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HIGH COURT OF DELHI
FAO(OS) (COMM) 8/2023
UNION OF INDIA ..... Appellant
Through: Mr. Vineet Dhandha, CGSC with Mr. Shubham Prasad and Ms. Shruti Gupta, Advs.
Through: Mr. Shatadru Chakraborty, Ms. Sonia Dube and Ms. Surbhi Anand, Advs.
Date of Decision: 30th January, 2023
HON'BLE MR. JUSTICE SAURABH BANERJEE
JUDGMENT
CM APPL. 2222-2223/2023 in FAO(OS) (COMM) 8/2023
CM APPL. 3967-3968/2023 in FAO(OS) (COMM) 17/2023
CM APPL. 3977-3978/2023 in FAO(OS) (COMM) 18/2023
Exemption allowed, subject to all just exceptions.
Accordingly, the applications stand disposed of.
1. Present appeals have been filed challenging the orders of the learned Single Judge dated 17th October, 2022 passed in O.M.P. (COMM) 425/2022 & O.M.P. (COMM) 426/2022 and 28th October, 2022 passed in O.M.P. (COMM) 422/2022 whereby the appellants’ petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the interim award dated 03rd January, 2022 were dismissed. The relevant portion of the impugned award dated 03rd January, 2022 and the order passed by the learned Single Judge in one of the matters are reproduced hereinbelow:- Interim Award dated 03rd January, 2022
19. In Numero Uno (supra), a Division Bench of the Hon’ble High Court of Delhi, inter alia, held as under: “Such being the legal nature and character of a counter claim, its pendency does not denude the arbitrator of the power to make an interim award in the original suit/claim if such an interim award is otherwise justified. What is significant is that the legality of an interim award may be tested by reference to the material on which it is based rather than the areas of dispute that may still call for adjudication between the parties. If an interim award on the basis of material available on record is not justified, the Court may set aside the same under Section 34 of the Act. No interference with an interim award would, however, be permissible only because the defendant has made a counter claim or because some areas of dispute independent of the area covered by the interim award remains to be resolved.
8. The issue can be viewed from yet another angle. The making of the interim award ensures to the party in whose favor the same is made the payment of an amount which is an admitted position payable to it. There is no reason why the payment of what is admittedly due should await the determination of other disputes which may take years before they are finally resolved. If at the conclusion of the arbitral proceedings, the defendant were to succeed in his claim, either wholly or partially, and if after adjustment of the amounts found payable to the plaintiff, any amount is eventually held payable to one or the other party, the arbitrator can undoubtedly make such an adjustment and direct payment of the amount to one or the other party, as the case may be. The final award would in any such case also take into consideration the payments, if any, made under the interim award. Suffice it to say that the making of the interim award in no way prevents the arbitrator from making adjustments of the amount in the final award and doing complete justice between the parties. By that logic even if we assume that the Prasar Bharti was to fail in substantiating its further claims which are disputed and the appellant were to succeed wholly in the counter claim that it has made, all that it would result in is an award in favor of the appellant. There is, therefore, no inherent illegality or perversity in the making of the interim award by the arbitrator so as to call for interference by this Court under Section 34 of the Act.” This was followed in Nimbus Communications (supra).
20. In view of the settled position in law, since the value of the said rakes of wagons as assessed by the Respondents is admittedly due to the Claimant, this amount need not await the determination of the other disputes. Accordingly, the Claimant is entitled to an interim award in the sum of Rs. 13,14,69,178.08 for the value of rakes as admittedly assessed by the Respondents and payable by them. It is awarded accordingly. This interim award shall be taken into consideration at the time of making the final award after determination of the other claims of the Claimant, including the claim for interest.” Order passed by the learned Single Judge in O.M.P. (COMM) 425-426/2022
12. If that be so, the learned Arbitrator was right, i.e., insofar as the counter claim of the petitioner for an amount of ₹582.18 crore is concerned, the same has to await determination by the learned Arbitrator as against the admitted dues of the respondent herein, which it is entitled to.
13. In fact, during the course of hearing, I have been informed that execution proceeding have been initiated by the respondent, and the said amount has been deposited before the High Court at Calcutta.
14. In view of the above, I do not see any merit insofar as the present petition is concerned. The petition and connected applications including for condonation the delay in re-filing are dismissed.”
2. Learned counsel for the appellant states that the termination of the agreement in question by the respondents was neither legal nor proper. He further states that as the Railways has filed a counter-claim which is pending before the learned Arbitrator, the interim award needs to be set aside as the counter-claim of the respondent is far in access of the claim put forward by the respondents-claimants.
3. In response to a pointed query, learned counsel for the appellant admits that the issue of termination of the agreement has been conclusively settled by the learned Single Judge, Division Bench as well as by the Supreme Court in an earlier proceeding inter se between the parties. He, however, states that the Railways would like to re-agitate this issue before the Apex Court.
4. It is not understood as to how an issue determined by the Courts including the Apex Court, in an earlier proceeding inter se between the parties, can be re-agitated in a proceeding challenging an interim award. It is settled law that re-litigation is an abuse of process of Court. (See: N.D.Qureshi Vs. UOI & Anr, 2008 SCC OnLine Del 675)
5. Further, this Court finds that the letters dated 23rd February, 2018 and 29th January, 2018 were issued by the appellant itself wherein the appellant had mentioned the exact value of rakes. In fact, according to these letters, valuation of rakes was determined in accordance with the report prepared by the appellant’s own ED Committee.
6. This Court is also in agreement with the view of the learned Arbitrator as well as the learned Single Judge that as the value of the rakes has been assessed by the appellant itself, the said admitted amount need not await the determination of the counter-claim, which was yet to be adjudicated upon.
7. It is settled law that the principles that apply to an interim award apply to a final award. This Court in Mangalwar Filling Station vs. Indian Oil Corporation Limited & Ors. [2021 SCC Online Del 3646] has held that once an arbitral award has been confirmed in an application filed under Section 34 of the Act, the appellate Court must be extremely cautious in disturbing concurrent findings of fact and law as they are ordinarily not amenable to interference under Section 37 of the Act. This Court further observed that the Appellate Court should generally not interfere unless it is apparent that the perversity of the arbitral award goes to the root of the case without a possibility of alternative interpretation that might sustain the award.
8. The Supreme Court vide order dated 16th August, 2021 in SLP NO. 12125/2021 was pleased to dismiss an appeal filed against the abovementioned judgment.
9. Consequently, the present appeals being bereft of merit are dismissed but no order as to costs. MANMOHAN, J SAURABH BANERJEE, J JANUARY 30, 2023