Case Note & Summary
The appellant, The Hatti Gold Mines Company Limited, a Karnataka State Government undertaking, was engaged in gold mining. It decided to increase production and called for tenders for transporting gold ore from UTI mines. The contract was awarded to respondent No.1, a contractor. Disputes arose regarding the measurement of loads transported and deductions made by the company. The matter was referred to arbitration, and the sole arbitrator (respondent No.2) passed an award in favor of the contractor. The appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District Judge, Raichur, seeking to set aside the award. The District Judge dismissed the petition, upholding the award. Aggrieved, the appellant filed the present appeal under Section 37(b) of the Act. The High Court examined the scope of interference under Section 37(b) and held that it is limited to grounds similar to those under Section 34, namely patent illegality or perversity. The court noted that the arbitrator had considered the evidence, including measurement slips and oral testimony, and had found that the contractor had transported the claimed quantity. The court found no patent illegality or perversity in the award and dismissed the appeal, upholding the order of the District Judge.
Headnote
A) Arbitration Law - Appeal under Section 37(b) - Scope of Interference - The court considered the scope of interference with an arbitral award under Section 37(b) of the Arbitration and Conciliation Act, 1996, and held that the appellate court cannot reappreciate evidence or substitute its own view unless the award suffers from patent illegality or perversity. The court found no such infirmity in the award. (Paras 1-10)
B) Arbitration Law - Measurement of Work - Deductions - The dispute pertained to the measurement of loads of gold ore transported by the contractor and deductions made by the company. The arbitrator had accepted the contractor's measurement based on evidence, and the court held that the findings were not perverse or patently illegal. (Paras 2-8)
C) Arbitration Law - Section 34 Petition - Dismissal - The Principal District Judge had dismissed the appellant's petition under Section 34 of the Act, and the High Court upheld this dismissal, finding no grounds to interfere under Section 37(b). (Paras 9-10)
Issue of Consideration
Whether the order of the Principal District Judge, Raichur, dismissing the appellant's petition under Section 34 of the Arbitration and Conciliation Act, 1996, and upholding the arbitral award, is liable to be set aside in appeal under Section 37(b) of the Act.
Final Decision
The High Court dismissed the appeal, upholding the order of the Principal District Judge, Raichur, dated 11.09.2009, and confirming the arbitral award.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 37(b)
- Section 34
- Patent illegality
- Reappreciation of evidence
- Arbitral award
- Contract interpretation
- Measurement of work
- Deductions
Case Details
2020 LawText (KAR) (12) 18
Sri Veeranagouda Malipatil for appellant; Sri Basavaraj Kareddy for respondent No.1
The Hatti Gold Mines Company Limited
S.Madavreddy and K.N.Venkatesh
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal under Section 37(b) of the Arbitration and Conciliation Act, 1996, against the order of the Principal District Judge, Raichur, dismissing the appellant's petition under Section 34 of the Act to set aside an arbitral award.
Remedy Sought
The appellant sought to set aside the order dated 11.09.2009 passed by the Principal District Judge, Raichur, in Arbitration Case No.5/2002, and consequently to set aside the arbitral award and allow the petition filed by the appellant-company.
Filing Reason
The appellant disputed the measurement of loads of gold ore transported by respondent No.1 and the deductions made, leading to arbitration and subsequent award in favor of the contractor.
Previous Decisions
The sole arbitrator (respondent No.2) passed an award in favor of the contractor. The Principal District Judge, Raichur, dismissed the appellant's petition under Section 34 of the Act, upholding the award.
Issues
Whether the order of the Principal District Judge, Raichur, dismissing the appellant's petition under Section 34 of the Arbitration and Conciliation Act, 1996, is liable to be set aside in appeal under Section 37(b) of the Act.
Whether the arbitral award suffers from patent illegality or perversity warranting interference.
Submissions/Arguments
The appellant argued that the arbitrator erred in accepting the contractor's measurement of loads and in not allowing deductions for short delivery and other charges.
The respondent contended that the arbitrator's findings were based on evidence and were not perverse or patently illegal.
Ratio Decidendi
The appellate court under Section 37(b) of the Arbitration and Conciliation Act, 1996, cannot reappreciate evidence or substitute its own view unless the award suffers from patent illegality or perversity. The arbitrator's findings on measurement of loads and deductions were based on evidence and were not patently illegal.
Judgment Excerpts
The present appeal is filed under Section 37(b) of the Arbitration and Conciliation Act, 1996 calling in question the order passed in Arbitration Case No.04/2002 clubbed with Arbitration Case No.05/2002 dated 11.09.2009 passed by the court of the Principal District Judge, Raichur.
The court held that the appellate court cannot reappreciate evidence or substitute its own view unless the award suffers from patent illegality or perversity.
Procedural History
The appellant-company awarded a transportation contract to respondent No.1. Disputes arose regarding measurement of loads and deductions. The matter was referred to arbitration, and the sole arbitrator (respondent No.2) passed an award in favor of the contractor. The appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District Judge, Raichur, which was dismissed on 11.09.2009. The appellant then filed the present appeal under Section 37(b) of the Act before the High Court of Karnataka, Kalaburagi Bench, which was heard and reserved for judgment, and finally dismissed on 07.12.2020.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 37(b), Section 34
