IFIN Commodities Limited vs Ayesha Madgavkar and Ors

,,

All these appeals involve common and connected questions of law and fact and as such they are being disposed of by this common judgment.,,

The facts obtaining in these appeals are similar. It would be sufficient to set out the facts in Appeal Under Arbitration No.13/2018.,,

 The respondent no.1, Mr. Anil Madgavkar and his family members (who are the respondent no.1 in the rest of the appeals) had invested various",,

amounts in the Multi Commodity Exchange (MCX) through the appellant Ifin Commodities Ltd., which is a member of the MCX. Mrs. Rashmi",,

Sharma (Respondent no.2) is the proprietress of 3P World, while Mr. Raj Sharma is its authorized person. According to the first respondent, Mr.",,

Rajesh Chheda of Finance factory was a franchise of 3P world. According to the first respondent and his family members (who were the claimants,,

before the Arbitrator in seven different claims, out of which these appeals arise) on account of illegal acts of the appellants and persons connected",,

with the appellant, the first respondent and his family members had suffered a loss and erosion of the amounts invested. It was contended that the",,

appellant and the persons connected with it have committed fraud by carrying out trades in the commodities market without the consent of the,,

respondent no.1 and his family members. They had issued false weekly statements, showing profits although huge losses were incurred by the first",,

respondent and his family members through unauthorized trades. It was contended that Mr. Rajesh Chheda of Finance factory had approached Mr.,,

Anil Madgavkar, some where in the month of February 2011 and had represented that he can offer good and safe investment opportunity in the",,

commodities market and the first respondent and his family members could receive an assured return 30% per annum on the investment made.,,

According to the first respondent and his family members the weekly statements from 3-P World were e-mailed to the respondent no.1 and his family,,

members, from February 2011 to 16/4/2011, which showed regular profits with a few losses in between.",,

Be that as it may, according to the first respondent and his family members, it was informed to Rajesh Chheda by a letter dated 14/4/2011 to stop all",,

further trades in the various accounts till the issues between the parties were sorted out. The respondent no.1 and his family members also asked the,,

appellant by an email dated 8/5/2011 to reimburse and compensate for the loss caused on account of the illegal trades done by the appellant and the,,

3P- World. It appears that Mr. Raj Sharma, the authorized signatory of the 3P -World approached Mr. Anil Madgavkar on 11/5/2011 and had",,

allegedly admitted about the illegal trading conducted and had agreed to unconditionally reimburse the entire loss and had passed a cheque of Rs.5.00,,

crores from the account of 3P World with HDFC Bank, as reimbursement of the losses of the respondent no.1 and his family members. It was",,

however contended that Mr. Raj Sharma had no intention to honour the commitment. The appellant informed the first respondent and his family,,

members by letter dated 22/7/2011 that they had terminated the 'authorized person agreement' with 3P- World w.e.f 19/7/2011 and as such, they are",,

no longer responsible for their actions. Subsequently, the first respondent and his family members received a statement of account showing substantial",,

erosion of the capital invested which was on account of unauthorized trades conducted by the appellant and the persons connected with it.,,

It appears that the first respondent and his family members received separate cheques towards the refund of the amount. The amounts so refunded,,

were substantially lesser than the amount originally invested. This led the first respondent and his family members to approach the MCX. The disputes,,

and differences between the parties came to be referred to a panel of three arbitrators, in accordance with Clause 3.4(c) of Rule 37 of the Business",,

Rules of the MCX.,,

The first respondent and his family members filed separate statements of claim seeking to recover different amounts being the balance due and,,

payable by the appellant, to the respondent no.1 in these appeals, along with interest at the rate of 15% p.a. from 15/4/2011 till actual payment.",,

The appellant resisted the claim. It was contended that the trading position was communicated to the first respondent and his family members daily,,

by SMS/s, the contract notes and by e-mail and there was no protest ever made that the trades were unauthorized. It was contended that the first",,

respondent and his family members had accepted the trades, as late as on 11/5/2011. It was specifically contented that any promise or assurance",,

made by Mr. Raj Sharma or Rajesh Chheda was a private agreement between the respondent no.1 and his family members and Mr. Raj Sharma. It,,

was contented that the appellant is not a party to any such promise or assurance made. It was contended that w.e.f 19/7/2011, 3P World had ceased",,

to be the authorized entity of the appellant and as such there is no legal or contractual relationship between the appellant and Mr. Rajesh Sharma. It,,

was contented that Mr. Rajesh Chheda of Finance Factory and Mr. Raj Sharma of 3P World have never been authorized by the appellant to represent,,

them and they are not party to any of the documents which were subject matter of the arbitration reference. The appellant placed reliance on an email,,

dated 13/5/2011 from Anil Madgavkar recording the fact that he wished to continue his account with the appellant, through 3P World and as such, he",,

is now estopped from claiming otherwise. It was also contended that by letter dated 13/5/2011, Mr. Anil Madgavkar had withdrawn his allegations",,

against the appellant.,,

It was contended before the Arbitral Tribunal, on behalf of the respondent no.1 and his family members that the investment of the amount was",,

made in the nature of mutual fund deposits. The Arbitral Tribunal came to the conclusion on the basis of the disclosure document and the other record,,

that the investment was not by way of a mutual fund deposit, but the amounts were invested in the hope of making profits in the commodity trade.",,

The Arbitral Tribunal has then referred to the letter dated 13/5/2011 from Anil Madgavkar making a reference to the previous emails sent to the,,

appellant on 8/5/2011. In a subsequent letter dated 13/5/2011 the respondent no.1 claimed that there was some difficulty in understanding the,,

functionality between the markets, operating during the circuits and the email dated 8/5/2011 was sent due to lack of clarification which matter was",,

now resolved. He further claimed that as instructed in his email dated 13/5/2011, he wished to continue his account with the appellant through 3P",,

World. In short, the Arbitral Tribunal came to the conclusion that on 13/5/2011 the matter was resolved between the parties and therefore, it was not",,

open to the first respondent and his family members to contend that, what was transacted with the appellant was a mutual fund account or that there",,

were no orders placed for trading or that the appellant had carried on trading activities, without their knowledge and consent. The Arbitral Tribunal",,

finally came to the conclusion that the cheque issued by Raj Sharma in the sum of Rs. 5 crores on his behalf and on behalf of the 3P World was a,,

private arrangement between Mr. Raj Sharma and the respondent no.1 “even though 3P World is the authorized person of the appellantsâ€. In,,

these circumstances the Arbitral Tribunal by an Award dated 30/06/2012 rejected the claim in all seven references. The record discloses that the,,

Arbitral Tribunal has recorded reasons only in respect of the Arbitration Matter No.MCX/Legal/699A/12 in which the respondent Anil Madgavkar,,

was the applicant/claimant. In so far as the other six references are concerned, the Arbitral Tribunal has adopted the same reasoning while rejecting",,

the claims of the family members of Mr. Anil Madgavkar.,,

Feeling aggrieved the respondent no.1 and his family members filed separate petitions under section 34 of the Arbitration and Conciliation Act, 1996",,

(Act, for short) being Arbitration Petition no.53/2012 and others before the leaned Principal District Judge, North Goa at Panaji. The learned District",,

Judge by separate judgment and awards dated 26/2/2018 has allowed Arbitration Petition no.53/2012 in the following terms :,,

 Application filed under section 34 of the Arbitration and Conciliation Act, 1996, is hereby allowed.",,

 The impugned Arbitral Award dated 30/6/2012 passed by the Hon'ble Arbitral Tribunal in the matter of MCX/Legal/704A/12 is hereby quashed and,,

set aside.,,

Application filed by the applicant in the matter of MCX/Legal/704A/12 is partly allowed in terms of refile clause no.1.,,

 It is held that the applicant is held entitled and the respondent no.1 is liable to pay balance amount of Rs.80,78,797/- along with interest at the rate of",,

15% per annum from 15th April, 2011 till the amount is actually paid.",,

The learned District Judge has come to the conclusion that the Arbitral Tribunal has not gone into the question of the appellant not having abided by,,

the rules and byelaws of the MCX while executing the trades on behalf of the respondent no.1 and his family members. A similar award has been,,

passed in the other petitions, albeit in different amounts depending upon the individual claim. Feeling aggrieved the appellants are before this Court,",,

under section 37 of the Act.,,

Before proceeding further it would be necessary to note that the respondents no.2 and 3 are not parties to any of the agreements between the,,

respondent no.1 and the appellant. Accordingly the respondents no.2 and 3 were not parties before the Arbitral Tribunal. The respondents no.2 and 3,,

filed intervention applications before the learned District Judge which came to be allowed on 23/3/2015 and accordingly they were arrayed as,,

respondents no.2 and 3 before the learned District Judge. It is a matter of record that the order dated 23/3/2015 was unsuccessfully challenged by the,,

first respondent and his family members before this Court in a batch of petitions being Writ Petitions no.436/2015 and others which were dismissed on,,

8/10/2015.,,

I have heard Shri Katariya, the learned counsel for the appellants and Shri Bhobe, the learned counsel for the respondents.",,

In view of the preliminary objection raised on behalf of the firstrespondent the appeals were heard on the following points:,,

(i) Whether the learned Principal District Judge, North Goaat Panaji had jurisdiction to hear and decide the application under section 34 of the Act?",,

(ii) If yes, whether the learned Principal District Judge could have granted the claim of the respondent no.1 while setting aside the award passed by",,

the Arbitral Tribunal by which the claim of the respondent no.1 and others was rejected?,,

(iii) Whether there is proper service on the respondents no.2 and 3? If not, what is the effect?",,

It is submitted by Shri Katariya, the learned counsel for the appellant that the once the notice by registered post A/D has been prepaid and",,

addressed to the last known address of the respondents no.2 and 3, the service on the respondents no.2 and 3 can be held to be good. Reliance in this",,

regard is placed on Section 27 of the General Clauses Act 1897 and the decision of the Supreme Court in the case of Madan and Company Vs. Wazir,,

Jaivir Chand (1989) 1 SCC 264 and of this Court in the case of Crown Worldwide Holdings Ltd. & anr. Vs. Crown Relocations Movers and Packers,,

2016 SCC Online Bom 15503.,,

In so far as the jurisdiction of the learned District Judge is concerned, it is contended that the contract notes issued by the appellant as also the",,

Business Rules pertaining to arbitration state that the “seat†of the arbitration would be Mumbai. It is submitted that the Supreme Court in the,,

case of Bharat Aluminum Company Vs. Daisar Aluminim Technical Services (2012) 9 SCC 552 has made a distinction between the term “subject,,

matter of arbitration†and “subject matter of the suitâ€. It is submitted that this being an arbitration governed by the rules and bylaws of MCX, the",,

'seat', as agreed between the parties was at Mumbai. Reliance is placed on Clause 24 of the Member-Client Agreement (MCX) which provides that",,

the agreement is subject to the exclusive jurisdiction of the Courts in Mumbai only and all the disputes shall be determined in terms of the rules,",,

byelaws and regulations of the exchange. It is thus submitted that the learned District Judge at Panaji had no jurisdiction to entertain the application,,

under section 34 of the Act.,,

In so far as the learned District Judge granting the claim of the respondent no.1 in the face of the award the Arbitral Tribunal rejecting the same,",,

reliance is placed on the decision of this Court in the case of M/s. Kaberi Mondol Vs. B.M.A Commodities Pvt. Ltd, 2015 SCC Online BOM 3353, in",,

order to submit that while setting aside the award of dismissal of the claim the learned District Judge cannot grant such a claim and has to leave the,,

parties to opt for arbitration, afresh if so advised.",,

On the contrary, it is submitted by Shri Bhobe, the learned counsel for the respondent no.1 that section 27 of the Act cannot be called into aid in",,

this case. It is submitted that the reliance in the case of Madan and Company and Crown Worldwide Ltd. (supra) is misplaced. It is pointed out that,,

the postal remark in the present case in respect of the summons issued by registered post to respondents no.2 and 3 was to the effect that the,,

addressee had left the premises unlike the remark in the case of Crown Worldwide Holdings Ltd. where the remark was that the notice was,,

unclaimed. It is submitted that the appeal cannot be decided unless the respondents no.2 and 3 are properly served.,,

In so far as the jurisdiction of the learned District Judge at Panaji, is concerned, it is contended that there was no objection raised to the jurisdiction",,

of the learned District Judge at Panaji in the reply filed to the application under section 34 of the Act and the said contention was sought to be raised,,

for the first time during the arguments. It is submitted that the appellant not having raised any objection to the jurisdiction at the first available,,

opportunity/earliest opportunity, the same is liable to be rejected as it would amount to waiver. It is contended that the appellants have not even",,

remotely shown as to how there has been failure of justice on account of the learned Principal District Judge at Panaji having taken up the application.,,

Reliance in this regard is placed on the following decisions:,,

(i) Mcdermott International INC Vs. BurnStandar Co. Ltd. and others (2006) 11 SCC 181.,,

(ii) Municipal Commissioner Vs. Salikumar Banerjee & others (2000) 4 SCC 108.,,

(iii) Narayanprasad Lohia Vs. Nikunjkumar Lohia (2002) 3 SCC 572. (iv) BSNL and others Vs. Subshachandra Kanchan and others (2006) 8 SCC,,

279.,,

It is next contended that during the pendency of the petition before the learned Principal District Judge, the respondents no.2 and 3 sought",,

intervention which was allowed and the respondent no.1 had challenged the said order before this Court in W.P. No.436/2015 and others. It is,,

contended that the appellant having invoked the jurisdiction of this court, the provisions of section 42 of the Act would apply and the learned Principal",,

District Judge at Panaji would have jurisdiction to entertain the challenge under section 34 of the Act.,,

Reliance is placed on section 4 of the Act, which provides for waiver of right to object. Reliance in this regard is also placed on the decision of the",,

Supreme Court in the case of Naryanprasad Lohia Vs. Nikunjkumar Lohia 2002 (3) SCC 572 (ii) BSNL and others Vs. Subhashchandra Kanchan,,

and others 2006 (8) SCC 279 and (iii) Mantoo Sarkar Vs. Oriental Insurance Company Ltd. 2009 (2) SCC 244. It is contended that the respondent,,

no.1 and his family members are residing within the jurisdiction of the Principal District Judge, North Goa at Panaji. The amount invested was handed",,

over to the Franchisee at Panaji. Reliance is also being placed on a letter dated 11/2/2011 passed by the respondent no.1 while handing over the,,

cheque in which it was stipulated that in case of any disputes the jurisdiction shall be at Panaji. It is contended that Rules 5A and 5B of the Business,,

Rules will indicate that the seat of arbitration could be decided by agreement and the appellant having accepted the amount in pursuance to the letter,,

dated 11/2/2011 are estopped from raising any contention to the contrary.,,

Lastly in so far as the reliance placed by the appellant in the case of Mrs. Kaberi Mondol Vs. B. M.A. Commodities Pvt. Ltd. 2015 SCC Online,,

BOM 3353. (supra) is concerned, it is contended that the said judgment is based on the judgment of the Supreme Court in the case of MacDermott",,

International Vs. Burn Standar Company Ltd. It is submitted that the Hon'ble Supreme Court in the case of MacDermott International was not,,

considering an issue as to whether the Court adjudicating a petition under section 34 of the Act could grant the claim which is rejected by the Arbitral,,

Tribunal. It is contended that the issue before the Supreme Court in the case of MacDermott International was, as to whether the Court exercising the",,

powers under section 34 of the Act could correct errors of the Arbitrator.,,

On behalf of the respondent no.1 reliance is placed on the decision of the Madras High Court in the case of Ms. Ms. G. Vs. ISG Novasoft,,

Technologies Ltd. ( Original Petition No.463/2012) decided on 2/9/2014 which according to the learned counsel for the respondent no.1 directly,,

involves the question as to whether in a petition under section 34 of the Act, the Court is entitled to modify the award, either by enhancing the amount",,

awarded by the Tribunal or by granting the relief that was rejected. It is submitted that the Madras High Court has held in para 52 Â of the judgment,,

that the power under section 34 (1), includes the power to modify and/or to vary the arbitral award. Reliance is placed on the decision of this Court in",,

the case of Union of India Vs. Artctic India, 2007 (4) ARBLR 524 Bom., in order to submit that there is no bar under the act to modify the award,",,

while exercising jurisdiction under section 34 of the Act. It is pointed out that even in the case of MacDermott International, the Supreme Court had",,

modified the award of the Tribunal.,,

I have carefully considered the rival circumstances and the submission made and I have gone through the award of the Arbitral Tribunal as well as,,

the judgment of the learned District Judge.,,

Point No.1 .,,

This point has to be taken up first as it goes to the root of the matter. If it is found that the District Judge lacked jurisdiction to entertain the application,,

under section 34 of the Act then the other points would pale into insignificance. Although the learned District Judge has not framed a specific point in,,

this regard, the same is dealt with in paras 11 to 13 of the impugned judgment. The learned District Judge has negatived the objection to the jurisdiction",,

for the following reasons:,,

(i) That the said objection was not raised by the petitioners in their reply filed to the application under section 34 of the Act. The said objection was,,

raised for the first time in the written notes of arguments.,,

(ii)That the petitioners challenged the order allowing impleadment of the respondents 2 and 3 before this court and has by this act had admitted the,,

jurisdiction of the 'Panaji courtsâ€. If the petitioners were “ aggrieved by the jurisdiction of the Panaji Courts it should have raised an objection to,,

that effect before this Court/ High Court of Bombay at Goa) or should have approached the High court of Bombay directly. iii) That the transaction,,

between the parties had taken place in Goa and the money was “rooted from Goa†iv) The judgment in the case of Bharat Alluminium Company,,

(supra) is distinguishable as it involved a international commercial arbitration unlike the present case where the agreements were entered in Goa and,,

the claimants are from Goa.,,

It is not possible to accept the reasoning articulated or the findings recorded by the learned District Judge. An Application filed under section 34 of,,

the Act, although styled as an application, is not an original proceeding. The jurisdiction exercised under section 34 of the Act is essentially appellate in",,

nature, although the scope of the challenge is restricted and is circumscribed by section 34 of the Act. It is thus not possible to envisage a reply being",,

filed to such an application. Thus the fact that such an objection was not raised in the reply would be inconsequential. The said objection was indeed,,

raised by the petitioners in their written arguments. That apart it is also not possible to accept that the objection was not raised at the first opportunity,,

or that is was belated. An objection to jurisdiction, territorial, pecuniary or otherwise, goes to the root of the matter and in a given case can be taken up",,

suo motu by the court. Reliance placed on behalf of the respondents on section 4 of the act in my view is misplaced for more reasons than one. In the,,

first place section 4 of the act applies when the matter is before the arbitral tribunal. Secondly failure to raise such objection by a party has to be,,

inspite of a knowledge that any provision of Part I (from which the parties may derogate) or any requirement under the arbitration agreement has not,,

been complied. The objection as raised on behalf of the petitioners does not fall in any of these categories. Thirdly ( and even assuming that section 4,,

applies) there is no undue delay in raising the objection in this case.,,

It is next contended by the learned counsel for the respondent no.1 that the petitioners have not shown as to how, there is failure of justice in",,

consequence of the challenge to the arbitral award being taken up by the learned District Judge. This contention also in my considered view cannot be,,

accepted for the reason that principles akin to section 21 of the Code of Civil Procedure cannot be imported or called into aid in this case. Section 21,,

of CPC provides that no objection to the place of suing ( which would apply to the trial court, assuming such jurisdiction and not the appellate court)",,

shall be allowed by the appellate or the revisional court unless such objection was taken at the earliest possible opportunity and in all cases, where",,

issues are settled, at or before such settlement and unless there has been a consequent failure of justice. The objection in this case is to the jurisdiction",,

of the learned District Judge who cannot be equated to a trial court in this case. The judgment in the case of Koopilan Uneen etc (supra) cannot come,,

to the aid of the petitioners, in as much as, it arose out of a civil suit and the question was whether the objection was raised in the court of first",,

instance, at the earliest possible opportunity and whether there was a consequent failure of justice. In the present case essentially the question is",,

whether the District Court at Panaji would be the court within the meaning of section 2(1) (e) of the Act which can exercise supervisory jurisdiction,,

over the arbitration proceedings.,,

The decision in the case of Salil Kumar Banerjee (supra ) also cannot come to the aid of the petitioners. In that case Municipal corporation had,,

directed demolition of a structure constructed by the respondent The respondent challenged the same before the 'Building Tribunal', Constituted under",,

the Calcutta Municipal Act. The tribunal having dismissed the appeal, the respondent challenged the same in a writ petition before the High Court,",,

inter alia contending that the tribunal was not properly constituted as it consisted of only two members and not three members as required by the act.,,

The High Court accepted the contention and allowed the petition which was subject matter of challenge before the Supreme court at the instance of,,

the Corporation. It was in these circumstances held by the Supreme Court that the respondent had not ever contended before the tribunal that it was,,

improperly constituted and thus the High Court ought not to have exercised discretion in favour of the respondent. In the present case as held earlier,,

the objection is raised before the District Court which also cannot be said to be belated.,,

The judgment in the case of Narayan Prasad Lohia (supra) turned on its own facts. The question therein was about the composition of the Arbitral,,

Tribunal which consisted of only two arbitrators in the face of the provisions of section 10 of the Act which requires that the number of arbitrators,,

shall not be an even number. The Supreme Court held that the objection to the composition of the arbitral tribunal can be raised under section 16 of the,,

Act, not later than the submission of the statement of defence. It is difficult to see as to how the judgment can come to the aid of the petitioners in this",,

case.,,

In the case of BSNL (supra) the appellants in an application under section 11 of the Act had initially consented for appointment of one of the,,

persons named by the respondent as an arbitrator. The High Court acting on the consent had appointed the said person as an arbitrator. Subsequently,,

the appellants moved the High Court for modification of the order on the ground that no such consent was given. The High Court refused to recall the,,

order. It was in these circumstances held by the Supreme Court that by consenting to the appointment of the arbitrator the appellants had waived their,,

rights to make the appointment.,,

In the case of Mantoo Sarkar (supra) a migrant labouror working in Nainital met with an accident while traveling in a bus of Madhya Pradesh,,

Road Transport Corporation in Faridpur (UP). A claims petition filed before the motor Accidents Claims Tribunal at Nainital was allowed which,,

judgment was set aside by the High Court on the ground that the Tribunal at Nainital lacked territorial Jurisdiction. The Supreme Court inter alia held,,

that the provisions as to the jurisdiction of the tribunal are wider than for the Civil Court. It has been held that a distinction has to be made between,,

jurisdiction as to the subject matter of the suit and that of the territorial and pecuniary jurisdiction . In a case falling in the former category the,,

judgment would be a nullity and in the latter it would not be so. Ordinarily an appellate court shall not entertain an appeal on the ground of lack of,,

territorial jurisdiction on the part of the court below, unless prejudice is demonstrated. On facts it was held in that case that no prejudice was",,

Seats of Arbitration â€

Regional Arbitration

Centres (RAC)",States covered by the RAC,

Delhi,"Delhi, Haryana, Uttar Pradesh, Uttaranchal,

Himachal Pradesh, Punjab, Jammu &

Kashmir, Chandigarh, Rajasthan",

Kolkata,"West Bengal, Bihar, Jharkhand, Orissa,

Assam, Arunachal Pradesh, Mizoram,

Manipur, Sikkim, Meghalaya, Nagaland,

Tripura, Chhattisgarh",

Chennai,"Andhra Pradesh, Karnataka, Kerala, Tamil

Nadu, Andaman & Nicobar, Lakshadweep,

Pondicherry",

Mumbai,"Maharashtra, Gujarat, Goa, Daman & Diu,

Dadra & Nagar Haveli, Madhya Pradesh",

Member Vs.

Member","If the dealing offices of

both the members from

where the dealing was

carried is situated in any

one of the states covered

by a particular RAC then

the Applicant

Member shall select the

Seat of that RAC for

arbitration.","Hearing shall be held

at the RAC where the

Applicant-Member

has filed the

Application for

arbitration and the

Respondent-Member

shall attend the

hearing in that

particular RAC.

Member Vs.

Client &

Client Vs.

Member","Where the Client

ordinarily resides in any

one of the states covered

by a particular RAC, then

the Applicant shall select

the Seat of that RAC for

arbitration.","Hearing shall be held

at that RAC where

the Applicant has filed

the application for

Arbitration and the

Respondent shall

attend the hearing in

that particular RAC.

power to modify or vary the award under section 34 of the Act. While holding so the Division Bench of the Delhi High Court, has noted the",,

observations and findings of the Full Bench of this Court in the case of R. S. Jiwani Vs. Ircon International  2010 (1) BCR 529.,,

It was submitted by Shri Bhobe, the learned counsel for the respondent no.1 that the Supreme Court in the case of MacDermott International was",,

not dealing with the specific question as to whether the Court while setting aside the award can grant the claim which has been rejected by the,,

arbitrator. It is submitted that the question before the Hon'ble Supreme Court was essentially about the scope of the powers under section 34 of the,,

Act and therefore, the observations of the Supreme Court in para 52 of the judgment in the case of MacDermott International cannot be relied upon to",,

hold that the Court while setting aside the award of the arbitrator, (refusing to grant any claim) cannot grant such a claim. In my considered view the",,

contention cannot be accepted. It is true that the question before the Hon'ble Supreme Court in the case of MacDermott International was about the,,

role of the Court and the grounds for interference available under section 34 of the Act vis-a-vis the position as obtaining under section 30 and 33 of,,

the Arbitration Act 1940. The Supreme Court also considered the question as to releif that can be granted under section 34 of the Act. This is what is,,

held in para 52 of the judgment:,,

The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court",,

is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors",,

of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration, again if it is desired. So the scheme of the provisions",,

aims at keeping the supervisory role of the court at minimum level and this can be justified, as parties to the agreement make a conscious decision to",,

exclude the court's jurisdiction by opting for arbitration, as they prefer the expediency and finality offered by",,

it.â€​                        (Emphasis supplied),,

It can thus clearly be seen that the Supreme Court in no uncertain terms has held that the Court cannot correct the errors of the arbitrator and it can,,

only quash and set aside the award leaving the parties to begin the arbitration again, if the parties so desire. The modification which were done by the",,

Supreme Court, were in the exercise of the jurisdiction under Article 142 of the Constitution of India, in order to do complete justice between the",,

parties which is the exclusive jurisdiction available to the Supreme Court. Thus the fact that the Supreme Court had modified the award in the case of,,

Macdermot International (supra) cannot be used to concede a similar jurisdiction to the 'court' entertaining an application under section 34 of the Act.,,

A learned Single Judge of this Court in the case of Mrs. Kaberi Mondal (supra) has held thus in para 67 of the judgment :,,

Insofar as submission of the learned counsel for the claimant that if this court comes to the conclusion that the arbitral tribunal has illegally rejected,,

the claim of the claimant and the award is perverse and shows patent illegality, this court can allow such claim under section 34(2) is concerned, this",,

issue raised by the petitioner was also raised when this court had heard this petition alongwith Arbitration Petition No.854 of 2012. In paragraph (69),,

of the said order and judgment dated 17th December, 2014, this court has already rejected this contention and has held that the court cannot correct",,

the errors of the arbitral tribunal under section 34 of the Arbitration and Conciliation Act, 1996. It can set aside the award wholly or partly and cannot",,

correct an error and cannot make an award under section 34 of the Arbitration Act. I do not propose to take any different view in the matter. The,,

view taken by this court is based on the judgment of Supreme Court in case of McDermott International Inc., vs. Burn Standard Co. Ltd. & Others",,

reported in (2006) 11 SCC 181, I am thus not inclined to accept the submission of the learned counsel for the claimant that this court can allow the",,

claim made by the claimant before the arbitral tribunal even if it comes to the conclusion that the award was perverse and patently,,

illegal.                       (Emphasis supplied),,

I am in respectful agreement with the view as expressed in the case of Mrs. Kaberi Mondal (supra). In the case of R.S. Jiwani Vs. Ircon,,

International Ltd., 2010 (1) Bom CR 529 (supra) before a Full Bench of this Court, the question was whether the Court under section 34 of the Act",,

can partly set aside the award, which was answered in the affirmative. The Full Bench after considering the scope and ambit of the powers under",,

section 34 of the Act has held thus :,,

“An award can only be set aside under the provisions of section 34 as there is no other provision except section 33 which permits the arbitral,,

tribunal to correct or interpret the award or pass additional award, that too, on limited grounds stated in section 33. It is also true that there are no",,

parimateria provisions like sections 15 and 16 of the Act of 1940 in the 1996 Act but still the provisions of section 34 read together, sufficiently indicate",,

vesting of vast powers in the court to set aside an award and even to adjourn a matter and such acts and deeds by the arbitral tribunal at the instance,,

of the party, which would help in removing the grounds of attack for setting aside the arbitral award.â€​",,

I thus find that the learned District Judge, after setting aside the award passed by the Arbitrator could not have substituted it by granting the claim of",,

the respondent no.1 in these appeals.,,

Point No.3:,,

It is not necessary to dwell on the point as to whether there is proper service on the respondents no.2 and 3. The arbitral Tribunal had held that the,,

contents of the affidavit of Mr. Raj Sharma dated 13/6/2011, reflects a private arrangement between the respondent no.1 and Raj Sharma which",,

cannot bind the appellants herein “even though, 3-P World was an authorized person of the appellantsâ€. The respondent no.2 and 3 had sought",,

intervention before the learned District Judge on the ground that this finding would cause prejudice to them, in as much as the contents of the affidavit",,

of Mr. Raj Sharma have been read to mean that it is a private arrangement between the respondent no.1 and Mr. Raj Sharma thereby exonerating the,,

appellants. A perusal of the operative part of the judgment of the learned District Judge would show that the District Judge has not allowed any claim,,

against the respondents no.2 and 3 . The claim is allowed only as against the appellant/s (the respondent no.1 before the learned District Judge). Even,,

in so far as the finding given by the Arbitral Tribunal is concerned (about there being a private arrangement between the respondent no.1 and Raj,,

Sharma), the same is rendered behind the back of the respondent nos. 2 and 3, in as much as the respondents no.2 and 3 were not parties to the",,

arbitral proceedings and could not have been parties, as they are not signatories to the arbitration agreement. Thus the said finding cannot bind the",,

respondent nos.2 and 3. In such circumstances it is unnecessary to dwell on the question as to whether they have been properly served in these,,

appeals . In the result the following order is passed:,,

        ORDER,,

(i) The appeals are allowed.,,

(ii) The impugned judgment and order passed by the learned District Judgein each of these appeals, are hereby set aside, on the ground that the",,

learned District Judge at Panaji had no jurisdiction to entertain the petitions under section 34 of the Act.,,

(iii) The respondent no.1 in each of these appeals, is left to take recourse to alegal remedy, if any, in accordance with law, before the appropriate",,

forum and if so advised.,,

(iv) In the circumstances, there shall be no order as to costs.",,

At this stage, the learned counsel for the respondent no.1 submits that the signed copy of the Award, which is filed before the learned District Judge,",,

be returned to the respondent no.1. The learned District Judge shall return the signed copy of the award in each of the appeals, subject to it being",,

replaced by a xerox copy.,,