Allowed

M/S.Karnataka Commercial and Industrial Corporation Private Limited v. the Airport Director and 3 Others

Telangana HC6 Jun 2022CMA/450/2018

Case brief

AI extract

What is this about?

The High Court allowed an appeal against an order where the Commercial Court modified a Section 34 award. Relying on Supreme Court precedents, the HC set aside the impugned order for transgressing jurisdiction and remitted the matter for a fresh order.

What did the court decide?

The impugned order of the lower court's modification of the award is set aside and the matter is remanded for a fresh order.

M/S.Karnataka Commercial and Industrial Corporation Private… — Arbitration | Telangana HC (2022)

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IN THE HIGH COURT FOR^{THE STATEOF TELANGANA} , AT HYDERABAD

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MONDAY, THE SIXTH DAY^{OF JUNE} TWO THOUSAND AND TWENTY^TWO

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PRESENT

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THE HONOURABLE THE^{CHIEF JUSTICE SATISH GHANDRASHARMA} AND

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THE HONOURABLE^{SRIJUSTICEABHINANDKUMAR SHAVILI}

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c.M.A. NO: 450 0F²⁰¹⁸

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Appeal under section 37(1)^{(c) of the Arbitration Act, and conciliationAct,} 1996 against the order^{and decree in coP No.210 of 2017 (Arb.oPNo.531 of 2009)} dated 2710212018 on the^{file of the court of the Judge, commercial court-cum-XXIV} Additional Chief Judge, City^{Civil Court, Hyderabad.}

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Between:

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M/s.Karnataka commercial^{and lndustrialcorporationPrivateLimite-d,H_avingits} ,i-'rt"reO otf[e at No.^{10, Church Road, Basavangudi, Bangalore -560 004 Rep' by} itiAuthorized sisnatory'^{tvr' Shaik *"n:.igflEitlNr/}

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RESpoN DENr/ .LATMANT

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AND

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'1 . The Airport Director, Airports Authority of lndia Hyde-rabad Airport,^Hyderabad Z. Rirportd Authority ol^{lndia, Rajiv Gandhi Bhavan, Safdarjung AirpodNew} Delhi

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S. ihe Executive Director^{(Commercial), Airports Authority of lndiaRajiv Gandhi} Bhavan, Safdarjung^{Airport New Delhi.}

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.....Respondent / Petitioners/^Respondents

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Mr. Justice V.Kanagaraj^{(Retd.),SoleArbitrator,No,.33, ChrukalingaNagar,} Behind DMS Office Gopalapuram,^{Chennai 600 086}

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(Ld. Arbitrator has been arrayed as^formal olll*",r*oroFl/ RESpoNDENT

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lA NO: 1 OF 2018

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Petition under Section^{151 CPC prayingthat in the circumstancesstated} in the affidavit filed therewith,^{the High courtmay be pleased to stay the} execution of the order^{and Decree daled 27.02.2018 in coPNo.210 0f 2017 0n} the file of commercial court-^{cum -XXIV Additional chiefJudge, city civil court,} Hyderabad (earlier Arb oP^{No. 53 of 2009)on the file of the commercial court-} cum- XXIV Additional Chief^{Judge, City Civil Court at Hyderabad, by setting}

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aside the Award dated 04.10.2008^{passed by the sole Ld. Arbitrator Mr. Justice} V. Kanagaraj (Retd)

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For the Appellant : Ms. SHIREEN SETHNA^{BARIA, Advocate}

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For the Respondents : SRI P.VIKRAM,^Advocate

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The Court delivered the following: JUDGMENT

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THE HON'BLE THE^{CHIEFJUSTICESATISH CHANDRASHARMA} AND THE HON'B LE^SRI IUSTI CE AB INAN KU S LI C.M.A.No'^{450of 2018}

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IIIDGMENT' 'r'ct^{'4 ttu "L ''ct Ltlktl'')ht .!n'n-\t'4a'}

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The present aPpeal^{is arisingout of orderdated 21 '02'2018} passed by the Judge,^{Commercial Court} -cum-^{)LXIV Additional Chief} .)udge,^{City Civil Court, Hydcrabad, in C O'P'No'210 ot 2017fi-he} Airpott Director,^{Airports Authority oIIndia' Hyderabadv'} M/s. I(arnataka^{Commercial & IndustrialCorporation Pvt' Ltd )'}

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The facts o[ the^{case revealthat the petition was preferred before} the court below^{under Section 34 of the Arbitationand Conciliation} -\ct,^{1996, with a prayerto set aside the award dated 04'10'2008passed} in favour of M/s.^{I(arnataka Commercial & Industrial Corporarion Pvt'} Ltd,., i.e., the appellant^{before this Court and the learnedJudge'} Commercial Court -cum-^{XXIV Additional Chief Judge, Ciry Civil} Court, Hyclerabad,^{has modified the award and the aforesaid fact has} not been disputed^{by either side in opcn court'}

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)

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Learned counsel^{for the parties have drawn the attendonof this} Court towards iudgrncnt^{deliveredby the Supreme Court in the case oi} Mc.Dermott International^{Inc. v'Burn Standard}

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Co.Ltd. and othersr. Paragraph 52 of the saitl ludurncnt rcads as

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under:

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"52, The 1996 Act makes provision fot the supervisory role of courts, for the review of the arbiual award only ro ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbiuators, violauon of nrural justice, etc. The cor,rrt cannot correct errors of the arbitatots. It can only quash the award leaving the parties free to begin the arbirauon again if it is desired. So, the scheme of the ptovision aims at keeping the supervisory tole of the cou$ at mrnimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbiuarion as rhey prefer the expediency and finaliry offered by it."

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Similarly attention was drawn towards the judgment deiivered bv the Hon'ble Supreme Court in the casc ol Project Director, National Highways No.45E and 22O, National Highways Authority of India v. M.Hakeem and another2. Paragtaph 48 of the said judgment teads as under:

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"48. Quite^{obviously if one rvereto includethc porver} to^modift, an award in Section 34, one would be crossing the Lakshman Rekha and doing rvhat, according to the just.ice of a case, ought to be done. In interpteting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result.

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1 {2(x)61 rl scc¹⁸¹

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2 (2O21)9 SCC I

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ParLiament very clearly intended that no power of modification of an award exists rn Section 34 of the Arbiuatron Act, 1996. It is only fot Parliament to amend the aforesaid provision in the light of the experience of the courts in the workrng of the Atbiuation Act, 1996, and bring it in Line wrth other legislations the world over."

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.'\fter careful considerauon of rhe aforesaid judgment, it is crystal clear that the court below has transgressed its jurisdiction b1, modifuing

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the award and the action of the court below is cettainly contrarv to rhe larv lard down by thc FIon'ble Suprcrne Court in the aforesaid cases

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Resultantly, the impugned order passed by the court below is, hereby, asidc. The court below shall pass a fresh order in accordance with law after hearing the parues. The parties shall appear before the court below on 27.06.2022.

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The appeal stands disposed of accordingly. No costs.

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As a sequel, miscellaneous pet.itions, pending if any, stand closed

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Sd/-B.S.CHIRANJEEVI JOINT REGISTRAR //TRUE COPYII G SECTION OFFICER

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To 1 The Judge, Commercial Court -cum- XXIV Additional Chief Judge, City Civil Court, Hyderabad. (with records, if any) 2. One CC to Ms. Shireen Sethan Baria, Advocate^(OPUC) One CC to Sri P.Vikram, Advocate (OPUC)

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