Court’s Jurisdiction U/S. 34 Of Arbitration & Conciliation Act Is Relatively Narrow & Scope For Interference Is Limited: Punjab & Haryana HC
The Punjab and Haryana High Court upheld an Arbitral Award in a land dispute matter and reiterated that the jurisdiction of the Court under Section 34 of the Arbitration & Conciliation Act,1996 is relatively narrow and the jurisdiction of the Appellate Court under Section 37 is all the more circumscribed.
The High Court was considering an Appeal challenging the order of the Special Commercial Court, Gurugram vide which the petition preferred by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 was dismissed.
The Division Bench of Justice Arun Palli and Justice Vikram Aggarwal asserted, “While noticing the law on the subject, the Special Commercial Court, Gurugram rightly rejected the petition.”
Advocate Vipul Sharma represented the Appellant while Senior Advocate Aashish Chopra represented the Respondent
As per the facts of the case, a development agreement was executed between the appellant and the respondents-land owners in the year 2005 as regards utilization of the land for development of a Commercial Complex/IT Complex. As per the agreement, the appellant was supposed to develop the land at its own costs and a sum of Rs.50,00,000 had been paid to the respondents as interest free refundable security deposit which was agreed to be refunded within 15 days from the issuance of the occupation certificate.Time for completion of the Project was agreed to be the essence of the contract and a period of 6 years from the date of execution of the agreement was fixed for its completion.
However, in the year 2008, a certain portion of the total land was notified under Section 4 of the Land Acquisition Act, 1894 and award was also announced. Ultimately, a legal notice was issued by the respondents informing the appellant that the agreement stood canceled. The arbitration clause was invoked by the appellant. In the arbitral proceedings, the claim of the appellant and counter claims of the respondents were rejected. Costs of Rs 4,00,000 were imposed upon the appellant which were ordered to be paid as litigation expenses to the respondents. Aggrieved by the award, a petition under Section 34 was preferred by the appellant which came to be declined leading to the filing of the instant appeal.
It was the appellant’s case that the Commercial Court rejected the petition under Section 34 on flimsy grounds without appreciating the controversy in the correct perspective. However, the Respondent contended that a petition under Section 34 is not an appeal and an award can be interfered with only on the limited grounds available under such provision.
At the outset, the Bench explained that after the petition under Section 34 is decided, an appeal can be preferred under Section 37 of the 1996 Act. As per Section 37 (1) (c), an appeal can be preferred from an order setting aside or refusing to set aside an arbitral award under Section 34 of the 1996 Act.
The Bench was of the view that the Arbitrator considered the matter in detail and detailed findings were returned. The argument as regards the force majeure clause was dealt with in extenso and it was observed that the same had not been set up in the claim petition but was argued at the time of arguments. It was held that this argument had no basis because out of total land, only a small part of it was the subject matter of acquisition which too was prior to the date of execution of the agreement and the rest of the land was not a subject matter of acquisition either at the time of the execution of agreement or at the time when the claimant had submitted its application for the grant of license.
It was also noticed that the Commercial Court held that that nothing had been brought before the Court which could even remotely establish that any finding of the Arbitrator was against the Public Policy of India or that the Arbitrator had violated the law. The Court further held that the findings of fact recorded by the Arbitrator could not be set aside simply even if a different view could be taken.
Thus, observing that the Commercial Court, Gurugram rightly rejected the petition, the Bench dismissed the appeal.
Cause Title:Active Promoters Private Limited v. Desh Raj and Others [Neutral Citation- 2024:PHHC:149676-DB]
Appearance:
Appellant: Advocate Vipul Sharma
Respondent: Senior Advocate Aashish Chopra, with Advocates Rupa Pathania, Gurpreet Randhawa, Nitika Sharma, Advocate