Johnson K Vettumvellil v. K.A. Kunjumoideen

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH** **&** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **MONDAY ,THE 21ST DAY OF JANUARY 2019 / 24TH POUSHA, 1940** **Arb.A.No. 20 of 2014** **AGAINST THE ORDER DATED 09-01-2014 IN OPARB 630/2012 of II ADDL.DISTRICT COURT,ERNAKULAM** **APPELLANT:** **JOHNSON K VETTUMVELLIL SON OF LATE KURUVILA, VETTUMVELLIL HOUSE PADINJARAKARA PO, VAIKOM, KOTTAYAM DISTRICT 686146** **BY ADV. SRI.G.HARIHARAN** **RESPONDENT:** **K.A.KUNJUMOIDEEN** **SON OF LATE V.K.ALIYAR, PEARL VIEW BUNGLAW, CHANDIROOR P.O, AROOR, ALAPUZHA DISTRICT.** **BY ADV.SRI.ALIAS M.CHERIAN** **THIS ARBITRATION APPEALS HAVING BEEN FINALLY HEARD ON 14.01.2019, THE COURT ON 21.01.2019 DELIVERED THE FOLLOWING:** ## **V.CHITAMBARESH &** ## **R.NARAYANA PISHARADI, JJ.** ************************** Arb.Appeal No.20 of 2014 ---------------------------------------------Dated this the 21[st] day of January, 2019 ## **JUDGMENT** ## **R.Narayana Pisharadi, J** This appeal arises out of the order dated 09.01.2014 passed by the Additional District Judge, Ernakulam in O.P.(Arb) No.630 of 2012, dismissing the application filed by the appellant under Section 34(1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). 2. The appellant and the respondent had entered into an agreement on 28.02.2009 regarding supply of teak timber. As per the agreement, the appellant had agreed to supply five lakhs cubic feet of teak timber to the respondent within a period of ten months. The respondent paid an amount of ten lakhs rupees as advance to the appellant. It was agreed that the respondent shall pay a further amount of ninety lakhs rupees to the appellant on or before the date 03.04.2009. The appellant did not supply Arb.A.No.20/2014 3 any timber to the respondent. The respondent did not pay the further amount of ninety lakhs rupees to the appellant. Disputes arose between the parties regarding performance of the contract between them. 3. The appellant filed Arb.Ref.No.2 of 2010 before this Court for appointment of an arbitrator for deciding the dispute. As per the order dated 23.02.2010, this Court appointed a retired District Judge as sole arbitrator. 4. During the arbitral proceedings, CW1 and CW2 were examined and Exts.A1 to A15 documents were marked by the respondent, who was the claimant. RW1 to RW3 were examined and Exts.B1 to B7 documents were marked on the side of the appellant. 5. On 04.05.2012, the arbitrator passed an award. The arbitrator found that the appellant was responsible for breach of the contract and that the respondent is entitled to recover the amount of ten lakhs rupees from the appellant with interest at the rate of 12% per annum. Arb.A.No.20/2014 4 6. The appellant filed application under Section 34(1) of the Act in the District Court, Ernakulam challenging the award passed by the arbitrator. As per the order dated 09.01.2014, the learned Additional District Judge dismissed the application. The aforesaid order is challenged in this appeal. 7. We have heard the learned counsel for the appellant as well as the respondent. 8. Admittedly, the appellant and the respondent had entered into an agreement between them on 28.02.2009. As per this agreement, the appellant had agreed that he shall supply five lakhs cubic feet of teak timber to the respondent within a period of ten months from the date of the agreement. Admittedly, the respondent had paid ten lakhs rupees to the appellant as advance out of the agreed amount of one crore rupees. 9. As per the agreement, the appellant had the obligation to obtain cutting permit, no objection certificate and other licences or permits required from the authorities concerned at his Arb.A.No.20/2014 5 own costs. He had also the obligation to get agreements from the owners of the teak trees and to show such agreements to the respondent on or before the date 03.04.2009. Thereafter, the appellant had also the obligation to take the respondent to the properties concerned and show him the trees to be cut and supplied pursuant to the agreement. It was also agreed that the respondent shall pay the appellant a further sum of ninety lakhs rupees on production of valuation certificate issued by the Village Officer concerned. It was further agreed that the appellant shall start supplying/delivering the timber within a period of ten days from the date of receipt of the total amount of one crore rupees. 10. The appellant did not obtain any cutting permits or no objection certificates or other licences required from the authorities concerned for cutting and removing the teak timber. Ext.A2 agreement was produced before the arbitrator to show that he had handed over two cutting permits to the appellants. The arbitrator has found that the recital in that regard in Ext.A2 document is not correct. It is more or less admitted in the Arb.A.No.20/2014 6 averments in the memorandum of appeal that the appellant had not obtained necessary cutting permits and other documents from the authorities concerned for cutting and removing teak timber. 11. There is no dispute with regard to the fact that permits and licences had to be obtained from the authorities concerned for cutting and removing teak timber. The appellant did not obtain such documents from the authorities concerned. Therefore, there can be no doubt with regard to the fact that he committed breach of contract. 12. The arbitrator also found that one of the agreements shown by the appellant to the respondent, that is, the agreement entered into between one Sirajudheen and Parukutty Mannadiar for sale of teak timber standing in the property of Parukutty Mannadiar was a forged document. The reason was that the aforesaid agreement was dated 02.04.2009 but Parukutty Mannadiar had died as early as in the year 1996. 13. The claim made by the respondent before the Arb.A.No.20/2014 7 arbitrator was only for return of the amount of ten lakhs rupees paid by him to the appellant, with interest at the rate of 12%. The appellant had raised a counter claim before the arbitrator that he had paid a total amount of Rs.18,00,000/- to third parties at the time of entering into agreements with them and that he lost this amount on account of breach of contract by the respondent and that he is entitled to receive this amount from the respondent. In the light of the finding that it was the appellant who committed breach of contract, the arbitrator rejected the counter claim made by the appellant and passed an award allowing the respondent to realise an amount of ten lakhs rupees from the appellant with interest at the rate of 12% per annum. 14. The learned Additional District Judge has considered all the aforesaid aspects in detail and found that the factual findings entered into by the arbitrator cannot be interfered with in an application filed under Section 34(1) of the Act. The learned Additional District Judge has also found that the award Arb.A.No.20/2014 8 passed by the arbitrator is not in any way perverse and that it is not in conflict with public policy. We see no ground to interfere with this finding made by the learned Additional District Judge. 15. The arbitrator has found that it was the appellant who committed breach of contract. This finding is based on the evidence adduced by the parties. The factual findings made by the arbitrator are based on a meticulous analysis of the evidence before him. 16. Unreasonableness of an award is not a matter for the court to consider unless the award is per se preposterous or absurd (See **Pathrose v. State of Kerala : (2010) 12 SCC 100** ). Where reasons have been given by the arbitrator in making the award, the court cannot examine the reasonableness of the reasons. While considering the challenge to an award, the court cannot sit in appeal over the award. The court cannot reappreciate the evidence for the purpose of finding whether on the facts and circumstances, the award in question could have been made (See **P.R.Shah,Shares and Stock Brocker Private** Arb.A.No.20/2014 9 ## **Limited v. M/s B.H.H.Securities Private Limited : AIR 2012** **SC 1866** ). In the anxiety to render justice to the party to arbitration, the court cannot reappraise the evidence intrinsically with a close scrutiny and find that the conclusion drawn by the arbitrator on facts, according to the understanding of the court, is erroneous. Such exercise of power, which can be made by an appellate court with power to reverse findings of facts, is alien to the scope and ambit of challenge to an award under the Act. Only when errors of finding of facts having a bearing on the dispute are patent and is easily demonstrable without the necessity of carefully weighing the evidence, interference with the award is possible on the ground of patent illegality. Errors which do not appear on the face of the award cannot be a ground for the Court to set aside the award. Award can be set aside on the ground that it is in conflict with the public policy only when the illegality goes to the root of the matter. 17. In our opinion, it is evident from the award made by the arbitrator that he has considered all the specific issues raised by Arb.A.No.20/2014 10 the parties in the arbitration proceedings and came to his findings after giving cogent reasons. As noticed earlier, reasonableness of the reasons stated by the arbitrator cannot be gone into in an application filed under Section 34(1) of the Act. The learned Additional District Judge has rightly dismissed the application filed by the appellant. 18. In the aforesaid circumstances, we see no ground to interfere with the order passed by the learned Additional District Judge. The appeal is liable to be dismissed. Accordingly, the appeal is dismissed. No costs. (sd/-) ## **V.CHITAMBARESH, JUDGE** (sd/-) ## **R.NARAYANA PISHARADI, JUDGE** jsr/18/01/2019 True Copy **==> picture [120 x 15] intentionally omitted <==**