Bombay High Court
National Agr.Co-Op.Marketing … vs Roj Enterprises Pvt. Ltd. And Ors on 7 March, 2025
Author: A. S. Chandurkar
Bench: A.S. Chandurkar
2025:BHC-AS:10854-DB
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
COMMERCIAL ARBITRATION APPEAL NO.15 OF 2024
National Agricultural Co-operative }
Marketing Federation of India }
Limited (NAFED), A cooperative Society, }
having its registered office at NAFED }
House, Siddhartha Enclave, Ashram }
Chowk, New Delhi-110014 and having }
its branch office at Naman Centre, }
A Wing, Unit No.803, G Block, C-31, }
Opp. Dena Bank, One BKC }
Mumbai-400 051 }
Through its authorized signatory }
Mr. Vikas Rawal, Asst. Manager (Legal) } .. Appellant
Verus
1. Roj Enterprises (P) Limited }
Having its office at A-8, Saket, }
45/1+2/A, Karwe Nagar, Off. }
Patwardhan Building, Pune }
2. Mr. Suresh G. Motwani, }
having his office at 39, Mysore }
Colony, Anik Village, Behind RCF, }
Chember, Mumbai. }
3. Mr. Rajendra Narhar Kulkarni, }
having his office at Row House No.8, }
Swapnashilpa, 19/2C, Ganesh Nagar, }
Kothrud, Pune-411029. } .. Respondents
...
Dr. Veerendra Tulzapurkar, Senior Advocate with Mr. Vaibhav
Joglekar, Senior Advocate, Mr. Ankit Tiwari, Mr. Sagar Chaurasiya
i/by Shashipal Shankar, Advocates for the appellant.
Mr. Ashish Kamat, Senior Advocate with Mr. Ranjeev Carvalho,
Mr. Rishab Murali, Ms. Punita Arora, Mr. Puneet Arora i/by
M/s. Arora & Co., Advocates for the respondent nos.1 and 3.
...
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CORAM : A.S. CHANDURKAR & RAJESH PATIL, JJ
Date on which the arguments concluded : 18th DECEMBER 2024
Date on which the judgment is pronounced : 7th MARCH 2025.
JUDGEMENT :
(PER : A. S. CHANDURKAR, J.)
1. This Commercial Arbitration Appeal filed under Section 37(1)
(c) of the Arbitration and Conciliation Act, 1996 (for short, ‘Act of
1996’) raises a challenge to the judgment dated 22/04/2024
passed by the learned District Judge-2, Pune in Civil
Miscellaneous Application No.1337 of 2019. By the said judgment,
the application preferred by the appellant under Section 34 of the
Act of 1996 challenging the award dated 12/02/2019 passed by
the learned Arbitrator came to be dismissed. As a result, the said
award was upheld.
Admit. The Commercial Arbitration Appeal is taken up for
final disposal.
2. The appellant (hereinafter referred to as ‘NAFED’) and the
first respondent (hereinafter referred to as ‘REPL’) entered into two
Tie Up Agreements dated 24/03/2004 and 30/04/2004 on the
basis of which NAFED agreed to extend financial assistance to
REPL to the extent of 80% of the value of stock that was to be
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procured by REPL. The balance 20% value of the stock was to be
procured by NAFED. On differences arising between the said
parties, NAFED invoked the arbitration clause by its letter dated
17/03/2008. The disputes were referred to the sole Arbitrator who
by his award dated 12/02/2019 dismissed the claim raised by
NAFED as made against the first respondent. He further held the
claim made against the second and third respondent to be not
maintainable in the absence of any arbitration agreement between
the parties. The counter claim filed by REPL came to be allowed
and NAFED was directed to pay an amount of Rs. 33,97,77,369/-
with interest. This award was the subject matter of challenge by
NAFED in proceedings filed under Section 34 of the Act of 1996.
By the impugned judgment dated 22/04/2024, the application
filed under Section 34 of the Act of 1996 came to be dismissed.
3. Dr. Veerendra Tulzapurkar, learned Senior Advocate for
NAFED in support of the appeal at the outset submitted that
insofar as the findings recorded against Issue nos.1 and 2 by the
learned Arbitrator were concerned, the same were not under
challenge. The award as passed in favour of REPL was under
challenge. Inviting attention to the impugned judgment dated
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22/04/2024, it was submitted that though NAFED raised variouscontentions by submitting its written note of arguments, the
grounds raised by it were not considered at all. Only by observing
that the learned Arbitrator had passed his award on the basis of
material on record, the learned Judge proceeded to dismiss the
application filed under Section 34 of the Act of 1996. It was urged
that the learned Judge ought to have considered the specific
grounds raised by NAFED especially as regards the nature of Tie
Up Agreements. It was submitted that the Tie Up Agreements
indicated that the relationship between the parties were that of a
lender and borrower. The learned Arbitrator erred in recording a
finding that the Tie Up Agreements were in the nature of a joint
venture or akin to a partnership. The relevant clause of the Tie
Up Agreements along with various letters exchanged between the
parties clearly indicated that the Tie Up Agreements were in the
nature of a loan/finance agreement. A specific ground raised by
NAFED in that regard before the learned Judge was not
considered in the proper perspective only on the premise that the
scope to challenge the arbitral award was limited. NAFED’s
contentions based on the documents on record had not been
considered. It was submitted that the powers conferred under
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Section 37 of the Act of 1996 were similar to the powers conferredunder Section 34 of the Act of 1996 while considering a challenge
to an arbitral award. Reliance was placed on the decision in Delhi
Metro Rail Corporation Ltd. Vs. Delhi Airport Metro Express Pvt. Ltd.
2024 SCC OnLine 522. In the light of the finding recorded by the
learned Arbitrator against Issue no.4, it was necessary for the
learned Judge to have considered the challenge within the limits
permissible under Section 34 of the Act of 1996. Reference was
made to the relevant terms in the Tie Up Agreements and it was
urged that the same ought to have been construed in a manner
recognised by law. In this regard, reliance was placed on the
decisions in Bangalore Electricity Supply Co. Ltd. Vs. A. S. Solar
Power Pvt. Ltd. (2021) 6 SCC 718, Ram Charan Das Vs. Girja
Nandini Devi and Ors. (1965) 3 SCR 841, State of Orissa Vs.
Titaghur Paper Mills Co. Ltd. (1985) (Suppl.) SCC 280,
Commissioner of Income Tax Vs. M/s. U. P. Cooperative Federation
Ltd. (1989) 1 SCC 747, Faqir Chand Gulati Vs. Uppal Agencies Pvt.
Ltd. (2008) 10 SCC 345, V. S. Talwar Vs. Prem Chandra Sharma,
(1984) 2 SCC 420 and Bhai Jaspal Singh Vs. Assistant
Commissioners of Commercial Taxes, (2011) 1 SCC 39. The
conduct of REPL in having issued various cheques in favour of
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the appellant from time to time and its effect was not consideredby the learned Arbitrator. From their conduct, it was clear that the
parties had understood the Tie Up Agreements to be loan/finance
agreements and the issuance of various cheques amounted to
admission of REPL’s liability. It was then submitted that the
learned Arbitrator erred in allowing the counter claim preferred
by REPL without examining as to whether such claim was in fact
maintainable or not. The basis for allowing the claim was the
alleged loss of profit. However, there was no evidence on record
placed by REPL to support such claim. Only on the basis of
assumption, relief was granted to REPL. Since the Tie Up
Agreements provided for payment of interest by REPL to NAFED at
rates mentioned therein, there was no question of NAFED paying
interest to REPL as has been directed by the learned Arbitrator.
Moreover, the relief with regard to interest as granted was beyond
the pleadings. It was thus submitted that the award as passed
was liable to be set aside. The learned Judge having failed to
consider various challenges raised to the said award, it was urged
that the same be considered in this appeal. The impugned
judgment dated 22/04/2024 as well as award dated 12/02/2019
were liable to be set aside.
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4. On the other hand, Mr. Ashish Kamat, learned Senior
Advocate for REPL supported the impugned judgment. He
submitted that the scope for interference under Section 37 of the
Act of 1996 was limited as the Court would not sit in appeal over
the award as passed and that it would not re-appreciate or re-
assess the evidence. Referring to the decisions in Associate
Builders Vs. DDA, (2015) 3 SCC 49 and MTNL Vs. Fujitshu India
Pvt. Ltd. (2015) 2 Arb LR 332 (Delhi) it was clear that only if the
award was in conflict with the Public Policy of India or if it
suffered from patent illegality was there scope to interfere. Perusal
of the award would indicate that no such ground in that regard
was available. The learned Judge having examined the award
within the permissible limits of Section 34 of the Act of 1996,
there was no reason whatsoever for this Court to interfere under
Section 37 of the Act of 1996. It was then submitted that the
learned Arbitrator after considering all relevant aspects had given
cogent reasons while dismissing the claim of NAFED and allowing
the counter claim preferred by REPL. The Tie Up Agreements were
indeed in the nature of joint venture or partnership agreements
between the parties. It was not the business of NAFED to grant
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any loan under its bylaws. Moreover, REPL was not a member of
NAFED which would clearly indicate that the Tie Up Agreements
between them were business transactions in the nature of a joint
venture / partnership agreement. The evidence on record was duly
considered by the learned Arbitrator while allowing the counter
claim. The award of interest was within the discretion of the
learned Arbitrator. The same had been duly exercised in
accordance with Section 31(7)(b) of the Act of 1996. Reference was
made to the decisions in Hyder Consulting (UK) Ltd. Vs. Governor,
State of Orissa, (2015) 2 SCC 189 and Assam State Electricity
Board & Ors. Vs. Buildworth Pvt. Ltd. (2017) 8 SCC 146 in that
regard. It was thus submitted that in the light of the fact that the
learned Judge in exercise of jurisdiction under Section 34 of the
Act of 1996 did not find any merit whatsoever in the challenge
raised by NAFED to the award dated 12/02/2019, no case had
been made out by NAFED to enable this Court to interfere under
Section 37 of the Act of 1996. It was thus submitted that the
Commercial Arbitration Appeal was liable to be dismissed.
5. We have heard the learned counsel for the parties at length
and with their assistance we have also perused the documentary
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material on record. The present appeal having been filed under
Section 37(1)(c) of the Act of 1996 raising a challenge to the
judgment of the learned Judge refusing to set aside the arbitral
award in exercise of jurisdiction under Section 34 of the Act of
1996, it would be necessary to consider the arbitral award and
thereafter the adjudication undertaken under Section 34 of the
Act of 1996. The contours and scope for interference with an
arbitral award under Section 34 of the Act of 1996 has been
considered by the Supreme Court in Associate Builders Vs. Delhi
Development Authority, (2015) 3 SCC 49 and Ssangyong
Engineering and Construction Company Limited Vs. NHAI, (2019)
15 SCC 131. Interference on the ground of patent illegality is
permissible if the decision of the Arbitrator is found to be perverse
or so irrational that no reasonable person would have arrived at
such decision or the construction of the contract is such that no
fair or reasonable person could take such view. A finding arrived
at ignoring vital evidence can also be termed to be perverse and
liable to be set aside under the head of “patent illegality”.
Similarly, if a matter not within the jurisdiction of the Arbitrator is
decided, it could result in a patent illegally. In Delhi Metro Rail
Corporation Limited (supra) the Supreme Court has held that the
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jurisdiction under Section 37 of the Act of 1996 is akin to the
jurisdiction of the Court under Section 34 and is restricted to the
same grounds of challenge as Section 34 of the Act of 1996.
The grounds for setting aside an award by the Court have
been stated in Section 34 (2) of the Act of 1996. While it is true
that the scope for interference under Section 34 (2) of the Act of
1996 would be limited to examining as to whether the
contingencies stipulated therein have been satisfied or not, it
would nevertheless be necessary for the Court exercising
jurisdiction under Section 34 of the Act of 1996 to examine the
challenge as raised on such permissible grounds. When a specific
challenge in this regard is raised to the award, it would thus be
necessary for the Court exercising jurisdiction under Section 34(2)
of the Act of 1996 to deal with such challenge. While it is true that
in exercise of such jurisdiction the Court does not sit in appeal
over the award passed by the Arbitrator, it would be required to
refer to and deal with the objections raised to the award. The
Court would be expected to assign some reasons for either
accepting such challenge or for turning down the same. Merely by
stating that the scope for interference under Section 34 was
limited, the Court would not be justified in refusing to examine
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specific challenges raised to the award on the grounds on which it
can be set aside. The order passed under Section 34 of the Act of
1996 therefore ought to indicate consideration of the challenges
raised on the touchstone of Section 34 of the Act of 1996 and
alteast briefly indicate the reasons for either accepting the same or
negating such challenge. The challenge to the impugned judgment
passed in exercise of jurisdiction under Section 34 of the Act of
1996 would have to be examined in the aforesaid context.
6. The learned Arbitrator in his award dated 12/02/2019
considered the claim statement submitted by NAFED and the
counter claim raised by REPL. 11 issues were accordingly framed.
The learned Arbitrator held that the Tie Up Agreements dated
24/03/2004 and 30/04/2004 were not loan agreements but were
in the nature of a joint venture. The claim as raised by NAFED
was disallowed while the counter claim filed by REPL came to be
allowed. The amount adjudicated was directed to be paid by
NAFED to REPL with interest @ of 12% per annum with monthly
rates.
In the proceedings filed under Section 34 of the Act of 1996
both the parties submitted their written note of arguments. The
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grounds raised by the NAFED while challenging the award have
been referred to in paragraph 12 of the impugned judgment while
the submissions made on behalf of the REPL have been referred to
in paragraphs 13 to 16 of the said judgment. The learned Judge
observed that the findings recorded against Issue no.3 could not
be said to be without evidence or against public policy. It was
further held that NAFED could not show that the impugned award
was in conflict with the fundamental principles of Indian law or in
conflict with the public policy of India. In paragraph 24 of the
impugned judgment reference was made to about 11 decisions
relied upon by NAFED and it was stated that the same were not
useful for justifying the grounds put forward by NAFED. On that
basis, the application filed under Section 34 of the Act of 1996
was dismissed on 22/04/2024.
7. The principal contention raised on behalf of NAFED in the
present appeal is that the learned Judge while exercising
jurisdiction under Section 34 of the Act of 1996 failed to
specifically consider the various challenges raised by NAFED. It
would thus be necessary to consider the grounds of challenge as
raised in the written note of arguments by NAFED and the
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response given by REPL in its written note of arguments which
would enable consideration of the grounds as raised in that
regard.
8. One of the grounds of challenge raised by NAFED was that
the Tie Up Agreements were in the nature of loan agreements and
not in the nature of any joint venture or partnership agreement.
This aspect has been considered by the learned Arbitrator while
answering Issue no.4. It has been held that the Tie Up Agreements
were not in the nature of loan agreements but in the nature of a
joint venture or akin to partnership. He has further observed that
the Tie Up Agreements did not mention anything about the
sharing of profit and loss by both the parties and has relied upon
Clauses 7 and 8 thereof which indicate payment of service charges
and interest. This finding was challenged by NAFED in the
proceedings filed under Section 34 of the Act of 1996. The same
has been referred to by the learned Judge in paragraph 12 (e) of
the impugned judgment. In the written note of arguments of
NAFED, Ground VI has been raised in support of the contention
that the Tie Up Agreements were in the nature of loan agreements
and that the finding recorded by the learned Arbitrator was in the
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absence of any evidence on record thus resulting in the impugned
award suffering from patent illegality. Ground VI thereof reads as
under:-
VI. FINDING WITH RESPECT TO THE NATURE
OF SAID AGREEMENTS IS DE-HORS THE
CONTENTS AND NATURE THEREOF :
The Hon’ble Arbitrator has, while arriving at
the finding in respect of the issue no. 4,
wrongly held that the Agreements dated
24.03.2004 and 30.04.2004 were not in the
nature of loan agreement but were in the
nature of joint venture or akin to a
partnership.
The Hon’ble Arbitrator, while arriving at the
said finding, lost sight of the nature and
contents of the said Agreement. The
Respondents had approached the Applicant to
issue financial assistance to them for the
purpose of their business. The said
Agreements specifically record that the
Respondents had approached the Applicant
‘for financing purchase and stock of …’ and
that the Applicant has ‘agreed to finance for
the purchase and stock of…’. The Applicant
was to ‘finance’ 80% of the value of the goods
purchased under the said Agreements by the
Respondents. It is also pertinent to note that,
the said Agreements record payment of only
interest and service charges, and not sharing
of profit and loss between the Applicant and
the Respondents. It is further pertinent to
note that the Applicant had no say in the
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commercial and business decisions of the
Respondent.
The Hon’ble Arbitrator, however, has come to
the aforesaid finding that is de-hors the facts,
circumstances and evidence on record.
The aforesaid finding by the Hon’ble Arbitrator
in the impugned Award displays the total
absence of application of the fundamental
principles and provisions of law by the Hon’ble
Arbitrator.
The impugned Award suffers from patent
illegality. The impugned Award is in
contravention of the Indian law including The
Indian Contract Act, 1872 and the principles
and provisions thereof, and is in conflict with
the public policy of India. The impugned
Award is blatantly hit by Section 34 of the
Arbitration Act, particularly clause (ii) of
clause (b) of sub-section (2) and sub-section
(2-A) thereof.
9. In response to the aforesaid stand of NAFED that the Tie Up
Agreements were in the nature of loan agreements, REPL in its
written note of arguments at paragraph 15(j) has stated as under:-
“It is further submitted that the Tie Up
Agreements do not mention anywhere the word
“loan” but refer to the financial participation of
the Claimant in the business as “investment”. In
fact it has been admitted by the Claimant’s
witness that the bye laws of the Claimant
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give loans only to its members, who are
cooperative societies. Admittedly, the
Respondent No.1 is neither a cooperative society
nor a member of the Claimant organization.
Further the said Tie Up Agreements do contain
any stipulation of a repayment period. It is
further admitted by the witness of the Claimant
that the officers of the Claimant actively
participated in the business by visiting the
vendors of the Respondent No.1, approving the
vendor’s facilities and also approving the quality
of the goods. From the facts and circumstances
it is clear that the said Tie Up Agreements were
clearly not loan agreements but akin to a joint
enterprise, which placed a higher responsibility
of diligence upon the Claimant in respect of the
goods in their custody.”
10. It can thus be seen that the conclusion recorded by the
learned Arbitrator that the Tie Up Agreements were in the nature
of joint enterprise was the subject matter of contest before the
learned Judge in the application filed under Section 34 of the Act
of 1996. In paragraph 18, the learned Judge has observed that he
had gone through the written note of arguments submitted by
NAFED below Exhibit-31. Perusal of the impugned judgment
thereafter indicates that this challenge as raised by NAFED as to
the nature of the Tie Up Agreements has not been dealt with at all.
Except for observing that the findings rendered by the learned
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Arbitrator were by appreciating the evidence on record and
applying certain legal provisions, the learned Judge has disposed
of that challenge. The parties being at issue on this aspect, it was
necessary for the learned Judge to have considered the rival
contentions and expressed his opinion so as to reflect its judicial
consideration, albeit within the scope permissible under Section
34 of the Act of 1996. The same has however not been done.
11. Coming to the counter claim that was preferred by REPL, it
may be noted that in the written note of arguments, REPL had
stated that after sale of the goods procured having value of
Rs.26,37,49,000/-, it would have made a profit of
Rs.13,36,77,339/- which was about 5% of the value of the goods
procured. Perusal of the award indicates that while allowing the
counter claim, the learned Arbitrator in paragraph 23 (B) as
proceeded on the basis that the loss of profit would be 20%. REPL
in its written statement cum counter claim claimed loss of profit
as per the calculation at Exhibit R-11. The calculation made
thereunder indicates such profit to be 20% to 21% of investments.
In its written note of arguments, NAFED raised the ground that
the pleadings of REPL and the submissions made were inter se
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contradictory and inconsistent. In paragraph IX (b) it was stated
as under:-
“(b) Respondents’ pleadings and submissions
are inter se contradictory and inconsistent :
(i) The Respondents, on one hand have
sought assumed return of investment
or loss of profit at 20-21% as stated by
the Hon’ble Arbitrator, while in
contradiction thereto, appear to
contend presumption of alleged loss of
profit at the rate of 5% as stated in the
Respondents’ written arguments
(Reference: paragraph (c) of paragraph
16 thereof) filed in the arbitration
(which written arguments have been
filed as annexure Exhibit AA in the
present proceedings).
(ii) The Hon’ble Arbitrator has failed to
consider and appreciate the
Respondents’ apparent contradictions
and inconsistencies inter se their own
pleadings and submissions. The
Hon’ble Arbitrator ought to have
considered and appreciated that the
claims of the Respondents are devoid
of any merits.”
12. Perusal of the impugned judgment does not indicate
consideration of this aspect by the learned Judge. Except for
observing that it would not be permissible to enter into merits
and replace the view of the learned Arbitrator, the learned Judge
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declined to go into the said aspects. Considering the fact that theground raised by NAFED was that the counter claim had been
allowed notwithstanding contradictory pleadings of REPL and also
by failing to consider and apply basic principles and provisions of
Indian Law thus rendering the impugned award liable to be
interfered with on the ground of patent illegality, it was necessary
for the learned Judge to have considered the said challenge under
Section 34 of the Act of 1996 and recorded his findings in that
regard. The same however does not appear to have been done.
13. Yet another contention raised on behalf of NAFED is the
grant of interest by the learned Arbitrator @ 12% per annum with
monthly rests from 31/08/2015 till realisation. In this regard if
the counter claim made on behalf of REPL is considered, it can be
seen that it has claimed interest on the claim amount @ 12% per
annum without any monthly rests. It was thus submitted by
NAFED that as interest was not claimed with monthly rests by
REFL in its counter claim, the learned Arbitrator was not justified
in granting the same. Grant of such interest amounted to the
learned Arbitrator travelling beyond the pleadings and reliefs
sought by REPL. This aspect has not been considered by the
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learned Judge in the impugned judgment when the grant of reliefas prayed for in the counter claim was under challenge by NAFED.
It was necessary for the learned Judge to have considered this
aspect while deciding the challenge to the impugned award under
Section 34 of the Act of 1996.
14. On the finding recorded by the learned Arbirator that the
affidavit-cum-undertakings dated 31/12/2005, 15/02/2006 and
22/05/2006 were obtained by NAFED from REPL under coercion,
the learned Arbitrator while answering Issue no.3 has held so in
favour of REPL. In the written note of arguments NAFED has
specifically challenged this finding by urging that the same had
been recorded without there being any evidence on record. It was
stated that though the affidavit cum undertakings were executed
in the year 2006, a grievance in that regard of the same having
been obtained under coercion was raised for the first time in
August 2015 in the statement of defence filed by REPL. There was
no declaration sought by REPL in that regard.
This aspect going to the root of the matter ought to have
been considered by the learned Judge when the same was raised
in challenge to the award in the proceedings under Section 34 of
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the Act of 1996. The impugned judgment however does not
indicate so.
15. In paragraph 25 of the award while answering Issue no.11 a
finding has been recorded that the post dated cheques issued by
REPL had not been issued towards any legally enforceable date.
The said finding according to NAFED was hit by Section
34(2) (b)(i) of the Act of 1996. In paragraph 12 of the impugned
judgment, reference has been made to the challenge in this
regard. However, the same does not appear to have been
specifically dealt with by the learned Judge.
16. We may state that on behalf of NAFED, it was contended
that it did not desire to pursue its claim against respondent nos.2
and 3 who were Directors of REPL. On this basis, it was urged by
REPL that in view of this stand of NAFED, Issue nos.1 to 3
answered by the learned Arbitrator had attained finality. In re-
joinder, it was contended by NAFED that giving up the claim
against respondent nos.2 and 3 did not imply that the challenge
to Issue no.3 was also given up. Issue no.3 pertains to the stand
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of REPL that the affidavit-cum-undertakings dated 31/12/2005,
15/02/2006 and 22/05/2006 were obtained by coercion.
In the light of the directions proposed to be issued, it is not
necessary for this Court to consider the effect of the claim against
respondent nos.2 and 3 being given up vis-a-vis Issue no.3. This
aspect is kept open for being urged in the proceedings under
Section 34 of the Act of 1996.
17. Thus taking an overall view of the matter, it can be seen that
NAFED in its grounds of challenge raised under Section 34 of the
Act of 1996 as well as its written note of arguments had
specifically assailed the award on various counts. Though the
learned Judge noted some of the grounds of challenge in the
impugned judgment, there has been no adjudication of the
grounds as raised. Merely by stating that the scope for
interference under Section 34(2) of the Act of 1996 was limited
and that re-appreciation of evidence was not permissible, the
challenge has been turned down. In our view, it was necessary for
the learned Judge to have considered the grounds of challenge
and recorded findings on the basis of such challenge by either
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accepting them or rejecting such grounds. Such exercise was
expected to be undertaken within the permissible limits of Section
34(2) of the Act of 1996. The challenge as raised could not have
been answered merely by stating that there was a limited scope
for interference or that the findings were based on appreciation
and application of legal provisions without indicating the manner
in which the same was done. We are therefore of the considered
view that the challenge as raised by NAFED to the award dated
12/02/2019 deserves to be re-considered on merits by the Court
under Section 34 of the Act of 1996. It may be stated that the
learned counsel for the parties addressed the Court on the merits
of such challenge and defence. However, in exercise of jurisdiction
under Section 37 of the Act of 1996 we are not inclined to examine
such grounds in absence of the same being considered by the
Court in exercise of jurisdiction under Section 34 (2) of the Act of
1996. We therefore find that a case has been made out to set aside
the impugned judgment to facilitate a re-consideration of the
proceedings under Section 34 of the Act of 1996. For this reason,
we have not referred to all the decisions relied upon by the learned
counsel in support of their respective contentions.
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18. Accordingly, for the reasons afore-stated, the judgment dated
22/04/2024 passed by the learned District Judge-2, Pune in Civil
Miscellaneous Application No.1337 of 2019 is quashed and set
aside.
i) The proceedings in Civil Miscellaneous
Application No.1337 of 2019 are restored for
being considered afresh under Section 34 of the
Act of 1996 in accordance with law.
ii) It is clarified that this Court has not examined
the respective submissions of parties on merits
and all grounds of challenge/defence raised are
open for being urged in the proceedings under
Section 34(2) of the Act of 1996. Any
observations made in this judgment shall not be
treated as expression of any opinion by this
Court on the merits/demerits of the impugned
order. Since the award was passed on
12/02/2019 and as the pleadings of the parties
with regard to the proceedings under Section 34
of the Act of 1996 are complete, Civil
Miscellaneous Application No.1337 of 2019 shall
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be decided on its own merits and in accordance
with law within a period of three months from
today. The amount deposited by NAFED
pursuant to the order dated 03/07/2024 shall
remain invested in deposit and would be
subject to outcome of the proceedings under
Section 34 of the Act of 1996. The Commercial
Arbitration Appeal is allowed in aforesaid terms
leaving the parties to bear their own costs.
[ RAJESH PATIL, J. ] [ A.S. CHANDURKAR, J. ]
Digitally
signed by
RAMESHWAR
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RAMESHWAR LAXMAN
LAXMAN DILWALE COARA-15-2024 judgement.doc Rameshwar Dilwale
DILWALE Date:
2025.03.07
18:14:31
+0530
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