2017 (7) TMI 1250 - SC - Indian Laws

Appointment of Arbitral Tribunal for deciding the disputes - disputes regarding non-payment of their bills - contract for construction of sports complex at Pune - Held that - We are constrained to allow the appeals, set aside the impugned order and remand the case to the High Court for deciding the appeal afresh on merits. The need to remand the case to the High Court has occasioned due to the reason that the High Court while dismissing the appeal did not set out even the factual controversy properly much less in detail and nor dealt with any of the grounds taken by the parties in their pleadings and in appeal in support of their respective contentions - The High Court erred in not recording any finding much less reasoned finding keeping in view the stand of the parties taken in the pleadings and the grounds of appeal. The High Court also erred in not pointing out as to why the order of the District Judge is legally sustainable calling no interference therein. If the High Court decided to embark upon the merits of the appeal then it should have recorded findings by dealing with all the issues arising in the case. It was, however, not done and hence it calls for interference by this Court. We cannot countenance the approach and the cryptic reasoning of the High Court and are, therefore, constrained to set aside the impugned order and remand the case to the High Court for deciding the appeal afresh on merits in accordance with law - appeal allowed by way of remand.

Summary

Issues:
1. Dismissal of Arbitration Appeal and Review Petition by High Court
2. Modification of Arbitral Award by District Judge
3. Appeal filed under Section 37 of the Arbitration and Conciliation Act
4. Lack of proper reasoning and findings in the High Court's judgment
5. Failure of parties to appear during the appeal hearing
6. Remanding the case to the High Court for fresh consideration

Issue 1: Dismissal of Arbitration Appeal and Review Petition by High Court
The Supreme Court granted leave to appeal against the judgments of the High Court of Judicature at Bombay, which dismissed the Arbitration Appeal and the Review Petition. The case involved a dispute between a Government agency and a company over non-payment of bills, leading to the appointment of an Arbitral Tribunal. The Tribunal awarded a sum in favor of the company, which was later modified by the District Judge, Pune. The High Court dismissed the company's appeal, prompting the filing of a review petition and subsequent special leave appeals.

Issue 2: Modification of Arbitral Award by District Judge
The District Judge, Pune, modified the Arbitral Tribunal's award by reducing the sum initially awarded to the company. This modification was challenged by the company through an appeal under Section 37 of the Arbitration and Conciliation Act before the High Court, which was dismissed. The Supreme Court noted the reduction in the awarded sum and the directions given by the District Judge, leading to the remand of the case for fresh consideration.

Issue 3: Appeal filed under Section 37 of the Arbitration and Conciliation Act
The appellant, feeling aggrieved by the modification of the award by the District Judge, filed an appeal under Section 37 of the Arbitration and Conciliation Act before the High Court. The single Judge of the High Court dismissed the appeal, prompting the filing of review petition and subsequent special leave appeals before the Supreme Court.

Issue 4: Lack of proper reasoning and findings in the High Court's judgment
The Supreme Court observed that the High Court failed to provide a detailed factual and legal analysis in its judgment. The High Court did not properly address the grounds raised by the parties or explain the basis for its decision. This lack of reasoning necessitated the remand of the case to the High Court for a fresh consideration on merits in accordance with the law.

Issue 5: Failure of parties to appear during the appeal hearing
During the appeal hearing in the High Court, neither the counsel for the appellant nor the counsel for the respondent appeared. The Supreme Court highlighted the procedural error in the High Court's handling of the appeal in the absence of both parties, emphasizing the need for adherence to the provisions of the Code of Civil Procedure for passing appropriate orders.

Issue 6: Remanding the case to the High Court for fresh consideration
The Supreme Court set aside the impugned order and remanded the case to the High Court for a fresh consideration on merits. The Court emphasized the importance of a detailed judgment containing factual background, legal analysis, and reasons for decision to enable proper appellate review. The High Court was instructed to decide the appeal expeditiously, ensuring notice to both parties and unbiased consideration of the case.