Case Note & Summary
The petitioner, M/s. Maks Glass Corporation, challenged an arbitral award dated 24th April 2010 passed under Section 84 of the Multi-State Co-operative Societies Act, 2002, which allowed the claim of respondent no.1, The Bombay Mercantile Co-operative Bank Limited, for recovery of loan amounts. The petitioner had obtained a term loan of Rs.4.80 lacs in 1993 and an overdraft facility of Rs.7 lacs in 1995 from the bank, both of which were repayable with interest. The petitioner and other respondents defaulted, leading to arbitration. The arbitrator awarded the bank's claim. The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, arguing that the award was perverse and against the evidence. The court, after hearing arguments, held that the scope of interference under Section 34 is limited and does not allow reappreciation of evidence. The court found that the award was based on evidence and was not perverse or patently illegal. Consequently, the court dismissed the petition, upholding the arbitral award.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - Scope of Interference - The court considered whether the arbitral award under Section 84 of the Multi-State Co-operative Societies Act, 2002 could be set aside for perversity or patent illegality. The court held that the scope of interference under Section 34 is limited and does not permit reappreciation of evidence. The award was based on evidence and not perverse. (Paras 1-10) B) Co-operative Societies - Loan Recovery - Section 84 of Multi-State Co-operative Societies Act, 2002 - Default in Repayment - The petitioner had taken term loan and overdraft facilities from the respondent bank and defaulted. The arbitrator allowed the bank's claim. The court upheld the award, finding no grounds to interfere. (Paras 2-10)
Issue of Consideration
Whether the arbitral award dated 24th April 2010 passed under Section 84 of the Multi-State Co-operative Societies Act, 2002 is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court dismissed the arbitration petition, upholding the arbitral award dated 24th April 2010.
Law Points
- Section 34 of Arbitration and Conciliation Act
- 1996
- Section 84 of Multi-State Co-operative Societies Act
- 2002
- scope of interference with arbitral award
- no reappreciation of evidence
- perversity
- public policy
