Arbitrator has to state reasons for the order passed under Section 30(1) A&C Act; non-granting of prayer does not by itself means rejection thereof  

Delhi High Court: A Single Judge Bench comprising of Navin Chawla, J. allowed a miscellaneous petition filed under Section 34 of Arbitration and Conciliation Act 1996, against the order of the Arbitrator wherein he did not consider the second part of the prayer made by the petitioner.

The petitioner was the successful bidder for certain commercial plot in an auction sale conducted by the respondent, for which he had paid Rs. 5.52 crores, being the entire bid amount. He also purchased stamp duty worth Rs. 33,12,040. However, the respondent failed to execute the lease deed. Consequently, the petitioner demanded from the respondent, 15% p.a. interest on earnest money deposit (EDM), bid amount and stamp duty. Learned Arbitrator in his impugned award, found the reference in favour of the petitioner and directed the respondent to pay back the entire amount of stamp duty purchased by the petitioner along with 9% p.a. interest thereon. The petitioner was aggrieved by non-consideration of his prayer regarding the bid amount and EDM. The issue was before the High Court in the instant petition filed by the petitioner.

The High Court considered the submission of the respondent that since the Arbitrator did not grant the said prayer made by the petitioner, it must be deemed to have been rejected. The Court rejected such submission of the respondent. There was no discussion in the award on the above-said prayer. The Court observed that in terms of Section 31(3) of the Act, the Arbitrator had to state the reasons upon which the order is passed. If the claim made by the petitioner was to be rejected, Arbitrator has to give reasons for the same. One cannot assume rejection of prayer and, further, the reasons therefor. The High Court held that clearly, the Arbitrator did not consider the prayer as far as bid amount and EDM was concerned. Thus, the High Court directed the petitioner to reagitate such claims under proper proceedings. The petition was disposed of in above terms. [Surajmal Yadav v. DSIIDC Ltd.,  2018 SCC OnLine Del 9555,dated 24-05-2018]

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