SUTLEJ CONSTRUCTION versus UNION TERRITORY OF CHANDIGARH

Citation: [2017] 12 S.C.R. 134 · Decided: 05-12-2017 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
[2017] 12 S.C.R. 134 
SUTLEJ CONSTRUCTION 
v. 
UNION TERRITORY OF CHANDIGARH 
(Civil Appeal No. 20885 of 2017) 
B 
DECEMBER 05, 2017 
c 
D 
E 
F 
[J. CHELAMESWAR AND SANJAY KISHAN KAUL, JJ.] 
Arbitration: 
Award of contract -
By respondent to appellant -
Termination of contract by respondent - Arbitration clause invoked 
- Award partly allowing claim of appellant and rejecting counter-
claims of respondent - Objections against the award u/s. 34 of 
Arbitration and Conciliation Act, 1996, rejected by Addi. District 
Judge - High Court set aside the award - On appeal, held: When it 
comes to setting aside of an award under the public policy ground, 
the award should shock the conscience of the court and the court 
should not substitute its view for that of the arbitrator - An 
arbitrator is a chosen judge by the parties and it is on limited 
parameters that an award be inteifered with - High Court acted as 
if it was the first appellate court against a decree - The dispute had 
resulted in a reasoned award after proper appreciation of evidence 
-Enforcement of award in toto is upheld. 
Allowing the appeal, the Court 
HELD: 1. The dispute in question had resulted in a 
reasoned award. It is not as if the arbitrator has not appreciated 
the evidence. The arbitrator has taken a plausible view and the 
correct view. The ability of the appellant to comply with its 
obligations were inter dependent on the respondent meeting its 
obligations in time, to facilitate appropriate areas for· unloading 
of the earth and for its compacting. At least it is certainly a 
G plausible view. [Para 11] [140-B, D] 
H 
2. When it comes to setting aside of an award under the 
public policy ground, it would mean that the award should shock 
the conscience of the court and would not include what the court 
thinks is unjust on the facts of the case seeking to substitute its 
. 134 
SUTLEJ CONSTRUCTION v. 
UNION TERRITORY OF 
135 
CHANDIGARH 
view for that of the arbitrator to do what it considers to be 
A 
"justice." [Para 12] [140-E] 
Associate Builders v. Delhi Development Authority 
(2015) 3 sec 49 - relied on. 
3. The approach adopted by the Additional District Judge 
was, thus, correct in not getting into the act of re-appreciating B 
the evidence as the first appellate court from a trial court 
decree. An arbitrator is a chosen Judge by the parties and it is 
on limited parameters can the award be interfered with. [Para 
13] [140-F-G] 
Sudarsan Trading Co. v. The Government of Kerala 
[1989] 1 SCR 665 ; Harish Chander & Co. v. State of 
U.P AIR 2016 SC 4257 : [2016] 8 SCR 773 ; Swan 
Gold Mining v. Hindustan Copper Limited 2014 (4) 
ArbLR 1 (SC) - relied on. 
c 
4. The High Court ought to have restrained itself from D 
getting into the meanderings of evidence appreciation and 
acting like a second appellate court. In fact, even in second 
appeals, only questions of law are to be determined while the 
first appellate court is the final court on facts. In the present case 
the High Court has, thus, acted in the first appeal against 
E 
objections dismissed as if it was the first appellate court against 
a decree passed by the trial court. The impugned order cannot 
be sustained and is accordingly set aside and the enforcement of 
the award in toto is upheld. [Paras 15-16] [141-A-B] 
Case Law Reference 
(2015) 3 sec 49 
relied on 
Para 11 
[1989] 1 SCR 665 
relied on 
Para 12 
[2016] 8 SCR 773 
relied on 
Para 12 
2014 (4) ArbLR 1 (SC) 
relied on 
Par.a 12 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 20885 
of2017. 
F 
G 
H 
136 
SUPREME COURT REPORTS 
[2017] 12 S.C.R. 
A 
From the Judgment and Order dated 01.04.2015 of the High Court 
B 
of Punjab and Haryana at Chandigarh in F.A.O. No. 1621 of 2014 
(O&M). 
Nidhesh Gupta, Sr. Adv., Tarun Gupta, Puneet Varshney, Advs 
for the Appellant. 
Rimali Batra, Ravi Prakash, Ms. Nikita Choukse, Chandra Prakash, 
U.T. Chandra Prakash, Advs for the Respondents .. 
The Judgment of the Court w~s delivered by 
SANJAY KISHAN KAUL, J. I. Leave granted. 
C 
2. The appellant was awarded a contract by the respondent of 
earth excavation work and loading into trucks and unloading for purposes 
of widening of the approach road Sukhna Choe on Chandigarh Kalka 
Road, Chandigarh vide memo No.201 dated 5.1.1996. The earth was 
required to be lifted from the first source near the regulator and carried 
D 
through trucks from Golf side initially. There was a second source of 
lifting the earth as per permission o
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