State of Chhattisgarh & Anr. vs. M/s Sal Udyog Private Limited [Civil Appeal No. 4353 of 2010]
A ground not raised in application for setting aside of arbitration award can be raised in appeal u/s 37
22. β¦β¦β¦In our opinion, this is the patent illegality
that is manifest on the face of the Arbitral Award inasmuch as the express
terms and conditions of the Agreement governing the parties as also the
Circular dated 27th July, 1987 issued by the Government of Madhya Pradesh have
been completely ignored.
23. We are afraid, the plea of waiver taken against
the appellant-State on the ground that it did not raise such an objection in
the grounds spelt out in the Section 34 petition and is, therefore, estopped
from taking the same in the appeal preferred under Section 37 or before this
Court, would also not be available to the respondent-Company having regard to
the language used in Section 34(2A) of the 1996 Act that empowers the Court to
set aside an award if it finds that the same is vitiated by patent illegality
appearing on the face of the same. Once the appellant-State had taken such a
ground in the Section 37 petition and it was duly noted in the impugned
judgment, the High Court ought to have interfered by resorting to Section
34(2A) of the 1996 Act, a provision which would be equally available for
application to an appealable order under Section 37 as it is to a petition
filed under Section 34 of the 1996 Act. In other words, the respondent-Company
cannot be heard to state that the grounds available for setting aside an award
under sub-section (2A) of Section 34 of the 1996 Act could not have been
invoked by the Court on its own, in exercise of the jurisdiction vested in it
under Section 37 of the 1996 Act. Notably, the expression used in the sub-rule
is βthe Court finds thatβ. Therefore, it does not stand to reason that a
provision that enables a Court acting on its own in deciding a petition under
Section 34 for setting aside an Award, would not be available in an appeal
preferred under Section 37 of the 1996 Act.