SIKKIM URGA LTD. Vs. ABIR INFRASTRUCTURE

JUDGEMENT

(1.) This is an appeal preferred under Sec. 37 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act). The impugned judgment and order dtd. 14/8/2023 dismissed the petition filed by M/s Teesta Urja Ltd. [now, Sikkim Urja Limited (appellant)] under Sec. 34 refusing to interfere with the arbitral award dtd. 1/10/2019 in favour of the respondents herein.

(2.) The grounds for interference under Sec. 34 of the Arbitration Act are limited. When should a Court interfere under Sec. 34 is clearly defined in the provision and amply clarified by the Hon'ble Supreme Court in its various judgments. On examination of the arbitral award, we find that the arbitral award is in conflict with the public policy of India, in that it is in contravention with the fundamental policy of Indian law. We also find that the arbitral award is vitiated by patent illegality appearing on the face of the award. The Arbitral Tribunal has also M/s Sikkim Urja Ltd. (formerly Teesta Urja Limited) vs. M/s Abir Infrastructure Pvt. Ltd. & Ors. imposed the liability of payment of cess upon the appellant although Sec. 3 of the Building and Other Construction Workers" Welfare Cess Act, 1996 (for short, the Cess Act, 1996) mandates that it is the respondent who are liable to pay it. While determining who is liable to pay the cess, the Arbitral Tribunal reversed the mandate of the law and imposed the liability upon the appellant instead. The arbitral award suffers from the vice of disregarding the two judgments of the Hon'ble Supreme Court in A. Prabhakara Reddy and Company vs. State of Madhya Pradesh and Others.(2016) 1 SCC 600 and M/s Dewan Chand Builders and Contractors vs. Union of India & Ors. (2012) 1 SCC 101 Thus, the impugned judgment passed by the learned Commercial Court while exercising the powers under Sec. 34 refusing to set aside such an arbitral award requires to be interfered with. We explain our reasons hereunder.

(3.) The claimant before the Arbitral Tribunal was the consortium of M/s Abir Infrastructure Pvt. Ltd. (respondent no.1 herein), M/s Navayuga Engineering Co. Ltd. (respondent no.2 herein) and M/s SEW Infrastructure Ltd. (respondent no.3 herein). The respondent therein was M/s Teesta Urja Ltd. M/s Sikkim Urja Ltd. (formerly Teesta Urja Limited) vs. M/s Abir Infrastructure Pvt. Ltd. & Ors.