GYAN PRAKASH ARYAversusM/S TITAN INDUSTRIES LIMITED

                         [2021] 11 S.C.R. 1                            1


                     GYAN PRAKASH ARYA                                 A
                                 v.
                M/S TITAN INDUSTRIES LIMITED
                   (Civil Appeal No. 6876 of 2021)
                       NOVEMBER 22, 2021                               B
          [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
       Arbitration and Conciliation Act, 1996 – s.33 – Modification
of award – Scope and ambit – Original award passed considering
the claim made by the claimant as per its original claim and as per
                                                                       C
the statement of the claim made – Subsequent application u/s.33
for modification of original award – Maintainability of – Held:
Only in a case of arithmetical and/or clerical error, the award can
be modified and such errors only can be corrected – In the instant
case, what was claimed by the original claimant in the statement of
claim was awarded – Therefore, order by the arbitrator in              D
application u/s.33 was beyond the scope and ambit of s.33 of the
Act.
        Allowing the appeal, the Court
      HELD: The original award was passed considering the claim
made by the claimant as per its original claim and as per the          E
statement of the claim made and therefore subsequently allowing
the application under Section 33 of the 1996 Act to modify the
original award in exercise of powers under Section 33 of the 1996
Act is not sustainable. In the instant case, it cannot be said that
there was any arithmetical and/or clerical error in the original       F
award passed by the arbitrator. What was claimed by the original
claimant in the statement of claim was awarded. Therefore, the
order passed by the arbitrator on an application filed under Section
33 of the 1996 Act and thereafter modifying the original award
cannot be sustained. [Para 12][7-D, E-F]
                                                                       G
        CIVIL APPELLATE JURISDICTION: Civil Appeal No.6876 of
2021.
      From the Judgment and Order dated 18.03.2021 of the High Court
of Karnataka at Bengaluru in M.F.A. No. 7098 of 2018 (AA).
                                                                       H
                                 1
2             SUPREME COURT REPORTS                          [2021] 11 S.C.R.


A         Sukumar Pattjoshi, Sr. Adv., Shekhar G. Devasa, Manish Tiwari,
    Shashi Bhushan Nagar for M/s Devasa & Co., Advs. for the Appellant.
          Sajan Poovayya, Sr. Adv., Vikram Hegde, Shravanth Arya Tandra,
    Ms. Raksha Agarwal, Shantanu Lakhotia, N. S. Sriraj Gowda, Sharan
    Balakrishna, Advs. for the Respondent.
B         The Judgment of the Court was delivered by
          M. R. SHAH, J.
           1. Feeling aggrieved and dissatisfied with the impugned judgment
    and order dated 18.03.2021 passed by the High Court of Karnataka at
C   Bengaluru in M.F.A. No.7098 of 2018 (AA), by which the High Court
    has dismissed the said appeal preferred by the appellant herein under
    Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter
    referred to as the ‘1996 Act’) and has confirmed the judgment and order
    passed by the XXIXth Additional City Civil & Sessions Court dismissing
    arbitration suit (A.S. No. 12/2011) under Section 34 of the 1996 Act and
D   confirming the Arbitral Award dated 04.12.2010, further modified vide
    order dated 14.01.2011, the original appellant has preferred the present
    appeal.
           2. That the appellant and the respondent herein had entered into
    an agreement dated 9.7.2003. A dispute arose between the parties relating
E   to recovery of pure gold weighing 3648.80 grams said to have been in
    the possession of the appellant herein. The respondent invoked the
    arbitration clause contained in the agreement dated 9.7.2003. The High
    Court appointed a retired District Judge as the sole arbitrator to adjudicate
    the dispute between the parties. The respondent filed a claim petition
F   before the learned arbitrator seeking the following reliefs:
          “a) to direct the respondent to deliver pure gold weighing 3648.80
          grams to the claimant or in the alternative direct the respondent to
          pay the claimant a sum of Rs.27,00,112.00 towards the cost of
          pure gold weighing 3648.80 grams (calculated at the rate of Rs.740
          per gram);
G
          b) to direct the respondent to pay to the claimant a sum of
          Rs.11,74,545.00 towards the interest amount due on the said
          amount of Rs.27,00,112.00 (value of pure gold weighing 3648.80
          grams) from June 2003 till date of filing of this claim and further
H
GYAN PRAKASH ARYA v. M/S TITAN INDUSTRIES LIMITED                              3
                [M. R. SHAH, J.]

      interest on the said amounts at 18% per annum during the pendency        A
      of these proceedings and until realization of the same;
      c) to direct the respondent to pay to the claimant a sum of
      Rs.26,50,338.00 towards the loss which has been caused to the
      claimant on account of the defaults committed by the respondent;
      and                                                                      B
      d) award costs of the proceedings and such other and further
      reliefs which are just in the interest of justice and equity.”
       3. The learned arbitrator passed an award dated 04.12.2010
directing the appellant herein to return to the claimant/respondent within
three months from the date of the award 3648.80 grams of pure gold             C
along with interest @ 18% per annum calculating the value of gold at
Rs.740 per gram from 24.07.2004 and up to the date of delivery of the
quantity of gold. The learned arbitrator also passed an award that in the
alternative, the appellant shall pay to the claimant/respondent within the
said period of three months, the market value of 3648.80 grams of pure         D
gold along with interest @ 18% per annum calculating the value of the
gold at Rs. 740 per gram from 24.07.2004 till the date of payment.
       4. Subsequently, the respondent filed an application under Section
33 of the 1996 Act and requested to modify the award dated 04.12.2010
by correcting computational/arithmetical/clerical error by deleting “at        E
Rs. 740 per gram as claimed in the claim statement” at page 14, second
para, line 20 and to delete “Rs.740.00 per gram” at page 17, para 15(b),
line 3, and substitute the same by “Rs.20,747/- per 10 grams” at page
17, para 15(b), line 3.
       5. The learned arbitrator allowed the said application under Section    F
33 of the 1996 Act vide order dated 14.01.2011 and corrected the original
award dated 04.12.2010 as under:
      “a) the respondent is directed to return to the claimant within
      three months from today 3,648.80 grams of pure gold along with
      interest @ 18% per annum calculating the value of gold at
                                                                               G
      Rs.740.00 per gram from 24.07.2004 and up to the date of delivery
      of that quantity of gold.
      b) in the alternative, the respondent shall pay to the claimant within
      the said period of three months the market value of 3,648.80 grams
      of pure gold at [Rs.20,747.00 per 10 grams … value substituted]
                                                                               H
4             SUPREME COURT REPORTS                           [2021] 11 S.C.R.


A         along with interest thereon at 18% per annum from 24.07.2004
          and up to the date of payment.
          c) the respondent is directed to pay to the claimant within three
          months from today a sum of Rs.50,000.00 (rupees fifty thousand
          only) as the probable loss suffered by the claimant due to his
B         failure to keep up to the time schedule in fulfilling his responsibility
          as a job worker. If he fails to pay that amount within three months,
          it shall carry interest @ 18% per annum from the date of this
          award and up to the date of payment.
          d) claimant is also entitled to cost which shall include the expenses
C         shared by the claimant along with respondent for arranging the
          venue for arbitration.
          e) advocate’s fee Rs.30,000.00"
          6. Being aggrieved, the appellant herein filed an arbitration suit
    under Section 34 of the 1996 Act before the City Civil Court. The said
D   Court dismissed the said suit under Section 34 of the 1996 Act. Further,
    appeal under Section 37 of the 1996 Act has been dismissed by the High
    Court, by the impugned judgment and order.
          7. Feeling aggrieved and dissatisfied with the impugned judgment
    and order passed by the High Court and the City Civil Court and the
E   order passed by the learned arbitrator allowing the application under
    Section 33 of the 1996 Act and modifying the award dated 04.12.2010
    as above, the original appellant – respondent before the arbitrator has
    preferred the present appeal.
           8. Shri Sukumar Pattjoshi, learned Senior Advocate appearing on
F   behalf of the appellant has vehemently submitted that the order passed
    by the learned arbitrator allowing the application under Section 33 of the
    1996 Act and consequently modifying the original award dated 04.12.2010
    as above, is beyond the scope and ambit of the jurisdiction of the arbitrator
    under Section 33 of the 1996 Act.
G          8.1 It is submitted that as such there was no arithmetical and/or
    clerical error in the original award passed by the learned arbitrator and
    what was awarded by the learned arbitrator was as per the original
    claim made by the claimant and even the discussion by the learned
    arbitrator was on the claim as made by the original claimant after a
    discussion on merits and on appreciation of the evidence on record.
H
GYAN PRAKASH ARYA v. M/S TITAN INDUSTRIES LIMITED                              5
                [M. R. SHAH, J.]

       8.2 It is submitted that in exercise of powers under Section 33 of      A
the 1996 Act, only an arithmetical and/or clerical error can be corrected
in the award. It is submitted that in the application under Section 33 of
the 1996 Act, the respondent – original claimant came out altogether
with a new claim which was not permissible in an application under
Section 33 of the 1996 Act.
                                                                               B
       8.3 It is therefore submitted that both, the City Civil Court as well
as the High Court have materially erred in upholding the order passed by
the learned arbitrator allowing the application filed under Section 33 of
the 1996 Act and modifying the award in purported exercise of powers
under Section 33 of the 1996 Act.
                                                                               C
       9. Shri Sajan Poovayya, learned Senior Advocate appearing on
behalf of the respondent, as such, is not a position to defend the order
passed by the learned arbitrator allowing the application under Section
33 of the 1996 Act and modifying the award. However, he submitted
that what has been modified by the learned arbitrator on an application
filed under Section 33 of the 1996 Act is in the context of the alternative    D
prayer and the relief being granted by the learned arbitrator. Even if the
original award stands as it is, the respondent – claimant shall be entitled
to return of the gold which was the first and primary relief claimed and
granted by the learned arbitrator.
       10. We have heard the learned counsel for the respective parties        E
at length.
       10.1 At the outset, it is required to be noted that in exercise of
powers under Section 33 of the 1996 Act, the learned arbitrator has
modified his earlier award dated 04.12.2010. The original claim made by
the respondent – original claimant is reproduced hereinabove. While            F
passing the original award, the learned arbitrator passed an award as
under:
       “a) the respondent is directed to return to the claimant within
      three months from today 3,648.80 grams of pure gold along with
      interest @ 18% per annum calculating the value of gold at                G
      Rs.740.00 per gram from 24.07.2004 and up to the date of delivery
      of that quantity of gold.
      b) in the alternative, the respondent shall pay to the claimant within
      the said period of three months the market value of 3,648.80 grams
                                                                               H
6            SUPREME COURT REPORTS                            [2021] 11 S.C.R.


A         of pure gold at Rs.740.00 per gram along with interest thereon at
          18% per annum from 24.07.2004 and up to the date of payment.
          c) the respondent is directed to pay to the claimant within three
          months from today a sum of Rs.50,000.00 (rupees fifty thousand
          only) as the probable loss suffered by the claimant due to his
B         failure to keep up to the time schedule in fulfilling his responsibility
          as a job worker. If he fails to pay that amount within three months,
          it shall carry interest @ 18% per annum from the date of this
          award and up to the date of payment.
          d) claimant is also entitled to cost which shall include the expenses
C         shared by the claimant along with respondent for arranging the
          venue for arbitration.
          e) advocate’s fee Rs.30,000.00"
           Thus, the original award passed by the learned arbitrator was as
    per the original claim made by the respondent – original claimant and as
D   per the statement of claim. Even, there was a specific finding by the
    learned arbitrator on the alternative relief of payment of value as on the
    date of the award. The relevant discussion reads as under:
          “However, in the relief para of the claim statement this rate has
          been shown as rs.740.00 per gram and the value of 3,648.80 grams
E         due to them as Rs.27,00,112.00.
          The counsel for the claimant submitted that as has been laid down
          by the Hon’ble Supreme Court in the decision in Dhian Singh
          Sobha Singh and another vs. Union of India AIR 1958 SC 274 in
          an action of wrongful detention of plaintiff’s chattel otherwise
F         known as judgment for the plaintiff in detinue is for delivery of the
          chattel or payment of its value and damages for detention. The
          counsel for the respondent has submitted that in this case it can
          either be ordered for return of 3,648.80 grams of pure gold (24
          carats) or in the alternative the payment of its value as on the
          date of the award. I think that this is a just and reasonable course
G
          to be followed. I also find that the claimant should be allowed
          appropriate interest on the said market value even in the event of
          the respondent returning the gold itself to the claimant. No doubt,
          the market value of gold has increased to a great extent as on
          today but in the absence of any reliable proof in this behalf I find
H         that as claimed in the claim statement it is just and reasonable to
GYAN PRAKASH ARYA v. M/S TITAN INDUSTRIES LIMITED                             7
                [M. R. SHAH, J.]

      allow interest on the market value of the balance gold in question      A
      at Rs.740 per gram as claimed in the claim statement and also
      interest on this amount at 18% per annum from the date of the
      claim statement and up to the satisfaction of the reliefs to be
      granted under this award issue Nos. 3 and 3a are answered
      accordingly.”
                                                                              B
       11. Therefore, the original award passed by the learned arbitrator
was as per the original claim made by the respondent in the statement of
claim. Thereafter, in an application under Section 33 of the 1996 Act, the
respondent prayed to modify the award as per the market value of
3648.80 grams of pure gold at Rs.20,747/- per 10 grams, instead of
Rs.740 per gram and the learned arbitrator allowed the said application       C
under Section 33 of the 1996 Act and modified the original award dated
04.12.2010. The modified award is reproduced hereinabove.
       12. The original award was passed considering the claim made
by the claimant as per its original claim and as per the statement of the
claim made and therefore subsequently allowing the application under          D
Section 33 of the 1996 Act to modify the original award in exercise of
powers under Section 33 of the 1996 Act is not sustainable. Only in a
case of arithmetical and/or clerical error, the award can be modified and
such errors only can be corrected. In the present case, it cannot be said
that there was any arithmetical and/or clerical error in the original award   E
passed by the learned arbitrator. What was claimed by the original claimant
in the statement of claim was awarded. Therefore, the order passed by
the learned arbitrator on an application filed under Section 33 of the
1996 Act and thereafter modifying the original award cannot be sustained.
The order passed by the learned arbitrator in the application under Section
33 of the 1996 Act is beyond the scope and ambit of Section 33 of the         F
1996 Act. Therefore, both, the City Civil Court as well as the High Court
have committed a grave error in dismissing the arbitration suit/appeal
under Sections 34 and 37 of the 1996 Act respectively. The modified
award passed by the learned arbitrator allowing the application under
Section 33 of the 1996 Act cannot be sustained and the same deserves          G
to be quashed and set aside.
      13. In view of the above and for the reasons stated above, the
present appeal is allowed. The impugned judgment and orders passed
by the High Court in an appeal under Section 37 of the 1996 Act and
City Civil Court in arbitration suit under Section 34 of the 1996 Act and     H
8              SUPREME COURT REPORTS                      [2021] 11 S.C.R.


A   the order passed by the learned arbitrator dated 14.1.2011 modifying the
    original award dated 04.12.2010 are hereby quashed and set aside.
    Consequently, the original award passed by the learned arbitrator dated
    04.12.2010 stands restored. However, in the facts and circumstances of
    the case, there shall be no order as to costs.
B
    Devika Gujral                                              Appeal allowed.




C




D




E




F




G




H