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 from 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. The subject matter property was Plot No. B-37 in Gokul Shirgaon Industrial Area, admeasuring 1000 Sq. Mtr. with RCC structure and machineries. A Memorandum of Understanding (MoU) dated 05.12.1995 was agreed between the parties, under which the Respondents agreed to pay a total amount of Rs. 8,75,000/- to the Appellant towards consideration of the said property being assets of the partnership. Out of this amount, Rs.1,25,000/- was to be paid to MIDC for expenses. The Respondents filed arbitration proceedings contending that the MoU was executed and they had paid the consideration. The Arbitral Tribunal passed an award in favor of the Respondents. The Appellant challenged the award under Section 34, which was dismissed by the District Judge. In the present appeal under Section 37, the Appellant argued that the award was perverse as the MoU was not executed and no consideration was paid. The Court, after hearing the parties, held that the Arbitral Tribunal had considered the evidence and concluded that the MoU was executed and the Respondents had paid the consideration. The Court found that the findings were not perverse and the District Judge rightly dismissed the Section 34 application. Consequently, the appeal was dismissed.
Headnote
A) Arbitration Law - Appeal under Section 37 - Scope of Interference - Section 37 of Arbitration and Conciliation Act, 1996 - The appeal challenged the order of the Principal District Judge dismissing the application under Section 34 of the Act, which had confirmed the Arbitral Award. The Court held that the scope of interference under Section 37 is limited and the findings of the Arbitral Tribunal, being not perverse, do not warrant interference. (Paras 1-4) B) Arbitration Law - Section 34 Application - Perversity - Section 34 of Arbitration and Conciliation Act, 1996 - The Appellant contended that the Arbitral Award was perverse as the MoU was not executed and no consideration was paid. The Court found that the Arbitral Tribunal had considered the evidence and concluded that the MoU was executed and the Respondents had paid the consideration. The Court held that the findings were not perverse and the District Judge rightly dismissed the Section 34 application. (Paras 4-4.3)
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 this appeal under Section 37 of the said Act.
Final Decision
The appeal is dismissed. The Judgment and Order dated 20.04.2016 passed by the Principal District Judge, Kolhapur in Civil Miscellaneous Application No.296 of 2008, confirming the Arbitral Award dated 04.08.2008, is upheld.
Law Points
- Section 37 of Arbitration and Conciliation Act
- 1996
- Section 34 of Arbitration and Conciliation Act
- Scope of interference with arbitral award
- Perversity
- Memorandum of Understanding
- Consideration
