Case Note & Summary
The petitioners, M/s. Sai Shradha Developers and its partners, filed a writ petition under Article 227 of the Constitution before the Bombay High Court, Aurangabad Bench, challenging an arbitral award passed under the Arbitration and Conciliation Act, 1996. The dispute arose out of a partnership firm and the arbitrator had passed an award against the petitioners. The petitioners contended that the award was erroneous and based on misappreciation of evidence. The respondents, Ravindra Ganpatrao Bharitkar and others, opposed the petition, arguing that the scope of interference under Article 227 is limited and the award was based on concurrent findings of fact. The court examined the legal principles governing the scope of interference under Article 227 and Section 34 of the Arbitration and Conciliation Act, 1996. The court held that the High Court under Article 227 can interfere only if there is a jurisdictional error or perversity in the award, and not to reappreciate evidence. The court found that the arbitrator's findings of fact were based on evidence and were not perverse. The court also noted that the petitioners had an alternative remedy under Section 34 of the Act, which they did not avail. The court dismissed the writ petition, holding that no interference was warranted. The decision was in favor of the respondents.
Headnote
A) Arbitration - Scope of Interference under Article 227 - Jurisdictional Error - The High Court under Article 227 can interfere only if there is a jurisdictional error or perversity in the award, not to reappreciate evidence. The court held that the arbitrator's findings of fact are final and cannot be interfered with unless they are patently illegal or perverse. (Paras 1-10) B) Arbitration - Section 34 of Arbitration and Conciliation Act, 1996 - Setting Aside of Award - The grounds for setting aside an arbitral award under Section 34 are limited to those specified in the Act, and the court cannot act as an appellate court. The court held that the petition under Article 227 challenging the award was not maintainable as the petitioner sought reappreciation of evidence. (Paras 1-10)
Issue of Consideration
Whether the High Court under Article 227 of the Constitution can interfere with an arbitral award passed under the Arbitration and Conciliation Act, 1996, when the award is based on appreciation of evidence and concurrent findings of fact.
Final Decision
The Bombay High Court dismissed the writ petition, holding that no interference under Article 227 was warranted as the arbitral award was based on findings of fact and was not perverse. The court also noted that the petitioners had an alternative remedy under Section 34 of the Arbitration and Conciliation Act, 1996.
Law Points
- Scope of interference under Article 227 of Constitution is limited to jurisdictional errors
- not reappreciation of evidence
- Arbitral award can be set aside only if it is patently illegal or perverse
- Section 34 of Arbitration and Conciliation Act
- 1996 does not permit appeal on merits
- Findings of fact by arbitrator are final unless perverse
