Case Note & Summary
The present writ petition under Article 227 of the Constitution of India was filed by the petitioners, who are legal representatives of the original plaintiff Basant Singh Bindra, challenging the judgment and order dated 30th January 2019 passed by the District Judge-2, Aurangabad, in Arbitration Petition No. 1 of 2018. The District Judge had dismissed the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral award dated 30th September 2017 passed by the sole arbitrator. The dispute pertained to a family property and a family settlement was arrived at between the parties. The arbitrator was appointed to give effect to the settlement and passed an award partitioning the properties. The petitioners contended that the arbitrator had erred in not considering certain documents and that the award was contrary to the family settlement. The respondents supported the award and submitted that the arbitrator had considered all the evidence and the findings were based on material on record. The High Court, after hearing the parties, held that the scope of interference under Section 34 of the Act is limited and that findings of fact recorded by the arbitrator cannot be reopened unless they are perverse or based on no evidence. The court found that the arbitrator had considered the evidence and arrived at plausible conclusions. The court also held that the award was not contrary to public policy. Accordingly, the writ petition was dismissed and the judgment of the District Judge was upheld.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 34, Arbitration and Conciliation Act, 1996 - Interference with Findings of Fact - The court held that findings of fact recorded by the arbitrator are final and cannot be reopened under Section 34 unless they are perverse or based on no evidence. The court found that the arbitrator had considered the evidence and arrived at plausible conclusions, and thus no interference was warranted. (Paras 10-15)
B) Arbitration Law - Public Policy - Section 34(2)(b)(ii), Arbitration and Conciliation Act, 1996 - The court held that an award is contrary to public policy only if it is against the fundamental policy of Indian law, or the interest of India, or justice or morality. Mere erroneous application of law or re-appreciation of evidence does not attract the ground of public policy. (Paras 16-18)
C) Family Law - Family Settlement - Validity - The court noted that the family settlement was arrived at between the parties and the arbitrator was appointed to give effect to the same. The arbitrator's award was based on the settlement and the evidence on record, and the court declined to interfere. (Paras 5-9)
Issue of Consideration
Whether the findings of fact recorded by the arbitrator can be interfered with under Section 34 of the Arbitration and Conciliation Act, 1996, and whether the arbitral award is liable to be set aside on the ground of being contrary to public policy.
Final Decision
The High Court dismissed the writ petition, upholding the judgment of the District Judge and the arbitral award.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 34
- Section 37
- Public Policy
- Perversity
- Findings of Fact
- Interference with Arbitral Award
- Family Settlement
- Partition
Case Details
2022 LawText (BOM) (03) 32
Writ Petition No. 2871 of 2019
Shri. A. P. Bhandari for petitioners, Shri. K. C. Sant for respondent nos. 1A to 1F, Shri. P. V. Mandlik, Sr. Counsel i/b Shri. P. P. Mandlik for respondent nos. 2-A, 2-C and 2-D, Shri. R. Mundada for respondent nos. 2-B, 2-F and 2-H, Shri. A. K. Gawali for respondent no. 2-G
Basant Singh s/o Mehersingh Bindra (since deceased) through his legal representatives
Autar Kaur w/o Hardayalsingh (since deceased) through LRs and others
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Nature of Litigation
Writ petition under Article 227 of the Constitution of India challenging the judgment of the District Judge dismissing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 against an arbitral award.
Remedy Sought
The petitioners sought to set aside the judgment of the District Judge and the arbitral award, and to remit the matter back to the arbitrator for fresh consideration.
Filing Reason
The petitioners were aggrieved by the arbitral award dated 30th September 2017 and the dismissal of their challenge under Section 34 by the District Judge.
Previous Decisions
The District Judge-2, Aurangabad, by judgment dated 30th January 2019, dismissed Arbitration Petition No. 1 of 2018 filed under Section 34 of the Arbitration and Conciliation Act, 1996, upholding the arbitral award.
Issues
Whether the findings of fact recorded by the arbitrator can be interfered with under Section 34 of the Arbitration and Conciliation Act, 1996.
Whether the arbitral award is liable to be set aside on the ground of being contrary to public policy.
Submissions/Arguments
The petitioners argued that the arbitrator failed to consider certain documents and that the award was contrary to the family settlement.
The respondents argued that the arbitrator had considered all the evidence and the findings were based on material on record, and that the scope of interference under Section 34 is limited.
Ratio Decidendi
Findings of fact recorded by an arbitrator are final and cannot be reopened under Section 34 of the Arbitration and Conciliation Act, 1996 unless they are perverse or based on no evidence. An award is contrary to public policy only if it is against the fundamental policy of Indian law, or the interest of India, or justice or morality.
Judgment Excerpts
The findings of fact recorded by the arbitrator are final and cannot be reopened under Section 34 of the Act unless they are perverse or based on no evidence.
The award is not contrary to public policy as it does not violate the fundamental policy of Indian law, or the interest of India, or justice or morality.
Procedural History
The original plaintiff Basant Singh Bindra filed a suit for partition which was referred to arbitration. The sole arbitrator passed an award on 30th September 2017. The petitioners filed Arbitration Petition No. 1 of 2018 under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge-2, Aurangabad, which was dismissed on 30th January 2019. Aggrieved, the petitioners filed the present writ petition under Article 227 of the Constitution of India before the Bombay High Court.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 37
- Constitution of India: Article 227
