We are concerned, in a situation, whereby the Judgment and order, while granting the application filed by the Respondent, the learned Judge has not only modified the Award, but granted the claims, which were not granted by the learned Arbitrator. Therefore, the grant of certain claims for the first time in the present facts and circumstances of the case, in our view required consideration. Therefore, after considering the above consideration of law and the facts, we are inclined to do so, by observing that it is not permissible to grant the claims for the first time on no foundation of fact and the reason. The scope of modification and/or correction of error and/or correction of mistakes, in no way, can be extended to read and mean to grant the claims by the Court, which were not granted by the learned Arbitrator. We have to read the scheme and object of Arbitration Act. Therefore, in the background, when the matter is admittedly travelled second time for the settlement of disputes between the same parties, as earlier Award dated 25th July, 1996 was disturbed and second order dated 25th June, 1999 is also overturned, by the learned Single Judge, as recorded above.
IN THE HIGH COURT OF BOMBAY
Appeal No. 1159 of 2005 in Arbitration Petition No. 469 of 2003 and Appeal No. 198 of 2007 in Arbitration Petition No. 469 of 2003
Decided On: 19.01.2017
The Municipal Corporation of Greater Mumbai and Ors. Vs. Tripat Chamanlal Oberoi and Ors.
Hon'ble Judges/Coram:
Anoop V. Mohta and P.R. Bora, JJ.
Citation: 2017(5) MHLJ312
1. Taken out from the final hearing board.
2. Heard finally, by consent of the parties.
3. As impugned order dated 23rd March, 2005 is common, the challenge and counter challenge are raised on the respective grounds and as the facts and issues are common, therefore, we are disposing of both these Appeals, by this judgment.
4. The present Appeals are filed under The Arbitration Act, 1940 (for short, "The Arbitration Act,1940."). Impugned order is dated 23rd March, 2005, passed in Arbitration Petition No. 469 of 2001, whereby, the Petitioner's some of the major claims have been awarded by the learned Judge, for the first time, though the same were not awarded by the Arbitrator in Award dated 25th July,1996.
5. The learned Counsel appearing for the Appellant has pointed out Section 15 and Section 39 (clause 1(3)) of Arbitration Act, 1940, which are reproduced as under -
"Section 15- Power of Court to modify award-The Court may by order modify or correct an award-
(a) where it appears that a part of, the award is upon a matter not referred to arbitration and such part can be separated from the other part and does affect the decision on the matter referred; or
(b) Where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision; or
(c) where the award contains a clerical mistake or an error arising from an accidental slip or omission.
Section 39 -Appealable orders - (1) An appeal shall lie from the following orders passed under this Act(and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order :
An order -
(iii) modifying or correcting an award."
6. The submission, therefore, is made that the learned Judge ought not to have been awarded the claim for the first time, by granting the applications so prayed, by the Respondent-Original claimant. It is at the most a case of remand, as there was no specific bar of remand under Arbitration Act. The above provision of law, in this regard, is very clear.
7. Merely because in view of Section 41 of the Arbitration Act, 1940, the procedure and power of Court includes to deal the subject/dispute referring to the provisions of the Code of Civil Procedure (for short CPC), that itself, in our view, cannot prevail over the specific provisions of the Arbitration Act, 1940, and the Arbitration Scheme, as even the scope and purpose of modification and/or correction of an Award is restricted and clarified specifically in above Sections.
8. There is no issue, so far as the power of Court to modify and/or correct an Award, but it must be within the scope and power under Sections 15 and 39 of the Arbitration Act. In the case of Numaligarh Refinery Ltd. Vs. Daelim Industrial Co, Ltd. MANU/SC/3629/2007 : (2007) 8 Supreme Court Cases 466, it is observed thus -
"We have considered the rival submissions of the parties. So far as the legal proposition as enunciated by this Court in various decisions mentioned above, it is correct that courts shall not ordinarily substitute their interpretation for that of the arbitrator. It is also true that if the parties with their eyes wide open have consented to refer the matter to the arbitration, then normally the finding of the arbitrator should be accepted without demur. There is no quarrel with this legal proposition. But in a case where it is found that the arbitrator has acted without jurisdiction and has put an interpretation on the clause of the agreement which is wholly contrary to law then in that case there is no prohibition for the courts to set things right. In the present case, the aforesaid clauses reproduced above, clearly lay down that all taxes, duties and levies have to be borne by the contracting party. Countervailing duty which came into force with effect from 1.1.1995 by way of Ordinance (subsequently converted into an Act) is a duty enforced by the statute and hence in face of Clause 2(b) and Clause 6 of the Consolidated Agreement read with Clause 2.1(g) of the Instructions to Bidders and Clause 13(f) of the Bid Document, there is leaves (sic left) no manner of doubt that DIC has to pay the same. Therefore, this levy has to be borne by DIC and they cannot escape from this situation. "
9. The Apex Court in case of State of Orissa Vs. Sudhakar Das, MANU/SC/0133/2000 : (2000)3 Supreme Court Cases 27 elaborated that the Award can be modified. The Supreme Court accordingly modified the part of the Award, granted claims, as the same was without any escalation clause. The Apex Court in case of Union of India and ors. Vs. Manager M/s. Jain and Associates MANU/SC/0084/2001 : (2001) 3 Supreme Court Cases 277 interpreting the provision of Arbitration Act, 1940 and specifically Sections 15, 16 and 17 expressed that the Court is empowered to modify the Award. The Apex Court has observed as under :
"(a) after receipt of an award, the court can suo motu refuse to make award rule of the court on the ground that (i) part of the award is upon a matter not referred to arbitration; and (ii) the award is imperfect in form or contains any obvious error. The court can also remit the award to arbitrator in case (i) where the award has left undetermined any matter referred to arbitration; or (ii) where it has determined any matter not referred to arbitration; or (iii) the award is so indefinite as to be incapable of execution; or (iv) is on the face of it illegal. This is also provided under parenthesis clause of Section 17 which provides "where the court sees no cause to remit the award or any of the matter referred to arbitration for reconsideration or to set aside the award, the court shall ... proceed to pronounce judgment...".
Therefore, it cannot be stated that in case where objections under Section 30 or 33 are not filed the court is bound to pass decree in terms of the award."
"Similarly, when the court is required to proceed without objection application under Section 30 or 33 of the Act, it cannot pronounce the judgment without considering the provisions of Sections 15 and 16 of the Act, which provide, as stated above, for modification or correction of any award or for remitting it to the arbitrator for reconsideration on the ground that (i) there is any error of law apparent on the face of the award, (ii) the award is incapable of being executed, (iii) the award has left undetermined any of the matters referred to arbitration, (iv) that a part of the award is upon a matter not referred to arbitration, and (v) the award contains any obvious error. Jurisdiction of the court to pronounce judgment depends on exercise of its power to modify or remit the award."
10. The Full Bench of this Court in case of R.S. Jiwani Vs. Ircon International MANU/MH/1492/2009 : 2010 Bombay Cases Reporter 529 reiterated the doctrine of severability and observed that Award can be modified, but only to the extent of severing part of the Award, which was not referred. The Award can be modified by the Court only to the limited extent, as the scope of Arbitrator is to grant the claim, as prayed.
11. We are concerned, in a situation, whereby the Judgment and order, while granting the application filed by the Respondent, the learned Judge has not only modified the Award, but granted the claims, which were not granted by the learned Arbitrator. Therefore, the grant of certain claims for the first time in the present facts and circumstances of the case, in our view required consideration. Therefore, after considering the above consideration of law and the facts, we are inclined to do so, by observing that it is not permissible to grant the claims for the first time on no foundation of fact and the reason. The scope of modification and/or correction of error and/or correction of mistakes, in no way, can be extended to read and mean to grant the claims by the Court, which were not granted by the learned Arbitrator. We have to read the scheme and object of Arbitration Act. Therefore, in the background, when the matter is admittedly travelled second time for the settlement of disputes between the same parties, as earlier Award dated 25th July, 1996 was disturbed and second order dated 25th June, 1999 is also overturned, by the learned Single Judge, as recorded above. The delay so condoned also requires re-consideration on facts itself in view of clear provision under the Arbitration Act. We are of the view that a case is made out by the Respondent-original claimant to set aside the Award, but to expedite the hearing of the Arbitration proceedings.
12. Taking overall view of the matter, and in the interest of justice, without observing anything on merits of the matter, by keeping all contentions open, including the claim and counter claim, if any, we are setting aside impugned judgment and order dated 23rd March, 2005 and restore the Arbitration proceeding for reconsideration. Hence, the following order.
ORDER
a) Judgment and order dated 23rd March, 2005 is quashed and set side.
b) Arbitration Petition No. 469 of 2003 is restored to file.
c) The learned Single Judge while dealing with the matter is required to dispose of the Arbitration Petition, as early as possible, preferably within 3 months, based upon the documents / pleadings already placed on record.
d) The hearing of the Petition is expedited.
e) Both the Appeals are allowed and disposed of accordingly.
f) No costs.
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