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2023 Supreme(Online)(Bom) 20238
BENCH AT NAGPUR
ANIL S. KILOR, J
Shri Yadneshwar S/o. Gangadhar Anwane – Appellant
Versus
Shri Mahesh S/o. Vijay Deshmukh – Respondent
Arbitration Appeal No. 09 of 2019
For the Appellants/Petitioners: Shri S.P.Kshirsagar
For the Respondents: Shri N.S.Khubalkar
District Judges lack authority under Section 34 of the Arbitration Act to modify arbitral awards, emphasizing the importance of maintaining arbitration's integrity and expediency.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Jurisdictional limits - The District Judge exceeded its powers by modifying the arbitral award instead of setting it aside or refusing to set aside as per provisions of Section 34. (Paras 10-12)
(B) Courts' supervisory role - Courts may only set aside awards under specific limited grounds to maintain arbitration's expediency, not correct errors. (Paras 10-11)
Facts of the case:
The dispute arose from a contract regarding the sale of a flat, wherein the arbitrator directed refund instead of specific performance. The District Judge modified the award, leading to this appeal.
Findings of Court:
The court held no power exists under Section 34 to modify an award, and thus remanded the case to the District Judge for fresh consideration.
Issues: Whether the District Judge had jurisdiction to modify the arbitral award under Section 34.
Ratio Decidendi: The court reaffirmed that modification of awards is outside the jurisdiction conferred to the District Judge under Section 34.
Result: Appeal is partly allowed.
| Table of Content |
|---|
| 1. dispute arose from a contract for flat sale. (Para 2 , 3) |
| 2. argument about modifying award and jurisdiction under section 34. (Para 4 , 5 , 6) |
| 3. court's role limited to setting aside awards, not modifying. (Para 10 , 11) |
| 4. decision confirms lack of modification authority under section 34. (Para 12) |
| 5. appeal resulted in remand for fresh consideration. (Para 18) |
1. Heard.
2. This Court in a dispute arising out of the agreement relating to performance of contract regarding the sale of a new flat, appointed a Sole Arbitrator, who passed an award refusing the specific performance and directing the petitioner to refund the amount.
3. The said award was the subject matter of challenge in Civil Misc. Application No.1240 of 2016 filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”) before the Principal District Judge, Nagpur, who has allowed the application and thereby modified the award vide judgment and order dated 05/02/2019, which is impugned in the present writ petition.
4. Shri Kshirsagar, learned counsel for the appellant submits that in view of the judgment of the Hon’ble Supreme Court of India in the case of NHAI ..vs.. M. Hakeem, reported in (2021) 9 SCC 1 and the judgment of the Division Bench of this Court passed in Arbitration Appeal No.06 of 2015 and other connected appeals, the Principal District Judge has no authority or power under Section 34 of the Act of 1996 to modify the award.
5. It is submitted that the District Court under Section 34 of the Act of 1996 can set aside the award or by adjourning the application for a period of time determined by the Court in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. Thus, he submits that the learned Principal District Judge has exceeded its powers and modified the award.
6. On the other hand, Shri Khubalkar, learned counsel for the respondent submits that the impugned judgment was passed on 05/02/2019, whereas the judgment in the case of M. Hakim (supra) was passed on 20/07/2021. He further submits that in the case of M. Hakim (supra) itself the Hon’ble Supreme Court held that it is not fair to send back the matter for a de novo start and accordingly, the Hon’ble Supreme Court of India did not interfere with the order impugned in the said proceedings.
7. He has further relied upon the judgment of the Hon’ble Supreme Court of India in the case of Tahera Khatoon ..vs. Salambin Mohammad, reported in (1999) 2 SCC 635, wherein the Hon’ble Supreme Court has refused to interfere with the order, though special leave was granted, for the reason that justice of the case on facts does not require interference. He submits that the similar approach was adopted by the Hon’ble Supreme Court of India in the case of Dyna Technologies (P) Ltd...vs..Crompton Greaves Ltd., reported in (2019) 20 SCC 1 considering the time period spent in the proceedings i.e. 25 years.
8. Shri Khubalkar, learned counsel for the respondent submits that the respondent is a poor person who has invested a huge amount for purchase of the flat in the year 2013 and since then he is waiting for justice to be done. It is therefore, submitted that considering the time span lapsed in this matter it would be futile to remand the matter back to the Principal District Judge to decide the same afresh. He, therefore, prays to adopt the mode as adopted by the Hon’ble Supreme Court of India in the above referred cases and prays to dismiss the present petition.
9. In light of the rival contentions of the parties, I have perused the record and the impugned judgment and order.
10. The Hon’ble Supreme Court of India in the case of M.
Hakim (supra) has observed thus :
“30. ...
118. This Court is inclined to follow the decisions in Central Warehousing Corpn., DDA, State Trading Corpn.
