Limited judicial interference under Sections 34/37 of Arbitration Act; no re-appreciation of arbitral findings absent patent illegality.

Judgment :

K.Kumaresh Babu, J.

This appeal has been filed challenging the order dated 19.08.2019 passed by the learned Single Judge, whereby the Arbitral Award dated 28.06.2017 was upheld. By the said award, the learned Arbitrator allowed the claim of the respondent and rejected the counter claim of the appellants.

2) The brief facts leading to the present appeal are that the first respondent is engaged in real estate development, whereas the appellants are the owners of the subject property. The parties entered into a development agreement dated 21.02.2012, whereby it was agreed that the developed property would be shared in the ratio of 60% to the appellants and 40% to the first respondent. According to the first respondent, one Kamalanathan, who represented the appellants, caused delay and obstruction in the completion of the project, resulting in loss to the first respondent. Consequently, the first respondent claimed a sum of Rs.3,00,00,000/- as damages for the delay and loss allegedly caused by the acts of the said person. It is further stated that when the appellants had not paid the claim amount, the parties entered into an agreement to sell one of the flats situated on the fourth floor. However, subsequently, the appellants allegedly prevented the first respondent from continuing the development work. The first respondent, by letter dated 16.07.2015, requested the appellants to extend cooperation and make the necessary payments. Upon receipt of the said letter, the appellants, by their communication dated 17.07.2015, allegedly threatened to cancel the power of attorney granted to the first respondent for the sale of the fourth flat.

3) Thereafter, the first respondent invoked the arbitration clause contained in the development agreement by issuing a letter dated 28.07.2015 and appointed an Arbitrator to resolve the disputes between the parties. Upon considering the claims and materials placed before him, the learned Arbitrator, by award dated 28.06.2017, allowed the claim of the first respondent and rejected the counter claim made by the appellants. Aggrieved by the said award, the appellants filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before this Court. The learned Single Judge, by order dated 19.08.2019, dismissed the application on the ground that the findings recorded by the learned Arbitrator were based on factual appreciation of evidence and that such findings cannot be re-appreciated or interfered with in proceedings under Section 34 of the Act. Challenging the said order, the present appeal has been filed.

4) Heard Mr. V. Ramamurthy, learned counsel appearing for the appellants and Mr. Arun Karthik Mohan, learned counsel appearing on behalf of the first respondent.

5) The learned counsel appearing for the appellants would submit that the learned Arbitrator failed to consider the report of the Engineer Commissioner, which had been obtained at the instance of the first respondent, and which clearly pointed out several defects in the construction. He would further submit that the first respondent failed to hand over possession of the property on or before 22.12.2014 or at least by 22.02.2015, as contemplated under the agreement. In this regard, the learned counsel would draw attention to the letter issued by the first respondent calling upon the appellants to pay the refundable interest-free deposit and take possession of the property. It was further contended that the learned Single Judge failed to take note of the fact that the first respondent had not taken adequate safety measures during the construction, which resulted in neighbouring residents lodging complaints with the police, leading to stoppage of the construction work. According to the appellants, it was one Kamalanathan, representing them, who intervened with the neighbours and the police authorities to enable the first respondent to continue the project.

6) The learned counsel would further submit that the refundable