Rajiv Sahai Endlaw, J.@mdashThis appeal u/s 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) impugns the order dated 10th
February, 2014 of the learned Single Judge of this Court of dismissal in limine of OMP No. 175/2014 preferred by the appellant u/s 34 of the
Arbitration Act for setting aside of the Arbitral Award dated 1st November, 2013.
2. In the light of our recent judgments, (i) State Trading Corporation of India Ltd. Vs. Toepfer International Asia PTE Ltd., and, (ii) Delhi State
Industrial and Infrastructure Development Corporation Ltd. Vs. Rama Construction Company, , dealing with the scope of interference with an
arbitral award u/s 34 and in an appeal u/s 37, we heard the counsel for the appellant in extenso at the stage of admission and reserved judgment.
3. The challenge to the arbitral award, before the learned Single Judge as well as before us is on two grounds. Firstly it is contended that the
Arbitral Tribunal had no jurisdiction to entertain the claims of the respondent as the same were preferred beyond the time of 120 days prescribed
in the contract and the Arbitral Tribunal erred in rejecting the said objection of the appellant. Secondly it is contended that the Arbitral Tribunal
erred in assessing the claim of the respondent for price of the items substituted for the items provided for in the contracts at prevailing market rates,
applying Sub-Clause (v) of Clause 12 of the Contract, when the same should have been assessed at the rates entered in the current CPWD
Schedule of Rates, as provided in Sub-Clause (iii) of the said Clause 12 of the Contract.
4. The arbitral award rejects the objection of the, appellant of the claims being not arbitrable for the reason of having been preferred beyond the
prescribed period of 120 days, by observing/holding (i) that the claims were within the prescribed period of limitation under the Limitation Act,
1963; (ii) as per Section 43 of the Arbitration Act, the provisions of the Limitation Act apply to arbitral proceedings also; and, (iii) that the Clause
in the Contract providing the period of 120 days, from receiving intimation from the Engineer-in-Charge that the final bill was ready for payment,
for preferring the claim is hit by Section 28 of the Contract Act, 1872 and is also void u/s 23 of the Contract Act.
5. As far as the second ground of challenge to the arbitral award is concerned, the arbitral award reasons (i) that the rates could not be determined
as per the CPWD Manual since the same was not part of the Contract and hence had to be necessarily determined under Sub-Clause (v) of the
Clause 12 which prescribes the measure of prevailing market rates; (ii) that the market rates as claimed by the respondent were less than as
verified by the appellant itself; and, (iii) that the rates at which the appellant was offering payment for the substituted items to the respondent were
never communicated by the appellant to the respondent during the course of execution of the works and the said rates were adopted by the
appellant only at the time of finalization of the bill, much after the date of completion of the works. Accordingly, the respondent was awarded a
total sum of Rs. 19,85,974/- besides interest at 9% per annum from the date of the award to the date of payment.
6. The learned Single Judge dismissed the petition u/s 34 of the Arbitration Act holding that there was no reason to interfere with the award since
the rates for the substituted item which the respondent had claimed and which had been awarded were lesser than the market rate assessed by the
appellant itself and that since the appellant had not intimated/informed the respondent at the time of execution of the works that it will be paying the
CPWD rates for the substituted items, the appellant at the time of preparation of the bills could not be permitted to make payment at the CPWD
rates.
7. The counsel for the appellant contended that the Arbitral Tribunal erred in reasoning that the CPWD Manual was not part of the contract and
thus the price of the substituted items could not be assessed at the CPWD rates and had to be assessed at the market rate. It is contended that
Clause 12 supra of the Contract clearly provides the manner in which the rates for such substituted items had to be worked out and assessed i.e. in
the first instance at the contracted rate for the substituted items if specified in the contract; if such rates are not specified in the contract then from
the rate for a similar class of work as specified in the Contract; if no rate for similar class of work also is specified in the Contract then at the rates
entered in the current CPWD Schedule of Rates; if the same is also not possible then on the basis of Delhi Schedule of Rates (DSR)-2007 and
only if there is no rate of substituted item in the DSR-2007 also then as per the prevalent market rates. It is argued that the CPWD Manual
prescribes the rates for the substituted items in the present case and as per which rates the appellant had offered the final payment and the Arbitral
Tribunal erred in awarding the rates as per the prevailing market rates.
8. We have enquired from the counsel for the appellant whether not the said challenge is a challenge on the merits of the arbitral award. We have
yet further put to the counsel for the appellant that as to how, misinterpretation of a contractual provision or misinterpretation of a contract by the
Arbitral Tribunal constitutes a ground of challenge u/s 34 of the Arbitration Act.
9. We have in State Trading Corporation of India Ltd. supra held:-
5. The challenge in this appeal is on the ground that the learned Single Judge ignored that the interpretation of the contract between the parties
given by the Arbitral Tribunal is contrary to the express terms and conditions thereof and the Arbitral Tribunal has given a meaning to the terms and
conditions which is not contemplated in the contract. The senior counsel for the appellant thus wants us to read the contract between the parties,
particularly the clauses relating to demurrage, and then to judge whether the interpretation thereof by the Arbitral Tribunal is correct or not.
6. In our view, the interpretation in Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd., of the ground in Section 34 of the Act for setting
aside of the arbitral award, for the reason of the same being in conflict with the public policy of India, would not permit setting aside, in the
aforesaid facts. A Section 34 proceeding, which in essence is the remedy of annulment, cannot be used by one party to convert the same into a
remedy of appeal. In our view, mere erroneous/wrong finding of fact by the Arbitral Tribunal or even an erroneous interpretation of
documents/evidence, is non-interferable u/s 34 and if such interference is done by the Court, the same will set at naught the whole purpose of
amendment of the Arbitration Act.
7. Arbitration is intended to be a faster and less expensive alternative to the courts. If this is one''s motivation and expectation, then the finality of
the arbitral award is very important. The remedy provided in Section 34 against an arbitral award is in no sense an appeal. The legislative intent in
Section 34 was to make the result of the annulment procedure prescribed therein potentially different from that in an appeal. In appeal, the decision
under review not only may be confirmed, but may also be modified. In annulment, on the other hand, the decision under review may either be
invalidated in whole or in part or be left to stand if the plea for annulment is rejected. Annulment operates to negate a decision, in whole or in part,
thereby depriving the portion negated of legal force and returning the parties, as to that portion, to their original litigating positions. Annulment can
void, while appeal can modify. Section 34 is found to provide for annulment only on the grounds affecting legitimacy of the process of decision as
distinct from substantive correctness of the contents of the decision. A remedy of appeal focuses upon both legitimacy of the process of decision
and the substantive correctness of the decision. Annulment, in the case of arbitration focuses not on the correctness of decision but rather more
narrowly considers whether, regardless of errors in application of law or determination of facts, the decision resulted from a legitimate process.
8. In the case of arbitration, the parties through their agreement create an entirely different situation because regardless of how complex or simple a
dispute resolution mechanism they create, they almost always agree that the resultant award will be final and binding upon them. In other words,
regardless of whether there are errors of application of law or ascertainment of fact, the parties agree that the award will be regarded as
substantively correct. Yet, although the content of the award is thus final, parties may still challenge the legitimacy of the decision-making process
leading to the award. In essence, parties are always free to argue that they are not bound by a given ""award"" because what was labeled an award
is the result of an illegitimate process of decision.
9. This is the core of the notion of annulment in arbitration. In a sense, annulment is all that doctrinally survives the parties'' agreement to regard the
award as final and binding. Given the agreement of the parties, annulment requires a challenge to the legitimacy of the process of decision, rather
than the substantive correctness of the award.
10. Joseph Raz in his paper ""The Politics of the Rule of Law"" has opined that the function of the rule of law is to facilitate the integration of a
particular piece of legislation with the underlying doctrines of the legal system; the authority of the courts to harness legislation to legal doctrine
arises neither from their superior wisdom nor from any superior law of which they are the custodians; it arises out of the need to bring legislation in
line with doctrine. The courts ensure coherence of purpose of law, ensuring that its different parts do not fight each other. The learned author has
further observed that a law which is incoherent in purpose serves none of its inconsistent purposes very well. Purposes conflict if due to
contingencies of life serving one will in some cases retard the other. The second basis for the authority of the courts to integrate legislation with
doctrine is the need to mix the fruits of long established traditions with the urgencies of short term exigencies. In ensuring the coherence of law, the
courts are expected to ensure the effectiveness of the democratic rule. In giving weight to the preservation of long established doctrines i.e., the
traditions, they protect the long term interest of the people from being swamped by the short term. We have taken the liberty to quote from the
aforesaid paper since the courts are being repeatedly called upon to adjudicate on the various provisions of the re-enacted arbitration law. From
the various pronouncements in the last about 18 years since re-enactment, it appears that the danger of interpreting the new Act in a manner doing
away with the whole object/purpose of re-enactment is imminent. The courts continue to be inundated till date, in spite of repeal of the old Act 18
years ago, with cases thereunder also, particularly of challenge to the arbitral award. Provisions of the old and the new Act relating to inference
with the arbitral award are vastly different. However, when the courts, in the same day are wrestling with a matter concerning arbitral award under
the old Act and with that under the new Act, the chances of culling out the huge difference between the two are minimal. It is not to be forgotten
that the courts deal with and rule on disputes where monies and properties of real persons are at stake. The courts do not decide in abstract. Thus,
when in one case the courts interfere with the arbitral award for the reason of the same not rendering to the litigant what the courts would have
granted to him, the courts find it difficult in the very next case, though under the new Act, to apply different parameters.
11. Arbitration under the 1940 Act could not achieve the savings in time and money for which it was enacted and had merely become a first step in
lengthy litigation. Reference in this regard can be made to para 35 of Bharat Aluminium Company and Others Vs. Kaiser Aluminium Technical
Service, Inc. and Others etc. etc., . It was to get over the said malady that the law was sought to be overhauled. While under the old Act, the
award was unenforceable till made rule of the court and for which it had to pass various tests as laid down therein and general power/authority was
vested in the court to modify the award, all this was removed in the new Act. The new Act not only made the award executable as a decree after
the time for preferring objection with respect thereto had expired and without requiring it to be necessarily made rule of the court but also did away
with condonation of delay in filing the said objections. The reason/purpose being expediency. The grounds on which the objections could be filed
are also such which if made out, the only consequence thereof could be setting aside of the award. It is for this reason that under new Act there is
no power to the court to modify the award or to remit the award etc. as under the old Act. A perusal of the various grounds enunciated in Section
34 will show that the same are procedural in nature i.e., concerning legitimacy of the process of decision. While doing so, the ground, of the award
being in conflict with Public Policy of India, was also incorporated. However the juxtaposition of Section 34(2)(b)(ii) shows that the reference to
Public Policy'' is also in relation to fraud or corruption in the making of the award. The new Act was being understood so [see Konkan Railway
Corpn. Ltd. and Others Vs. M/s. Mehul Construction Co., and which has not been set aside in S.B.P. and Co. Vs. Patel Engineering Ltd. and
Another, till the Supreme Court in Saw Pipes Ltd. (supra) held that the phrase Public Policy of India'' is required to be given wider meaning and if
the award on the face of it is patently in violation of statutory provisions, it cannot be said to be in public interest and such award/judgment/decision
is likely to adversely affect the administration of justice. In para 37 of the judgment it was held that award could be set aside if it is contrary to
fundamental policy of Indian Law or the interest of India or justice or morality or if it is patently illegal. A rider was however put that illegality must
go to the root of the matter and if the illegality is of trivial nature it cannot be held that the award is against the public policy. Yet another test laid
down is of the award being so unfair and unreasonable that it shakes the conscience of the court.
12. The courts have thereafter been inundated with challenges to the award. The objections to the award are drafted like appeals to the courts;
grounds are urged to show each and every finding of the arbitrator to be either contrary to the record or to the law and thus pleaded to be against
the Public Policy of India. As aforesaid, the courts are vested with a difficult task of simultaneously dealing with such objections under two diverse
provisions and which has led to the courts in some instances dealing with awards under the new Act on the parameters under the old Act.
13. The result is that the goal of re-enactment has been missed.
14. The re-enactment was not only to achieve savings in time and prevent arbitration from merely becoming the first step in lengthy litigation but
also in consonance with the international treaties and commitments of this country thereto. Since the enactment of the 1940 Act, the international
barriers had disappeared and the volume of international trade had grown phenomenally. The new Act was modeled on the model law of
international commercial arbitration of the United Nations Commission on International Trade Law (UNICTRAL). It was enacted to make it more
responsive to contemporary requirements. The process of economic liberalization had brought huge foreign investment in India. Such foreign
investment was hesitant, owing to there being no effective mode of settlement of domestic and international disputes. It was with such lofty ideals
and with a view to attract foreign investment that the re-enactment was done. If the courts are to, notwithstanding such re-enactment, deal with the
arbitration matters as under the old Act it would be a breach of the commitment made under the treaties on international trade.
15. Applying the aforesaid test, we are afraid, the arguments of the senior counsel for the appellant are beyond the scope of Section 34.
16. The senior counsel for the respondent has in this regard rightly argued that the scope of appeal u/s 37 is even more restricted. It has been so
held by the Division Benches of this Court in Thyssen Krupp Werkstoffe GMBH Vs. Steel Authority of India Ltd., and Shree Vinayak Cement
Clearing Agency Vs. Cement Corporation of India, . It is also the contention of the senior counsel for the respondent that the argument made by
the appellant before the learned Single Judge and being made before this Court, that the particular clause in the contract is a contract of
indemnification, was not even raised before the Arbitral Tribunal and did not form the ground in the OMP filed u/s 34 of the Act and was raised for
the first time in the arguments.
17. The Supreme Court in Rashtriya Ispat Nigam Ltd. Vs. Dewan Chand Ram Saran, refused to set aside an arbitral award, under the 1996 Act
on the ground that the view taken by the Arbitral Tribunal was against the terms of the contract and held that it could not be said that the Arbitral
Tribunal had travelled outside its jurisdiction and the Court could not substitute its view in place of the interpretation accepted by the Arbitral
Tribunal. It was reiterated that the Arbitral Tribunal is legitimately entitled to take the view which it holds to be correct one after considering the
material before it and after interpreting the provisions of the Agreement and if the Arbitral Tribunal does so, its decision has to be accepted as final
and binding. Reliance in this regard was placed on Sumitomo Heavy Industries Limited Vs. Oil and Natural Gas Commission of India, and on
Kwality Manufacturing Corporation Vs. Central Warehousing Corporation, . Similarly, in P.R. Shah, Shares and Stock Broker (P) Ltd. Vs.
B.H.H. Securities (P) Ltd. and Others, it was held that a Court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or
reappreciating evidence and an award can be challenged only under the grounds mentioned in Section 34(2) and in the absence of any such ground
it is not possible to reexamine the facts to find out whether a different decision can be arrived at. A Division Bench of this Court also recently in
National Highways Authority of India Vs. M/s. Lanco Infratech Ltd., held that an interpretation placed on the contract is a matter within the
jurisdiction of the Arbitral Tribunal and even if an error exists, this is an error of fact within jurisdiction, which cannot be reappreciated by the Court
u/s 34 of the Act. The Supreme Court in Steel Authority of India Ltd. Vs. Gupta Brother Steel Tubes Ltd., even while dealing with a challenge to
an arbitral award under the 1940 Act reiterated that an error by the Arbitrator relatable to interpretation of contract is an error within his
jurisdiction and is not an error on the face of the award and is not amenable to correction by the Courts. It was further held that the legal position is
no more res integra that the Arbitrator having been made the final Arbiter of resolution of dispute between the parties, the award is not open to
challenge on the ground that Arbitrator has reached at a wrong conclusion.
18. If we were to start analyzing the contract between the parties and interpreting the terms and conditions thereof and which will necessarily have
to be in the light of the contemporaneous conduct of the parties, it will be nothing else than sitting in appeal over the arbitral award and which is not
permissible.
Before proceeding further, mention may also be made of New Delhi Apartment Group Housing Society Vs. Jyoti Swaroop Mittal, which remained
to be noticed and where a Division Bench of this Court held that Saw Pipes Ltd. supra cannot be read as permitting a Court exercising powers u/s
34 to sit in appeal over the findings of fact recorded by the Arbitrator or interpretation placed upon the provisions of the agreement.
10. We have in Delhi State Industrial & Infrastructure Development Corporation Ltd. supra further held that:-
...the parties, by agreeing to be bound by the arbitral award and by declaring it to be final, agree to be bound also by a wrong interpretation or an
erroneous application of law by the Arbitral Tribunal and once the parties have so agreed, they cannot apply for setting aside of the arbitral award
on the said ground. Even under the 1940 Act where the scope of interference with the award was much more, the Apex Court in Tarapore and
Company Vs. Cochin Shipyard Ltd., Cochin and Another, and U.P. Hotels and Others Vs. U.P. State Electricity Board, held that the arbitrator''s
decision on a question of law is also binding even if erroneous. Similarly, in N. Chellappan Vs. Secretary, Kerala State Electricity Board and
Another, it was held that even if the umpire committed an error of law in granting amount, it cannot be said to be a ground for challenging the
validity of the award; the mistake may be a mistake of fact or of law.
11. We are further of the view that the scope of judicial review of an arbitral award is akin to review under Article 226 of the Constitution of India
of the decisions of bodies, where it is a settled principle of law (See State of Uttar Pradesh and Others Vs. Maharaja Dharmander Prasad Singh
and Others, and State of U.P. and Another Vs. Johri Mal, that the judicial review is of the decision making process and not of the decision on
merits and cannot be converted into an appeal. This is quite evident from the various Clauses of Section 34(2)(a) which prescribe the grounds of
challenge on the lines of violation of the principles of natural justice in making of the award or invalidity of the arbitral agreement and non-
arbitrability of the disputes arbitrated and of the composition of the Arbitral Tribunal or arbitral procedure being not in accordance with the
agreement between the parties. Section 34(2)(b) adds the ground of the arbitral award being in conflict with the public policy of India. None of the
said grounds are the grounds of challenge on the merits of the award. The ground of challenge of the award being in conflict with the public policy
of India is explained as the award being induced or affected by fraud or corruption or being in violation of Section 75 or Section 81. Thus the
grounds of challenge are akin to the grounds of judicial review under Article 226 and not to grounds of appeal or revision. We are reminded of the
merits legality distinction in judicial review as culled out by Lord Hailsham in The North Wales Vs. Evans (1982) 1 WLR 1155 by observing ""the
purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment,
reaches on a matter which it is authorized by law to decide for itself a conclusion which is correct in the eyes of the Court"". Lord Brightman in the
same judgment held that judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was
made and it would be an error to think that the Court sits in judgment not only on the correctness of the decision making process but also on the
correctness of the decision itself. It was clarified that only when the issue raised in judicial review is whether a decision is vitiated the judicial review
of the decision making process includes examination, as a matter of law, of the relevance of the factors. In our opinion the same is an apt test also
for judicial review of the arbitral awards and just like a mere wrong decision without anything more is not enough to attract the power of judicial
review, the supervisory jurisdiction conferred on the Court under the Arbitration Act is limited to see that the Arbitral Tribunal functions within the
limits of its authority and that the arbitral award does not occasion miscarriage of justice. The Supreme Court in McDermott International Inc. Vs.
Burn Standard Co. Ltd. and Others, commenting on the radical changes brought about by the re-enactment of the arbitration law observed that the
role of the Courts under the new law is only supervisory, permitting intervention in few circumstances only, like, in case of fraud or bias by the
arbitrators, violation of natural justice etc. and the Court cannot correct the errors of arbitrators and can only quash the award leaving the parties
free to begin arbitration again.
12. Of the finality of arbitral awards, there is no doubt under our arbitration law. The Supreme Court as far back as in Union of India (UOI) Vs.
A.L. Rallia Ram, held that:-
An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute
submitted to him is ordinarily not liable to be challenged on the ground that it is erroneous. In order to make arbitration effective and the awards
enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Courts are also entrusted with power to modify or correct
the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those
referred........The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of
fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision
appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the
agreement. The award is the decision of a domestic tribunal chosen by the parties, and the civil courts which are entrusted with the power to
facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding, if it be
reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided in the arbitration agreement.
of course the said judgment being under the Arbitration Act, 1940 proceeds to hold that an award is bad on the ground of error of law on the face
of it. However the legislature while re-enacting the arbitration law has removed the ground of challenge of error of law on the face of the award. In
Mc. Dermott International Inc. supra also it was held that the parties to the Arbitration Agreement make a conscious decision to exclude the
Courts jurisdiction as they prefer the expediency and finality offered by arbitration. We are bound to respect the said change brought about by the
legislature and cannot dogmatically review the awards on the grounds of challenge which have been intentionally taken away by the legislature.
13. It cannot also be lost sight of that non-conferring of finality on the arbitral awards not only affects the speed and expense of arbitration but also
has a more subtle consequences of, extensive judicial review changing the nature of the arbitral process to an even greater extent. If arbitration
becomes simply another level of decision making, subject to judicial review on merits, arbitrators may begin to decide cases and write opinions in
such a way as to insulate their awards against judicial reversal producing opinions that parrot the appropriate statutory standards in conclusory
terms, but suffer from a lack of reasoned analysis. Such a shift from the arbitral model, in which decision makers are free to focus solely on the
case before them rather than on the case as it might appear to an Appellate Court, to the administrative model, in which decision makers are often
concerned primarily with building a record for review, in our opinion would substantially undercut the ability of arbitrators to successfully resolve
disputes. The Courts therefore have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or
determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to
arbitration, not merely those which the Court will deem meritorious. The Courts if start undertaking to determine the merits of the grievance, would
be usurping the function which under that Arbitration Act, 1996 is entrusted to the Arbitration Tribunal. This plenary review by the Courts of the
merits would make meaningless the provisions that the arbitral award is final, for in reality it would almost never be final. We though may admit that
sieving out the genuine challenges from those which are effectively appeals on merits is not easy.
14. Arbitration will not survive, much less flourish, if this core precept is not followed through by the Courts. The integrity and efficacy of
arbitration as a parallel dispute resolution system will be subverted if the Courts appear unable or unwilling to restrain themselves from entering into
the merits of every arbitral decision that comes before it. The power to intervene must and should only be exercised charily, within the framework
of the Arbitration Act. Minimal curial intervention is underpinned by need to recognise the autonomy of the arbitral process by encouraging finality,
so that its advantage as an efficient alternative dispute resolution process is not undermined. The parties having opted for arbitration, must be taken
to have acknowledged and accepted the attendant risks of having only a very limited right of recourse to the Courts. It would be neither
appropriate nor consonant for the Court to lend assistance to a dissatisfied party by exercising appellate function over arbitral awards, save to the
extent statutorily permitted.
15. As it would be obvious from the above, the contention aforesaid of the counsel for the appellant does not constitute a challenge to the arbitral
award on the grounds permitted and as discussed hereinabove. It is not the case of the appellant that the arbitral award is vitiated, for us to go into
the merits of the challenge.
16. As far as the other argument of the counsel for the appellant of the claims of the respondent which have been allowed in the award being not
arbitrable for the reason of having been preferred beyond the time stipulated, the same if tenable would indeed constitute a ground of challenge to
the award within the parameters laid down in Section 34 of the Arbitration Act.
17. The counsel for the appellant in this regard referred to paras 49 to 51 of Manohar Singh and Sons Vs. Raksha Karamchari Coop. Gr. H. Soc.
and Another, which in turn referred to the judgment of the Supreme Court in National Insurance Co. Ltd. Vs. Sujir Ganesh Nayak and Co. and
another, laying down that though an agreement which in effect seeks to curtail the period of limitation and prescribes a shorter period of limitation
that prescribed by law would be void as offending Section 28 of the Contract Act but there could be agreement which does not seek to curtail the
time for enforcement of the right but which provides for forfeiture or waiver of the right itself, if no action is commenced within the period stipulated
by the agreement and such an agreement would not fall within the mischief of Section 28 of the Contract Act. On the basis thereof, it was
contended that the Arbitral Tribunal wrongly held the clause in the subject contract requiring the respondent to prefer a claim within 120 days to be
void as offending Section 28 of the Contract Act, as the said clause instead of curtailing the time for making the claim provides for forfeiture or
waiver of the claim itself, if not made within 120 days.
18. I am afraid, the reliance on National Insurance Co. Ltd. supra is without regard to the subsequent judgments considering the same. It has been
held by this Court in Punj Lioyd Ltd. Vs. National Highways Authority of India, that National Insurance Co. Ltd. though pronounced on 21st
March, 1997 i.e. soon after the amendment of Section 28 of the Contract Act with effect from 8th January, 1997, does not deal with the amended
Section 28 and for which reason it held that party could agree/provide for forfeiture of rights, when the amendment was brought to get over such
interpretations of Section 28 as existing earlier. SLP(C) No. 14885-14886/2009 preferred thereagainst was dismissed on 18th April, 2012,
though leaving the question of law with regard to Section 28 open. However, as far as this Court is concerned, the same view was also taken in
Smt. Biba Sethi and Mr. Nitin Sethi Vs. Dyna Securities Limited, and in Shri Satender Kumar Vs. Municipal Corporation of Delhi and Another
and earlier thereto in Pandit Construction Company Vs. Delhi Development Authority and Another, . In the said state of law, the said contention
has also no merit.
19. We accordingly do not find any merit in this appeal and dismiss the same.
No costs.