Full Text
HIGH COURT OF DELHI
FAO (COMM) 125/2022 & CM APPLs. 36814/2022, 36815/2022 &
36816/2022 JAI PRAKASH NARAYAN APEX TRAUMA CENTRE ..... Appellant
Through: Mr. Atul Kumar with Ms. Sweety Singh and Mr. Rahul Pandey, Advocates.
Through: Mr. Debasish Mohapatra, Advocate
Date of Decision: 01st August, 2023
HON'BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
1. The instant appeal has been preferred against the judgment dated 18th April, 2022 passed by the learned District Judge (Comm.) in OMP (COMM) No. 13/2021 by which the petition filed on behalf of appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter called ‘the Arbitration Act’) has been dismissed. Thus, the award dated 12th March, 2020 passed by the learned Arbitrator has been upheld.
2. In brief, facts leading to the filing of the present appeal, are that an agreement dated 15th February, 2016 was entered between the appellant and respondent for laundry work at the hospital of appellant. Subsequently, Show Cause Notice dated 04th August, 2017 was issued by appellant regarding deficiency in service by respondent. Thereafter, appellant constituted an internal committee to look into the irregularities and deficiencies in service of respondent. Since respondent was found to be deficient in its services by the said committee, second Show Cause Notice dated 09th October, 2017 was issued to respondent. Response dated 17th October, 2017 was given by respondent, which was found to be evasive and mechanical by appellant. Being dissatisfied with the response of respondent, appellant gave another opportunity to respondent by way of personal hearing on 26th October, 2017. Thereafter, the committee constituted by appellant debarred respondent from entering into a tender floated by appellant for 5 years w.e.f. 01st November, 2017, along with forfeiture of the performance security deposit vide letter dated 31st October, 2017.
3. Subsequently, respondent invoked arbitration clause and arbitration proceedings were held before learned Sole Arbitrator under the aegis of Delhi International Arbitration Centre (DIAC). By award dated 12th March, 2020, the learned Sole Arbitrator held that there had been no breaches on part of respondent and awarded a sum of ₹36,41,324/- and ₹6,11,180/towards the washing of linen and blankets respectively along with interest of 15% per annum. Further, a sum of ₹4,50,000/- paid by respondent as performance security deposit was directed to be refunded along with interest of 12% per annum for the contract period and a further interest of 15% per annum was awarded till payment. A sum of ₹1,67,493/- was also awarded to respondent towards cost and fee of the arbitration proceedings.
4. Aggrieved by the said arbitral award, appellant herein filed a petition under Section 34 of the Arbitration Act for setting aside the same. By the impugned judgment dated 18th April, 2022, the learned District Judge dismissed the petition of appellant. Hence, the present appeal has been filed before this Court.
5. Learned counsel appearing for appellant has contended that the learned Arbitrator took a view/interpretation of the terms of the rate contract, which was not even remotely possible making the award perverse and patently illegal. However, the learned District Judge completely overlooked the glaring perversity and patent illegality on the face of the award passed by the learned Arbitrator.
6. It is contended by learned counsel for appellant that the learned Arbitrator ignored and overlooked admitted facts while interpreting the contractual obligations between the parties. The learned Arbitrator completely ignored the evidence put forth by appellant, which remained unshaken. During the cross-examination, CW-1 admitted several times that there was breach of contract on multiple occasions by respondent. Attention of this Court has been drawn to the following paragraphs from the crossexamination of CW-1: “Q[1]. I put it to you that the Certificate dated 13.01.2017 filed by you bearing Page-66 and a part of CW1/18 mentioned above was issued prior to the disputed period of April, 2017 till October, 2018? Ans. That the Certificate issued by the Respondent are not periodically sent but were sent as and when we requested them. Hence, they could be of different dates and they depict that on different dates/period we performed satisfactorily continuously. We did not get any such certificate after 13.01.2017 as we did not apply for the same but we had the feed-back laundry services from July, 2017 till October, 2017 (which show the satisfaction till the end of the contract) running from Pages-68 to 85 shown in the document filed by us as Ex. CW1/18 (colly). It is correct that the feed-back forms filed by me pertain to only three parameters of adjudicating the quality of services and as regards 23 other parameters asked by the Ld. Counsel for the Respondent, they were never put to the Claimant. Q[2]. (By LCR). Have you put laundry feed-back satisfactory forms for all the wards for all the months? Ans. It is correct that the feed-back satisfactory forms for all the wards for all the months were not obtained. The Respondent did not issue them regularly and we did not apply for them. Q[3]. ………. Q[4]. Have you brought original Books of Accounts and Bill Book from where Ex.CW1/22 (colly) is annexed in the Claim Petition? Ans. I have not brought the original Books of Accounts and Bill Book as I was not asked to get them but can produce them if required. Q[5]. Why did you include the services for blankets washing when it was not part of the contract? Ans. Negotiations were being held with the Respondent regarding the price for washing of blankets. Moreover, these were part of the original tender document though they were not included in the original contract dated 15.02.2016 although the negotiations regarding the price continued while we kept washing the blankets as well. All our monthly bills raised by us included the bills for washing of blankets also without mentioning the price. Although we kept billing for the washing of the blankets in the earlier bills also prior to the bill dated 30.04.2017 but we have not placed them on record and can be produced on the next date. However, Respondent No. 2 would be having the same. xxx xxx xxx
7. By reference to the aforesaid cross-examination, it is contended on behalf of appellant that service for blankets was not part of the contract dated 15th February, 2016 which was admitted by respondent. It is further contended that respondent admitted that it did not tag the linen, which was the requirement under the contract. Thus, the breach of contract by respondent was established and respondent was not entitled to any relief.
8. Per contra, learned counsel for respondent appearing on advance notice justified the impugned judgment dated 18th April, 2022 passed by the learned District Judge and the arbitral award dated 12th March, 2020 passed by the learned Sole Arbitrator.
9. We have heard learned counsel for the parties and perused the record.
10. The contentions as raised on behalf of appellant before this Court are found to be undeserving, as this Court cannot enter into the merits of the claim and decide the present appeal as if it is an appeal against the judgment and decree of a Trial Court. Appellant has sought to re-examine the evidence extensively, which is impermissible in the present proceedings at the time of hearing an appeal under Section 37 of the Arbitration Act. It is undisputed that interference under Section 37 of the Arbitration Act cannot travel beyond the restrictions as laid down under Section 34 of the Arbitration Act. While hearing appeals under Section 37 of the Arbitration Act, this Court cannot undertake an independent assessment of the merits of the award.
11. Likewise, the contention raised on behalf of appellant pertaining to interpretation of contract as given by the learned Arbitrator, does not find favour with this Court. With respect to interpretation of contract, it has been held in a catena of judgments that construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would so construe (See Associate Builders Vs. DDA, (2015) 3 SCC 49). If another possible view of the contract is possible, Court cannot substitute its own view on that account. In the present case, appellant has failed to point out from the record that the impugned judgment passed by the learned District Judge or award passed by the learned Arbitrator is perverse in any manner so as to impel this Court to exercise its limited jurisdiction under Section 37 of the Arbitration Act. Appellant is seeking re-examination of the evidence in order to contend that the findings by the learned Arbitrator are erroneous. However, such an exercise of re-appreciation of evidence, as sought to be pleaded on behalf of appellant, cannot be allowed in proceedings under Section 37 of the Arbitration Act.
12. Dealing with the scope of interference with an arbitral award, Supreme Court in the case of MMTC Limited Vs. Vedanta Limited, 2019 SCC OnLine SC 220; (2019) 4 SCC 163 has held as follows:
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. (See Associate Builders v. DDA [Associate Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC (Civ) 204]. Also see ONGC Ltd. v. Saw Pipes Ltd. [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705]; Hindustan Zinc Ltd. v. Friends Coal Carbonisation [Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445]; and McDermott International Inc. v. Burn Standard Co. Ltd. [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] )............
14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.”
13. Perusal of the arbitral award in the present case clearly shows that the learned Arbitrator has considered the material and relevant documents available on record. As held by the learned District Judge in the impugned judgment dated 18th April, 2022, the learned Arbitrator has given a categorical finding that washing of blankets was done right through the contract. The charges for the same, though not quantified, were being shown in the bills raised by respondent. Learned Arbitrator has further held that appellant herein did not ask respondent herein not to carry out the service of washing of blankets. Learned Arbitrator has held that blankets is an essential part of the items to be provided to the admitted patients and that it was imperative for the blankets to be washed regularly along with other linen items.
14. Learned District Judge has returned a clear finding that the learned Arbitrator had observed in his award that appellant had not averred anywhere that it had entrusted the service of washing blankets to any other agency. Even before this Court, there was a clear admission by learned counsel for appellant that blankets were being sent for washing to respondent. It was further admitted before this Court that blankets were not being given for washing to any other third agency.
15. Further, learned Arbitrator has categorically observed that nontagging/marking of all linen has satisfactorily been explained by respondent herein, by placing on record the communication dated 25th October, 2016, Ex. CW-1/16 by respondent to appellant, by which appellant asked for the ‘Inventory’.
16. There is a categorical finding by the learned Arbitrator that there was no deficiency on the part of respondent herein.
17. The jurisdiction of this Court under Section 37 of the Arbitration Act is extremely limited and this Court cannot re-appreciate the evidence in order to disturb the findings of fact and interpretation of contract as given by the learned Arbitrator. The Arbitrator is the final judge of facts. It is not open to the appellant to challenge the arbitral award on the ground that the learned Arbitrator has given a wrong interpretation of the contract. This Court cannot reappraise the evidence and substitute its views with that of the Arbitrator. This Court is not required to re-evaluate and re-examine the evidence and facts in proceedings under Section 37 of the Arbitration Act. No interference with the arbitral award is called for unless such award is found to be patently illegal. Arbitral Tribunal has been held to be the final adjudicator of the evidence. Thus, Supreme Court in the case of Dyna Technologies Private Limited Vs. Crompton Greaves Limited, (2019) 20 SCC 1 has held has follows:
18. Considering the aforesaid position of law and for the reasons as stated above, this Court finds no infirmity in the impugned judgment dated 18th April, 2022 passed by the learned District Judge upholding the award dated 12th March, 2020 passed by the learned Arbitrator. It cannot be said that the view expressed by the learned Arbitrator is perverse or patently illegal so as to warrant any interference by this Court.
19. In view of the aforesaid detailed discussion, this Court finds no merit in the present appeal and the same is accordingly dismissed along with pending applications. MINI PUSHKARNA, J MANMOHAN, J AUGUST 1, 2023