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TMI Blog2024 (9) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'the Corporation' entered into an agreement dated 06.10.2008 with M/s Sanman Rice Mills hereinafter referred to as 'the Rice Mill' whereunder the Corporation was to supply paddy to the Rice Mill for the purpose of milling that had to supply back the resultant rice to the Corporation. 4. A total of 2,02,850 bags of Grade 'A' variety of paddy weighing 70,997.50 quintals was supplied by the Corporation to the Rice Mill. However, after processing, the Rice Mill resupplied only a part of the same with a shortfall of 35110.39 quintals of rice. Thus, this shortage in quantity of rice equivalent to a total cost of Rs.7,16,15,716/- was recoverable from the Rice Mill. Against the aforesaid outstanding amount, the Rice Mill paid ten cheques of Rs.50 lakh each amounting to Rs.5 crore to the Corporation leaving a balance of Rs.2,16,15,716/-. Thus, there arose a dispute between the parties with regard to the recovery of the balance amount. The dispute was referred to the Arbitrator. 5. The Arbitrator passed an award on 08.11.2012 and awarded a sum of Rs.2,67,66,804/- in favour of the Corporation as against the Rice Mill. The amount awarded was to be paid with interest @ 12 per cent per ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in reading of Section 34 reveals that the scope of interference by the court with the arbitral award under Section 34 is very limited and the court is not supposed to travel beyond the aforesaid scope to find out if the award is good or bad. 11. Section 37 of the Act provides for a forum of appeal inter-alia against the order setting aside or refusing to set aside an arbitral award under Section 34 of the Act. The scope of appeal is naturally akin to and limited to the grounds enumerated under Section 34 of the Act. 12. It is pertinent to note that an arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law that too upon reappraisal of the evidence adduced before the arbitral trial. Even an award which may not be reasonable or is non-speaking to some extent cannot ordinarily be interfered with by the courts. It is also well settled that even if two views are possible there is no scope for the court to reappraise the evidence and to take the different view other than that has been taken by the arbitrator. The view taken by the arbitrator is normally acceptable and ought to be allowed to prevail. 13. In paragraph 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act." 16. It is seen that the scope of interference in an appeal under Section 37 of the Act is restricted and subject to the same grounds on which an award can be challenged under Section 34 of the Act. In other words, the powers under Section 37 vested in the court of appeal are not beyond the scope of interference provided under Section 34 of the Act. 17. In paragraph 14 of MMTC Limited v. Vedanta Limited, (2019) 4 SCC 163 it has been held as under: "14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., [1948] 1 Κ.Β. 223 (CA)] reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract."" CONCLUSION : 20. In view of the above position in law on the subject, the scope of the intervention of the court in arbitral matters is virtually prohibited, if not absolutely barred and that the interference is confined only to the extent envisaged under Section 34 of the Act. The appellate power of Section 37 of the Act is limited within the domain of Section 34 of the Act. It is exercisable only to find out if the court, exercising power under Section 34 of the Act, has acted within its limits as prescribed thereund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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