NDLI: Union of India & Ors. Vs. M/s. Bharat Enterprise

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	application u/s.16 No Claims Certificate Arbitration and Conciliation Act 1996
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Arbitration and Conciliation Act, 1996 – Arbitrator passedan award allowing claims which were submitted after the submissionof the f inal bi ll (containing No Claims Cert ificate) by theRespondent-Contractor – During the arbitration, the appellant filedan application u/s.16 invoking clauses 65 and 65A of the Contractwhich interdicted the submission of a new claim after the submissionof the final bill – Application rejected – Petition filed by theappellant u/s.34 challenging the award, allowed – Order set asideby High Court in appeal u/s.37 – Held: When a contractor seeks towriggle out of a final bill or a ‘no claims due certificate’ which hehas submitted, he must establish a case that a final bill or acertificate of no further claims was the result of any of the vitiatingfactors under the law – Sans such finding, the final bill would stand– If the final bill cannot be overridden by any factors known to lawthen the clauses relied upon by the appellants in this case wouldoperate – There was no finding by the Arbitrator that the final billand the no claims certificate were vitiated – The clauses in thecontract were binding not only on the parties but also on theArbitrator – Going against the terms of clauses 65 and 65A wouldindeed render the Award illegal being contrary to the contract and,therefore, without jurisdiction – If the clauses operate, the inevitableresult is the arbitrator could not have traveled outside of thecontractual prohibition and passed an award allowing claimssubmitted after the submission of the final bill – While, the reasoningadopted by the High Court cannot be subscribed to, it cannot alsobe lost sight of that the amounts in question are fairly meagre andthe final bill was settled only after long delay of over an year – Itwas apparently the long delay in the payment of the final bill amountwhich led to the raising of the new claims – Perhaps, if the final billitself was not kept pending for such a long time, the entire dispute may not have arisen at all – Impugned order set aside – Appellantsto pay Rs.3 lakhs to the respondent in full and final settlement of itsclaims – Constitution of India – Art. 136.Arbitration and Conciliation Act, 1996 – ss.16(2), (3), 34, 37– Plea of the respondent that the order dtd. 04.03.2009 passed bythe Arbitrator u/s.16 had attained finality as the same was notimpugned u/s.37 – Held: Under s.37(2)(a), an appeal lies to theCourt from an order of the Arbitral Tribunal accepting the pleareferred to in sub-sections (2) and (3) of s.16 – This means that anappeal can be preferred against the order of the Arbitral Tribunalallowing the plea that the Arbitral Tribunal does not have jurisdiction– Similar is the case with reference to an order which is renderedappealable u/s.16(3) – Thereunder also, it is the plea that the ArbitralTribunal is exceeding the scope of its authority which is allowedwhich is rendered appealable – In the present case, by orderdtd.04.03.2009, the Arbitral Tribunal did not allow the plea be it u/s.16(2) or u/s.16(3) – On the other hand, the Tribunal rejected theplea of the appellants – Therefore, no appeal could have been filedu/s.37 against the order dtd.04.03.2009 – An order passed by theArbitral Tribunal rejecting the plea u/s.16(2) or 16(3) being part ofthe Award itself, it is open to the parties to challenge the same whena petition is filed u/s.34 challenging the Award.Arbitration – Arbitrator is a creature of the parties and thecontract – As Arbitrator he cannot stray outside the contours of thecontract – He is bound to act within its confines – A disregard ofthe specific provisions of the contract would incur the wrath of theAward being imperiled.
Judge	Hon'ble Mr. Justice K.M. Joseph
Neutral Citation	2023 INSC 277
Petitioner	Union Of India & Ors.
Respondent	M/s. Bharat Enterprise
SCR	[2023] 8 S.C.R. 803
Judgement Date	2023-03-23
Case Number	3441

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2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
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