w w w . L a w y e r S e r v i c e s . i n


Srei Infrastructure Finance Limited v/s Candor Gurgaon Two Developers & Projects Pvt. Ltd.

    GA. Nos. 3064 to 3065 of 2018 With AP. Nos. 343, 345, 346 of 2018
    Decided On, 02 September 2019
    At, High Court of Judicature at Calcutta
    By, THE HONOURABLE MR. JUSTICE ASHISH KUMAR CHAKRABORTY
    For the Petitioner: S.N. Mookerjee, Ratnanko Banerjee, Sr. Advocates, Swatarup Banerjee, Hashnuhana Chakraborty, Neelina Chatterjee, Advocates. For the Respondent: S.K. Kapur, Siddartha Mitra, Sr. Advocates, Akash Bajaj, Shreya Singh, Advocates.


Judgment Text
In these three applications, under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") the same petitioner has challenged three awards, all dated December 11, 2017 made by the sole Arbitrator in three separate arbitral proceedings between same parties as mentioned hereinafter.

With consent of the parties all the three applications are decided by this common judgment, inasmuch all the three awards made by the same Arbitrator in arbitral proceeding between the same parties are identical in terms except that the dates of the arbitration agreements and the amounts involved therein are different. In all the three arbitral proceedings, the respondent and the petitioner herein were the claimant and the respondent, respectively. By the award dated December 11, 2017 which has been challenged by the petitioner in the first application, namely A.P. No. 346 of 2017, the Arbitrator has directed the present petitioner to pay Rs. 60,09,18,356/- and costs of Rs. 50, 00,000/- , within 30 days to the present respondent, the claimant in the arbitration. By the second award dated December 11, 2017 which has been challenged by the present petitioner in the second application, A.P. No. 343 of 2018, the Arbitrator has directed the present petitioner to pay Rs. 89,94,06,575/- and costs of Rs. 50,00,000/-, within 30 days, to the present respondent, the claimant in the arbitration. By the third award dated December 11, 2017, which has been challenged by the petitioner in the third application, namely, A.P. No. 345 of 2018, the Arbitrator has directed the present petitioner to pay Rs.74,02,47,944 and costs of Rs.50,00,000/-, within 30 days to the present respondent, the claimant in the arbitration. The aforementioned awarded amounts of Rs.60,09,18,356 Rs.89,94,06,575 and Rs.74,02,47,944 included pre- reference interest. The arbitral awards further directed that if the respondent, the petitioner herein failed to pay the principal amounts together with pre-reference interest and cots within 30 days from the award December 11, 2017 it would be liable to pay interest pendente lite at the rate of 16% per annum. Some typographical errors appearing in the all three awards were corrected by the Arbitrator on February 6,2018.

Until January 18,2016 the name of the claimant in the arbitration proceedings, the respondent herein was Unitech Developers & Projects Ltd. It was the case of the claimant in all the arbitration proceedings that it had entered into three Inter Corporate Deposit Agreements (hereinafter referred to as "the ICD Agreements") with the respondent, the petitioner herein. The first two ICD Agreements were dated January 16, 2012 and the third agreement was dated January 27, 2012. Under the first ICD Agreement dated January 16, 2012 the paid Rs.40 crores to the respondent. Under the second and third ICD Agreements dated January 16, 2012 and January 27, 2012 the claimant paid Rs.50 crores and Rs.60 crores, respectively to the respondent. Each of the said three ICD Agreements contained separate arbitration agreement for adjudication of any dispute relating to the respective agreement through arbitration. The claimant alleged that the respondent committed breach of each of the three ICD Agreements and failed to refund the said amounts of Rs.40 crores, Rs.50 crores, Rs.60 crores, respectively together with agreed rate of interest. Therefore, the claimant invoked the respective arbitration agreement contained in all the said ICD Agreements. However, the parties failed to agree to the appointment of the Arbitrator as per the procedure stipulated in each of the said three arbitration agreement. Accordingly, the claimant filed three separate applications, being A.P. No. 126 of 2016, A.P. No. 127 of 2016 and A.P. No. 129 of 2016, under Section 11 of the Act of 1996, before this Court for appointment of the Arbitrator(s) for adjudication of the disputes between the parties relating to each of the said ICD Agreement. By three separate orders dated June 29, 2016 a learned Single Judge of this Court appointed a learned Senior Advocate practising in this Court, as the Arbitrator to adjudicate the disputes between the parties relating to each the said three ICD Agreements.

After the Arbitrator entered upon reference in the arbitration proceedings, the filed three separate statements of claim. In the statements of claim, the claimant claimed that in terms of the said three ICD Agreements it had deposited a Rs. 40 crores, Rs. 50 crores and Rs. 60 crores, respectively with the respondent as inter corporate deposits. The terms and conditions for repayment of the said inter corporate deposits were stipulated under the respective ICD Agreement. Since the respondent, in spite of demands did not make refund of any of the said inter corporate deposits the claimant claimed awards against the respondent in each of the arbitration proceeding for recovery of the said sum of Rs.40 crores, Rs.50 crores and Rs.60 crores, respectively with interest and ancillary reliefs. In the statement of claim filed in the respective arbitral proceeding the claimant disclosed the relevant ICD Agreement based on which it claimed the awards against the respondent.

In the counter statements filed before the Arbitrator, the respondent, the petitioner herein did not dispute either execution of any of the ICD Agreements or receipt of the said amounts of Rs. 40 crores, Rs. 50 crores and Rs. 60 crores, respectively from the claimant. The respondent, however, alleged that the claimant company (previously known as Unitech Developers & Projects Ltd.) together with Unitech Ltd. and few other companies form part of the Unitech Group of companies, controlled by, Mr. Ramesh Chandra together with his sons, namely Mr. Ajay Chandra and Mr. Sanjay Chandra. It was further alleged that on the basis of an oral agreement entered into between the respondent and Mr. Ajay Chandra, representing the Unitech Group of companies the respondent advanced a loan of Rs.150 crores to Unitech Ltd. under the Rupee Loan Agreement No. SRE 256, (hereinafter referred to as "the Rupee Loan Agreement") on condition that repayment of the said loan facilities by Unitech Ltd. to the respondent would be the condition precedent for the claimant to enforce the said ICD Agreements for refund of the said inter corporate deposits. According to the respondent in the arbitral proceedings, the said oral agreement between the parties is evidenced by the conduct and course of dealings between the parties. The tenure of all the said ICD Agreements was 364 days from the respective date of the deposit and the respondent in its counter statements alleged that it had been agreed by the parties that the said inter corporate deposits would, at all times, stand security for repayment of the dues by Unitech Ltd. under the Rupee Loan Agreement. It was further alleged that put option was available to the respondent under the Rupee Loan Agreement at the end of a period of every three months starting from January 15, 2013 but as requested by Mr. Ajay Chandra, on behalf the claimant and Unitech Ltd. with continuance of the security in the form of the inter corporate deposits furnished by the claimant, the respondent did not exercise its right of put option under the said Rupee Loan Agreement. The respondent claimed that in spite of its requests and demands, Unitech Ltd. failed to repay its dues under the Rupee Loan Agreement and on May 22, 2014 it gave notice to the claimant and Unitech Ltd. that the deposits under the said three ICD Agreements amounting to Rs.150 crores would be adjusted towards the outstanding principal and interest under the said Rupee Loan Agreement. However, neither the claimant nor Unitech Ltd. replied to the said letter dated May 22, 2014 and as such it appropriated all the deposits received from the claimant under all the said ICD Agreements towards the amount due from Unitech Ltd. under the Rupee Loan Agreement. Therefore, according to the respondent in the arbitration proceedings no amount is due and payable by it to the claimant under any of the said ICD Agreements. A copy of said the Rupee Loan Agreement dated January 19/20, 2012 entered into between the respondent and Unitech Ltd. was disclosed by the respondent in the counter statements filed before the Arbitrator. In each of its counter statement, the respondent not only denied the liability to make any payment to the claimant under any of the ICD Agreements it also raised counter claims. The respondent claimed a declaration that the inter corporate deposit under the respective ICD Agreement has been duly appropriated by it towards satisfaction of the amount due under the Rupee Loan Agreement and that the relevant ICD Agreement is unenforceable and void. The respondent further claimed awards for perpetual injunction restraining the claimant from claiming recovery of any money under the respective ICD Agreement and for delivery up of the relevant ICD Agreement after the same being adjudged void and cancelled as well as perpetual injunction restraining the claimant from taking a step or any further step on the basis of the relevant ICD Agreement.

The claimant filed its rejoinder in each of the arbitration proceeding and denied all material allegations made by the respondent in its respective counter statement. The claimant denied any authority of Ajay Chandra or Ramesh Chandra to represent itself. According to the claimant, the Rupee Loan Agreement relied by the respondent had no connection either with itself or any of the said ICD Agreements and there was no privity of contract between the parties to the arbitration proceedings and Unitech Ltd. in respect of any the said ICD Agreements which are independent agreements with their express terms and conditions. The ICD Agreements contain no provision whatsoever for adjustment or set off of the amounts due thereunder against any other alleged transaction between the respondent and Unitech Ltd. and the record manifests that the ICD Agreements and the Rupee Loan agreement were independent of each other. As such, the question of the respondent's repayment obligation under the ICD Agreements being controlled by the alleged Rupee Loan Agreement could not and did not arise.

In the background of the common defence of the respondent that all the transactions relating to the three ICD Agreements were interrelated and it appropriated the dues under ICD Agreements against its dues under the said Rupee Loan Agreement the parties decided that all the three arbitration proceedings would be consolidated and heard together, but principally with reference to the pleadings, documents filed and evidence adduced in the arbitral proceeding in A.P No. 126 of 2016.

According to the claimant, the existence the three ICD Agreements and receipt of the sum of Rs.150 crores by the respondent were not in dispute and, as such, the claimant decided not to call any witness before the Arbitrator. The respondent, however, examined one Ganesh Prasad Bagree, senior Vice-President as its witnesses in the arbitration. The said witness of the respondent filed his affidavit of evidence and was also cross- examined by the claimant.

It was contended by the claimant that in view of the exclusionary rules contained in Sections 91and 92 of the Evidence Act prohibiting any oral evidence to add, vary or contradict the terms of a written agreement, the respondent should not be allowed to rely on any oral agreement by way of its defence to the claim of the claimant based on the said ICD Agreements. The respondent, however, argued that the provisions of Sections 91 and 92 of the Evidence Act do not prohibit proof of a collateral oral agreement being entered into between the parties for the purpose of proving the basis for entering into or to overwrite a written agreement. The Arbitrator accepted the said argument advanced by the respondent and held that the parties were free to enter into an oral agreement with the object and purpose that the respondent would be entitled to adjust its liability in the sum of Rs. 150 crores under the said three ICD Agreements against liability of the Unitech Ltd. under the Rupee Loan Agreement. The Arbitrator, however, held that whether there was such an oral agreement is the battle ground and only issue in the arbitration proceedings.

Considering the three ICD Agreements, which were admitted documents, the Arbitrator found the same to contain express provisions, (i) stipulating a fixed date of repayment of the principal advanced; (ii) the right of the borrower (the respondent in the arbitration) to refund the inter corporate deposits in full or in part before the agreed repayment date; and (iii) the right of the claimant to recall the facility at any point of time during tenure of the deposit by giving an agreed notice. The Arbitrator further found the evidence of the witness of the respondent, Ganesh Prasad Bagri ranged from alleged initial representation and making of the alleged oral agreement to its purported termination by performance, namely by alleged adjustment of the claimant's liability of Unitech Ltd under the Rupee Loan Agreement against the respondent's liability to the claimant under the said three ICD Agreements. The Arbitrator held that a perusal of the two sets contractual documents, namely the ICD Agreements and the said Rupee Loan Agreement make it quite clear that two agreements are two independent self-contained documents, each having its own life and logic. Reliance on the ICD Agreements, was not necessary in any fashion for efficacious implementation of the Rupee Loan Agreement. According to the Arbitrator, the variance between pleading and proof by the respondent is too obvious to be overlooked. In terms of the pleading of the respondent under Section 16 application made in the arbitration as well as in the counter-statements, the oral agreement was allegedly reached at a face to face meeting between Ajay Chandra, Rajib Virmani and Sanjay Agarwal, the last two being senior officers of Unitech Ltd on the one hand and Ganesh Prasad Bagri representing the respondent on the other hand. In flat contradiction to such case, Ganesh Prasad Bagri the sole witness of the respondent under cross-examination clearly stated that the oral agreement was made between him and Ajay Chandra only and that too by way of telephonic conversation leaving a discrepancy between the two versions as to when such oral agreement was made.

The Arbitrator further found that the evidence of Ganesh Prasad Bagri that the arrangement of treating the ICD Agreements as securities for the Rupee Loan Agreement was not based on the representation of either Mr. Ramesh Chandra or Mr. Ajay Chandra, but the same was conceived and originated from a team of which he himself was a part. Though the respondent's witness said that the said team supposed to have made representations to a Committee of Directors, but such representation by the team or deliberation by the committee of directors were not recorded in any writing at the request of Ajay Chandra. Significantly, Ganesh Prasad Bagri in his evidence admitted that Ajay Chandra had no position in the claimant company. The Arbitrator further held that in any event, the case of the respondent treating the said ICD Agreements as securities for the Rupee Loan Agreement on the basis of an oral agreement between individuals is irrational and opposed to well- settled commercial practice, particularly when transaction of such magnitude is involved. The Arbitrator also found that the reason for such informal approach was sought to be justified by the respondent by referring to some uncertain and indefinite underlying transaction to avoid legal consequences which remained unexplained. According to the respondent, by a letter dated May 22, 2014 it informed the claimant that the three ICD Agreements to the tune of Rs. 150 crores would be adjusted against the total outstanding dues of Unitech Ltd. towards the principal and interest amounting to Rs.1,625,066,770/- under the Rupee Loan Agreement. The Arbitrator, however, found that at no stage, neither in the pleadings or in course of cross-examination of the respondent's witness, it was disclosed or stated as to when such adjustment was made. According to the Arbitrator, the evidence of the respondent's witness in his cross-examination was ambivalent, inasmuch as he stated that the adjustment had been made in May, 2014 but he came to know about it in June, 2014.

The claimant disputed the existence and receipt of the said notice letter dated May 22, 2014 from the respondent. It was the case of the claimant that by three demand letters dated June 4, 2014 and August 01, 2014 the respondent was informed that repayment of the said ICD Agreements should be made on the extended due dates as noted in the said letters and no further extension should be acted upon if, prayed for. The first of such letters was written by IDFC which had, in the meantime, acquired 40% share holding in the claimant company informing the respondent-borrower under the said three ICD Agreements that the repayment should be made on the extended due dates as noted in the said letter and no further extension should be acted upon, if prayed for. The letter dated June 4, 2014 was issued by UCPL in its capacity as owner of the 60% share holding in the claimant addressed to Sunil Kanoria the top man of the respondent. By the said letter, UCPL sought confirmation that the repayment under the said three ICD Agreements would be made by the respondent during the extended period as noted in the letter dated May 28, 2014. None of the said letters dated May 28, 2014 and June 4, 2018 was replied to by the respondent. According to the Arbitrator, in view of the definite stand taken by the cent per cent shareholders of the claimant company, it is inconceivable that only one person in the Unitech Group would venture to proceed with the adjustment. The Arbitrator further found that even the direct letter of demand dated August 01, 2014 from the claimant to the respondent was not responded either and the purported reply by alleged letter dated August 28, 2014 is clearly dubious and full of self-contradictory assertions. When the claimant disputed the said letter dated August 28, 2014 was sent to them the witness of the respondent, Bagri himself admitted in his cross-examination that no receipt of the dispatch of the acknowledgement of the said letter had been produced in the arbitral proceeding.

In support of its defence of an oral agreement, strenuous effort was made by the respondent to trace and establish certain pattern of dealings concerning the Rupee Agreement on the one hand and the three ICD Agreements on the other. The respondent made reference to various correspondence and electronic mails relating to both sets of agreements which had the appearance of relevance simply by reason of their contemporaneity. The Arbitrator, however, found neither of those by themselves or taken together reveal any nexus between the two sets of agreements towards establishing the said oral agreement or that the claimant had either acknowledged or received any benefit from such arrangement, allegedly made between Unitech Ltd. and the respondent. According to the Arbitrator, the fact that certain senior employees of Unitech Limited handled matters pertaining to the Rupee Agreement and the ICD Agreements by itself does not lend any credibility to the case of the respondent as it is common place to a group of company for senior employee of one company to be seconded to or asked to help out any other company within the group temporarily or on occasions, to help out. The Arbitrator held that the oral agreement having stumbled at the threshold, there cannot be any question of retrieval of the lost ground at such a late stage by any means. According to the Arbitrator the weakest point in the defence remains as to why the so called arrangement which entitled the respondent to adjust its liability to the claimant UDPL under the three ICD Agreements against the outstanding dues of Unitech Limited under the Rupee Agreement was not recorded in writing. The Arbitrator was of the opinion that any reasonable man would not accept such a course to be adopted by a hard-nosed business organisation, such as the respondent. Although in the counter- statement the respondent alleged that the said arrangement was not recorded in writing at the request of Ajay Chandra which was reiterated in cross-examination by the respondent's witness who claimed one of the participant in the negotiation of such arrangement in January, 2012 by feebly referring to some underlying understanding. After appreciating the evidence adduced by the respondent the Arbitrator held that the fact remains that the alleged underlying understanding or purpose has not been spelt out anywhere.

Based on the above findings the Arbitrator made three awards all dated December 11, 2016 directing the petitioner in these applications to pay Rs.60,09,18,356, Rs.89,94,06,575 and Rs.74,02,47,944, respectively as well as costs, as mentioned above to the claimant, the respondent herein. By the said awards, the Arbitrator rejected all the counter claims of the present petitioner in each of the arbitral proceeding. Which have been challenged in these applications, respectively.

At this juncture, it may be noted that in these applications the present petitioner also prayed for stay of operation of all the arbitral awards dated December 11, 2017. In a Special Leave Petition filed by the present petitioner against the judgment and order dated July 19, 2018 passed by this Court, by order dated September 14, 2018 the Hon'ble Supreme Court directed interim stay of the impugned awards subject to the petitioner depositing 60% of the awarded amounts in Court and furnishing a bank guarantee for the remaining 40% of the awarded amounts of a Nationlised bank. Subsequently, the order dated December 03, 2018 the time for furnishing the bank guarantee and making the cash deposit by the petitioner in these applications were extended by the Hon'ble Supreme Court. Accordingly, the present petitioner has furnished a bank guarantee securing 40% of the awarded amounts of the impugned awards before the Registrar, Original Side of this Court. The petitioner has also deposited 60% of the awarded amounts by way of demand draft before the Registrar, Original Side of this Court.

Assailing the aforementioned awards made by the Arbitrator learned Senior Counsel appearing for the present petitioner, the respondent in the arbitral proceedings, submitted that in the counter statements it was the case of the present petitioner that the said Ajay Chandra had represented that the claimant and Unitech Ltd. were group companies and that he, along with his father Ramesh Chandra and brother Sanjay Chandra was at the helm of Unitech Group of Companies. The said Ajay Chandra was also one of the directors of Unitech Corporate Parks PlC (hereinafter referred to as "UCPP") and had substantial control over the said company which was again a major shareholder of the claimant. It was the specific case of the petitioner in the counter statements that the said Ajay Chandra entered into an oral agreement with the petitioner on the basis whereof the petitioner advanced a loan of Rs.150 crores to Unitech Ltd. under the Rupee Loan Agreement upon the condition that the repayment of the loan facilities advanced to Unitech Ltd. by the petitioner under the said Rupee Loan Agreement was a condition precedent for repayment of the inter corporate deposits by the petitioner to the respondent. According to the petitioner, the said oral agreement entered into by Ajay Chandra and the present respondent, the claimant in the arbitration is evidenced by the conduct and course of dealing between the parties which was duly proved by the petitioner through its witness Ganesh Prasad Bagree. In this regard, learned senior counsel for the petitioner referred to various correspondence exchanged between the petitioner and the respondent which were either addressed to or issued by Rajiv Virmani, Sunil Keshwani and Vijay Goyal representing the petitioner appearing at pages 265 to 276,pages 278 to 294,pages 372 to 376,pages 379 to 381 and pages 382 to 384 of the application. It was submitted that the said documents were disclosed by Ganesh Prasad Bagree in his affidavit of evidence and there has been absolutely no cross examination by the claimant respondent on the said documents. Therefore, the said documents reflecting the terms of the oral agreement between the parties, the release of the funds under the Rupee Loan Agreement by the present respondent to Unitech Ltd. only after the deposits (by the claimant respondent under the ICD Agreements), as well as that repayment of the dues of Unitech Ltd. under the Rupee Loan Agreement to the respondent was the condition precedent to the repayment of the inter corporate deposits by the petitioner to the respondent of stand admitted by the claimant. It was further argued that the money under the Rupee Loan Agreement was not disbursed to Unitech Ltd. in one go. The same was disbursed in trenches and only after the monies under the three several Inter Corporate Deposit Agreements dated January 16, 2012 (Rs.40 crores), January 27, 2012 (Rs.60 crores) and March 29, 2012 (Rs.50 crores) were received from the respondent. In this regard, the petitioner referred to its bank statements and some electronic-mails addressed to Mr. Rajiv Virmani by the respondent towards the deposits made under the said ICD Agreements forming part of the affidavit of evidence of Ganesh Prasad Bagree being Page 277 in volume II, Page 295 in Volume II, Pages 377 to 378 in Volume III, Pages 382 to 383 in Volume III and Page 385 in Volume III of Section 34 application respectively. The petitioner submitted that once again, there has been no cross examination on any of the said documents and its in the arbitrations stands admitted. Further, repayment of the dues of the Unitech Ltd. under the Rupee Loan Agreement to the petitioner was the condition precedent to the repayment of the inter corporate deposits by the petitioner to respondent claimant is also evident from the fact that although the Inter Corporate Deposit Agreements were initially for a period of one year, but the tenure of each of the said agreements was extended from time to time inasmuch as the monies under the Rupee Loan Agreement had not been repaid by Unitech Ltd. In view of the delay in repayment of the monies under the Rupee Loan Agreement, neither the respondent herein demanded nor the petitioner has paid the agreed rate of interest under the Inter Corporate Deposit Agreements. On the other hand, the tenure of the Inter Corporate Deposit Agreements were extended and the same continued till such time when the petitioner terminated the Rupee Loan Agreement and adjusted the inter corporate deposits against the outstanding dues from Unitech Ltd. It was contended that although the Inter Corporate Deposit Agreements had the tenure of one year but Clause II thereof provided the agreement to remain in force and effect till all the monies due and payable thereunder are fully paid off by the borrower. This, according to the petitioner, goes to show that the parties had never intended the Inter Corporate Deposit Agreements to have a fixed tenure and the agreement between the parties was that the inter corporate deposits, would stand as the security to the due repayment of dues under the Rupee Loan Agreement. It was argued that all the said ICD Agreements were extended and all the e-mails pertaining to extension of the inter corporate deposits were issued by the representative of Unitech Group of Company, namely, Rajiv Virmani, Sunil Keswani, Vijay Goyal and others which were disclosed and proved by the sole witness of the present petitioner. In fact, there was no cross-examination of the sole witness of the present petitioner on the said electronic mails. It was emphasised that when the present respondent did not adduce any evidence through any witness to dispute the involvement of the aforementioned persons belonging to the Unitech group in finalising the terms of the inter corporate deposits, release of money under the inter corporate deposits and extension of the tenure of each of the said inter corporate deposits with the petitioner, the impugned awardsss made by the learned Arbitrator rejecting the present petition's contention that the inter corporate deposits were advanced by the claimant on the basis of an oral agreement entered into by and between the Unitech Group of Companies represented by Ajay Chandra with other persons and the respondent in the arbitration is vitiated by perversity.

Learned counsel appearing for the petitioner contended that while passing the impugned awardsss, the learned Arbitrator has not even considered that the disbursement under the Rupee Loan Agreement were made by the petitioner to Unitech Ltd. only after the payments were deposited by the claimant under the inter corporate deposits. According to the petitioner when the documentary and oral evidence adduced by it substantiates the involvement of the said Ajay Chandra, Rajiv Virmani, Sunil Keswani, Vijay Goyal and others (belonging to the Unitech group) in the finalisation of the term of the said inter corporate deposits as well as the consequentive extension of each of the said inter corporate deposits, the findings of the Arbitrator that the existence of an oral agreement as pleaded by the respondent in the arbitration was completely unbelievable and that the order in which the inter corporate deposits had been entered into by and between the claimant and respondent in the arbitration and the Rupee Loan Agreement had been entered into between the respondent in the arbitration and Unitech Ltd. "militates against the existence" of such oral agreement are contradictary, incongruous and perverse. It was emphasised that the pattern of dealing between the parties and especially the manner/order in which disbursements had been made under the ICD Agreements and the Rupee Loan Agreement clearly show the existence of a prior oral agreement under which the repayment of the dues of Unitech Ltd. in respect of the said Rupee Loan Agreement was the condition precedent to the repayment of the ICD Agreements. Therefore, the finding of the Arbitrator rejecting the case of the petitioner, the respondent in the arbitration on the basis of the said oral agreement is perverse. It was urged that while passing the arbitral awards the learned Arbitrator acted perversely by not appreciating that the oral agreement pleaded by the persent petitioner comes within the Explanation (III) to Section 92 of the Evidence Act. The learned Arbitrator, according to the petitioner, committed the patent illegality in not considering the decision relied by the petitioner in the case of Narandas Morardas Gaziwala & Ors. -Vs- S.P.A.M. Papammal & Anr. reported in AIR 1967 SC 333.

The learned counsel for the petitioner further referred to the letter dated May 22, 2014 issued by the petitioner to the respondent, letter dated May 28, 2014 issued by IDFC to the petitioner, the letter dated June 04, 2014 to Mr. Sunil Kanoria of the petitioner by the UCPP, the letter dated August 01, 2014 by the respondent to the petitioner and various electronic-mails dated August 13, 2014, August 14, 2014 etc. According to the petitioner, the said set of correspondence proved that the present respondent was aware that the said inter corporate deposits were held by the present petitioner, as securities and it had adjusted the said inter corporate deposits against the outstanding dues under the said Rupee Loan, but the Arbitrator has passed the impugned awardsss without considering any of the said correspondence. The Arbitrator has made the impugned awardsss arbitrarily without applying his judicial mind and in a perverse manner in favour of the claimant respondent. Consequently, the impugned awardsss lack judicial approaches and are vitiated by perversly. Therefore, all the arbitral awards are contrary to public policy. In view of the decisions of the Supreme Court in the cases of Oil & Natural Gas Corporation Ltd. vs. Western GECO International Ltd. reported in (2014) 9 SCC 263 and Associate Builders vs. Delhi Development Authority reported in (2015) 3 SCC 49 the impugned awardsss are liable to be set aside by this Court. In order to establish the ground of perversity the petitioner relied upon the decision of the Supreme Court in the case of K. P. Poulose vs State of Kerala & Anr. reported in (1975) 2 SCC 236.

It was further urged by the petitioner that when the facts as proved would show that there was an oral agreement first (in late December, 2011 and early January, 2012) and thereafter, the first ICD Agreement was entered into on January 16, 2012 and the Rupee Loan Agreement was entered into on January 19 and 20 of 2012, the finding of the Arbitrator in the award that the "sequence in which the three ICD Agreements and SRE-256 were executed militates against such claim" is once again vitiated by perversity. It was strenuously argued that when the e-mails on record go to show that the employees of Unitech Ltd. were acting for the claimant UDPL and the Claimant had not adduced any oral evidence the observation of the Arbitrator that "it is common place in a group company for senior employee of one company to be seconded to or asked to help out any other company within the group temporarily or on occasion to help out is completely perverse.

On the other hand, learned senior counsel for the respondent contended that the impugned awardsss made by the Arbitrator do not suffer from any infirmity constituting any ground for interference by this Court under Section 34 of the Act of 1996. It was argued that the disputes between the present petitioner and the respondent-claimant arose in relation to three separate ICD Agreements dated January 16, 2012, January 27, 2012 and March 29, 2012 respectively, whereunder the respondent advanced an aggregate amount of Rs.140 crore to the petitioner. The arbitration proceedings were held in repect of the said three ICD Agreements which culminated in passing of the three separate arbitraral awards allowing the claims of the claimant, the respondent herein under each of the three agreements. It was submitted that the present petitioner, as the respondent in the arbitration proceedings admitted all the basic facts urged by the present respondent in the arbitration proceedings in support of its case, namely (i) that the the parties had entered into three written ICD Agreements; (ii) the receipt of the amounts by the present petitioner from the respondent under the said three ICD Agreements; (iii) the liability to repay the principal sum under the ICD Agreements along with interest at agreed rates; and (iv) that the amounts under the ICD Agreements were not repaid by the present petitioner to the respondent claimant. In spite of such admissions the petitioner sought to resist the respondent's claim in the arbitration proceedings for payment under the said ICD Agreements before the learned Arbitrator on the basis of a purported oral agreement under which it was entitled to set off its entire liability in respect of the three ICD Agreements against a debt that the petitioner claimed was due to it from a third party, a company named Unitech Ltd. It was submitted by the respondent that considering the defence put up by the present petitioner in the arbitral proceedings on the basis of an oral agreement, as recorded in the impugned awardsss the Arbitrator was of the opinion that the key factual issue in the arbitration was "Whether there was such an oral agreement is a battle ground and only issue in this proceeding". According to the present respondent, when the execution of the three ICD Agreements between the parties herein and the receipt of the amounts under each of the said agreements by the petitioner are admitted facts, the burden of proof wholly lied on the petitioner to prove its case of the alleged oral agreement and the petitioner chose to tender oral evidence and produced the sole witness, namely Mr. Ganesh Bagree, a senior Vice-President. It was submitted that the Arbitrator after hearing the parties at length and weighing and appreciating the evidence, both oral and documentary allowed the claims of the claimant, the respondent herein against the present petitioner. The Arbitrator held that every stage of evidence of the sole witness of the petitioner reveals inconsistency, contradictions and incredulity. The petitioner in its applications under Section 16 of the Act of 1996, as well as in the counter statements filed before the Arbitrator asserted that the oral agreement relied upon by it was allegedly reached at a face to face meeting between Ajay Chandra, Rajiv Virmani and Sanjay Kumar Agarwal, the last two being senior officers of Unitech Ltd. on the one hand and Ganesh Prasad Bagree representing the petitioner on the other hand. In flat contradiction to such case, as found by the Arbitrator the sole witness of the petitioner under cross-examination stated that the alleged oral agreement was between him and Ajay Chandra only and that too by way of telephonic conversion. Accordingly, the Arbitrator was absolutely correct in his finding in the impugned awardsss that there is a clear discrepancy between the two versions as to when such oral agreement was made and such cannot be interfered with. It was further urged that when the present petitioner failed to prove the existence of the oral agreeemnt, the sheet anchor of its defence, the decision of the Arbitrator in each of the arbitral proceeding allowing the respondent claimant's claim by disbelieving the sole witness of the petitioner and repelling the defence sought to be put up by the petitioner on the basis of the alleged oral agreement between the parties is not vitiated by any error or infirmity.

Learned senior counsel for the respondent further contended that it is the settled position of law that while dealing with an application under Section 34 of the Act of 1996, the Court does not act as a court of appeal and consequently, re-examination of the facts by a Court to find out whether a different decisions can be arrived at, is impermissible. It was further argued that the expression "justice" when it comes to setting aside an arbitral award under the public policy ground it only means that the award shocks the conscience of the Court. However, the expression "justice" does not include what the court thinks it is unjust on the facts of the case for which it then seeks to substitute its view for the Arbitrator's view. It is well settled that a finding of fact by an Arbitrator can be held to be perverse only when the same is based on no evidence or the evidence on record is not at all considered by the Arbitrator. However, if there is some evidence on record which is acceptable and could be relied upon, howsoever compendious it may be, the findings of the Arbitrator would not be treated as perverse and the findings would not interfered with by the Court under Section 34 of the Act of 1996. In support of such contention, the respondent claimant relied on the decisions of the Supreme Court in Associate Builders (supra), Sutlej Construction Ltd. -vs- State reported in (2018) 1 SCC 718, Steel Authority of India Ltd. -vs- Gupta Brothers Steel Tubes Ltd. reported in (2009) 10 SCC 63, P.R. Shah, Shares and Stock Brokers (P) Ltd. -vs- B.H.H. Securities (P) Ltd. reported in (2012) 1 SCC 594 and Municipal Corporation of Delhi -vs- Jagannath Ashok Kumar reported in (1987) 4 SCC 497.

It was emphasised that after considering two sets of agreements, that is, the three ICD Agreements on and the Rupee Loan Agreement, respectively and the evidence on record extensively, the Arbitrator rightly held that the two agreements are two independent self-contained documents each has its own life and logic. The Arbitrator also noticed that none of the ICD Agreements refer to the Rupee Loan Agreement nor does the Rupee Loan Agreement makes even a passing mention of any of the ICD Agreements. In view of the detailed consideration of the three ICD Agreements and the Rupee Loan Agreement, as well as the evidence adduced by the present petitioner the Arbitrator was absolutely correct to hold that the reliance on ICD Agreements was not necessary in any fashion for efficacious implementation of the Rupee Loan Agreement. By no stretch of imagination such finding of the Arbitrator can be faulted as perverse or vitiated by non application of judicial mind. It was pointed out that while the parties to the ICD Agreements are the petitioner and the respondent herein, the parties to Rupee Loan Agreement are the present petitioner and Unitech Ltd. Even the tenure of the ICD Agreements were different from that of the Rupee Loan Agreement. Further, the substantial list of securities mentioned in Rupee Loan Agreement (comprising in excess of 100 pages including the securities over property and personal guarantees) and providing more than two times coverage for the loan, does not make any reference to or include the inter corporate deposits covered by the said ICD Agreements. The signatories to the agreements were different people; while the Rupee Loan Agreement was signed by Mr. Bagree, Ajay Chandra and Ramesh Chandra, the ICD Agreements were signed by Shailendra Mahajan, Samir Kejriwal and Sanjeev Sancheti. It was submitted by the respondent that when the sole witness of the petitioner, Ganesh Prasad Bagree failed to prove the alleged oral agreement as mentioned above, after considering the said ICD Agreements and the Rupee Loan Agreement the Arbitrator rightly held that the two agreements are two imdependent self contained documents; each has its own life and logic and reliance on the ICD Agreements was not necessary for officacious implementation of the Rupee Loan Agreement.

The present respondent submitted that as found by the Arbitrator each of the three ICD Agreements contains (i) a fixed date of repayment of the principal sum advanced thereunder; (ii) the right of the borrower, the petitioner herein to refund the inter corporate deposits in full or in part prior to the agreed repayment date; and (iii) the right of the depositor, the respondent herein, to recall the facility at any point of time during the tenure of deposit by giving a notice. Therefore, the Arbitrator rightly held that the essential terms of the ICD Agreement mutilate the whole case of the present petitioner in the arbitration proceeding.

With regard to the evidence adduced by the sole witness of the petitioner, namely, Ganesh Bagree it was strenuously contended by the present respondent that the said witness stood completely discredited and no part of what he said was either credible or acceptable under any circumstances whatsoever. Before the Arbitrator the said witness failed to provide any consistent or cogent or believable evidence regarding the critical questions that is, 'who, what, where and how' regarding the making of the alleged oral agreement and the alleged subsequent adjustment. In its application under Section 16 of the Act of 1997 filed before the Arbitrator as well as in the counter-statement the present petitioner made out the case that the alleged oral agreement was reached at a physical meeting attended by him with Ajay Chandra, Rajiv Virmani and Sanjay Kumar Agarwal. However, it was the oral evidence of the said witness of the present petitioner before the Arbitrator that the alleged oral agreement was made only between Ajay Chandra and himself, that too over telephonic conversation and there was no physical meeting. Further in his cross- examination, the petitioner's witness could not determine even the approximate date, vacillating between December, 2011 and January, 2012, as to when the said alleged oral agreement was made. It is most important to consider that the petitioner's witness did not even try to give any coherent or credible reasons for not recording the alleged oral agreement in writing at any time. He admitted that the oral agreement was never referred to in any written document or in any correspondence or in any internal board meetings. Although the said witness claimed that he had been asked by Ajay Chandra not to record the arrangement based on the said oral agreement but in further cross examination, he could not explain the petitioner's statement, in its application under Section 16 of the Act of 1996, that such secrecy was "in order to avoid various legal consequences". He was even unable to explain what legal consequences were sought to be avoided. The witness of the petitioner, according to the present respondent, was equally inconsistent as to the alleged adjustment of the inter corporate deposits. In cross-examination when the said witness was asked when the alleged adjustment took place and who took the decision to adjust the significant amounts of Inter Corporate Deposits he was unable to either mention or disclose any certain date of adjustment even though the matter related to the accounts. No accounts were produced by the present petitioner to substantiate the alleged adjustment of the Inter Corporate Deposits nor any explanation could be given by the petitioner's witness about the absence of the same. The witness of the present petitioner, in his evidence only vaguely deposed that the adjustment took place "sometime in May, 2014". It was stressed that in the light of these facts, when the present petitioner clearly failed to establish the very factum of the alleged oral agreement the Arbitrator was absolutely to conclude that the petitioner has failed to prove his defence based on the alleged oral agreement. In this regard, learned senior counsel for the respondent/claiment referred to the various answers of the said G.D. Bagree in his cross examination.

It was strongly urged that when the present petitioner failed to prove the alleged oral agreement, all the attempts by the witness of the petitioner to sustain remainder of the false defence fell through altogether. It was submitted that with failure of the present petitioner to prove the oral agreement there is no merit in the petitioner's contention that the pattern of payments or events, that is, transfers of money and extentions of the ICD Agreements would establish sinchronicity between and bind together the ICD Agreements and the SRE-256 agreement. It was, therefore, argued that the Arbitrator was absolutely right to hold that whilst this evidence has the 'appearance' of relevance by reason of contemporanity, the alleged timing or the 'sequence' did not reveal any sufficient nexus between the two sets of agreements. This was pure finding of fact based on appraisal of assessment of oral and documentary evidence, which according to the present respondent, cannot be interfered by this court in this application.

It was strongly contended by the present respondent that all the findings of the Arbitrator in the impugned awards are based on correct appreciation of the pleadings as well as evidence of the respective parties and none of the findings or the decisions of the arbitrator in the impugned awards is either shocking or viciated by perversity. According to the respondent, there is no merit in any of the grounds of challenges advanced by the petitioner against any of the impugned awards. The present respondent, therefore, pressed for dismissal of all the applications.

I have considered the records of the three arbitral proceedings before the learned arbitrator has also the arguments advanced by the learned senior counsel of the respective parties. Although Section 34 of the Act of 1996 contemplates various grounds on which an arbitral award can be challenged before a court but in the present case, is only ground urged by the present petitioner, being the respondent in all the three arbitral proceedings is that the arbitral award is in conflict with the public policy of India. As held by the Supreme Court in the case of Associate Builders (supra) the ground "Public Policy of India" as mentioned in Section 34(2) (b) (ii) of the Act of 1996 can be divided into sub-heads, that is, (a) Fundamental Policy of India; (b) Interest of India; (c) Justice or Morality; (d) Patent Illegality. Further Fundamental Policy of India comprises (i) compliance with statutes and judicial precedents; (ii) need for judicial approach; (iii) natural justice compliance and (iv) wednesburi reasonableness. In the said decision it was further held when any of the heads/sub-heads of based of "Public Policy" is applied to an arbitral award, the court does not act as court of appeal and interference is permissible only when findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shock or when, illegality is not trivial but goes to the root of matter. The Supreme Court further held that the Arbitrator being the ultimate master of quantity and quality of evidence while drawing the arbitral award, an award based a little evidence on a evidence of which does not measure up in quality to a trend legal mind cannot be held to be invalid. Even when the court finds that the arbitrator has based his finding on appreciation of the evidence adduced by the respective parties the Court, in an application under Section 34 of the Act of 1996, cannot interfere with the arbitral award by re-appreciating the evidence and by merely coming to a different conclusion than what was arrived at by the arbitrator. The ratio of the said decision has subsequently been relied by the Supreme Court in the cases of P.R. Shah Shares and Stock Brokers Pvt. Ltd. (supra) and Sutlej Construction Ltd. (supra).

In the instant case, the respondent in these applications initiated the arbitral proceedings for recovery of Rs.40 crores, Rs.60 crores and Rs.50 crores respectively from the present petitioner under the three ICD Agreements. In the three arbitral proceedings the present petitioner could not and did not dispute the receipt of a total sum of Rs.150 crores (Rs.40 crores+Rs.60 crores+Rs.50 crores) under the said ICD Agreements. While admitting its liablity under each of the said three ICD Agreements, the present petitioner sought to resist the claim of the present respondent on the ground that by virtue of an oral agreement it was entitled to adjust and it did adjust its liability under the said three ICD Agreements against the liability of the present respondent under the said Rupee Loan Agreement made between itself and a company called Unitech Ltd.. In the applications filed under Section 16 of the Act of 1996 challenging the jurisdiction of the arbitrator, as well as in the counter statemens filed in the respective arbitral proceedings, the present petitioner alleged that the said oral agreement was reached at a face to face meeting between Ajay Chandra and Rajiv Virmani and Sanjay Agarwal representing the present respondent on the one hand and Ganesh Prasad Bagree representing the present petitioner on the other hand. However, during his cross- examination the said G.D. Bagree, the sole witness of the present petitioner, in answer to questions 83 and 84 stated that the said alleged oral argreement was made between him and Ajay Chandra only and that too by way of telephonic conversastion. Further, in answer to question 61, during his cross-examination, the said G.D. Bagree accepted that Ajay Chandra had no position in the present respondent. Therefore, having regard to the discrepancy in the pleading and proof of the present petitioner as to when, where and how the said alleged oral agreement was made, the Arbitrator after appreciating the evidence adduced by the sole witness of the present petitioner held that the present petitioner has failed to prove the alleged oral agreement, it's the sheet anchor of defence against the claims of the present respondent in the arbitral proceedings. Such finding of the Arbitrator cannot, by any means, be called to be vitiated by any petent illegality or perversity. Further, by cosidering the said three ICD Agreements as well as the Rupee Loan agreement in detail the Arbitrator arrived at his finding in the impugned awards that the said two sets of agreements are two independent self-contained documents; each has his own life and logic and reliance of the ICD Agreements was not necessary in any fashion for effective implemention of the Rupee Loan Agreement. Once again, after considering the clauses of the said ICD Agreements, contemplating (i) a fixed date of repayment of principal sum advanced thereunder; (ii) the right of the borrower (the present petitioner herein) to refund inter-corporate deposits in full or in part tried to the agreed repayment date; (iii) the right of the depositor the respondent herein to recall the facility at any point of time during the tenure of deposit by giving an agreed notice; (iv) an amendment to the said ICD Agreements is to be in writing and duly signed by the parties thereto as well as absence of any reference to the Rupee Loan Agreement I find no perversity in the finding arrived by the Arbitrator that the said ICD Agreements and the Rupee Loan Agreement are two independent self-contained documents; each has its own life and logic and reliance on ICD Agreements was not necessary in any fashion for efficacious implementation of the Rupee Loan Agreement. Further, although in the counter statements filed in the arbitration proceedings it was the specific case of the present petitoner that by the letter dated May 22, 2014 addressed to the present petitioner it stated that the said three ICD Agreements amounting to Rs.150 crores would be adjusted against the total outstanding dues towards the principal and interest amounting to Rs.1,65,066,770 under the Rupee Loan agreement. The present respondent disputed the authenticity of the said letter and denied to have received any such communication. It is to be noted that in answer to questions 65 and 69, during his cross-examination, the sole witness of the present petitioner admitted that there was no receipt evidencing ser

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vice of the said letter dated May 22, 2014 upon the present respondent. Further, after appreciating the evidence adduced by the sole witness of the present petitioner, the Arbitrator found at no stage, neither in the pleadings or in course of cross- examination of the petitioners witness, it was disclosed or stated as to when the petitioner adjusted the dues under the ICD Agrrments of Rs.1.50,00,000, towards the principal and interest amounting to Rs.1,625,066,770/- under the Rupee Loan Agreement. Even, the alleged decision for adjustment of the said inter corporate deposits was clearly not a decision of the Board or Committee of Directors, but by some delegated authorities composed of Vice- Chairman, Saud Siddique and the Managing Director, Sunil Kanoria. The Arbitrator found absence of any clear case of the respondent that any authority was vested in the said two persons to take such decision, though the witness said that the authority was vested in them and that too, by writing but no such alleged writing was disclosed by the respondent in the arbitration proceeding. Even by letters dated May 28, 2014 and June 04, 2014, the IDFC (who acquired substantial shares in the present respondent) addressed to the present peititoner (with attention to Mr. G.D. Bagree) categorically demanded payments of the dues under the ICD Agreements. By a further dated June 04, 2014 addressed directly to Shri Sunil Kanoria, who for all purposes contols the present petitoner, the present resondent requiested for confirmation of the repayment of the inter corporate deposits.The present petitioner received both the said letters but admittedly it did not respond to any of the said letters. In fact, during his cross-examination, while answering to question 596, the sole witness of the present petitioner that was contemporaneous reply to the said letters. Further, the present respondent denied to have received the alleged letter dated August 28, 2014 from the petitioner by which the latter claimed to have replied to the letter of demand dated August 01, 2014 issued by the former. In the arbitration proceedings the present petitioner could not produce any evidence to prove that the present respondent had received the said letter dated August 28, 2014 and such fact was admitted by the sole witness of the present petitioner in his cross-examination. In these facts, when the Arbitrator rejected the defence of the present petitioner that it was entitled to and adjusted its dues to the present respondent, against the alleged dues under said Rupee Loan Agreement such decision cannot be held to be shocking or vitiated by perversity or illegality of any kind. When the present respondent failed to prove the alleged oral agreement pleaded in its counter statements, the entire d edifice of its defence to the claims of the present respondent under the three ICD Agreements fell through. As discussed above, the Arbitrator also rightly disbelieved and rejected the further defence of the present petitioner of adjustment of the dues of the present respondent under the ICD Agreements against its alleged dues under the said Rupee Loan Agreement and such decisions of the Arbitrator suffers from no infirmity calling for interference by this Court under Section 34 of the Act of 1996. In view of above, the reference made by the present petitioner to other documents forming part of the records of the applications under Section 34 of the Act of 1996 and the arguments advanced on the basis thereof have no significance or merit. For all the foregoing reasons, neither any finding of the Arbitrator nor his decisions allowing the claims of the present respondent, being the claimant in each of the three arbitral proceeding A.P. No.126 of 2016, A.P no.127 of 2016 and A.P. No. 129 of 2016 suffers from no infirmity or illegality. The Arbitrator was absolutely right to reject the counter claims of the present petitioner in the three arbitral proceedings. In the facts of the present case, as discussed above, in the cases of Western Capital GECO International Ltd. (supra), Associate Builders (supra) and K.P. Poulose (supra) are of no assistance to the petitioner. In any event, in these applications the petitioner has not advanced any argument to dispute the basis or correctness of amounts awarded by the Arbitrator in the three arbitral proceedings. For all the reasons as aforesaid, I do not find any merit in these applications filed by the petitioner, under Section 34 of the Act of 1996. Accordingly the applications being A.P. No.343 of 2018, A.P. No.345 of 2018 and A.P. No.346 of 2018 stand rejected. At this juncture, it may be noted that in each of the application under Section 34 of the Act of 1996, the petitioner had filed separate applications, being G.A. No.3064 of 2018, G.A. No.3065 of 2018 and G.A. No.3066 of 2018,respectively seeking for leave to disclose further documents. However, in view of the findings which I have arrived at on the basis of the oral evidence of the sole witness of the present petitioner I find no reason to entertain any of the said applications. There shall, however, be no order as to costs. Let, urgent certified website copies of this judgment be made available to the parties, subject to the compliance of the requisite formalities. (ASHIS KUMAR CHAKRABORTY,J.) Later : A prayer was made by Ms. Hashnuhana Chakraborty, appearing for the petitioner in the applications under Section 34 of the Act of 1996 for continuance of the cash deposit made by the petitioner, as well as the bank guarantees furnished by the petitioner in terms of the order dated September 14.2018 passed by the Supreme Court for a period of two weeks from date. Such prayer is considered and allowed. The respondent in these applications shall not encash the bank guarantee furnished by the present petitioner or withdraw the cash deposit lying with the Registrar, Original Side of this Court for a period of two weeks from date.
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