HARYANA TOURISM LIMITED versus M/S KANDHARI BEVERAGES LIMITED

Citation: [2022] 2 S.C.R. 316 · Decided: 11-01-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
316
SUPREME COURT REPORTS
[2022] 2 S.C.R.
[2022] 2 S.C.R. 316
316
HARYANA TOURISM LIMITED
v.
M/S KANDHARI BEVERAGES LIMITED
(Civil Appeal No. 266 of 2022)
JANUARY 11, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Arbitration and Conciliation Act, 1996 – ss.34 and 37 –
Exercise of powers u/s.37 – Scope of – High Court in appeal u/s.37
set aside the award passed by the arbitrator as well as the order
passed by the first appellate Court-Additional District Judge–On
appeal, held: An award can be set aside only if it is against the
public policy of India –The award can be set aside u/ss.34/37, if it
is found to be contrary to fundamental policy of Indian Law; or the
interest of India; or justice or morality; or if it is patently illegal –
None of the aforesaid exceptions are applicable to the facts of the
present case –In appeal u/s.37, the High Court entered into the
merits of the claim which is not permissible– It decided the appeal
u/s.37 as if it was deciding the appeal against the judgment and
decree passed by the trial Court – High Court exercised the
jurisdiction not vested in it u/s.37– Impugned judgment of High
Court set aside – Award passed by the arbitrator and the order
passed by the Additional District Judge u/s.34 overruling the
objections are restored.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 266 of
2022.
From the Judgment and Order dated 17.07.2018 of the High Court
of Punjab and Haryana at Chandigarh in FAO No.1399 of 2015 (O&M).
B. K. Satija, Himanshu Satija, Ms. Neha Mehta , Advs. for the
Appellant.
Kanwal Chaudhary, Bimlesh Kumar Singh, Rajeev Kumar Gupta,
Joginder Mann, Hardik Ahluwalia, Ms. Urvi Kashiwal, Advs. for the
Respondent.
A
B
C
D
E
F
G
H
317
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 17.07.2018 passed by the High Court of Punjab and
Haryana at Chandigarh in F.A.O. No. 1399 of 2015 (O&M), by which
the High Court has allowed the said appeal preferred under Section 37
of the Arbitration and Conciliation Act, 1996 (for short, ‘the Arbitration
Act’) and has set aside the award dated 17.11.2005 passed by the
arbitrator as well as the order dated 25.09.2014 passed by the first
appellate Court – Additional District Judge, Chandigarh, the original
claimant – respondent before the High Court has preferred the present
appeal.
2. The facts leading to the present appeal in a nutshell are as
under:
 That the appellant herein – Haryana Tourism Limited (for short,
‘Corporation’) invited tenders/quotations for the supply of Aerated Cold
Drinks at its Tourist Complexes for the period 15.05.2001 to 14.05.2002.
The tender submitted by the respondent herein was accepted by the
Corporation. As per the agreement, the respondent-company was
supposed to pay a sum of Rs. 20 lakhs on account of Brand Promotion
which was required to be spent as per mutual agreement between the
parties.
2.1 That the Corporation organised a Mango Mela on 07/08th July,
2001. The Corporation spent a sum of Rs. 1 lakh. Both the parties agreed
to hold musical nights. According to the respondent herein, it spent a
sum of Rs.13.92 lakhs. However, the appellant-Corporation asked the
respondent vide letter dated 20.09.2001 to deposit a sum of Rs. 19 lakhs
as sponsorship money. The appellant vide letter dated 17.01.2002
terminated the contract. Dispute arose between the parties. The matter
was referred to the sole arbitrator.
2.2 Vide award dated17.11.2005, the arbitrator directed the
respondent to pay a sum of Rs. 9.5 lakhs. The counter claim lodged by
the respondent claiming Rs. 13.92 lakhs was dismissed by the arbitrator.
The respondent thereafter filed objection petition before Additional District
Judge, Chandigarh under Section 34 of the Arbitration Act against the
award passed by the arbitrator. Vide order dated 25.09.2014, the
Additional District Judge dismissed the appeal/objection petition.
HARYANA TOURISM LTD. v. M/S KANDHARI BEVERAGES LTD.
A
B
C
D
E
F
G
H
318
SUPREME COURT REPORTS
[2022] 2 S.C.R.
2.3 Feeling aggrieved and dissatisfied with the order passed by
Additional District Judge, Chandigarh dismissing the appeal/objection
petition under Section 34 of the Arbitration Act, the respondent herein
preferred a further appeal before the High Court under Section 37 of
the Arbitration Act. By the impugned judgment and order, the High Court
has allowed the said appeal by entering into the merits of the claim and
has quashed a

Excerpt shown. Read the full judgment & AI analysis in Lexace.