CHINTELS INDIA LIMITED Vs. BHAYANA BUILDERS PRIVATE LIMITED (2021)

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INTRODUCTION

The case of Chintels India Limited vs. Bhayana Builders Private Limited states about appeal related to a certificate that was issued by the High Court of Delhi in its judgment on 04 December 2020 that covers Article 133 read with Article 134A of the Constitution of India. In the said case, the parties entered into a contract for the purpose of construction and issue arose due to non- payment of one party for the services received and defects in construction by the committed by the other party. The case was first referred to an arbitral tribunal and the award was challenged in the court of law.

FACTS

1. The Appellant and the Respondent entered into a contract for construction of a group of housing project.
2. The Respondent started the agreed construction work and raised accounting bills that had incurred throughout the construction.
3. Certain disputes arose between the two parties. Appellant raised concerns about defects, delay and improper construction work by Respondent whereas the Respondent said that the Appellant failed to make necessary payments for the work completed.
4. The disputes were referred to Arbitral Tribunal as per the construction agreement entered by the parties. The said Arbitral Tribunal passed an award in the favour of the Respondents and directed Appellants to pay the required costs and payments.
5. The Appellants challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 in the Delhi High Court stating that the award was erred. 
6. The said challenge was dismissed by the Delhi High Court which led to filing of an appeal in the Supreme Court by the Appellant under Section 37 of the Arbitration and Conciliation Act, 1996.

ISSUES

1. Whether a learned single judge’s order refusing to condone the appellant’s delay in filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 is an appealable order under Section 37 (1) (c) of the said Act? 
2. Whether the award passed by the Arbitral Tribunal was as per investigation and evidences found?
3. Whether the grounds to set aside arbitral award were met as per Section 34 of the Arbitration and Conciliation Act, 1996?
4. Whether the dismissal of challenge by the Delhi High Court was as per investigation carried out or whether there were enough grounds to do so?

CONTENTIONS OF APPELLANT

1. The Appellant contended that the Respondent made certain defects and deficiencies while carrying out the construction work and also made delay to complete the work.
2. The Appellant further contended that the Arbitral Tribunal erred the award challenging it in the High Court of Delhi.
3. When the Delhi High Court dismissed the challenge, the Appellant further appealed in Supreme Court. 

CONTENTIONS OF RESPONDENT

1. The Respondent contended that the Appellants did not make any payments for the work completed and submitted the account bills for the same.
2. The Respondent also further claimed for extra work done, that the costs have been escalated and other expenses have been incurred due to changes in work.  

JUDGEMENT

The Arbitral Tribunal not only made the Appellant to pay outstanding amount, but also made to pay interest on unpaid amount. 

Upon challenging this, the Delhi High Court dismissed the challenge stating that the Arbitral Tribunal had acted within its jurisdiction without violating any provisions. The said High Court also pointed out the use of principle of minimal judicial interference in arbitral awards. 

The Supreme Court examined the decision of Delhi High Court and stated that there is limited scope of judicial review in case of arbitral award and that to set aside arbitral award, only limited grounds exist such as improper procedure, violation of public policy and lack of jurisdiction to arbitral tribunal. Hence, the Supreme Court affirmed the Delhi High Court decision.  

ANALYSIS

In the case, the arbitral tribunal after scrutinizing the matter held that the appellant, who received the services as per contract entered by the parties, is not only liable to pay the unpaid amount but also the interest incurred on the unpaid amount. The case puts light on the importance of the ways to settle matter outside the court. Further, the principle of minimal judicial interference is showcased, explaining the importance of ways to settle matters outside the court. The Supreme Court stated the reason behind its decision that the whole purpose of having Arbitration is to have fewer burdens on court. The court also stated grounds to challenge an arbitral award in the court of law. Hence, there is a limit for judicial review. 

CONCLUSION

The Arbitration and Conciliation Act, 1996 gives provisions that explain procedure to be followed, jurisdiction of Arbitral Tribunal and grounds to challenge the award passed. In case of violation of the provisions given by the said Act, it is reasonable to approach higher court. The main purpose of Arbitration, which is to reduce the burden of the court of law, is highlighted and the autonomy and finality of Arbitration should be respected. 

REFERENCES

1. Indian Kanoon https://indiankanoon.org/doc/155272142/
2. PSL Advocates and Solicitors https://www.pslchambers.com/case-brief/chintels-india-ltd-v-bhayana-builders-pvt-ltd/  

This Article is written by Kavita Rajendra Amin, student of DES’s Shri Navalmal Firodia Law College, Pune; intern at Legal Vidhiya.

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