Bbm Enterprises vs The State Of West Bengal on 30 July, 2020

Try out our Premium Member services: Virtual Legal Assistant, Query Alert Service and an ad-free experience. Free for one month and pay only if you like it.

Supreme Court of India

Bbm Enterprises vs The State Of West Bengal on 30 July, 2020

Author: Rohinton Fali Nariman

Bench: Rohinton Fali Nariman, Navin Sinha, Hon’Ble Ms. Banerjee



                                        IN THE SUPREME COURT OF INDIA

                                         CIVIL APPELLATE JURISDICTION

                                        CIVIL APPEAL NO. 2834 OF 2020
                                  (ARISING OUT OF SLP (C) NO. 11697 OF 2019)

                         B.B.M ENTERPRISES                                   …APPELLANT


                         THE STATE OF WEST BENGAL AND ANR.                …RESPONDENTS


                                        CIVIL APPEAL NO. 2835 OF 2020
                                  (ARISING OUT OF SLP (C) NO. 11775 OF 2019)


R.F. Nariman, J.

1) Leave granted.

2) We have heard learned counsel for the parties at great length.

3) Mr. Sidharth Luthra, learned Senior Advocate, appearing on

behalf of the respondent, painstakingly took us through the records,

including the Award, in order to point out various deficiencies which,

according to him, fell within the parameters of a Section 34 petition

Signature Not Verified
as a result of which we should not therefore disturb the judgment of
Digitally signed by

the High Court, which has merely remanded the matter and directed
Date: 2020.08.05
17:46:53 IST

that the matter be disposed of in six months.

4) This matter has a chequered history. The Award that was made

by the learned Arbitrator was on 16.09.2009. Five claims were

made before him amounting in all to Rs. 2,08,59,989. However,

ultimately the Award that was made in favour of the appellant herein

was to the extent of Rs. 1,38,44,430 plus 15% on a sum of Rs.

1,17,77,080 as pendente lite interest plus Rs. 2,67,350 by way of

costs without interest. If the said amount, dehors costs, was not

paid in four months, the interest figure would become higher and

would attract 18%.

5) When the Award was put into execution, the Executing Court

pointed out that by the date of its order dated 11.02.2010, the 120

day period – beyond which no Award can be challenged – was

already over and therefore proceeded with the execution. It was

only when an order of 17.02.2010 was made directing the RBI to

disburse the awarded amount after attaching the Government’s

Bank Account, and the reply of the RBI dated 20.02.2010 stating

that adequate funds were not in such account, that the matter was

then remitted by the High Court by an order dated 24.02.2010

stating that the Government was willing to deposit, at that point of

time, 50% of the decretal dues in two weeks. At this stage,

therefore, the High Court set aside the Executing Court’s order

dated 17.02.2010. It is only after these proceedings that the

respondent woke up and filed a Section 34 petition challenging the

Award on 02.04.2010.

6) In the first round of litigation, the Section 34 petition was

dismissed by the learned District Judge on 22.03.2012, stating that

the period of 120 days was over, and hence no foray into the merits

would be permissible at this stage. However, by an order dated

11.01.2013, the Division Bench set aside this judgment and

remanded the matter for a fresh hearing.

7) The learned District Judge, in the second round, by an order

dated 22.12.2016, heard learned counsel for both parties and found

as follows:-

“A court must not substitute its interpretation as
against the views and interpretation of the
arbitrator, the finding of the arbitrator requires to
be accepted without demur because court has no
power or jurisdiction to sit over the finding of fact
arrived at by the arbitrators. In the instant case,
so far I could realize from the argument as
advanced by the Ld. Advocate of the petitioner
and also from the petition under Sec. 34 of
Arbitration & Conciliation Act and the photo copy
of documents placed before the court that the
petitioner challenges the finding of facts but
nothing is oozing out from record that the
impugned award is perverse either on account of
interpretation of law or any other collateral aspect
and consequent decision taken by the Arbitrator.
The ground upon which the award is challenged is
an entirely factual issue; in no way covered by
any ground as enumerated in Sec. 34 of the
Arbitration and Conciliation Act. We cannot forget
that since the arbitrator is a judge appointed by
the parties, the parties are bound by his decision.


His decision is final unless the reasons given by
him in arriving at his decision are totally perverse
or award is based on wrong proposition of law. In
this case the dispute arises out of work contract,
its execution and payment, i.e. Amount of claim,
that aspect totally comes within the jurisdiction of
arbitrator that very finding cannot be interfered in
a proceeding under Sec. 34 of the Arbitration and
Conciliation Act. In a case titled Union of India vs.
Kalinga Construction Company
, reported in AIR
1971 SC 646 it has been categorically held by the
Hon’ble Supreme Court that it is not open to the
court to re-examine and reappraise the evidence
considered by the arbitrator to hold that the
conclusion reached by the arbitrator is wrong. It
is also settled principle that award cannot be
challenged on the ground arbitrator has arrived at
a wrong conclusion or has failed to properly
appreciate the facts and evidence. As per ratio of
decision reported in 1994 (1) Arbi. L.R. 45, AIR
2003 NOC 156 (Raj) and in consonance with the
object of Arbitration & Conciliation Act jurisdiction
of the court has been fettered. In Narayan Prasad
Lohia vs. N. Kunj Kumar Lohia
reported in (2002)
3 SCC 572, it has been held that one of the
objects of the said Act is to minimize the role of
Courts in the arbitration process. This has been
find place in Sec. 5 of the Arbitration &
Conciliation Act and Sec. 5 of the Arbitration &
Conciliation Act speaks that Judicial authorities
should not interfere except where, so provided in
the Act. It is the intention of the legislature that
there should be a minimum interference with the
award. It can only be challenged under Sec. 34 of
the Arbitration & Conciliation Act. Taking the risk
of repetition I again mentioned there is no valid
ground in the petition under Sec. 34 of the
Arbitration & Conciliation Act for challenging the
award. On perusal of the award it has come to
my notice that Ld. Arbitrator has dealt with all the
pleas/issues at the time of arbitration hearing and
there is nothing which may tantamount to any
glaring procedural defect or there is any manifest
error on the point of law or any miscarriage of

justice had been taken place. Ld. Arbitrator has
given a detailed, speaking and well reasoned
award. Therefore, there is no iota of evidence to
cast doubt about the integrity of award or
arbitrator was biased because Arbitrator has the
jurisdiction and authority to decide the question of
entitlement of contractor’s enhanced claim. I get
support of this view from the decision reported in
2003 (2) Arbi L.R. 280 (DB). So, award requires
no interference.”

8) The impugned order dated 01.03.2019 set aside the learned

District Judge’s order stating:

“Even assuming that the award was assailable
on the basis of unamended provisions of
Section 34 of the Arbitration and Conciliation
, the Court would expect that there would be
some discussion on the merits of the objection
on the award and not a mechanical affirmation
of the award by simply stating that the award
does not come within any of the grounds of
challenge enumerated in Section 34 of the Act.

The learned Trial Judge did not indicate the
reason as to why the award is unassailable
under Section 34 of the Arbitration and
Conciliation Act.”

Having so held, the matter was remanded to be disposed of in six

months. The stay that has been granted throughout the hearing

would continue. A resume of these facts would show that the

matter has gone up and down already twice. We may only state

that even though it does not appear that, in the second round, the

point of limitation was argued, since a de novo hearing by the

Division Bench was ordered on 11.01.2013, this point also stared at

the Court like a sore thumb. We are not satisfied that there is any

answer to the limitation point. Even otherwise, having perused the

order of the learned District Judge, we are of the view that adequate

reasons were given to dispose of the Section 34 petition filed by the

respondent. We do not agree with the High Court that no reasons

were given as a result of which a remand ought to be ordered.

Resultantly, therefore the impugned High Court judgment is set

aside and the judgment dated 22.12.2016 passed by the learned

District Judge is affirmed.

9) At the fag end, Mr. Sidharth Luthra, learned Senior Advocate,

made a fervent appeal to reduce the rate of interest which would be

18% after the four months from the date of the Award expired. We

think the interest of justice requires that 18% be set aside and that

the respondent pay interest at the rate of 15%. Further, he prayed

that six months’ time be granted in order to pay the balance amount

under the Award. We think, in the circumstances of the case, a

period of three months is reasonable.

10) The appeals are disposed of accordingly.

…………………………………….. J.


…………………………………….. J.


…………….……………………… J.

New Delhi                                (INDIRA BANERJEE)
July 30, 2020.

Source link