Ramporan Paswaan vs M/S Bharat Petroleum Corporation Ltd, Through Its General Manager, And 2 Others

APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 28 of 2025

Ramporan Paswaan

.....Appellant(s)

Versus

M/S Bharat Petroleum Corporation Ltd, Through Its General Manager, And 2 Others

.....Respondent(s)

Counsel for Appellant(s)

:

Varun Pratap Singh, Parimal Bhatt

Counsel for Respondent(s)

:

Mohammad Ehtesham Khan

Reserved

Court No. - 7

HON'BLE JASPREET SINGH, J.

1. The instant appeal has been preferred under Section 37 of the Arbitration and Conciliation Act 1996 assailing the judgment and order dated 18.03.2023 passed by the A.D.J/F.T.C Ist Sultanpur in Misc Case no.66 of 2015 whereby the petition preferred by the appellant under Section 34 of the Act, 1996 has been dismissed. As a consequence, the award passed by the sole Arbitrator dated 24.02.2015 dismissing the claim of the appellant has been affirmed.

2. Sri Parimal Bhatt learned counsel for the appellant has assailed the order passed by the Court dated 18.03.2023 on the premise that the Court has not considered the submissions of the appellant in the correct perspective and it is urged that there is no finding recorded by the Court while dismissing the petition under Section 34 of the Act of 1996.

3. It is pointed out that the Court has merely reproduced the averments and contentions of the appellant herein (who was the petitioner before the Court in the Section 34 petition) and it went on to notice the submissions of the respondent and thereafter there has been copious reproduction of paragraphs of certain decisions of the Apex Court and then in a cursory manner, it has concluded that the scope of proceedings under Section 34 of the Act, 1996 is narrow and the contentions raised by the appellant did not fall within the said ambit, accordingly, the petition had been dismissed.

4. It is also pointed out that the Arbitrator had clearly misread the clauses of the agreement and moreover there was ample material brought on record to indicate that the appellant did not suppress or conceal any fact rather the information furnished by him was absolutely correct. The conclusion arrived at by the Arbitrator by relying upon the report of the Tehsildar indicating some defect in the income certificate of the appellant which was not attributable to the appellant could not be made the basis to reject the claim.

5. Elaborating his submissions, it has been urged that the appellant had applied for LPG dealership with the respondents. The appellant had filed his application which was followed by an interview and thereafter, the respondents issued a letter of intent (LOI) dated 22.06.2001 whereafter the appellant had made his investments and the dealership was commissioned on 26.02.2002.

6. It is urged that on the basis of an alleged complaint by a third party, indicating that the appellant had furnished false income certificate, the said complaint was taken note of by the respondent and without putting the appellant to notice, a report was called from the Tehsildar who vide his report dated 10.10.2006 informed the respondent authorities that the income certificate furnished by the appellant was false.

7. It is urged that the respondent thereafter issued a show cause notice to the appellant dated 15.01.2007 which was duly replied on 05.02.2007. The reply of the appellant did not find favour with the respondent authorities. As a consequence, the dealership agreement was terminated by the respondents on 27.05.2007.

8. It is also urged that soon after the termination order was passed and the appellant got engaged in a series of litigation. Initially he preferred a writ petition before the Division Bench of this Court and it was dismissed, whereafter a civil suit was also instituted and the orders passed in the civil suit were put to challenge in another writ petition. However, this attempt of the appellant assailing the order did not find favour with the Court whereafter the appellant was relegated to the forum of Arbitration.

9. The appellant filed an application under Section 11 of the Act of 1996, however, before the same could be decided, the respondent had appointed an Arbitrator. As a result, the Section 11 petition of the appellant was dismissed as having become infructuous.

10. It is in the aforesaid backdrop that the appellant filed a statement of claim before the Arbitrator, however, on exchange of pleadings and evidence on affidavits, the Arbitrator returned the finding that the appellant had not given a clear disclosure and the income certificate furnished by him could not be verified from the Tehsil authorities and hence it was found to be fake and the order of termination was upheld.

11. Learned counsel for the appellant has also submitted that the award was challenged by the appellant by filing a petition under Section 34 of the Act 1996 and primarily the appellant had urged that the dealership agreement contained a clause that if any information furnished by the appellant is false, the respondent authorities would have a right to terminate the agreement. However, it is urged that this clause was invoked for terminating the dealership agreement but the fact remains that before it could be resorted, it was first required to return a finding whether there was any information at all given by the appellant which was false.

12. It is urged that the appellant had clearly indicated his status as well as the fact that the income was Rs.9,600/- and as far as this information is concerned, it was not incorrect. The issue which was taken note of by the Arbitrator as well as the Court is that the income certificate issued by the Tehsil authorities which was furnished by the appellant was dated 04.10.2000 and it indicated its serial no as 630.

13. It is further pointed out that even in the said certificate, the information as conveyed by the appellant was correct and the only reason why the said certificate was held to be fraudulent was on account of the fact that the serial number as mentioned in the certificate was 630 whereas the details of the certificate relating to the appellant was actually at serial no.4063.

14. It is urged that if an incorrect serial number was given by the Tehsil Authority but with correct information it cannot be said that the information as given by the appellant was false. The emphasis is that neither the information given in the certificate was false nor the information conveyed by the appellant to the respondent authorities was false rather the discrepancy in the serial number of the certificate was cause of trouble and in any case the mistake of the serial number was not attributable to the appellant, hence, the same could not have been made the basis of terminating the dealership and for the said reason, the finding returned by the Arbitrator as well as the Court is perverse and suffers from the vice of the patent illegality.

15. Learned counsel for the appellant has further urged that the appellant had furnished the record obtained from the office of the Tehsildar under the Right to Information Act and placed it on record before the Arbitrator to establish that the fact and the crux of the information as indicated by the appellant was reflected in the certificate was true and the certificate was also found to be recorded in the register maintained by the State authorities and the serial number was mistakenly mentioned as 630 instead of 4063 and this piece of evidence was ignored by the respondent, accordingly, it would reveal that, had the evidence furnished by the appellant be appropriately taken note of, the outcome would have been different and the dealership could not be terminated on the said ground. Thus, the appeal deserves to be allowed after setting aside the award.

16. Sri M.E Khan, learned counsel appearing for the respondents have vehemently opposed the aforesaid submissions. It is urged that from a bare perusal of the statement of claim filed by the appellant before the Arbitrator, a copy of which has been brought on record as Annexure no.7, it would indicate that it was the case of the appellant himself that he had furnished an income certificate dated 29.05.2001 and the same related to the father of the appellant. It was also stated that the copy of the said certificate was handed over to Sri M.B.S Naidu (sales officer) of the respondent companywho had verified the same from the original and while retaining the photocopy had returned the original to the appellant.

17. It is further stated that in para-13 of the statement of claim it was stated that the copy of the said certificate was also sent to the respondent addressed to the territory manager through fax and speed post on 29.05.2001.

18. It is further stated that in para-26 of the statement of claim it was stated that the appellant had sought information from the Tehsil authorities under RTI and he received a reply indicating that the income certificate issued to the appellant dated 04.10.2000 was at serial number 4063 whereas the certificate indicating that it was at serial number 630 was incorrect.

19. It is stated that the aforesaid averments in the statement of claim filed by the appellant on 14.01.2014 also suffers from inherent contradiction. It is urged that the appellant had filed an application seeking allotment of the dealership on 15.11.2000. In furtherance thereof, the interview took place on 14.05.2001 and the LOI was issued on 22.06.2001 and the dealership was finally commissioned on 26.02.2002.

20. It is urged that in light of the mentioned above mentioned chronology, it would indicate that in the statement of claim filed by the appellant in para-7 he mentioned that he had furnished the income certificate on 29.05.2001 which would be indicative of the fact that the same was furnished after the filing of the dealership application and after the interview took place on 14.05.2001, thus, the fact that the information which was furnished at the time of furnishing the application and at the time of his interview the said certificate dated 29.05.2001 related to the income certificate of the father of the appellant and not of the appellant himself.

21. Admittedly, the income certificate of the appellant is dated 10.10.2006 which is all much subsequent to the grant of the dealership as the dealership had already been commissioned on 26.02.2002. It is, thus, urged that the basic premise on which the appellants have argued is not supported by any material.

22. It is further urged that even the averments made in paras-13, 21 and 26 of the statement of claim does not coroborate the averments nor it is indicative of the fact that the appellant had furnished the correct and complete information including the fact of the serial number of the income certificate. In the given circumstances, where the Arbitrator had taken note of the submissions and the material produced before him and has formed an opinion objectively the said finding is based on the available material and being a finding of fact is not assailable before the Court in terms of Section 34 of the Act 1996 as the Court does not sit over the award as its appellate authority and if a plausible view has been formed by the Arbitrator based on material, it cannot be said to be perverse merely because another view may be possible coupled with the fact that the dealership agreement in itself is of such a character that it is determinable in terms of Section 14 of the Specific Relief Act, 1963 and for the said reason the dealership cannot be restored and taking stock of the over all facts as well as the applicable law, the Arbitrator delivered his award dated 24.02.2015 hence the same does not suffer from any error, accordingly, the appeal deserves to be dismissed.

23. The Court has heard learned counsel for the parties and also perused the material on record.

24. At the outset, it may be noticed that the appeal under Section 37 of the Act, 1996 has a narrow scope. The scope of an appeal and the width of jurisdiction exercised by the appellate court in terms of Section 37 of the Act of 1996 has been considered by the Apex Court in Batliboi Environmental Engineers Ltd v Hindustan Petroleum Corporation Ltd and Anr; (2024) 2 SCC 375. More specifically in paras 32, 33, 37, 38, 39 to 45:-

"32. Post award interference and the extent of the second look by the courts under Section 34 of the A&C Act has been a subject-matter of perennial parley. The foundation of arbitration is party autonomy. Parties have the freedom to enter into an agreement to settle their disputes/claims by an Arbitral Tribunal, whose decision is binding on the parties. [ See Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549, which examines arbitrability and non-arbitrability of subject-matters and claims, which aspect will not be examined in this case.] It is argued that the purpose of arbitration is fast and quick one-stop adjudication as an alternative to court adjudication, and therefore, post award interference by the courts is un-warranted, and an anathema that undermines the fundamental edifice of arbitration, which is consensual and voluntary departure from the right of a party to have its claim or dispute adjudicated by the judiciary. The process is informal, and need not be legalistic [ The expression "judicially", does not equate arbitration with formal/court proceedings, and would include a just and fair decision.] . Per contra, it is argued that party autonomy should not be treated as an absolute defence, as a party despite agreeing to refer the disputes/claims to a private tribunal consensually, does not barter away the constitutional and basic human right to have a fair and just resolution of the disputes. The court must exercise its powers when the award is unfair, arbitrary, perverse, or otherwise infirm in law. While arbitration is a private form of dispute resolution, the conduct of arbitral proceedings must meet the juristic requirements of due process and procedural fairness and reasonableness, to achieve a "judicially" sound and objective outcome. If these requirements, which are equally fundamental to all forms of adjudication including arbitration, are not sufficiently accommodated in the arbitral proceedings and the outcome is marred, then the award should invite intervention by the court.

33. To disentangle and balance the competing principles, the degree and scope of intervention of courts when an award is challenged by one or both parties needs to be stated. Reconciliation as a statement of law and in particular application in a particular case has not been an easy exercise. We begin by first referring to the views expressed by this Court in interpreting the width and scope of the post award interference by the courts under Section 34 of the A&C Act.

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37. Explanation to sub-clause (ii) to clause (b) to Section 34(2) of the A&C Act, as quoted above and before its substitution by Act 3 of 2016, had postulated and declared for avoidance of doubt that an award is "in conflict with the public policy of India", if the making of the award is induced or affected by fraud or corruption, or was in violation of Sections 75 or 81 of the A&C Act. Both Sections 75 and 81 of the A&C Act fall under Part III of the A&C Act, which deal with conciliation proceedings. Section 75 of the A&C Act relates to confidentiality of the settlement proceedings and Section 81 deals with admissibility of evidence in conciliation proceedings. Suffice it is to note at this stage that while "fraud" and "corruption" are two specific grounds under "public policy", these are not the sole and only grounds on which an award can be set aside on the ground of "public policy".

38. Act 3 of 2016 with retrospective effect from 23-10-2015 has substituted the Explanation referred to above, by two new Explanations that are differently worded. [Explanations 1 and 2 to sub-clause (ii) to clause (b) of Section 34(2) of the A&C Act substituted vide Act 3 of 2016 read as under:"Explanation 1.?For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if?(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or(ii) it is in contravention with the fundamental policy of Indian law; or(iii) it is in conflict with the most basic notions of morality or justice.Explanation 2.?For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute."Sub-section (2-A) of Section 34 of the A&C Act inserted vide Act 3 of 2016 reads as under:"34. (2-A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the court, if the court finds that the award is vitiated by patent illegality appearing on the face of the award:Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence."] Sub-section (2-A) to Section 34 of the A&C Act, which was instituted by Act 3 of 2016 with retrospective effect from 23-10-2015, states that the arbitral award arising out of arbitrations other than international commercial arbitrations can be set aside by the court, if it is vitiated by patent illegality appearing on the face of the award. The proviso to sub-section (2-A) to Section 34 of the A&C Act also states that the award shall not be set aside merely on the ground of erroneous application of law or by reappreciation of evidence. The aforesaid sub-section need not be examined in the facts of the present case, as we are not required to interpret and apply the substituted Explanations to sub-clause (ii) to clause (b) to Section 34(2) of the A&C Act in the present case.

39. The expression "public policy" under Section 34 of the A&C Act is capable of both wide and narrow interpretation. Taking a broader interpretation, this Court in ONGC Ltd. v. Saw Pipes Ltd. [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] (for short Saw Pipes), held that the legislative intent was not to uphold an award if it is in contravention of provisions of an enactment, since it would be contrary to the basic concept of justice. The concept of "public policy" connotes a matter which concerns public good and public interest. An award which is patently in violation of statutory provisions cannot be held to be in public interest. Thus, expanding on the scope and expanse of the jurisdiction of the court under Section 34 of the A&C Act, it was held that an award can be set aside if it is contrary to:

(a) fundamental policy of Indian law; or

(b) the interest of India; or

(c) justice or morality, or

(d) in addition, if it is patently illegal.

40. Nevertheless, the decision in Saw Pipes case [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] holds that mere error of fact or law in reaching the conclusion on the disputed question will not give jurisdiction to the court to interfere. However, this will depend on three aspects:

(a) whether the reference was made in general terms for deciding the contractual dispute, in which case the award can be set aside if the award is based upon erroneous legal position;

(b) this proposition will also hold good in case of a reasoned award, which on the face of it is erroneous on the legal proposition of law and/or its application; and

(c) where a specific question of law is submitted to an arbitrator, erroneous decision on the point of law does not make the award bad, unless the court is satisfied that arbitrator had proceeded illegally.

In Saw Pipes case [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] , the Court set aside the award on the ground that the award had not taken into consideration the terms of the contract before arriving at the conclusion as to whether the party claiming the damages is entitled to the same. Reference was made to the provisions of Sections 73 and 74 of the Contract Act, which relate to liquidated damages, general damages and penalty stipulations. This view had held the field for a long time and was applied in subsequent judgments of this Court in Hindustan Zinc Ltd. v. Friends Coal Carbonisation [Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445] , Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd. [Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., (2006) 11 SCC 245] , DDA v. R.S. Sharma & Co. [DDA v. R.S. Sharma & Co., (2008) 13 SCC 80] , J.G. Engineers (P) Ltd. v. Union of India [J.G. Engineers (P) Ltd. v. Union of India, (2011) 5 SCC 758 : (2011) 3 SCC (Civ) 128] , and Union of India v. L.S.N. Murthy [Union of India v. L.S.N. Murthy, (2012) 1 SCC 718 : (2012) 1 SCC (Civ) 368] .

41. In 2006, this Court in McDermott International Inc. [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] despite following the ratio of Saw Pipes [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] , made succinct observations regarding the restrictive role of courts in the post-award interference. In addition to the three grounds introduced in Renusagar Power Co. Ltd. v. General Electric Co. [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644] , as noticed above, an additional ground of "patent illegality" was introduced in Saw Pipes Limited, for exercise of the court's jurisdiction in setting aside an arbitral award. This Court, in McDermott International Inc. [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , held that patent illegality, must be such which goes to the root of the matter. The public policy violation should be so unfair and unreasonable as to shock the conscience of the court. Arbitrator where s/he acts contrary to or beyond the express law of contract or grants relief, such awards fall within the purview of Section 34 of the A&C Act. Further, what would constitute public policy is a matter dependent upon the nature of transaction and the statute. Pleadings of the party and material brought before the Court would be relevant to enable the Court to judge what is in public good or public interest, or what would otherwise be injurious to public good and interest at a relevant point. So, this must be distinguished from public policy of a particular government.

42. A similar view was expressed in Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran [Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran, (2012) 5 SCC 306] with the clarification that where a term of the contract is capable of two interpretations and the view taken by the arbitrator is a plausible one, it cannot be said that the arbitrator travelled outside the jurisdiction or the view taken the arbitrator is against the terms of the contract. The Court cannot interfere with the award and substitute its view with the award and interpretation accepted by the arbitrator, the reason being the Court does not sit in appeal over the findings and decision of the arbitrator, while deciding an application under Section 34 of the A&C Act. The arbitrator is legitimately entitled to take a view after considering the material before him/her and interpret the agreement. The judgment should be accepted as final and binding.

43. Subsequently, in ONGC Ltd. v. Western Geco International Ltd. [ONGC Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] (for short Western Geco), a three-Judge Bench of this Court observed that the Court, in Saw Pipes [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] , did not examine what would constitute "fundamental policy of Indian law". The expression "fundamental policy of Indian law" in the opinion of this Court includes all fundamental principles providing as basis for administration of justice and enforcement of law in this country. There were three distinct and fundamental juristic principles which form a part and parcel of "fundamental policy of Indian law". The first and the foremost principle is that in every determination by a court or an authority that affects rights of a citizen or leads to civil consequences, the court or authority must adopt a judicial approach. Fidelity to judicial approach entails that the court or authority should not act in an arbitrary, capricious or whimsical manner. The court or authority should act in a bona fide manner and deal with the subject in a fair, reasonable and objective manner. Decision should not be actuated by extraneous considerations. Secondly, the principles of natural justice should be followed. This would include the requirement that the Arbitral Tribunal must apply its mind to the attending facts and circumstances while taking the view one way or the other. Non-application of mind is a defect that is fatal to any adjudication. Application of mind is best done by recording reasons in support of the decision. As noticed above, Section 31(3)(a) of the A&C Act [ "31. Form and contents of arbitral award.?(1)-(2) * * *(3) 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 on agreed terms under Section 30"] states that the arbitral award shall state the reasons on which it is based, unless the parties have agreed that no reasons are to be given. Sub-clauses (i) and (iii) to Section 34(2) also refer to different facets of natural justice. In a given case sub-clause to Section 34(2) and sub-clause (ii) to clause (b) to Section 34(2) may equally apply. Lastly, is the need to ensure that the decision is not perverse or irrational that no reasonable person would have arrived at the same or be sustained in a court of law. Perversity or irrationality of a decision is tested on the touchstone of Wednesbury principle of reasonableness [ As expounded in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 (CA).] . At the same time, it was cautioned that this Court was not attempting an exhaustive enumeration of what would constitute "fundamental policy of Indian law", as a straightjacket definition is not possible. If on facts proved before them, the arbitrators fail to draw an inference which ought to have been drawn or if they have drawn an inference which on the face of it, is untenable resulting in injustice, the adjudication made by an Arbitral Tribunal that enjoys considerable latitude and play at the joints in making awards, may be challenged and set aside.

44. The decision of this Court in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] elaborately examined the question of public policy in the context of Section 34 of the A&C Act, specifically under the head "fundamental policy of Indian law". It was firstly held that the principle of judicial approach demands a decision to be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would not satisfy the said requirement.

45. Referring to the third principle in Western Geco [ONGC Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] , it was explained that the decision would be irrational and perverse if (a) it is based on no evidence; (b) if the Arbitral Tribunal takes into account something irrelevant to the decision which it arrives at; or (c) ignores vital evidence in arriving at its decision. The standards prescribed in State of Haryana v. Gopi Nath & Sons [State of Haryana v. Gopi Nath & Sons, 1992 Supp (2) SCC 312] (for short Gopi Nath & Sons) and Kuldeep Singh v. Delhi Police [Kuldeep Singh v. Delhi Police, (1999) 2 SCC 10 : 1999 SCC (L&S) 429] should be applied and relied upon, as good working tests of perversity. In Gopi Nath & Sons [State of Haryana v. Gopi Nath & Sons, 1992 Supp (2) SCC 312] it has been held that apart from the cases where a finding of fact is arrived at by ignoring or excluding relevant materials or taking into consideration irrelevant material, the finding is perverse and infirm in law when it outrageously defies logic as to suffer from vice of irrationality. Kuldeep Singh [Kuldeep Singh v. Delhi Police, (1999) 2 SCC 10 : 1999 SCC (L&S) 429] clarifies that a finding is perverse when it is based on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it. If there is some evidence which can be acted and can be relied upon, however compendious it may be, the conclusion should not be treated as perverse. This Court in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] emphasised that the public policy test to an arbitral award does not give jurisdiction to the court to act as a court of appeal and consequently errors of fact cannot be corrected. Arbitral Tribunal is the ultimate master of quality and quantity of evidence. An award based on little evidence or no evidence, which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Every arbitrator need not necessarily be a person trained in law as a Judge. At times, decisions are taken acting on equity and such decisions can be just and fair should not be overturned under Section 34 of the A&C Act on the ground that the arbitrator's approach was arbitrary or capricious. Referring to the third ground of public policy, justice or morality, it is observed that these are two different concepts. An award is against justice when it shocks the conscience of the court, as in an example where the claimant has restricted his claim but the Arbitral Tribunal has awarded a higher amount without any reasonable ground of justification. Morality would necessarily cover agreements that are illegal and also those which cannot be enforced given the prevailing mores of the day. Here again interference would be only if something shocks the court's conscience. Further, "patent illegality" refers to three sub-heads : (a) contravention of substantive law of India, which must be restricted and limited such that the illegality must go to the root of the matter and should not be of a trivial nature. Reference in this regard was made to clause (a) to Section 28(1) of the A&C Act, which states that the dispute submitted to arbitration under Part I shall be in accordance with the substantive law for the time being in force. The second sub-head would be when the arbitrator gives no reasons in the award in contravention with Section 31(3) of the A&C Act. The third sub-head deals with contravention of Section 28(3) of the A&C Act which states that the Arbitral Tribunal shall decide all cases in accordance with the terms of the contract and shall take into account the usage of the trade applicable to the transaction. This last sub-head should be understood with a caveat that the arbitrator has the right to construe and interpret the terms of the contract in a reasonable manner. Such interpretation should not be a ground to set aside the award, as the construction of the terms of the contract is finally for the arbitrator to decide. The award can be only set aside under this sub-head if the arbitrator construes the award in a way that no fair-minded or reasonable person would do."

25. Applying the aforesaid parameters to the facts of the instant case, it is not disputed that the appellant was put to notice regarding the discrepancy of the income certificate submitted by him, as the respondents issued a show cause notice to the appellant on 15.01.2007.

26. The appellant had taken note to the said notice by filing its reply, however, though the contention as set out in the show cause notice was denied but it was not brought to the notice of the respondent authorities regarding the alleged discrepancy in the serial number of the certificate.

27. It would reveal that the dealership came to be terminated on 27.05.2007 whereafter the said order was earlier assailed in a Writ petition bearing no.3707 (MB) of 2007 which was dismissed by the writ court. The appellant, thereafter, preferred a civil suit bearing Regular Suit no.501 of 2007 which was also dismissed on 14.11.2007 against which the appellant preferred a civil revision bearing no.196 of 2007 which also was dismissed on 21.02.2008 whereafter the appellant preferred another writ petition bearing no.1337 (MS) of 2008 which was dismissed on 05.08.2010. It is only thereafter that the appellant preferred the petition under Section 11(6) of the Act of 1996 which came to be dismissed as infructuous on 22.01.2010 as the respondent authorities had already appointed an Arbitrator on 30.11.2009.

28. It is also an undisputed fact that the appellant furnished his statement of claim and succumbed to the jurisdiction of the Arbitrator. A fact which could not be disputed by the counsel for the appellant was that a letter/document was furnished by the appellant indicating that his income certificate was recorded with the Tehsil authorities, and it was the solitary documentary evidence filed by the appellant.

29. It is being referred to as a solitary document for the reason that as per the appellant he had obtained the same under the Right to Information Act, however, the record would indicate that in para-26 of his statement of claim, it was mentioned that the information under RTI was not obtained by the appellant rather it was obtained by the erstwhile Pradhan Sri Panna Lal Paswan who had furnished an application dated 06.01.2014. In pursuance thereof, the information which was received comprised of 20 pages which included the details regarding the income certificates issued between July, 2000 to December, 2000 and the certificate issued to the appellant is said to have been mentioned at serial number 4063 dated 04.10.2000.

30. The fact which is also undisputed is that the entire application and the information received under the RTI Act, 2005 has not been brought on record except one sheet of paper which in its isolation cannot be treated as authentic without any corroborating evidence. The appellant ought to have furnished entire sequence of exchange of documents ie the letter of RTI to ascertain what question and information was sought and then the reply/the covering letter issued by the authority concerned along with the necessary complete enclosures to ascertain what was the question, the answer and the accompanying documents provided. Apparently, without bringing the entire document on record and merely relying upon one isolated document cannot substantiate the case as sought to be projected by the appellant.

31. There is another reason to eschew the submission of the learned counsel for the appellant and that is if the appellant had his own income certificate dated 04.10.2000 then there was no reason for the appellant to have stated in paragraph-7 of his statement of claim that he had furnished the income certificate of his father dated 29.05.2001. It is also noticed by this Court that in para-7, it was pleaded by the appellant that in the year, 2000, he was taking education, hence, his income certificate dated 04.10.2000 does not inspire confidence for the reason as well.

32. It appears that the appellant has improved his case then what was indicated in the statement of claim. It is not disputed that the application for seeking dealership was moved on 15.11.2000 and if the income certificate of the appellant was available on 04.10.2000 then why the same was not furnished as this averment is contrary to paras- 7 and 13 of the statement of claim. It is also an admitted case that even when the show cause notice dated 15.01.2007 was issued to the appellant and he had furnished his reply on 05.02.2007 yet the appellants made no effort to verify the said discrepancy or obtain the necessary corrected document or information from the Tehsil authorities. It is only on 03.12.2013 that the appellant is stated to have obtained information under the RTI Act (and that too through the earlier Pradhan Panna Lal Paswan) and he had received the said information on 06.01.2014 but nevertheless, the same was not brought to the notice earlier. Even though the dealership was terminated on 27.05.2007, meaning thereby, that even after knowing fully well that the dealership had been terminated on 27.05.2007 and the appellant had taken recourse to several litigations which has been mentioned hereinabove but during this entire period he did not have a single document to establish his own case and only in the year 2014, the said letter and that too incomplete was sought to be introduced in the arbitral proceedings and in the given circumstances, it cannot be said that there is any error apparent on the face of the record or that the Arbitrator while making his award dated 24.02.2015 had committed any palpable error or a patent illegality which may create a doubt or permit the Court under Section 34 of the Act of 1996 to intervene.

33. Even though the submission has been made by the learned counsel for the appellant that the Court under Section 34 has not dealt with the matter, however, this Court finds that the contentions of both the appellant and the respondents has been detailed by the Court and after taking note of the decisions of the Apex Court, it has also found favour with the findings returned by the Arbitrator. It would have been a different situation, if the Court was of the opinion that the findings returned by the Arbitrator was not in accordance with law and while reversing the said findings, detailed discussion should have been recorded. Though, in an ideal situation, the Court also while dismissing the petition under Section 34 could have dealt with the issues raised in a slightly better manner dealing with the facts as well as the material on record but be that as it may, this Court has examined the material before this Court and does not find that merely on that ground any prejudice has been caused to the appellant.

34. For the aforesaid reasons, this Court does not find that there is any patent illegality committed by the Arbitrator or the Court under Section 34 of the Act 1996 which may persuade this Court to intervene in an appeal under Section 37 of the Act, 1996, hence, this Court finds that the appeal sans merit and is accordingly dismissed. There shall be no order as to costs.

(Jaspreet Singh,J.)

September 19, 2025

Harshita