BEFORE THE HONOURABLE ARBITRATOR, SRI N.

NARAYANA,
RETIRED DISTRICT JUDGE, BENGALURU, SOLE ARBITRATOR
IN
A.C. No.647/2022
Arising out of CMP No.411/2021

IN THE COURT OF THE CITY CIVIL AND SESSIONS JUDGE,

COMMERCIAL COURT AT BENGALURU
COM A.P 87/2024
Between:
M/s Laxmi Gold Khazana Private Limited Respondent/Petitioner
And
M/s. Panchamashree
Constructions Pvt. Ltd., and another Claimant/Respondent No.1

WRITTEN ARGUMENTS ON BEHALF OF THE RESPONDENT NO.1

The Respondent No.1 humbly submits as follows: -

CLAIM STATEMENT AVERMENTS:

1. The Respondent No.1 herein has initiated the instant Arbitration

Proceedings against the Petitioner seeking recovery of Rs.93,00,626/-
(Rupees Ninety Three lakhs six hundred and twenty six only) which
includes 5% interest withheld by the Petitioner along with 18% interest
from the due date i.e. date of raising invoices till the date of realization.

2. It is the case of the 1st Respondent that being a Private Limited

Company they have entered into an Agreement of sell dated
15.12.2014 with the Petitioner, wherein the Respondent No.1 was
appointed for putting up construction in property bearing Plot No.83/1,
83/2A, 83/28 and 83/3 suitated at‘V’ Ward, IX Division, P.J. Extension,
Davangere.

3. It is submitted that as per the terms of the above said Agreement the
Contractor has to purchase the entire material at his costs and raise
bills. The said bills have to be settled by the owner i.e. Petitioner
herein within 10 days from the date of bill subject to approval and
certification of completion of work by the Architect M/s. Cruthi
Consultants Consortium Private Limited.

4. Accordingly, the Respondent No.1 presented the following bills in tune

with the stage of construction and work done.
 Amount in (Rs.)

i. RA Bill dated 17.03.2015 - 1,02,01,714.00

ii. RA Bill dated 04.04.2015 - 12,09,010.00
iii. RA Bill dated 10.06.2015 - 63,47,220.65
iv. RA Bill dated 06.10.2015 - 69,39,323.35
v. RA Bill dated 18.03.2016 - 40,94,393.17

The Petitioner has made following payments, which are detailed as below
–

i. 18.03.2015 - 25.00,000/-
ii. 06.04.2018 - 10,00,000/-
iii. 24.04.2015 - 15,00,000/-
iv. 11.05.2015 - 40,00,000/-
v. 12.06.2015 - 10,00,000/-
vi. 19.06.2015 - 10,00,000/-
vii. 11.07.2015 - 10,00,000/-
viii. 01.08.2018 - 07,00,000/-
ix. 08.08.2015 - 10,00,000/-
x. 12.08.2015 - 12,00,000/-
xi. 04.09.2015 - 05,00,000/-
xii. 19.11.2015 - 14,70,000/-
xiii. 30.11.2015 - 14,70,000/-
xiv. 31.12.2015 - 15.00.000/-
xv. 10.02.2016 - 05.00,000/-

5. The Petitioner as on 18.03.2016 owed a sum of Rs.93,00,626/- to

Respondent No.1 in terms of the above stated bills raised by
Respondent No.1 which were duly approved and certified by M/s.
Cruthi Consultants Consortium Private Limited after due inspection of
the work completed.

6. In spite of several requests the Petitioner failed to make the payment

to Respondent No.1 due to which Respondent No.1 issued Notice
dated 08.09.2016 requesting the Petitioner to pay the above said
amount. Since there was no reply, Respondent No.1 invoked the
 Arbitration Clause contained in the Agreement dated 15.12.2014 and
issued Notice dated 21.11.2016 suggesting an Arbitrator from the
Arbitration Centre to resolve the disputes. Since there was no reply,
the Respondent No.1 preferred CMP No.69/2017 before the Hon’ble
High Court of Karnataka seeking appointment of Sole Arbitrator. The
Hon’ble High Court vide Order dated 29.03.2019 dismissed the said
CMP No.69/2017 in view of the fact that Respondent No.1 had stated
that the Arbitration Centre has to appoint a the Sole Arbitrator for
resolving the disputes between the parties reserving liberty to the
Respondent No.1 to issue fresh notice invoking the Arbitration Clause.

7. It is submitted that, the Respondent No.1 in terms of the above said

Order issued an Arbitration Notice dated 30.10.2019. Since there was
no reply to the same, the Respondent No.1 preferred CMP
No.411/2021 which came to be allowed vide Order dated 31.10.2022.

8. It is the case of the Respondent No.1 that, they have suffered huge
financial losses as huge money was stuck in the construction and due
to the default in payment by the Petitioner.

STATEMENT OF OBJECTIONS

9. It is the case of the Petitioner that they are a company engaged in the
business of sale of gold ornaments and had entered into an
Agreement with Respondent No.1, wherein Respondent No.1 was
appointed as a Contractor to put up construction i.e. commercial
building in the property mentioned in the Agreement.

10. As per the Petitioner the value of the work to be done in terms of the
Agreement is Rs.2,81,90,000/-(Two Crore Eighty-One Lakh Ninety
Thousand Rupees only) . Further, Respondent No.1 should have
completed the work in the month of December 2015 and failed to do
the same. Further, the bills raised by Respondent No.1 are not in
accordance with the requirements of the check lists of the work bills.

11. It is the case of the Petitioner that they have made timely payments as
and when the construction work was being done and they have
maintained records and as per the said records, the Petitioner is not
due any amount to the Respondent No.1 and therefore, the demand
 for Rs.93,00,000/- (Ninety-Three Lakhs only) by Respondent No.1 is
false.

ISSUES
(1) Whether the claimant proves that under the agreement dated

15.12.2014, the respondent was required to settle all the bills within
ten days from the date of the respective bills and that in case of
delay in payment, the respondent would be liable to pay interest at
2 per cent?

(2) Whether the claimant proves that the five invoices raised by it were

in accordance with the check-list for the works bill?

(3) Whether the claimant proves that it is entitled to claim a sum of

Rs.20 lakhs towards financial losses?

(4) Whether the claimant proves that it is entitled to claim Rs.50 lakhs

towards damages for mental agony?

(5) Whether the claimant proves that it has always been ready and

willing to perform its part of the contract?

(6) Whether the claimant proves that the default committed by the

respondent in payment of money as per the schedule, was the

cause for the delay in the construction?

(7) Whether the respondent proves that it has made payments as

detailed in SI.Nos.6, 9, 11, 12, 14, 16 to 18 and 20 to 22 of the

tabular statement in para 6 on page 5 of the statement of
objections and as such is not liable to pay anything?

(8) Whether the respondent proves that the claimant is guilty of

misrepresentation and suppression of material facts so as to

disentitle him from the relief sought for?

(9) Whether the respondent proves that because of the claimant's fault

it was forced to sell incomplete building for a low price which has
resulted in heavy loss to it?

(10) Whether the claimant proves that as on 18.03.2016 a sum of

Rs.93,00,626/- (inclusive of retention amount of 5% withheld by the

respondent) is due and payable by the respondent?

(11) To what reliefs are the parties entitled?

 RESPONDENT NO.1 EVIDENCE
12. It is submitted that the authorized representative of Respondent No.1
Company got examined as CW1 and got marked documents from
Ex.C1 to Ex.C34. The authorized representative of M/s. Cruthi
Consultants Consortium got examined as CW2.

Exhibi Date Document Description

t
C1 15.02.2017 Board The Respondent No.1
Resolution company authorized its
Managing Director, Sri S
Sethuram to represent the
Respondent No.1.

C2 15.12.2014 Agreement The Agreement entered

into between Respondent
No.1 and the Petitioner for
the purpose of putting up
construction in the nature
of a commercial building in
the property mentioned in
the Agreement.

C3 17.03.2015 RA Bill An amount of

Rs.1,02,01,714/- was
raised by Respondent No.1
for the work done. Same
has been duly certified
after completion of
inspection by M/s. Cruthi
Consultants.

C4 04.04.2015 RA Bill An amount of

Rs.12,09,010- was raised
by Respondent No.1 for
the work done. Amount
was not paid by the
 Petitioner with respect to
the previous bills where
carry forwarded to this bill.
Same has been duly
certified after completion of
inspection by M/s. Cruthi
Consultants.

C5 10.06.2015 RA Bill An amount of

Rs.63,47,220/- was raised
by Respondent No.1 for
the work done. Amount
was not paid by the
Petitioner with respect to
the previous bills where
carry forwarded to this bill.
Same has been duly
certified after completion of
inspection by M/s. Cruthi
Consultants.

C6 06.10.2015 RA Bill An amount of

Rs.69,39,323/- was raised
by Respondent No.1 for
the work done. Amount
was not paid by the
Petitioner with respect to
the previous bills where
carry forwarded to this bill.
Same has been duly
certified after completion of
inspection by M/s. Cruthi
Consultants.

C7 18.03.2016 RA Bill An amount of

Rs.40,94,393/- was raised
by Respondent No.1 for
the work done. Amount
 was not paid by the
Petitioner with respect to
the previous bills where
carry forwarded to this bill.
Same has been duly
certified after completion of
inspection by M/s. Cruthi
Consultants.

C8 08.09.2016 Notice along The Respondent No.1

with Postal issued Notice to Petitioner
Receipt seeking settlement of bills
raised in Ex.C3 to Ex.C7.
No reply by Petitioner.

C9 21.11.2016 Arbitration Clause 19 of the

Notice along Agreement dated
with Postal 15.12.2014 was invoked by
Receipt and Respondent No.1 seeking
Acknowledgmen appointment of Arbitrator to
t resolve the disputes.

C10 29.03.2019 Order in CMP The Hon’ble High Court

No.69/2017 dismissed CMP preferred
by Respondent No.1 on
the ground that
Respondent No.1 has not
suggested name of the
Arbitrator. However, liberty
granted to issue fresh
Arbitration Notice.

C11 30.10.2019 Notice along Arbitration Notice issued

with Postal by Respondent No.1 in
Receipt and compliance with the Order
Packing at Ex.C10, suggesting an
Consignment Arbitrator for resolving the
disputes between the
 parties.

C12 31.10.2022 CMP Hon’ble High Court allowed

No.411/2021 the CMP and thereby
appointed the Arbitrator to
resolve the disputes.

C13 20.02.2017 Plaint in OS The Respondent No.1 had

No.1297/2017 filed a Suit seeking
recovery of Rs.61,84,133/-
against the Petitioner with
respect to a residential
building constructed by the
Respondent No.1 in terms
of the Agreement dated
15.12.2014.

C14 14.08.2018 Examination-in-

Chief in O.S.
No.1297/2017
by Respondent
No.1

C15 15.02.2017 Board Ex.C1

Resolution

C16 23.12.2016 Khatha Issued in favour of the

Certificate Petitioner pertaining to the
construction put up in the
residential premises.

C17 23.12.2016 Khatha Extract Issued in favour of the

Petitioner pertaining to the
construction put up in the
residential premises.

C18 09.07.2015 RA Bill An amount of

Rs.38,88,943/- was due by
the Petitioner to
Respondent No.1 with
 respect to the construction
put up in the residential
premises.

C19 05.08.2015 RA Bill An amount of

Rs.26,68,128/- was due by
the Petitioner to the
Respondent No.1 with
respect to the construction
put up in the residential
premises. Amounts not
cleared in the previous bills
is carried forward to this
bill.

C20 23.09.2015 RA Bill An amount of

Rs.30.95,434/- was due by
the Petitioner to
Respondent No.1 with
respect to the construction
put up in the residential
premises.

C21 09.10.2015 RA Bill An amount of

Rs.11,81,666/- was due by
the Petitioner to
Respondent No.1 with
respect to the construction
put up in the residential
premises.

C22 08.09.2016 Notice Ex.C8

C23 Postal Receipt

for C22

C24 15.12.2014 Agreement Ex.C2

C25 MoA of Claimant

 Company

C26 AoA of Claimant

Company

C27 Certificate of
Incorporation of
Claimant
Company

C28 20.02.2023 Judgment in The Trial Court directed the

O.S. Petitioner herein to pay a
No.1297/2017 sum of Rs.61,84,133/-
along with 24% interest
from date of the Suit till
realization to Respondent
No. 1 herein

C29 20.02.2023 Decree in O.S.

No.1297/2017

C30 Bank Statement Reflecting amounts

of HDFC Bank transferred by the
Petitioner for both
residential and commercial
projects.

C31 Karur Vysya Reflecting amounts

Bank transferred by the
Petitioner for both
residential and commercial
projects.

C32 Bank Statement Reflecting amounts

of HDFC Bank transferred by the
Petitioner for both
residential and commercial
projects.

C33 21.08.2023 65B Certificate In compliance with

 Evidence Act for
production of Ex.C30 to
Ex.C32. Nevertheless,
certified copies of the said
Exhibits have also been
produced.

C34 e-Mail e-Mail correspondence

between Respondent No.1
and the Petitioner wherein
requests were made from
Respondent No.1 to clear
pending payments by
Petitioner and also
correspondences to show
that construction put up by
Respondent No.1 both
commercial and residential
premise

Admissions
 The Authorized Representative of M/s. Cruthi Consultants Consortium
Private Limited i.e. CW2 witness has admitted that after inspection of
the site of construction and verifying the stage of construction they
have certified and signed the bills. The signature affixed on the bills
indicate that till that date the stage at which the construction had
reached.

Petitioner Evidence
The Authorized Representative of the Petitioner Company i.e. Sri K.K.S.
Rajen got examined as RW1 and got marked documents from Ex.R1 to
Ex.R3.

Admissions
 Witness does not remember having sent any communication through
e-Mail informing Respondent No.1 with respect to the delay in
construction (Para 14).
 No document has been established that there was a delay in
construction (Para 14).

 The Davangere Commercial Complex Building though incomplete has

been sold by the Petitioner Company. Sale Consideration amount
could not be recalled by the witness (Para 16).

 Witness denies suggestion that since there was no lost caused to the
Petitioner and since there is a reference to the fact that building is
completed in the Sale Deed, witness has not produced the same
(Para 17).

 No document to show that the complaint has been lodged against the
Respondent No.1 for delay in construction (Para 17).

 No document produced to show the total cost of commercial building

was approximately Rs.10 Crores (Para 20).

 No document to show that M/s Cruthi Consultant has given

information regarding incompleteness, delay and defect in
construction (Para 21).

 The witness denies the suggestion that since there was no loss
suffered on account of any alleged delay, defect or incompleteness of
construction, no counter claim was raised (Para 22).

 No document to show that Petitioner Company had Rs.2 Crores or

even Rs.10 Crores to show that they possessed funds for construction
(Para 24).

Arguments advanced
 BILLS RAISED ARE NOT DISPUTED:
It is not the case of the Petitioner that they have not received the bills
raised by Respondent No.1, but it is the case that the bills raised are
defective. However, no explanation has been provided by the
Petitioner to explain the defects. The 1 st Respondent has produced 5
RA Bills at Ex.C3 to Ex.C7 as per the work completed by Respondent
No.1.The said Bills were signed and duly certified by M/s Cruthi
Consultants Consortium after due inspection of the work completed as
stated in the Bills. The same has been deposed by CW2. Since there
 has been no dispute with Respondent No.1 having raised the above
Bills and no explanation has been given with respect to the alleged
defects in the above said Bills, the Hon’ble Tribunal will have presume
that the Bills raised are authentic and that the Petitioner is liable to pay
the same to Respondent No.1. In the case of Gian Chand and
Brothers and Ors. Vs. Rattan Lal, reported in 2013 (2) SCC 606, has
held that “Accounts regularly maintained in the course of business are
to be taken as correct unless there are strong and sufficient reasons to
indicate that they are unreliable”. In the instant case, no reason has
been provided by the Petitioner to show any defects with respect to
the RA Bills raised. Moreover, M/s Cruthi Consultants have also
deposed through their authorized representatives i.e. CW2 that the RA
Bills have been raised only after due inspection.

 PAYMENTS TOWARDS BILLS RAISED NOT DISPUTED:

It is submitted that on perusal of Ex.C3 to Ex.C7, it can be ascertained
that certain amounts made by the Petitioner towards clearance of the
Bills raised are reflected in the Bills and whatever amount is
outstanding is carried forward to the next Bill. The 1 st Respondent has
put up construction for the Petitioner into two premises i.e. residential
and commercial. In O.S .No.1297/2017 Respondent No.1 sought
recovery of dues pertaining to the residential project and the same
came to be decreed on 20.02.2023 at Ex.C28. In the instant case it is
pertaining to the dues with respect to the commercial project. The
Petitioner has made payment for both commercial and residential
projects simultaneously. The payments made for the respective
projects were reflected in the Bills raised in the respective projects.
The Petitioner has till date not disputed the same. The Petitioner had
an opportunity at the time of rising of the Bills to state that, the
payments made must be adjusted towards the commercial project.
However, having kept quite till date they cannot now say that all
payments were made towards the commercial projects. Moreover, no
document has been produced by the Petitioner to show that a
particular payment was made for a particular project. Ex.C34 are e-
Mail correspondence between Respondent No.1 and the Petitioner
wherein Respondent No.1 was seeking payments for dues against the
Petitioner for both residential and commercial projects and also
 correspondences which reflects that construction was put up for the
residential project as well by Respondent No.1. The said e – Mail has
not been disputed by the Petitioner. It is submitted that the Petitioner is
trying to mislead this Hon’ble Tribunal by making false statement that
the payments made by Petitioner was only for one project.
The Apex Court in AIR 1956 SC 593, has stated that “A Plaintiff is not
permitted to approbate and reprobate”. A person cannot say at one
time that a transaction is valid and thereby obtain some advantage, to
which he could only be entitled on the footing that it is valid and then
turn around and say it is void for the purpose of securing some
advantage. In the instant case, the Petitioner was adjusted towards
the bills raised with respect to the residential project. Moreover, the
Judgment and Decree passed in OS No.1297/2017 against the
Petitioner directing the Petitioner to pay the 1 st Respondent
Rs.61,84,133/- also goes to show that there are two projects for which
Respondent No.1 and Petitioner have entered into an Agreement.

 NO LOSS UNDERGONE BY THE PETITIONER:

It is submitted that admittedly the Petitioner has sold the commercial
building, even though no document has been produced by the
Petitioner to depict the same, adverse inference has to be drawn
against the Petitioner and this Hon’ble Tribunal has to presume the
fact that the Petitioner has not undergone any loss on account of
Respondent No.1 since the Petitioner has not produced the best
evidence i.e. the Sale Deed to show that the Petitioner has undergone
any loss. The Apex Court in AIR 1968 SC 1413 has held that Adverse
Inference has to be drawn against the party when the best evidence is
withheld.

 NO DOUCMENTS TO PRODUCED BY THE PETITIONER TO

SUBSTITUTE THEIR CLAIMS:
The Petitioner has not produced any document to show they
possessed funds to show that they were ready to make payments
towards the Bills raised. The Petitioner has not produced any
document to show that the Bills raised by Respondent No.1 are not
defective nor have they produced any document to show that
Respondent No.1 has delayed in putting up construction. The
 Petitioner tactics appears to be to mislead this Tribunal by not only
making false statements but also by stating that all the payments
made are towards the Commercial Project which is in contrary to the
e-Mails Correspondences between Respondent No.1 and Petitioner
at Ex.C34 and the RA Bills raised at Ex.C3-C7.
 SCOPE OF SECTION 34 OF THE ARBITRATION AND
CONCILIATION ACT, 1996:
It is submitted that the Petitioner herein has failed to established that
how the Petitioner has not liable to the amount of Rs. 93,00,626/- with
interest at the rate of 18% P.A from the date of raising bills till
realization during the trial conducted before the Arbitral Tribunal. On
the other hand, the Learned Arbitrator has gone through the Pleadings
in depth and analyzed all documents placed before the Arbitral
Tribunal, which are marked as exhibits. Accordingly, the Arbitrator has
tried the matter and decided that the Petitioner is liable for the
aforementioned amount.

It is pertinent to note that the Arbitrator is the master of the facts and
the Court cannot be reconsidered the evidence. Therefore, Scope of
challenging the Arbitral Award is very limited for which the Arbitral
award is not appealable orders. However, the party can be challenged
the award under Section 34 of Arbitration and Conciliation Act, 1996 in
certain circumstances. The provision of Section 34 of the Act extracted
bellow:
(2) An arbitral award may be set aside by the Court only if –

(a) the party making the application furnishes proof that –

(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under
the law for the time being in force; or
(iii) the party making the application was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission to
arbitration:
 Provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, only that part of the
arbitral award which contains decisions on matters not submitted to
arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure

was not in accordance with the agreement of the parties, unless such
agreement was in conflict with a provision of this Part from which the
parties cannot derogate, or, failing such agreement, was not in
accordance with this Part; or

(b) the Court finds that –

(i) the subject matter of the dispute is not capable of settlement by

arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

 SUPREME COURT DECISION ON SECTION 34 OF ARBITRATION

AND CONCILIATION ACT, 1996:
It is submitted that the Apex Court also observed in various cases
for validity of the Section 34 of the Arbitration and Conciliation Act,
1996. Therefore, some reported Judgments are mentioned bellow:
1. In Associates Builders v. Delhi Development Authority reported
(2015) 3 SCC 49 held that, “PARA 30.-The audi alteram
partem principle which undoubtedly is a fundamental juristic principle
in Indian law is also contained in Sections 18 and 34(2)(a)(iii) of the
Arbitration and Conciliation Act. PARA 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.

PARA 32 - A good working test of perversity is contained in two

judgments. In Excise and Taxation Officer-cum-Assessing
 Authority v. Gopi Nath & Sons [1992 Supp (2) SCC 312] , it was
held : (SCC p. 317, para 7)

“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 as to suffer from the vice of irrationality incurring the
blame of being perverse, then, the finding is rendered infirm in
law.”

In Kuldeep Singh v. Commr. of Police [(1999) 2 SCC 10 : 1999

SCC (L&S) 429] , it was held: (SCC p. 14, para 10)

“10. A broad distinction has, therefore, to be maintained between

the decisions which are perverse and those which are not. If a
decision is arrived at on no evidence or evidence which is
thoroughly unreliable and no reasonable person would act upon
it, the order would be perverse. But if there is some evidence on
record which is acceptable and which could be relied upon,
howsoever compendious it may be, the conclusions would not be
treated as perverse and the findings would not be interfered with.”

PARA 33 - It must clearly be understood that when a court is

applying the “public policy” test to an arbitration award, it does not act
as a court of appeal and consequently errors of fact cannot be
corrected. A possible view by the arbitrator on facts has necessarily to
pass muster as the arbitrator is the ultimate master of the quantity
and quality of evidence to be relied upon when he delivers his arbitral
award. Thus an award based on little evidence or on evidence which
does not measure up in quality to a trained legal mind would not be
held to be invalid on this score. Once it is found that the arbitrators
approach is not arbitrary or capricious, then he is the last word on
facts. In P.R. Shah, Shares & Stock Brokers (P) Ltd. v. B.H.H.
Securities (P) Ltd. [(2012) 1 SCC 594 : (2012) 1 SCC (Civ) 342] , this
Court held : (SCC pp. 601-02, para 21)

“21. A court does not sit in appeal over the award of an Arbitral
Tribunal by reassessing or reappreciating the evidence. An award
can be challenged only under the grounds mentioned in Section
34(2) of the Act. The Arbitral Tribunal has examined the facts and
held that both the second respondent and the appellant are liable.
The case as put forward by the first respondent has been
accepted. Even the minority view was that the second respondent
was liable as claimed by the first respondent, but the appellant
was not liable only on the ground that the arbitrators appointed by
the Stock Exchange under Bye-law 248, in a claim against a non-
 member, had no jurisdiction to decide a claim against another
member. The finding of the majority is that the appellant did the
transaction in the name of the second respondent and is
therefore, liable along with the second respondent. Therefore, in
the absence of any ground under Section 34(2) of the Act, it is not
possible to re-examine the facts to find out whether a different
decision can be arrived at.”

2. In Delhi Airport Metro Express Private Limited v. Delhi Metro Rail

Corporation Limited Cited (2022) 1 SCC 131 held that, “ PARA 28

This Court has in several other judgments interpreted Section 34

of the 1996 Act to stress on the restraint to be shown by Courts
while examining the validity of the arbitral awards. The limited
grounds available to Courts for annulment of arbitral awards are
well known to legally trained minds. However, the difficulty arises
in applying the well-established principles for interference to the
facts of each case that come up before the Courts. There is a
disturbing tendency of Courts setting aside arbitral awards, after
dissecting and reassessing factual aspects of the cases to come
to a conclusion that the award needs intervention and thereafter,
dubbing the award to be vitiated by either perversity or patent
illegality, apart from the other grounds available for annulment of
the award. This approach would lead to corrosion of the object of
the 1996 Act and the endeavours made to preserve this object,
which is minimal judicial interference with arbitral awards. That
apart, several judicial pronouncements of this Court would
become a dead letter if arbitral awards are set aside by
categorising them as perverse or patently illegal without
appreciating the contours of the said expressions”.

3. In ssangong engineering and construction Company Limited

v. Na5titional Highway Authority of India (NHAI) reposted
(2015) 15 SCC 131 held that
“PARA 37
Insofar as domestic awards made in India are concerned, an
additional ground is now available under sub-section (2-A), added
by the Amendment Act, 2015, to Section 34. Here, there must be
patent illegality appearing on the face of the award, which refers
to such illegality as goes to the root of the matter but which does
not amount to mere erroneous application of the law. In short,
what is not subsumed within “the fundamental policy of Indian
law”, namely, the contravention of a statute not linked to public
policy or public interest, cannot be brought in by the backdoor
when it comes to setting aside an award on the ground of patent
illegality.

PARA 38
Secondly, it is also made clear that reappreciation of evidence,
which is what an appellate court is permitted to do, cannot be
permitted under the ground of patent illegality appearing on the
face of the award.

PARA 40
The change made in Section 28(3) by the Amendment Act really
follows what is stated in paras 42.3 to 45 in Associate
Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2
SCC (Civ) 204] , namely, that the construction of the terms of a
contract is primarily for an arbitrator to decide, unless the
arbitrator construes the contract in a manner that no fair-minded
or reasonable person would; in short, that the arbitrator's view is
not even a possible view to take. Also, if the arbitrator wanders
outside the contract and deals with matters not allotted to him, he
commits an error of jurisdiction. This ground of challenge will now
fall within the new ground added under Section 34(2-A).

PARA 69
We therefore follow the aforesaid authorities, that in the guise of
misinterpretation of the contract, and consequent “errors of
jurisdiction”, it is not possible to state that the arbitral award would
be beyond the scope of the submission to arbitration if otherwise
the aforesaid misinterpretation (which would include going
beyond the terms of the contract), could be said to have been
fairly comprehended as “disputes” within the arbitration
agreement, or which were referred to the decision of the
arbitrators as understood by the authorities above. If an arbitrator
 is alleged to have wandered outside the contract and dealt with
matters not allotted to him, this would be a jurisdictional error
which could be corrected on the ground of “patent illegality”,
which, as we have seen, would not apply to international
commercial arbitrations that are decided under Part II of the 1996
Act. To bring in by the backdoor grounds relatable to Section
28(3) of the 1996 Act to be matters beyond the scope of
submission to arbitration under Section 34(2)(a)(iv) would not be
permissible as this ground must be construed narrowly and so
construed, must refer only to matters which are beyond the
arbitration agreement or beyond the reference to the Arbitral
Tribunal”.

 CONCLUSION
The 1st Respondent has clearly established the averments of the
statement of objection; the Petitioner has failed to show that the
Arbitral Award is appealable under Section 34 of the Arbitration and
Conciliation Act, 1996.

Wherefore, the 1st Respondent most respectfully prays that this

Hon’ble Court may be pleased to dismiss the above Petition with
exemplary cost as prayed for in the interest of justice and equity.

Bengaluru
Date: Advocate for Respondent No.1