S. Shanmugha Sundaram Krishna Priya v. Bharat Sanchar Nigam Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MRS. JUSTICE SHIRCY V. FRIDAY, THE 23RD DAY OF MARCH 2018 / 2ND CHAITHRA,1940** **AGAINST THE ORDER DATED 31.10.2016 IN OP(ARB) 110/2012 of ADDITIONAL DISTRICT COURT-II, THIRUVANANTHAPURAM** ## **APPELLANT/PETITIONER :** **S.SHANMUGHA SUNDARAM KRISHNA PRIYA,ALTHARAMOODU.P.O, ALAMCODE, THIRUVANANTHAPURAM-695001.** **BY ADVS.SRI.B.DEEPAK SRI.KARTHIK BHAVADASAN** ## **RESPONDENTS/RESPONDENTS :** **1. BHARAT SANCHAR NIGAM LTD., REPRESENTED BY THE PRINCIPAL GENERAL MANAGER, BSNL, TELECOM DISTRICT, THIRUVANANTHAPURAM-695001.** **2. SUKUMARAN.N.K.(SOLE ARBITRATOR), DIRECTOR(TECH),KURISHADLAL BHAVAN, JANPATH, NEW DELHI, HAVING ALSO OFFICE OF THE CHIEF GENERAL MANAGER, BSNL, DOOR SANCHAR BHAVAN, THIRUVANANTHAPURAM-695001.** **R1 BY ADV. SRI.MATHEWS K.PHILIP,SC, BSNL** **THIS ARBITRATION APPEALS HAVING BEEN FINALLY HEARD ON 23-03-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **DSV/-** ## **C.K.ABDUL REHIM & SHIRCY V., JJ.** ======================== Arbitration Appeal No. 42 of 2017 ======================== Dated this the 23[rd] day of March, 2018 ## **JUDGMENT** ## Shircy V., J. The petitioner in O.P.(Arbitration) No.110 of 2012 on the files of the Additional District Court No.II, Thiruvananthapuram has filed this appeal challenging the order of dismissal of the petition to set aside partialy the award of the Arbitrator dated 09.12 .2011. The father of the petitioner/claimant is the owner of the building situated in 4.3 cents of land comprised in Sy. No.480/24 of Nagaroor Village of Chirayinkeezhu Taluk. The building situated in that property with Panchayath No.N.P. IX/238 of Nagaroor Panchayath was leased out to the 1[st] respondent Bharat Sanchar Nigam Limited (hereinafter referred to as 'BSNL'), for a monthly rent of 8,000/-.₹ The initial lease period was for a period of 5 years commencing from 01.11.2000 with an option to renew the lease. As per the terms of the agreement, the 1[st] 2 Arbitration Appeal No.42/17 respondent was bound to hand over the premises in the same condition as it was at the time of commencement of the lease or in alternative, to pay compensation for the same. While the building was in the possession of BSNL, on 26.04.2008, a notice was issued intimating intention to vacate the building by 15.05.2008. The appellant was also directed to take over the keys of the building from the Divisional Engineer, Telecom, Attingal. Thereafter, the appellant issued a notice on 30.04.2008, requesting the 1[st] respondent to effect repairs, as the building was damaged considerably by the BSNL and to hand over possession in the same condition as it was at the time when it was leased out to the 1[st] respondent. Thereafter, so many communications were issued by the appellant to the BSNL but there was no effective response from the part of the BSNL. Since there was failure to dismantle the fittings erected by BSNL and to effect repair works, and restore the building to its original position, the dispute was referred to the Arbitrator as per the terms of the Arbitration Appeal No.42/17 3 agreement. Before the Arbitrator, the appellant was examined and he adduced evidence that the repairs were not effected and the building was not handed over as agreed, by restoring the same to its original position. Before the Arbitrator the appellant produced Exhibits-P1 to P19. BSNL also examined 4 witnesses and marked documents as R1 to R12. 2. The Arbitrator after evaluating the evidence, passed an award on 09.12.2011, directing restoration of work as mentioned in R3 and R9 within a period of two months by the BSNL as per CPWD work standards. A further direction was given to the effect that if the works were not completed within the period of two months, rent at the rate of ₹8,000/should be paid to the appellant/claimant till completion from the third month onwards and also to pay the rent arrears up to 30.06.2010 from 01.01.2009 at the rate of 8000/- per₹ month totalling to 1,44,000/-. It was also found that the₹ appellant is eligible to get interest at the rate of 6% from 4 Arbitration Appeal No.42/17 30.06.2010 up to the date of payment of arrears. The claim for enhancement of rent was declined. 3. Aggrieved by the said award, the appellant/petitioner has filed O.P.(Arbitration) before the Additional District Court-II, Thiruvananthapuram challenging the award under Section 34 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act') and sought for a relief to award rent from 01.07.2010. The learned Additional District Judge-II, Thiruvananthapuram, by an order dated 31[st] October, 2016, dismissed the O.P.(Arbitration) with cost . The said order is under challenge in this appeal. The learned counsel appearing for the appellant has argued that the award is perverse in law, unsustainable and hence is liable to be set aside. It is contended that extensive damages were caused to the building by the BSNL especially by installing a tower in the terrace and while dismantling the tower and fittings, damages have been caused to the building and though a Contractor was 5 Arbitration Appeal No.42/17 entrusted to effect the repair works, it was not completed effectively and the damages were not rectified. But the Arbitrator has not appreciated the evidence properly and the award was passed without taking into consideration of those aspects and hence, the award is perverse and is liable to be set aside. 4. _Per contra_ the learned counsel for the BSNL has argued that the repair work was entrusted to a Contractor during the arbitration proceedings itself and due to the interference from the side of the claimant, the work was not completed and hence, a further period of two months was granted and rent has also been paid for a further period of two months at the rate of 8,000/- as₹ agreed by the parties at the time when the building was handed over to the BSNL. 5. We heard the learned counsel for the appellant and the learned counsel for the respondents. 6. Admittedly, though the original period of lease was for a period of 5 years from 01.11.2000, it was 6 Arbitration Appeal No.42/17 extended on mutual consent as per the terms of the agreement. The BSNL expressed its intention to vacate on 15.05.2008. Rent upto 30.06.2010 was paid as per the award. The claim for rent from 01.07.2010 alone was denied by the Arbitrator and hence the petition under Section 34 (2)(b) of the Act. Section 34 of the Act reads as follows: “ **34. Application for setting aside arbitral** **award.** --(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if -- (a) the party making the application furnishes proof that – **==> picture [47 x 13] intentionally omitted <==** **==> picture [54 x 13] intentionally omitted <==** **==> picture [53 x 12] intentionally omitted <==** (iv) xxxx (v) xxxx (b) (i) xxxx (ii) the arbitral award is in conflict with the public policy of India. _[Explanation 1.--For the avoidance of any doubt,_ 7 Arbitration Appeal No.42/17 _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.]_ ” 7. It is clear that an award can be set aside only on grounds mentioned under Section 34 of the Act. Though the learned counsel for the petitioner argued that denial of rent from 01.07.2010 was not proper and illegal; only if the illegality goes to the root of the matter and is of trivial nature, it can be said that the award is against public policy. It is also well settled by various decisions that a court while dealing with a petition under Section 34 of the Act, cannot re-appreciate the evidence adduced by the parties and the appellate jurisdiction is co-extensive and co-terminus with the jurisdiction of the first Court. 8. As referred above, the learned counsel for the appellant would argue that the award is perverse, since 8 Arbitration Appeal No.42/17 the Arbitrator has not correctly considered the evidence adduced before him and hence the Award can be partialy set aside . In support of his argument, he placed reliance on the decision of the Apex Court in **Associate Builders** **v. Delhi Development Authority [(2015) 3 SCC 49],** where, it has been observed that: “31. _The third juristic principle is that a decision, which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where:_ _(i) a finding is based on no evidence, or_ _(ii) an Arbitral Tribunal takes into account something irrelevant to the decision which it arrives at; or_ _(iii) ignores vital evidence in arriving at its decision,_ _such decision would necessarily be perverse. 32. A good working test of perversity is contained in two judgments._ In _**H.B. Gandhi, Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons [1992 Supp (2) SCC 312]** at p.317, it was held:_ _“7....... It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic_ 9 Arbitration Appeal No.42/17 _as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law.””_ 9. In **H.P.State Electricity Board v. R.J. Shah and Company [(1999) 4 SCC 214]** , it has been observed that ' _the court has to examine documents including the contract and reference of dispute to arbitrator for the limited purpose of determining whether arbitrator had jurisdiction or not. Even if another view is possible, an award cannot be set aside merely on that ground.'_ 10. The learned Additional District Judge has specifically observed in paragraph No.19 of the impugned order that the award produced before the court shows that it was passed by the Arbitrator after considering all the evidence adduced by both the parties . 11. The finding of the District Judge is that the Arbitrator has meticulously gone through the rival contentions and applied its mind properly and concluded that the claimant (petitioner) has interfered while the Arbitration Appeal No.42/17 10 work was going on, blocking the smooth conduct of work and hence not entitled to get rent from 01.07.2010 onwards. In fact the High Power Committee met on 04.05.2010 had taken into consideration of the petitioner's view and decided the work to be completed. However, it was delayed due to the interference of the petitioner as well failure to carry out routine maintenance work earlier as per the lease agreement. Therefore, it cannot be said that Award is erroneous or is in conflict with public policy of India so as to justify an interference by the court. 12. It is also to be noted that as the building was not handed over to the claimant after completing the work as directed and as two months further time was required for the same, the appellant was found entitled for rent arrears up to 30.06.2010 from 01.01.2009. It is admitted by the learned counsel for the appellant that later the building was handed over to him after completion of the work. It is clear from the records that Arbitration Appeal No.42/17 11 all these facts have been properly considered by the Arbitrator and hence, the learned Additional District Judge refused to interfere with the award and to accept the prayer for setting aside the award under Section 34(2)(b) (ii) of the Act. Applying the ratio laid down by the Supreme Court in the above referred decisions to the present case, we are of the opinion that the learned Additional District Judge was right in dismissing the petition filed by the claimant to set aside the award. For the above reasons, we find no ground to interfere with the order under challenge. The Appeal accordingly stands dismissed. There shall be no order as to costs. Sd/- ## **C.K.ABDUL REHIM, JUDGE** Sd/- ## **SHIRCY V., JUDGE** DSV/26/3/18