Court Has Almost “Nil” Scope Of Interference Against Order Disposing Of S. 34 Petition Under Arbitration Act: Delhi High Court
The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37. The Court added that it has almost “Nil” scope...
The Delhi High Court has ruled that, as a necessary corollary of the provisions of Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), what cannot be considered by the adjudicating Court under a Section 34 petition can certainly not be adjudicated upon by the appellate Court under Section 37.
The Court added that it has almost “Nil” scope of interference while dealing with a challenge against an order disposing of a Section 34 petition, unless there is something perverse, contrary to law and/or which actually shocks the conscience of the Court.
The bench of Justices Manmohan and Saurabh Banerjee remarked that the position across all the Statutes is the same, and the scope of interference by an appellate Court is statutorily very limited and restricted from that which is provided in the Court of first instance.
The petitioner, Municipal Corporation of Delhi (MCD), allotted a parking site to the respondent, Narinder Kumar, under a tender.
Contending that a sizable chunk of the parking site originally allotted to it could not be made operational, the respondent initiated arbitral proceedings against MCD, claiming refund of the excess amount paid along with interest. In its claim raised before the Arbitral Tribunal, the respondent, Narinder Kumar, sought a declaration that he was not liable to pay any amount to MCD towards the alleged licence fee.
The Sole Arbitrator passed an award in favour of the respondent. MCD challenged the award under Section 34 of A&C Act before the District Court, who upheld the arbitral award. Against this, MCD filed an appeal under Section 37 of A&C Act before the Delhi High Court.
Referring to the facts of the case, the bench noted that MCD had failed to file its Statement of Defence despite due service of notice. After its right to file the same stood waived by the Sole Arbitrator, MCD, though duly represented by its counsel, made no challenge to it.
The Court further observed that in the objections filed against the award under Section 34, MCD raised the same contentions and relied upon the same two judgments which were already refuted by the Sole Arbitrator in the arbitral proceedings.
The bench added that in the appeal filed under Section 37 of the A&C Act, MCD had, once again, reiterated the same contentions and relied upon the very same two judgments which were already refuted twice, once by the Sole Arbitrator and thereafter, by the Trial Court in the Section 34 petition.
The Court thus concluded that, “…the MCD is indeed, through the present appeal, blatantly trying to exhibit the same old dilapidated building albeit with a fresh coating over it for approval again, even though the same has twice been rejected as such.”
“MCD by this appeal is trying to reiterate and reagitate the very same issues which warrant no consideration after the concurrent findings of the two forums below,” it added.
The bench added that the Court has almost “Nil” scope of interference while dealing with a challenge against an order disposing of a petition/ objection under Section 34, unless there is something adverse, perverse, contrary to law and/or which actually shocks the conscience of the Court.
While holding that an order under Section 34 of the A&C Act cannot be interfered with if the two forums below, after exercising their minds, have come to the same conclusion/finding of fact and law, the Court said, “The Court exercising jurisdiction under Section 37 of the Act cannot and is not allowed to create a new path to render a new finding save and except when something has been left, overlooked and/or ignored.”
The Court further held that, as a necessary corollary of Sections 34 and 37 and the above legal position, what cannot be gone into by the adjudicating Court in a Section 34 petition, can certainly not be adjudicated upon by the appellate Court under Section 37.
Thus, the High Court concluded that MCD cannot be allowed to reagitate the same grounds which have already been refuted and rejected by two forums below, especially when perversity and absence of alternative interpretation are not made out, since the same is beyond the scope of adjudication under Section 37 of the A&C Act.
“Accordingly, as the present appeal is per se not maintainable in law and/or facts and further as the MCD has been unable to make out any ground of interference for this Court to exercise jurisdiction under the said provisions of Section 37 of the Act to interfere with the impugned order, the present appeal, along with the pending applications, if any, is dismissed in limine, leaving the appellant/MCD to bear its own costs,” the Court ruled.
The Court thus dismissed the petition.
Case Title: Municipal Corporation of Delhi vs. Narinder Kumar
Citation: 2023 LiveLaw (Del) 196
Counsel for the Petitioner: Mr. Sanjeev Sagar, Standing Counsel for MCD with Ms. Nazia Parveen, Adv