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The Hatti Gold Mines Company Limited, Bangalore v/s S. Madavreddy & Another

    M.F.A. No. 31914 of 2009 (AA)

    Decided On, 07 December 2020

    At, High Court of Karnataka Circuit Bench OF Kalaburagi

    By, THE HONOURABLE MR. JUSTICE HANCHATE SANJEEVKUMAR

    For the Appellant: Veeranagouda Malipatil, Advocate. For the Respondents: R1, Basavaraj Kareddy, Advocate.



Judgment Text

(Prayer: This MFA is filed under Section 37(b) of the Arbitration and Conciliation Act, 1996 praying to allow the appeal by setting aside the order dated 11.09.2009 passed by the learned Principal District Judge, Raichur in Arbitration Case No.5/2002 by setting aside the award passed by respondent No.2 and consequently to allow the petition filed by the appellant-company.)1. The present appeal is filed under Section 37(b) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') calling in question the order passed in Arbitration Case No.04/2002 clubbed with Arbitration Case No.05/2002 dated 11.09.2009 passed by the court of the Principal District Judge, Raichur.2. Brief facts of the case are as follows :- The appellant-Company is a Karnataka State Government undertaking Company, carrying activities of mining of gold and was established for treating 900 tons of gold per day. The appellant-Company has decided to increase its production from the existing 900 tons of gold per day to 2000 tons per day and the main source of gold are from Hatti unit and UTI unit. Therefore, it was planned to produce 800 metric tons and remaining 400 tons of gold ore was planned from UTI mines. Therefore, the appellant-Company started mining activities at UTI mines and called tender for transporting gold ore and then contract of transportation was allotted to respondent No.1-Contractor after following the procedure of tender and respondent No.1-Contractor started the work after getting the work order dated 24.04.1998 for transportation of gold ore from UTI into to Hatti unit.It is further submitted that one of the stipulation as per the said work order is that the respondent No.1- Contractor shall transport daily 400 tons of gold ore from UTI gold mines to Hatti with variation of (+ or -) of 10% for a period of 12 months and the total quantity was fixed at 1,40,000 tons in that year.3. It is the allegation against respondent No.1- Contractor by the appellant-Company that respondent No.1-Contractor had failed to transport gold ore as per the terms and conditions in the work order and was transporting lesser quantity of gold ore than what has been stipulated in the terms and conditions in the contract and it is the contention of the appellant-Company that due to lesser quantity of transportation of gold core then what is stipulated as per terms and conditions of contract, the appellant-Company was not able to produce gold as per their target and therefore sustained loss and hence as per the stipulation in the contract the appellant- Company had raised dispute for resolving the same by appointing an arbitrator who is respondent No.2 herein.4. In this regard, it is contended that the appellant-Company has issued several notices to respondent No.1-Contractor but the respondent No.1- Contractor in spite of rectifying himself for transportation of 400 tons of gold ore per day but continued the transportation of lesser quantify of gold ore to the appellant-Company and therefore it is contended that the appellant-Company was not able to produce the expected target of the production of the gold. Therefore, in this regard a dispute arose between the appellant-Company and respondent No.1-Contractor. Hence, as per the stipulations in the said contract for resolving the said dispute, it was referred to the Arbitrator who is respondent No.2 herein. Accordingly, the respondent No.2 is appointed as an Arbitrator resolving the issue.5. The respondent No.2 sole Arbitrator had conducted proceedings and passed an award on 30.01.2002. By the said award the respondent No.2- Arbitrator has disallowed the claim of the appellant- Company but allowed the counter claim made by respondent No.1-Contractor.6. The appellant-Company being aggrieved by the said award dated 30.01.2002 passed by respondent No.2- Arbitrator has invoked Section 34 of the Act challenging the award filed Arbitration Case No.5/2002 before the Court of Principal District Judge, Raichur.. At the same time respondent No.1-Contractor has also filed an Arbitration Case No.4/2002 as per Section 33(1)(a) of the Act, calling in question the said award so far as non granting of future interest at the rate of 12% per annum by respondent No.2-Aarbitrator.7. The learned Principal District Judge, Raichur has dismissed the Arbitration application filed under Section 34 of the Act preferred by the appellant-Company and the Arbitration application filed under Section 33(1)(a) of the Act preferred by the respondent No.1-Contactor is also dismissed.8. The appellant-Company has preferred this present appeal by invoking Section 37(b) of the Act calling in question the dismissal of Arbitration Case No.5/2002 which was filed by invoking the provisions under Section 34 of the Act. The learned Principal District Judge has dismissed the arbitration application filed under Section 34 of the Act mainly on the ground that just because the respondent No.2-Arbitrator has not considered some of the documents produced by the appellant-Company that cannot be made ground to set aside the award and dismissed the arbitration application in Arbitration Case No.5/2002.9. The learned counsel for the appellant- Company has submitted that the respondent No.2- Arbitrator has not at all considered any of the documents placed by the appellant-Company during the proceedings under the arbitration and also in the award the respondent No.2-Arbitrator has not assigned any reasons for rejecting the claim of the appellant-Company as it can be seen apparently on the face of the award, but without there being any reasons assigned in the award has allowed the counter claim of respondent No.1-Contractor. Therefore, submitted that the arbitral award passed by respondent No.2-Arbitrator suffers from lack of reasons which goes to the very core of the dispute to resolve and therefore submitted that the arbitral award can be said to be legally non-est arbitral award. Therefore, prays to set aside the said order passed by respondent No.2-Arbitrator, and also attacking on the orders passed by the learned Principal District Judge that even the learned Principal District Judge has not assigned any reason while passing the order and just by extracting the arbitral award in verbatim and by quoting some decisions of the Hon'ble Apex Court and the Hon'ble High Court, has simply dismissed the Arbitration Case No.5/2002 without assigning any reasons. Therefore, this order also suffers from non assigning any reasons and thus the entire approach of the respondent No.2-Arbitrator and the learned Principal District Judge in considering the matter it cannot be said that it is a valid award and the order as being perverse. Thus submitted that where none of the documents are considered or discussed and without any reasons assigned in the arbitration award and also in the order passed by the learned Principal District Judge, therefore the matter is required to be remitted for fresh for resolving the dispute by another arbitrator.10. It is contended that now respondent No.2- Arbitrator passed away, therefore submitted the matter is required to be reconsidered by another Arbitrator and thus prays for remitting of the case for consideration before any other arbitrator and in such an event the respondent No.1-Contractor would not get any prejudice.11. On the other hand, learned counsel for respondent No.1-Contractor submitted that respondent No.2-arbitrator has assigned the reasons for rejecting the claim of the appellant-Company and allowing the counter claim made by respondent No.1-Contractor and has passed an arbitral award and same is considered by the learned Principal District Judge and therefore submitted that the appeal is devoid of merits.12. Further submitted that for challenging the arbitral award there are no grounds available as per Section 34 of the Act and the scope of considering the arbitral award under Section 34 of the Act is very minimal and the appellant-Company had not made out any ground attacking on the award passed by respondent No.2- Arbitrator.13. Further submitted that just because some reasons are not assigned and some documents are not considered and discussed in the arbitral award that cannot be made ground to remand the case for fresh consideration before the same Arbitrator or before any other Arbitrator. In this regard, the learned counsel for respondent No.1-Contractor has relied on the judgment of the Hon'ble Apex Court and thus submitted that remand of the case is not necessary and also the two forums have disallowed the claims of appellant-Company and allowed the claim of respondent No.1-Contractor and when this being the two forums have categorically held by passing arbitral award and is confirmed by the learned Principle District Judge, therefore, under these circumstances the appeal is found to be devoid of merits prays for dismissal of the appeal.14. Upon hearing the rival contentions the point that arise for consideration is as follows :-Whether the arbitral award passed by respondent No.2-Arbitrator confirmed by learned Principal District Judge requires in its power exercising under Section 34 of the Act requires interference for the reason that both the Arbitrator and the learned Principal District Judge have not assigned any reasons in the arbitral award and in the order passed by the learned Principal District Judge and this matter requires to be reconsidered afresh by another Arbitrator ?15. Upon considering the dispute between the appellant-Company and the respondent No.1-Contractor as discussed above and considering that the respondent No.2-Arbitrator is a sole Arbitrator and upon perusal of the arbitration award dated 30.01.2002 made by respondent No.2-Arbitrator, it is found apparent on the face of the award that respondent No.2-Arbitrator had not assigned any reasons in rejecting the claim of the appellant-Company. Upon perusing the arbitral award dated 30.01.2002 upto the page 3, the contentions and the documents filed by the appellant-Company are mentioned. From page 3 to 5 straightway it is stated that the claim of the appellant-Company is rejected and counter claim of respondent No.1-Contractor is allowed by mentioning the gist of the claim 1 to 5 of the appellant- Company and the counter claim No.1 to 8 of respondent No.1-Contractor. Then at page 6 of the arbitral award starts with caption of 'Reasons for the Award'. In page 6 of the arbitral award, without assigning any reasons the respondent No.2- Arbitrator has rejected the claim No.1 of the appellant-Company and also rejected all claims. It is worthwhile to extract the observations made by respondent No.2-Arbitrator, which reads as follows :-"The evidences before me produced by the parties show and prove beyond all reasonable doubts that this single allegation made by the claimants against the respondent is totally false."16. Further the other observations made by respondent No.2-Arbitrator are found to be only on assumption and presumption basis without assigning any reasons. The respondent No.2-Arbitrator had observed that the appellant-Company had forfeited the contract given to respondent No.1-Contractor but by which document the forfeiture is made is not discussed. It is only stated that from 02.02.1999 the appellant-Company had forfeited the work of respondent No.1-Contractor, but on which document it is based there is no discussion. Likewise, there are no reasons at all assigned in the arbitral award in coming to conclusion of rejecting the claim of the appellant-Company and allowing the counter claim of respondent No.1-Contractor. When the appellant- Company had invoked Section 34 of the Act and when the respondent No.1-Contractor had invoked Section 33(1)(a) of the Act calling in question the arbitral award dated 30.01.2002 in their respective contentions, the learned Principal District Judge has also not assigned reasons and by just extracting the paragraph of the arbitral award and by mentioning some of the citations has dismissed the Arbitration Case No.5/2002. Therefore, even the learned Principal District Judge also has not assigned any reason why the Arbitration Case No.5/2002 was dismissed.17. Furthermore, the learned Principal District Judge has referred the citations but only it is stated the principle enunciated in the above cited judgments are not helpful and are not applicable to the appellant-Company and has only observed these types of observations. Therefore, even learned Principal District Judge has also not considered the case and in mechanical way just by extracting the paragraphs in the arbitral award in the judgment and quoting some of the citations and by just observing these citations are not helpful and are not applicable, hence dismissed the appeal of the appellant- Company. Therefore, in this way both respondent No.2- Arbitrator as well as learned Principal District Judge have not assigned any reasons while passing arbitral award and orders in appeal respectively. Under these circumstances, the question before this court is that without there being any record and material muchless from the arbitral award and order of the Principal District Judge itself it is not possible to make discussion whether the factors enumerated in Section 34 or Section 37 or Section 33 of the Act whether are made out or not so as to consider under the present case under those parameters. Under these circumstances, the question is whether the case is liable to be reconsidered afresh by the arbitrator by remitting the case to decide the dispute afresh either by the very same arbitrator or by the different arbitrator. In the present case, it is submitted that now respondent No.2-Arbitrator is no more therefore under these circumstances whether the matter requires further consideration by another Arbitrator.18. The learned counsel for respondent No.1- Contrctor submitted that it is not permissible the matter to be remitted for fresh consideration by other Arbitrator or by the same Arbitrator and he places reliance on the judgment of the Hon'ble Apex Court in the case of M/s Dyna Technologies Pvt.Ltd., vs. M/s Crompton Greaves Ltd. in Civil Appeal No.2153 of 2010 decided on 18.12.2019.19. The Hon'ble Apex Court in Dyna's case (supra), the very same question is for consideration as involved in the present case and it is worthwhile to extract the observations made by their Lordship at para 1 which is as under :-"1. The question involved herein revolves around the requirement of reasoned award and the cautionary tale for the parties and arbitrators to have a clear award, rather than to have an award which is muddled in form and implied in its content, which inevitably leads to wastage of time and resources of the parties to get clarity, and in some cases, frustrate the very reason for going for an arbitration."20. The learned Single Judge of the High Court of Judicature at Madaras has confirmed the arbitral award passed by the Arbitral Tribunal. Aggrieved by the aforesaid decision of the learned Single Judge the respondent herein appeared before the Division Bench of the High Court of Judicature at Madras and Division Bench allowed the appeal in part and set aside the award of the Tribunal relating to claim No.2 by forming an opinion that the award does not contain sufficient reasons and statements contained in paragraph 3.1 (a) to 3.1 (g) of the award does not provide any reasons, discussions or conclusion. Then the appellant-Company has preferred the appeal before the Hon'ble Apex Court. The Hon'ble Apex Court were pleased to consider the relevant provisions of Sections 31, 34 and 37 of the Act and various judgments rendered previously and were pleased to observe at paragraphs 36, 37, 38 and 39 which are as follows :-"36. When we consider the requirement of a reasoned order three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate. If the reasoning in the order are improper, they reveal a flaw in the decision-making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner. On the other hand, ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award. Therefore, the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards.37. At this juncture it must be noted that the legislative intention of providing Section 34 (4) in the Arbitration Act was to make the award enforceable, after giving an opportunity to the Tribunal to undo the curable defects. This provision cannot be brushed aside and the High Court could not have proceeded further to determine the issue on merits.38. In case of absence of reasoning the utility has been provided under of Section 34(4) of the Arbitration Act to cure such defects. When there is complete perversity in the reasoning then only it can be challenged under the provisions of Section 34 of the Arbitration Act. The power vested under Section 34 (4) of the Arbitration Act to cure defects can be utilized in cases where the arbitral award does not provide any reasoning or if the award has some gap in the reasoning or otherwise and that can be cured so as to avoid a challenge based on the aforesaid curable defects under Section 34 of the Arbitration Act. However, in this case such remand to the Tribunal would not be beneficial as this case has taken more than 25 years for its adjudication. It is in this state of affairs that we lament that the purpose of arbitration as an effective and expeditious forum itself stands effaced.39. It may be noted that when the High Court concluded that there was no reasoned award, then the award ceased to exist and the Court was functus officio under Section 34 of the Arbitration Act for hearing the challenge to the award under the provisions of Section 34 and come to a conclusion that the arbitration award was not in terms of the agreement. In such case, the High Court ought to have considered remanding the matter to the Tribunal in the usual course. However, the High Court analyzed the case on merits, but, for different reasons and we need not go into the validity of High Court's interference."21. Therefore, in the above cited case the ratio laid down is that if there are no reasons assigned or when there is complete perversity in the reasoning or if the award has some gap in the reasoning then Section 34(4) of the Act can be applied for curing the defects.22. Further, it is the ratio laid down that when there is no reasoned award, then the award ceased to exist and the Court was functus officio under Section 34 of the Act for hearing the challenge to the award under the provisions of Section 34 of the Act and remand the matter to the Tribunal in usual course without analyzing the case on merits.23. In the present case also upon perusing both arbitral award passed by respondent No.2-Arbitrator and also the order passed by the learned Principal District Judge no reasons are assigned while coming to conclusion why the claim is to be rejected and counter claim is to be allowed. In the arbitral award there is no reasons assigned much less discussion on the documents produced before it and in simple way and in straightway it is simply stated after perusal of the case the claim of the appellant- Company is liable to be rejected. Therefore, the arbitral award lacks in mentioning the reasons. The learned Principal District Judge has also without making any discussion on it and without any reasons has simply extracted the paragraphs from the arbitral award and by mentioning some authorities and by simply saying the said authorities are not helpful in the present case and thus the arbitration case filed by the appellant-Company is dismissed. In this background of the case the present case is needed to be remanded for another Arbitrator Tribunal for fresh consideration. Since it is submitted from the Bar that respondent No.2-Arbitraror is now no more, therefore as per the dictum of the Hon'ble Apex Court (supra) this court restrains itself in considering the case on merits except remanding the case for fresh consideration by different Arbitral Tribunal.24. Further the decision of the Hon'ble Apex Court in the case of Som Datt Builders Limited v. State of Kerala [(2009) 10 Supreme Court Cases 259] were pleased to discuss with reference to Section 31(3) and 34(4) of the Act, regarding recording of reasons, the necessity and extent of requirement of stating reasons and remitting the award to the Tribunal for recording reasons when warranted and it is held the ratio by considering the various judgments rendered previously by the Hon'ble Apex Court from paragraphs 20 to 25, which are as follows :-"20. Section 31(3) mandates that the arbitral award shall state the reasons upon which it is based, unless - (a) the parties have agreed that no reasons are to be given, or (b) the award is an arbitral award under Section 30. That the present case is not covered by clauses (a) and (b) is not in dispute. In the circumstances, it was obligatory for the Arbitral Tribunal to state reasons in support of its award in respect of Claim 1 and 4-B. By legislative mandate, it is now essential for the Arbitral Tribunal to give reasons in support of the award. It is pertinent to notice here that 1996 Act is based on UNCITRAL Model Law which has a provision of stating the reasons upon which the award is based.21. In Union of India v. Mohan Lal Capoor [(1973) 2 SCC 836], this Court said : (SCC p.854, para 28)"28. ...Reasons are the links between the materials on which certain conclusions are based and the actual conclusions.""22. In Woolcombers of India Ltd. v. Woolcombers Workers Union and Another [(1974) 3 SCC 318], this Court stated : (SCC pp.320-21, para5)"5. ....The giving of reasons in support of their conclusions by judicial and quasi- judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations."23. In S.N. Mukherjee v. Union of India[(1990) 4 SCC 594], the Constitution Bench held that recording of reasons :"(i) guarantee consideration by the authority;(ii) introduce clarity in the decisions; and(iii) minimise chances of arbitrariness in decision making."(SCC p.612, para 35)24. Learned Senior Counsel for the contractor referred to a decision of Delhi High Court in the case of Delhi Electric Supply Undertaking v. Victor Cable Industries Ltd. [(2006) 1 Arb LR 297 (Del)] and submitted that where the arbitrator has referred to facts of the case and has noticed some reasoning which in view of arbitrator was sufficient to arrive at conclusion for granting relief, award cannot be stated to be unreasoned. He also referred to yet another decision of Delhi High Court in Kumar Construction Co. v. DDA [(1996) 64 DLT 553] wherein it has been observed that the Arbitrator is not expected to write elaborate judgment and where Arbitrator has noticed contentions of the counsel, it cannot be said that arbitrator failed in stating reasons for the award.25. The requirement of reasons in support of the award under Section 31(3) is not an empty formality. It guarantees fair and legitimate consideration of the controversy by the Arbitral Tribunal. It is true that Arbitral Tribunal is not expected to write judgment like a court nor it is expected to give elaborate and detailed reasons in support of its finding(s) but mere noticing the submissions of the parties or reference to documents is no substitute for reasons which the arbitral tribunal is obliged to give. Howsoever brief these may be, reasons must be indicated in the award as that would reflect thought process leading to a particular conclusion. To satisfy the requirement of Section 31(3), the reasons must be stated by the Arbitral Tribunal upon which the award is based; want of reasons would make such award legally flawed."25. Therefore, in the above cited case, it was found that the Arbitral Tribunal has not assigned reasons, hence the matter was remitted for fresh consideration before the Additional District Judge, Ernakulam with a direction to the District Judge shall first remit the award to the Arbitral Tribunal for stating their reasons in support of the claims stated therein. The ratio laid down in the above cited case is squarely applicable to the case on hand considering the factual matrix involved so far as non assigning reasons as above discussed.26. The Hon'ble Apex Court in the case of Radha Chemical v. Union of India in Civil Appeal No.10386 of 2018 (Arising out of SLP (C) No.2334/2018) decided on 10.10.2018, by referring the judgment of the Hon'ble Apex Court in the case of Kinnari Mullick and Another vs. Ghanshyam Das Damani [(2018) 11 SCC 328 - FB] were pleased to held as follows :-"5) This Court in a series of judgments culminating in Kinnari Mullick and Another vs. Ghanshyam Das Damani, (2018) 11 SCC 328 held that the court while deciding a Section 34 petition has no jurisdiction to remand the matter to the Arbitrator for a fresh decision. It is, therefore, clear that the learned Single Judges judgment is contrary to this judgment as a result of which both the judgments of the Single Judge as well as the Division Bench have to be set aside.6) We, therefore, set aside both the judgments and relegate the matter to the stage of the original Section 34 petition, which now has to be heard, on its merits in accordance with the parameters laid down by this Court for decision under Section 34 of the Arbitration and Conciliation Act, 1996.7) Accordingly, we remand the matter to the Single Judge, who is requested to take up the matter and decide the same at the earliest considering that the Award in this case has been passed over ten years ago."Therefore, in the above cited case the matter was remanded to the learned Single Judge of the High Court to consider the matter afresh.27. The Hon'ble Apex Court in the said Kinnari Mullick's case (supra) were pleased to lay down the conditions required to be satisfied for remanding the matter to the arbitral Tribunal to consider the matter afresh and at paragraphs 15 and 16 were pleased to observe as follows:-"15. On a bare reading of this provision, it is amply clear that the Court can defer the hearing of the application filed under Section 34 for setting aside the award on a written request made by a party to the arbitration proceedings to facilitate the Arbitral Tribunal by resuming the arbitral proceedings or to take such other action as in the opinion of the Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. The quintessence for exercising power under this provision is that the arbitral award has not been set aside. Further, the challenge to the said award has been set up under Section 34 about the deficiencies in the arbitral award which may be curable by allowing the Arbitral Tribunal to take such measures which can eliminate the grounds for setting aside the arbitral award. No power has been invested by Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section (4) of Section 34. This legal position has been expounded n McDermott International Inc. v. Burn Standard Co.Ltd., [(2006) 11 SCC 181]. In para 8 of the said decision, the Court observed thus: (Bhaskar Industrial Development Ltd. V. South Western Railway, [2016 SCC Online Kar 8330]"8. ... Parliament has not conferred any power of remand to the Court to remit the matter to the Arbitral Tribunal except to adjourn the proceedings as provided under sub-section (4) of Section 34 of the Act. The object of sub-section (4) of Section 34 of the Act is to give an opportunity to the Arbitral Tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award." (Emphasis supplied)16. In any case, the limited discretion available to the Court under Section 34(4) can be exercised only upon a written application made in that behalf by a party to the arbitration proceedings. It is crystal clear that the Court cannot exercise this limited power of deferring the proceedings before it suo motu. Moreover, before formally setting aside the award, if the party to the arbitration proceedings fails to request the Court to defer the proceedings pending before it, then it is not open to the party to move an application under Section 34(4) of the Act. For, consequent to disposal of the main proceedings under Section34 of the Act by the Court, it would become functus officio. In other words, the limited remedy available under Section 34(4) is required to be invoked by the party to the arbitral proceedings before the award is set aside by the Court."28. In the above cited decision, it was observed by the Hon'ble Apex Court that the Division Bench of the Calcutta High Court has committed an error while remanding the matter for consideration before the Arbitral Tribunal as there was no written request made as per Section 34(1) of the Act and accordingly the order passed by the Division Bench of the Calcutta High Court is set aside but liberty is given to the parties to pursue their remedies in accordance the law. Therefore, it is the ratio laid down that if there are no reasons assigned or there is gap in assigning the reasons to come to a conclusion then for removing of said defects in the award an application under Section 34(1) of the Act can be filed before the Court then only the power under Section 34(4) of the Act can be exercised. The judgment in Kinnari Mullick's case (supra) is not referred before the Hon'ble Apex Curt in M/s Dyna's case (supra).29. Section 34(4) of the Act can be exercised by the Court upon making an application under Section 34(1) of the Act against an arbitral award for setting side the same in accordance with law under sub section (2) and (3) of Section 34 of the Act. Therefore, in the present case the appellant-Company has made a written application under Section 34(1) of the Act and by making such recourse prays for setting aside the arbitral award but the learned Principal District Judge without looking into the provisions under Section 34(4) of the Act straightway rejected the arbitration petition even after noticing the fact that the respondent No.2-Arbitrator has not assigned any reasons in the arbitration award. Therefore, the learned Principal District Judge ought to have taken recourse as per Section 34(4) of the Act where the appellant-Company has filed an application as required under Section 34(1) of the Act for seeking setting aside the Arbitral award. Therefore, the ratio laid down in M/s Dyna's case (supra) is squarely applicable to the case on hand as in the present case the arbitral award does not contain the reasons, discussions on the material produced during the proceedings of the Arbitral Tribunal. Therefore, without having any recourse being left with the case needed to be remanded for fresh consideration before any Arbitral Tribunal in accordance with law and as per the terms of agreement between the parties and in the present case it is submitted that respondent No.2-Arbitrator is now no more therefore liberty is given to the appellant-Company and respondent No.1-Contrcator to espouse dispute before any other Arbitral Tribunal for their respective claims and counter claims.30. Further, in the decision of the Division Bench of this Court in the case of Bhaskar Industrial Development Limited, Kolkata vs. South Western Railway, Hubballi [2016 (3) KCCR 2285 (DB)] were pleased to lay down the principle of law after referring the judgment of the Honb'le Apex Court in the case of McDermott International Inc. vs. Burn Standard Co. Ltd. [(2006) 11 SCC 181], at paragraph 7 and 8, it is observed as follows :-"7. It is also relevant to refer to para 52 of the decision of the Supreme Court

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in McDermott International Inc. Vs. Burn Standard Co.Ltd. [(2006) 11 SCC 181] relied on by the learned Senior Counsel:"52. The 1996 Act makes provision for the supervisory role of Courts, for the review of the arbitral award only to ensure fairness. Intervention of the Court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The Court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the Court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the Court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."8. A plain reading of Section 34 of the Act extracted above will show that Parliament has not conferred any power of remand to the Court to remit the matter to the arbitral tribunal except to adjourn the proceedings as provided under sub-section (4) of Section 34 o the Act. The object of sub-section (4) of Section 34 is to give an opportunity to the arbitral tribunal to resume the arbitral proceedings or to enable it to take such other action which will eliminate the grounds for setting aside the arbitral award. This provision (sub-section (4)) cannot be invoked, once the Arbitral Award is set aside."31. Therefore, as per the ratio laid down in McDermott's case (supra) the court cannot correct errors of the arbitrators in the award passed by the Arbitrator and it can only quash the award leaving the parties to free to begin the arbitration again if they so desire.32. Further, it is the ratio in McDermott's case (supra) that as per sub-section (4) of Section 34 of the Act there is no power to remand the dispute to the Arbitrator Tribunal except to adjourn the proceedings by giving an opportunity to the Arbitral Tribunal to resume the arbitral proceedings to enable it to take such other action which will eliminate the grounds for setting the arbitral award. But the learned Principal District Judge has not done so in the present case. In those peculiar facts and circumstances involved in the present case as it is submitted by the learned counsel for the appellant- Company, now the respondent No.2-Arbitrator is no more therefore remanding to the very same Arbitrator is not possible for making correction in the Arbitral award. Therefore, the case is needed to be considered afresh by leaving the parties free to begin arbitration again if they so desire by another Arbitrator as the same is propounded by the Hon'ble Apex Court in McDermott's case (supra) at paragraph No.52, by giving an opportunity to the parties free to begin the arbitration again if they so desire.33. Hence with these observations the arbitral award dated 30.01.2002 passed by respondent no.2- Arbitrator and the order dated 11.09.2009 passed in Arbitration Case No.4/2002 clubbed with Arbitration Case No.5/2002 by the Principal District Judge, Raichur are hereby set-aside and remanded the case to the Arbitral Tribunal for fresh consideration in accordance with law. Hence, I proceed to pass the following :ORDERThe appeal is allowed.The impugned order dated 11.09.2009 passed in Arbitration Case No.4/2002 clubbed with Arbitration Case No.5/2002 by the Principal District Judge, Raichur and Arbitral award dated 30.01.2002 passed by respondent No.2-Arbitrator are hereby set-aside.The parties are at liberty to espouse the dispute before the Arbitral Tribunal as per the terms of agreement entered between them for fresh consideration in accordance with law.
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