Case Note & Summary
The appellant, Mr. Abdulgapr Maktumsab Hudali, filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging the judgment and order dated 20.04.2016 passed by the Principal District Judge, Kolhapur in Civil Miscellaneous Application No.296 of 2008. The District Judge had dismissed the appellant's application under Section 34 of the Act, thereby confirming the Arbitral Award dated 04.08.2008. The dispute arose out of a partnership firm 'M/s. Rubb Steel', originally a proprietary concern of the appellant, which was later converted into a partnership. The respondents, Sardar Mohammad Pathan and Bashir Mohammad Pathan, were admitted as partners with 50% and 45% shares respectively, leaving the appellant with only 5% share. A Memorandum of Understanding (MoU) dated 05.12.1995 was executed between the parties, under which the respondents agreed to pay a total consideration of Rs. 8,75,000/- to the appellant for the assets of the partnership, including Plot No. B-37 in Gokul Shirgaon Industrial Area. The respondents initiated arbitration proceedings contending that the MoU was acted upon and the consideration was paid. The arbitrator passed an award in favor of the respondents, which was challenged by the appellant under Section 34. The District Judge dismissed the application, leading to the present appeal. The appellant argued that the MoU was not acted upon and that the consideration was not paid, and that the findings of the arbitrator and the District Judge were perverse. The respondents supported the concurrent findings. The High Court, after hearing the parties, held that the scope of an appeal under Section 37 is limited and does not permit re-appreciation of evidence unless the findings are perverse. The court found that the appellant failed to demonstrate any perversity or error of law in the concurrent findings of fact. Accordingly, the appeal was dismissed, and the impugned judgment and order were upheld.
Headnote
A) Arbitration Law - Appeal under Section 37 - Scope of Interference - The court considered the scope of an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an order dismissing a petition under Section 34 of the Act. The court held that the appellate court under Section 37 does not sit as a court of appeal over the findings of fact recorded by the arbitrator or the court under Section 34. Interference is warranted only if the findings are perverse, i.e., based on no evidence or contrary to the material on record. (Paras 3-5) B) Arbitration Law - Section 34 - Perversity - The court examined whether the findings of the arbitrator and the District Judge under Section 34 were perverse. The appellant contended that the Memorandum of Understanding dated 05.12.1995 was not acted upon and that the consideration was not paid. However, the arbitrator and the District Judge concurrently found that the MoU was executed and acted upon, and the consideration was paid. The court held that these findings were based on evidence and not perverse, hence not liable to be interfered with. (Paras 4-5) C) Arbitration Law - Section 37 - Finality of Concurrent Findings - The court emphasized that concurrent findings of fact by the arbitrator and the court under Section 34 should not be lightly disturbed in an appeal under Section 37. The appellant failed to demonstrate any perversity or error of law warranting interference. (Para 5)
Issue of Consideration
Whether the impugned judgment and order dated 20.04.2016 passed by the Principal District Judge, Kolhapur in Civil Miscellaneous Application No.296 of 2008, dismissing the application under Section 34 of the Arbitration and Conciliation Act, 1996 and confirming the Arbitral Award dated 04.08.2008, is liable to be set aside in appeal under Section 37 of the said Act.
Final Decision
The appeal is dismissed. The impugned judgment and order dated 20.04.2016 passed by the Principal District Judge, Kolhapur in Civil Miscellaneous Application No.296 of 2008 is confirmed.
Law Points
- Section 37 of Arbitration and Conciliation Act
- 1996
- Scope of appeal under Section 37
- Interference with findings of fact
- Perversity
- Section 34 of Arbitration and Conciliation Act
