½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 34 && iapkV && dkj.kksa dk vHkko && U;wure izR;k'kk ;g Fkh fd U;k;ky; bl ckjs esa ;Fkksfpr dkj.k nsxk fd vkosnd }kjk fy, x, vk/kkj mls D;ksa mi;qDr ugha yxs && U;k;ky;] mlds fy, dksbZ ^dkj.k* fn, fcuk] lh/ks ^fu"d"kZ* ij igq¡p x;k && èkkjk 34 ds v/khu vkosnu esa fy, x, vk/kkj 'krks± dks iwjk djrs gSa ;k ugha] bl ij mfpr dkj.k nsdj fopkj fd;k tkuk pkfg, Fkk && dkj.k fu"d"kZ dh /kM+du gksrs gSa && fupys U;k;ky; us i{kdkjksa ds izfrLi/khZ ladFkuksa ij U;wure mfpr dkj.k nsdj fopkj ugha fd;k && i{kdkjksa dks lqu dj fof/k ds vuqlkj u, fljs ls fofu'pr fd, tkus ds fy, ekeyk izfriszf"krA ¼2010½9 ,l lh lh 496 rFkk ¼1983½2 ,l lh lh 305 vuqlfjrA ek/;LFke~ vihy Ø- 1 lu~ 2012 fu.khZr fnukad 22-4-2016 ¼Xokfy;j [kaMihB½ fufnZ"VA ¼iSjk 28] 30] 31 ,oa 34

JUDGEMENT

1. In these appeals, the appellants have called in question the legality, validity and propriety of the similar impugned orders dated 20.4.2022 whereby, the applications filed by the appellant under section 34 of the Arbitration Act 1996 (Arbitration Act) were dismissed by the Commercial Court.

A.A. No.46 of 2022

2. This appeal filed under section 37 of the Arbitration Act assails the order dated 20.4.2022 whereby the application of appellant under section 34 of the Arbitration Act was dismissed merely by giving two reasons. Firstly, application filed under section 34 is barred by limitation. Secondly, the grounds taken in the application filed under section 34 are not sufficient to disturb the award of the learned Arbitrator.

Appellant’s contentions :--

3. Shri Amit Seth, learned Deputy Advocate General submits that so far question of limitation is concerned, the learned Commercial Court has passed the order without considering its own finding wherein while rejecting an application under section 34(3) of Arbitration Act of the respondent, the Commercial Court itself recorded that the application under section 34 was filed within time. Reliance is placed on order of Court below dated 3.7.2019 whereby the application preferred by the respondent under section 34(3) was rejected by the Court below.

4. Learned counsel for the appellant by taking this Court to the grounds taken in the application preferred under section 34 of the Arbitration Act, urged that appellant had raised various grounds which fall within the ambit and scope of section 34 of the said Act. The learned Commercial Court considered and reproduced the contentions of the parties up to para 5 of the impugned order.

5. Thereafter, the Court framed a question and the Court recorded its finding from para 7 to 8 relating to limitation. The Court then reproduced the judgments cited by the parties and referred the relevant statutory provisions.

6. For the reasons stated above and as per previous order of Court below dated 3.7.2019, para-9 is pregnant with an erroneous finding that the application filed under section 34 was barred by limitation. Thereafter, again upto paragraph 15, the tribunal either reproduced the statutory provisions or mentioned the judgments cited by the parties.

7. In para 16 of the impugned order, the tribunal directly reached to a conclusion that the grounds taken by the appellant assailing the award do not fall within the ambit of section 34 (2)(b)(ii) of the Arbitration Act.

8. It is further recorded that award is against ‘public policy’ could not be established by the appellant and therefore the application is dismissed.

9. Shri Amit Seth, learned Deputy Advocate General submits that the Court below has not assigned any reason as to why the grounds taken by the appellant were not found to be trustworthy. There is no iota of discussion by considering each ground taken by the State and by assigning reason as to why the said grounds do not fall within the ambit of section 34 of the said Act. The Court below directly jumped to the ‘conclusion’ without assigning any ‘reason’. Reliance is placed on a Division Bench judgment of this Court in A.A. No.01/2012 (General Manager BSNL v. Anil Kumar Tripathi) decided on 22.4.2016 (Gwalior Bench). It is urged that for this reason alone, impugned order is liable to set aside and matter may be remitted back to the Court below to pass a reasoned order in accordance with law.

10. Learned counsel for the appellant/State further submits that section 34(2)(iv) makes it clear that when arbitral award is passed on a point not contemplated or not falling within the terms of submission to arbitration or it contains decision on matters beyond the scope of submission to arbitration, interference can be made. The Court below although mentioned the grounds and factual backdrop raised by appellant in sufficient deta

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