(Prayer: Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 read with Clause 15 of the Letters Patent read with Order XXXVI Rule 1 of the Original Side Rules against the order dated 18.12.2017 passed in O.P. No.150 of 2013.)
T.S. Sivagnanam, J.
We have heard Mr.A.R.Ramanathan, learned counsel for the appellant and Mr.R.Subramanian, learned counsel appearing for the first respondent.
2. This appeal is directed against the order dated 18.12.2017 made in O.P.No.150 of 2013.
3. The said original petition is filed by the appellant herein seeking to set aside the award of the learned Arbitrator dated 29.12.2011.
4. The learned Single Judge, while considering the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter called the Act), had dealt with in detail as to how the learned Arbitrator proceeded with the matter, concurred with the findings rendered by the learned Arbitrator and ultimately dismissed the said original petition.
5. Before us, Mr.A.S.Ramanathan, learned counsel for the appellant would contend that the first respondent herein filed a suit in C.S.No.623 of 1997 on the Original Side of this Court, in which, the appellant was impeladed as the first defendant and the third defendant was one M/s.Enmas Process Technologies Limited, seeking a judgment and decree for recovery of a sum of Rs.62,66,790/~ from the defendants therein and their assets jointly and severally and also for recovery of interest at the rate of 18% per annum on the principal sum of Rs.41,50,192/~ from the date of the said suit till the date of realization from the defendants jointly and severally.
6. The said suit was decreed ex parte on 17.7.2001 against all the defendants including the appellant before us. Aggrieved by that, the appellant filed appeals in OSA.Nos.39 and 40 of 2005. When the said appeals were pending before a Division Bench of this Court, the appellant and the first respondent entered into a memorandum of understanding agreeing to refer the suit claim for arbitration. They also agreed upon the name of the learned Arbitrator, who could be nominated to resolve and decide the claim in the plaint in CS.No.623 of 1997.
7. The memorandum of understanding was placed before the Division Bench of this Court and a decree dated 17.6.2010 came to be passed in the said OSA.Nos.39 and 40 of 2005 in terms of the said memorandum of understanding. The salient features of the said memorandum of understanding were that the ex parte decree passed against the appellant dated 17.7.2001 in the said CS.No.623 of 1997 was set aside and the first respondent was permitted to withdraw Rs.25 lakhs from and out of Rs.65 lakhs, which the appellant deposited before the Nagpur Bench of the Bombay High Court in Company Appeal No.5 of 2007. Based on the said memorandum of compromise, the first respondent filed a claim petition before the learned Arbitrator, to which, the appellant filed a counter by raising a preliminary objection stating that in terms of the memorandum of understanding, the plaint in the said CS.No.623 of 1997 was to be referred for arbitration and that but, on going through the statement of claim, it was seen that there was lot of variation between the plaint in the said CS.No.623 of 1997 and the statement of claim filed before the learned Arbitrator. Apart from the preliminary objection, various other objections were raised in the counter on the merits of the matter.
8. The claimant namely the first respondent herein filed a proof affidavit in December 2010. It appears that the appellant before us did not lead any evidence, but contested the arbitral proceedings before the learned Arbitrator. After contest, an award was passed on 29.12.2011. The challenge made as against the award also ended in dismissal. Aggrieved by that, the appellant is before us.
9. The appellant is aggrieved mainly on the ground that when the memorandum of understanding clearly stated that the said CS.No.623 of 1997 had to be referred for arbitration, it would mean that it was the plaint that was referred for arbitration and that the first respondent cannot make any amendments nor alter the claim nor add nor delete any of the pleadings, which was already a part of the record. To buttress this submission, the learned counsel has referred to paragraph 26 of the plaint stating that the first respondent herein, while filing the said civil suit, had clearly indicated as to what was the amount payable by the third defendant in the suit namely M/s.Enmas Process Technologies Limited and what was the claim against the appellant. However, in the claim petition, the entire claim has been laid against the appellant, which had been accorded by the learned Arbitrator.
10. Under normal circumstances, the appellant would be justified in canvassing such a contention. But, unfortunately, it cannot be done before us in the light of the fact that the first respondent had filed an appeal before a Division Bench of this Court in OSA.No.113 of 2004 against that portion of the judgment and decree dated 17.7.2001 in the said C.S.No.623 of 1997 in so far as dismissal of the said suit against the third defendant namely the said M/s.Enmas Process Technologies Limited. However, the said OSA.No.113 of 2004 was dismissed by a Division Bench of this Court by judgment dated 28.2.2011 on the ground that there was absolutely no privity of contract between the first respondent herein and the said M/s.Enmas Process Technologies Limited. The Division Bench having held so, the first respondent cannot make any claim against the said M/s.Enmas Process Technologies Limited. The appellant, who was a party to the said OSA.No.113 of 2004, was given up, as they remained ex parte in the said C.S.No.623 of 1997. The appellant had not taken any steps to modify the judgment dated 28.2.2011 in the said OSA.No.113 of 2004 after they had knowledge about it.
11. In our considered view, the learned Arbitrator rightly adjudicated the questions and passed an award. The correctness of the award was tested by the learned Single Judge under Section 34 of the Act. The learned Single Judge noted that the award was a reasoned award and did not suffer from any error or perversity. Now, we are called upon to test the correctness of the order passed by the learned Single Judge.
12. The appellant does not dispute the fact that the jurisdiction under Section 37 of the Act is very narrow and limited. On a reading of the order passed by the learned Single Judge as well as the award, which was impugned before the learned Single Judge, it is seen that the view taken by the learned Arbitrator is on a consideration of the evidence and the materials placed before him and that the conclusion arrived at is a reasonable conclusion. Therefore, we are of the considered view that the findings rendered by the learned Arbitrator as affirmed by the learned Single Judge do not call for any interference.
13. Mr.A.S.Ramanathan, learned counsel for the appellant submits that the learned Arbitrator awarded interest at 12% on Rs.34 lakhs from 01.4.1997 till the date of the award ie. 29.12.2011. The learned Arbitrator further ordered that if the appellant failed to pay the amount on or before 31.3.2012, the appellant would be liable to pay interest at 18% on Rs.34 lakhs calculated from the date of the award i.e. 29.12.2011 till date of payment.
14. The endeavour of the learned counsel for the appellant is to convince us that the award of interest at 18% is not sustainable.
15. We have
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perused the contentions, which were advanced by the appellant before the learned Single Judge and we find that nowhere such a contention was raised before the learned Single Judge. 16. Mr.A.S.Ramanathan, learned counsel for the appellant submits that this was one of the grounds raised in the petition under Section 34 of the Act. 17. Though it may be one of the grounds raised, it was never canvassed before the learned Single Judge. Therefore, we cannot permit the appellant to canvass such a point before us for the first time. Apart from that, as observed earlier, the award is a reasoned award based on the evidence placed before the learned Arbitrator and calls for no interference. 18. For the above reasons, the above original side appeal is dismissed. No costs. Consequently, the connected CMP is also dismissed.