PATHERYA J. - (1.) THIS is an application filed under Section 34 of the 1996 Act for setting aside the Award dated 5th January, 2006. The case of the petitioners is that pursuant to a finance agreement between the parties the respondents financed purchase of equipment by the petitioner. On the ground of alleged non-payment of instalments, possession was taken of the equipments on 11th July, 2002 and agreement terminated on 30th August, 2002. Under the agreement 18 instalments were to be paid and in 2004 the respondents received full payment. Therefore the question of making any further payment as directed by the Award does not arise. One of the issues raised before the Arbitrator was with regard to seizure of the equipments before termination of agreement so also the right to claim interest by the respondents. In the counter statement filed it was specifically pleaded that huge funds were invested by the petitioners for completion of the roadwork and default in payment cannot be attributed to the petitioners. A request was made to the respondents by the petitioners to defer presentation of cheques. Proposal for rescheduling the payment of instalments was also made and inspite of various problems faced substantial sums on account of margin money and instalment was paid to the respondent. Therefore re-possession of the equipments without any notice was wrongful and against the principles of equity and natural justice. The equipments were sold for a price which was far below the market value and by virtue thereof, the petitioners have suffered loss at the hands of the respondent. The case of the respondents though set out in paragraph 8 of the Award the counter-claim has not been considered and no reason has been given nor is there any finding in respect thereof. By virtue of Section 14 of the 1996 Act the mandate of the Arbitrator stood terminated in 2004 and the Award passed in 2005 is no Award in the eye of law.
(2.) THE Award is contrary to the general provisions of law. From a reading of ground (xii) the Award is contrary to the provisions of the Contract Act. The parties have been unequally treated therefore the Arbitrator has been biased. One year 's delay in publishing the Award and serving the same thereafter on the petitioner is a glaring example of misconduct on the part of the Arbitrator. Payment of future instalments is not based on the agreement as the said stood terminated therefore disentitles the respondents from raising the said issue. The instalments to be paid was as per the agreement and on its termination, payment of such future instalments could not have been granted. On 29th March, 2004 the arguments were completed and thereafter the Arbitrator became functus officio and could not have passed the Award in 2005 after undue delay. Therefore the Award be set aside. Counsel for the respondents in opposing the said application submits that the reasonings and the discussions which form the basis of the Award will appear therefrom. The only ground for challenging the Award is that it is in conflict with public policy but there is no mention as to which of the Acts it is in conflict with. The petitioner failed to make payment of instalments as per the agreement and in breach of contract the respondent was entitled to terminate the same. The petitioners were seeking amicable settlement and they were aware of sale of equipments. In fact the basis for passing the Award exists and the Award calls for no interference. Although at hearing before the Arbitrator the agreement was produced the same was not allowed to be relied on. Having considered the submissions of the parties the petitioner seeks to set-aside the Award dated 5.1.2006. Under the 1996 Act Section 34 permits setting aside of an Award and Section 34(2)(b)(ii) permits an Award to be setaside if it is in conflict with the public policy of India. As held in (2003) 5 SCC 705 (ONGC �vs.- Saw Pipes) "public policy " will include anything contrary to � (i) fundamental policy of Indian law; (ii) the interest of India; or (iii) justice or morality; or (iv) if it is patently illegal. Therefore the illegality must go to the root of the matter and must be so unfair and unreasonable that it shocks the Court 's conscience. In the instant case admittedly the petitioner had availed of finance from the respondent and had defaulted in making payment. Therefore had committed breach of the terms and conditions of the agreement and the respondent as owner took possession of the equipment and sold it. This was to the knowledge of the petitioner. In fact by letter dated 11.7.2002 the petitioner accepted that administrative compulsion may have compelled the respondent to repossess the equipment and informed that a settlement proposal would follow. No settlement proposal was forwarded as no pleading of any settlement can be found in the petition. While the petitioner has alleged that it had bonafide claims against the respondent and that the claims had not been considered, the Arbitrator rightly held that as owner the respondent had repossessed its goods and the question of the petitioner suffering any loss or damage did not arise.
(3.) REASONS have also been given while dealing with each issue. Therefore as the Award is not against the public policy of India or the enactments viz. the Contract Act, the Award dated 5.1.2006 calls for no interference and the application is dismissed.;