M/S. DYNA TECHNOLOGIES PVT. LTD. versus M/S. CROMPTON GREAVES LTD.

Citation: [2019] 15 S.C.R. 295 · Decided: 18-12-2019 · Supreme Court of India · Bench: N.V. RAMANA, MOHAN M. SHANTANAGOUDAR, AJAY RASTOGI · Disposal: Disposed off

Cited by 5 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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M/S. DYNA TECHNOLOGIES PVT. LTD.
v.
M/S. CROMPTON GREAVES LTD.
(Civil Appeal No. 2153 of 2010)
DECEMBER 18, 2019
[N. V. RAMANA, MOHAN M. SHANTANAGOUDAR
AND AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act, 1996 – ss.31(3) and 34 –
Contract entered into between a company and the respondent for
an aquaculture unit to be set up by such company – Respondent
invited tenders for carrying out certain works for construction of
ponds, channels, drains and associated works – Appellant gave
proposal, estimate and quotation for carrying out the work –
Respondent issued work order on 15.11.94 – On 05.01.95,  the
respondent instructed the employees of the appellant to stop the
work – Appellant claimed compensation for premature termination
of the contract – Dispute referred to Arbitral Tribunal – Claim no.
3 (loss of profit), disallowed by the Arbitral Tribunal – Not
questioned by the appellant and attained finality – Only objection
is in reference to claim no.2 (losses due to unproductive use of
machineries) which was accepted by the Arbitral Tribunal for
Rs. 27,78,125/- with interest @ 18% p.a.– Single Judge upheld the
award – Division Bench partly allowed the appeal and set aside
the award of the Tribunal relating to claim no.2 – Held: Mandate
u/s.31(3) is to have reasoning which is intelligible and adequate
and, which can in appropriate cases be even implied by the Courts
from a fair reading of the award and documents referred to
thereunder, if the need be – In the present case, although the
Tribunal dealt with the claims separately under different sub-
headings, the award is confusing and jumbled the contentions,
facts and reasoning, without appropriate distinction– It abruptly
concluded at the end of the factual narration, without providing
any reasons – Inadequate reasoning and basing the award on the
approval of the respondent cannot be stated to be appropriate
considering the complexity of the issue involved, and accordingly
the award is unintelligible and cannot be sustained – Legislative
intention of providing s.34 (4) was to make the award enforceable,
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SUPREME COURT REPORTS
[2019] 15 S.C.R.
after giving an opportunity to the Tribunal to undo the curable
defects – When the High Court concluded that there was no
reasoned award, then the award ceased to exist and the Court was
functus officio u/s.34 for hearing the challenge to the award – In
such case, the High Court ought to have considered remanding
the matter to the Tribunal in the usual course but, it analyzed the
case on merits – However, in the present case such remand to the
Tribunal would not be beneficial as the case has taken more than
25 years for adjudication, without any end for the parties –
Respondents to pay Rs. 30,00,000/- to the appellant in full and
final settlement against claim no.2 within 8 weeks, failing which
the appellant will be entitled to interest at 12% p.a. until payment,
for providing quietus to the litigation.
Arbitration and Conciliation Act, 1996 – s.34 – Mandate of
– Discussed.
Arbitration and Conciliation Act, 1996 – s.31 – Requirement
of reasoned award – Discussed.
Arbitration and Conciliation Act, 1996 – s.34 – Challenge
to arbitral award – Award whether unintelligible or there is
inadequacy of reasons in award – Held: If the challenge to an
award is on the ground that it is unintelligible, the same would be
equivalent of providing no reasons at all – Ordinarily unintelligible
awards are to be set aside, subject to party autonomy to do away
with the reasoned award – In case of an award challenged on
adequacy of reasons, the Court while exercising jurisdiction u/s.34
has to adjudicate the validity of such award based on the degree
of particularity of reasoning required having regard to the nature
of issues falling for consideration – Courts are required to be
careful while distinguishing between inadequacy of reasons in an
award and unintelligible awards.
Disposing of the appeal, the Court
HELD: 1.1 Section 34 of the Arbitration Act limits a
challenge to an award only on the grounds provided therein or
as interpreted by various Courts. Arbitral awards should not be
interfered with in a casual and cavalier manner, unless the Court
comes to a conclusion that the perversity of the award goes to
the root of the matter without there being a possibility of
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alternative interpretation which may sustain the arbitral award.
Section 34 is different in its 

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