FAO-178-2024(O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT Punjab State Civil Supplies Corporation Limited and M/s Ajay Agro Tech Private Limited and another CORAM : HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Ashish Verma, Advocate, for the appellants. LAPITA BANERJI Learned that the award is arbitrary and perverse on the face of the record and the learned Arbitrator misdirected himself by denying the claim of appellant No.1-PUNSUP in respect of April 1, 2013 till quintals of rice. Furthermore dated September 1, 2023 acted arbitrarily and 34 of the Arbitration and Conciliation Act, 1996 filed by the appellants. 2. This Court has heard learned counsel appear the appellants 3. It is apparent from a learned Arbitrator being the master of quality and quantity) conclusion that delivered by respondent No.1 2024(O&M) Sr. No.220 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO Date of Decision : Punjab State Civil Supplies Corporation Limited and Versus M/s Ajay Agro Tech Private Limited and another HON’BLE MS. JUSTICE LAPITA BANERJI Mr. Ashish Verma, Advocate, for the appellants. *** LAPITA BANERJI, J. (Oral) Learned counsel appearing on behalf of the appellant award is arbitrary and perverse on the face of the record and the learned Arbitrator misdirected himself by denying the claim of appellant PUNSUP in respect of interest component pril 1, 2013 till July 31, 2013 on account of quintals of rice. Furthermore, he submits that dated September 1, 2023, the learned Additional District Judge, Sangrur acted arbitrarily and irrationally by rejecting the application under Section 34 of the Arbitration and Conciliation Act, 1996 filed by the appellants. This Court has heard learned counsel appear the appellants and perused the material available It is apparent from a perusal of the impugned award that the learned Arbitrator being the master of appreciation quality and quantity), perused the documents on record and conclusion that out of 43,117.57 quintals of rice that was required to be delivered by respondent No.1-Miller pursuant to the agreement dated IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-178-2024(O&M) Date of Decision :09.07.2026 Punjab State Civil Supplies Corporation Limited and another …Appellants M/s Ajay Agro Tech Private Limited and another …Respondents HON’BLE MS. JUSTICE LAPITA BANERJI counsel appearing on behalf of the appellants submits award is arbitrary and perverse on the face of the record and the learned Arbitrator misdirected himself by denying the claim of appellant component @ 13% with effect from July 31, 2013 on account of late supply of 4335.92 he submits that vide the impugned judgment the learned Additional District Judge, Sangrur irrationally by rejecting the application under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, ‘the 1996 Act’) This Court has heard learned counsel appearing on behalf of available on record. perusal of the impugned award that the appreciation of evidence (both perused the documents on record and came to the quintals of rice that was required to be Miller pursuant to the agreement dated VANDANA 2026.07.17 09:20 I attest to the accuracy and integrity of this document FAO-178-2024(O&M) October 5, 2012 for the purpose of shelling of 38,781.65 quintals by June 30, 2013. The learned Arbitrator observ the remaining 4335.92 quintals o month (delivery effected on July 31, 2013) due to shortage of space with the Food Corporation of India arbitral record. Furthermor suffered by appellant No.1 was also sought to be compensated by the FCI by payment of interest. Therefore, there was no occasion for the appellants to claim interest for the said de Therefore, the sai 4. Vide impugned learned Additional judgment held that the learned Arbitrator had correctly decided t petition and had given case. Opportunity of hearing was given to both the parties and the evidence has been led. 5. Therefore hearing the application under Section 34 of the the well-reasoned award. 6. It is well settled that t under Section 34 of the 1996 Act is extremely limited. reference may be made to ‘Associate Builders V Relevant extract of the same is being reproduced hereinafter: 2024(O&M) October 5, 2012 for the purpose of shelling of 781.65 quintals by June 30, 2013. The learned Arbitrator observ the remaining 4335.92 quintals of rice was delayed in delivery month (delivery effected on July 31, 2013) due to shortage of space with the Food Corporation of India-FCI. Letters to that effect were arbitral record. Furthermore, learned Arbitrator also recorded that the loss suffered by appellant No.1 was also sought to be compensated by the FCI by payment of interest. Therefore, there was no occasion for the appellants to claim interest for the said delay from respondent No.1 Therefore, the said claim of the appellants failed. Vide impugned judgment dated dditional District Judge in paragraph 10 of the impugned judgment held that the learned Arbitrator had correctly decided t petition and had given detailed findings on each and every aspect of the Opportunity of hearing was given to both the parties and the evidence Therefore, it was held that no reason existed for the Court application under Section 34 of the reasoned award. It is well settled that the scope of interference under Section 34 of the 1996 Act is extremely limited. reference may be made to the judgment of the Hon’ble Supreme Court in Associate Builders Vs. Delhi Development Authority’ Relevant extract of the same is being reproduced hereinafter: “12. xxxxx xxxxxxx xxxxxx xxxxx xxxxx It must clearly be understood that when applying the “public policy” test to an arbitration October 5, 2012 for the purpose of shelling of paddy, it had delivered 781.65 quintals by June 30, 2013. The learned Arbitrator observed that f rice was delayed in delivery by one month (delivery effected on July 31, 2013) due to shortage of space with s to that effect were a part of the e, learned Arbitrator also recorded that the loss suffered by appellant No.1 was also sought to be compensated by the FCI by payment of interest. Therefore, there was no occasion for the appellants lay from respondent No.1-Miller/claimant. d claim of the appellants failed. dated September 01, 2023 the in paragraph 10 of the impugned judgment held that the learned Arbitrator had correctly decided the claim findings on each and every aspect of the Opportunity of hearing was given to both the parties and the evidence it was held that no reason existed for the Court application under Section 34 of the 1996 Act, to interfere with he scope of interference in an application under Section 34 of the 1996 Act is extremely limited. In this regard, the judgment of the Hon’ble Supreme Court in s. Delhi Development Authority’, (2015)3 SCC 49. Relevant extract of the same is being reproduced hereinafter:- 12. xxxxx xxxxxxx xxxxxx xxxxx xxxxx It must clearly be understood that when a court is applying the “public policy” test to an arbitration VANDANA 2026.07.17 09:20 I attest to the accuracy and integrity of this document FAO-178-2024(O&M) 7. A beneficial reference may be made to the decision of the Apex Court in Project Undertaking, hereinafter:- “14. of the Court under Section 37 of the Act, as Court in akin to the jurisdiction of the Scope of of the Act, in examining an order, setting aside or set aside an award, is restricted and subject grounds as the challenge under Section 34 15. and Section 37 of the Act is not akin to normal 2024(O&M) 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 quantity and quality of evidence to be relied upon when he delivers his arbitral. Thus an award base on little evidence or on evidence which does not measure up in quali on this score arbitrators approach is not arbitrary or capricious, he is the last word on facts. xxxx xxxxx xxxx xxxx xxxx xxxx An arbitral tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable it will not mean that the award can be set ground. Construction of the terms of a primarily for an arbitrator to decide unless arbitrator construes the contract in such a way that could be said to be something that reasonable person could do. It wa that 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 seeking to substitute its view for that of the arbitrator to do what considers to be “justice”. xxxx xxxxx xxxx xxxx xxxx xxxx” A beneficial reference may be made to the decision of the Apex Court in Konkan Railway Corporation Limited vs. Chenab Bridge Project Undertaking, (2023) 9 SCC 85. The relevant extract is reproduced 14. Analysis: At the outset, we may state that the of the Court under Section 37 of the Act, as Court in MMTC Ltd. v. Vedanta Ltd., akin to the jurisdiction of the court under Section 34 of the Act. Scope of interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or set aside an award, is restricted and subject grounds as the challenge under Section 34 15. Therefore, the scope of jurisdiction under Section and Section 37 of the Act is not akin to normal award, it does not act as a court of appeal and fact cannot be corrected. A view by the arbitrator on facts has necessarily muster as the arbitrator is the ultimate master of quantity and quality of evidence to be relied upon he delivers his arbitral. Thus an award base on evidence or on evidence which does not measure quali on this score. Once it is found that the ch is not arbitrary or capricious, then he is the last word on facts. xxxx xxxxx xxxx xxxx xxxx xxxx An arbitral tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do. It was opined by this court that 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 ourt thinks is unjust seeking to substitute its view for that of the arbitrator to do what it xxxx xxxxx xxxx xxxx xxxx xxxx” A beneficial reference may be made to the decision of the Konkan Railway Corporation Limited vs. Chenab Bridge The relevant extract is reproduced Analysis: At the outset, we may state that the jurisdiction of the Court under Section 37 of the Act, as clarified by this MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163, is court under Section 34 of the Act. interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate VANDANA 2026.07.17 09:20 I attest to the accuracy and integrity of this document FAO-178-2024(O&M) jurisdiction. with the arbitral award in a mere possibility of an interpretation of the the findings of the Ar xxx 8. T limited as the scope of interference in an application under Section 34 the 1996 Act, the award dated misdirected himself nor 9. According 2023 also does Court. 10. Accordingly, dismissed. 11. Connected application July 09, 2026 Vandana Whether speaking/reasoned : Whether reportable 2024(O&M) jurisdiction. It is well-settled that courts with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal. xxx xxx xxx” The scope of interference in an appeal under Section 37 limited as the scope of interference in an application under Section 34 , if not more. There is no infirmity, illegality the award dated April 20, 2018. The learned Arbitrator has neither misdirected himself nor committed any patent illegality. Accordingly, the impugned judgment dated also does not suffer any infirmity warranting interference by this Accordingly, the present appeal being FAO Connected application(s), if any, shall also stand disposed of. (LAPITA BANERJI) JUDGE 6 ther speaking/reasoned : Yes/No Whether reportable : Yes/No settled that courts ought not to interfere casual and cavalier manner. The alternative view on facts or contract does not entitle courts to reverse bitral Tribunal. appeal under Section 37 is as limited as the scope of interference in an application under Section 34 of . There is no infirmity, illegality, or perversity in he learned Arbitrator has neither committed any patent illegality. ly, the impugned judgment dated September 01, infirmity warranting interference by this appeal being FAO-178-2024 is , if any, shall also stand disposed of. (LAPITA BANERJI) JUDGE VANDANA 2026.07.17 09:20 I attest to the accuracy and integrity of this document