Case Note & Summary
The case involves a commercial appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award passed in favor of the respondent, Sussanne Khan, sole proprietor of Sussanne Khan House of Design, against the appellants, Mudhit Gupta and EMGEE Properties. The dispute originated from an agreement dated 18th September 2003 (Ex-C-148) for commercial premises. The respondent claimed that the appellants breached the agreement by failing to hand over possession and causing loss. The arbitrator awarded mesne profits and damages with interest at 18% per annum. The appellants appealed under Section 37, arguing that the award was patently illegal and perverse. The High Court, per Justice Bharati Dangre, held that the scope of interference under Section 37 is narrow and the arbitrator's findings were based on evidence. The court found no patent illegality or perversity and dismissed the appeal, upholding the award.
Headnote
A) Arbitration - Appeal under Section 37 - Scope of Interference - Patent Illegality - The court examined whether the arbitral award suffered from patent illegality or perversity. Held that the scope of interference under Section 37 is limited and the court cannot re-appreciate evidence unless the findings are perverse or contrary to law. (Paras 1-10)
B) Contract Law - Breach of Agreement - Mesne Profits - The dispute arose from an agreement dated 18th September 2003 for commercial premises. The arbitrator found the appellant in breach and awarded mesne profits and damages. Held that the findings were based on evidence and not perverse. (Paras 2-15)
C) Arbitration - Interest - Award of Interest - The arbitrator awarded interest at 18% per annum. The court upheld the rate as within the arbitrator's discretion and not patently illegal. (Paras 16-20)
Issue of Consideration
Whether the impugned arbitral award suffers from patent illegality or perversity warranting interference under Section 37 of the Arbitration and Conciliation Act, 1996.
Final Decision
The High Court dismissed the appeal, upholding the arbitral award.
Law Points
- Section 37 of the Arbitration and Conciliation Act
- 1996
- Section 34 of the Arbitration and Conciliation Act
- Patent illegality
- Perversity
- Breach of contract
- Mesne profits
- Damages
- Interest
Case Details
2020 LawText (BOM) (02) 47
Commercial Appeal Lodging No. 474 of 2018 in Comm. Arbitration Petition No. 917 of 2018
Pradeep Nandrajog, C.J., Bharati Dangre, J.
Mr. Simil Purohit with Mr. Jairam Chandnani, Mr. Vishal Raman and Mr. Ashish Gupta i/b. Lexim Associates for the Appellants. Mr. Sharan Jagtiani with Dr. Abhinav Chandrachud, Ms. Pooja Tidke and Ms. Krushi N. Barfiwala i/b Parinam Law Associates for the Respondent.
Mudhit Gupta and EMGEE Properties
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Nature of Litigation
Commercial appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an arbitral award.
Remedy Sought
The appellants sought to set aside the arbitral award passed in favor of the respondent.
Filing Reason
The appellants challenged the arbitral award on grounds of patent illegality and perversity.
Previous Decisions
An arbitral award was passed in favor of the respondent, which was challenged under Section 34 of the Arbitration and Conciliation Act, 1996, and the petition was dismissed. The present appeal is against that dismissal.
Issues
Whether the arbitral award suffers from patent illegality or perversity warranting interference under Section 37 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
The appellants argued that the award was patently illegal and perverse, and that the arbitrator misappreciated evidence.
The respondent argued that the award was based on evidence and within the arbitrator's jurisdiction, and the appeal should be dismissed.
Ratio Decidendi
The scope of interference under Section 37 of the Arbitration and Conciliation Act, 1996 is limited to cases of patent illegality or perversity. The court cannot re-appreciate evidence unless the findings are perverse or contrary to law. In this case, the arbitrator's findings were based on evidence and not perverse, hence no interference was warranted.
Judgment Excerpts
Prolix pleadings akin to a Banyan tree having aerial roots dropping on to the ground and with passage of time taking the shaping of a trunk, resulting in the viewer seeing multiple trunks, warranting each and every trunk to be viewed with a piercing eye to determine where from the seed sprouted to form the original trunk has resulted in an equally lengthy Award.
Agreement, Ex-C-148, dated 18th September 2003, is the fertile ground where the seed germinated.
Procedural History
The dispute arose from an agreement dated 18th September 2003. The respondent filed a claim before the arbitrator, who passed an award in her favor. The appellants challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, which was dismissed. The appellants then filed the present appeal under Section 37.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 37, 34
