MANOHAR LAL Vs. DDA

JUDGEMENT

(1.) The DDA awarded the work for development of land for industrial area in mongolpuri Industrial Area to Manohar Lal and Company in pursuance to agreement dated 28/ee/nd-25/dda/85-86. Dispute arose between the parties which resulted in the rescission of the contract on 23. 01.1990. In view of Clause 25 of the terms and conditions agreed to between the parties, same being the arbitration clause, the engineer-member DDA referred the matter to a sole arbitrator. There were series of arbitrators appointed and finally Sh. Som Dutt was appointed as the sole arbitrator, who made and published his award dated 08. 01.2002.

(2.) Both the parties have filed objections u/s 34 of the arbitration and conciliation Act, 1996 (hereinafter referred to as said Act).

(3.) Learned counsel for the parties state that they are conscious of the fact that scrutiny of this court in such objections has to be within the parameters of Section 34 (2) of the said Act as elucidated by the apex court in ongc v. SAW Pipes Ltd (2003) 4 Scale 92. The Supreme Court expanded the ambit of the phrase 'public policy of India' used in Section 34 of the said Act by giving it a wider meaning and observed, by including aspects such as fundamental policy of Indian Law, the interest of India, justice or morality or the award being patently illegal, in Para 31 as under:"31. Therefore, in our view, the phrase 'public policy of India' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term 'public policy in Renusagar's case (supra) , it is required to be held that the award could not be set aside if it is patently illegal. Result would be - award could 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. Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void. "