M/S Aditya Birla Fashion and Retail Ltd v. Dayanand

INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAo AToCHANDIGARHo o FAO-CARBoNo.o39oofo2025o(O&M)oo Reservedoon:o14.11.2025.o Dateoofopronouncement:o13.02.2026oo o M/soADITYAoBIRLAoFASHIONoANDoRETAILoLIMITEDooooo...Appellant(s)o o V/so DAYANANDoo o o o o...Respondent(s)o o CORAM:oo HON'BLEoMR.oJUSTICEoASHWANIoKUMARoMISHRAo o o HON'BLEoMR.oJUSTICEoROHIToKAPOORo o Arguedoby:o Mr.oAashishoChopra,oSenioroAdvocate,oassistedobyo o o Mr.oVijenderoParmar,oAdvocate,o o o Ms.oRupaoPathania,oAdvocate,oandoo o o Mr.oYashoPaloSharma,oAdvocateoforotheoappellant.oo o o o Mr.oSumeetoMahajan,oSenioroAdvocate,oassistedobyo o o Mr.oSakshamoMahajan,oAdvocate,oo o o Mr.oShreyoSachdeva,oAdvocate,oandoo o o Ms.oRadhikaoDekshayoAdvocate,ofororespondent.o o o o ****o

1.e o Dateowhenoorderowasoreservedo 14.11.2025o

2.e o DateoofoPronouncementoofoordero 13.02.2026o

3.e o Dateoofouploadingoofoordero 16.02.2026o

4.e o Whetherooperativeopartoorofulloorderoiso Fullo pronouncedo

5.e o Delay,oifoany,oinopronouncingoofofulloordero NAo andoreasonsothereof.oo o ASHWANIoKUMARoMISHRA,oJ.oo o o JurisdictionoofothisoCourtounderoSectiono37oofotheoArbitrationo andoConciliationoAct,o1996o(foroshorto'theoActoofo1996')oisoinvokedobyoM/so Adityao Birlao Fashiono ando Retailo Ltd.o (hereinaftero referredo too aso theo 'appellant')oinoorderotooassailotheoorderopassedobyotheoExclusiveoCommercialo CourtoatoGurugram,odatedo22.08.2025,owherebyoappellant'soobjectionoundero Sectiono34oofotheoActoofo1996otootheoArbitraloAwardodatedo23.12.2023,ocameo o Pageo2oofo53o o o o

2.e Appellanto iso ao companyo incorporatedo undero theo Indiano CompaniesoAct,o1956.oItoisoengagedoinotheobusinessoofo'apparels',omarketingo ofo garmentso ando garmento accessorieso undero variouso internationalo brando nameso ando trademarkso sucho aso 'Vano Heusen',o 'Louiso Philippe',o 'Alleno Solly',o'PeteroEngland'oetc.oItointendedotooestablishoaowarehouseoforostorageo ofoitsoproductsoatoGurugram.oForosuchopurposes,otheoappellantoenteredointooano agreementowithotheoclaimant/respondent,owhoowasotheoowneroinopossessiono ofo Khasrao No.130/19,o 12,o 20,o 21,o 22,o 23,o 18/2o ando 131/25,o admeasuringo 16674o sq.o meterso situatedo ino villageoPataudi,o WardoNo.13,oRewarioRoad,o TehsiloPataudi,oGurugramoalongowithohisobrothersoRameshoChand,oBhanuo Sherawato(sonoofolateobrotheroofoDayanand)oandoNareshoKumar.oPlanoforo constructionoofotheowarehouseoonotheoaforesaidolandoofotheoclaimantowaso alreadyo approvedo byo theo concernedo authoritieso ino theo yearo 2012-2013.o Commercialo godowno ino theo nameo ofo 'Mishao Sehrawato Warehouse'o waso constructedo overo ano areao admeasuringo 103982.72o sq.o feeto (9660.31o sq.o meters)oallegedlyobyoincurringoanoamountoofoINRo8.62oCrores.oAoloanoofoRs.6o CroresowasoalsooavailedobyotheoclaimantofromoPunjaboNationaloBank,oforo suchopurpose,owhichowasorepayableoino93oequaloinstallmentsoofoRs.5,16,563/-o pero montho commencingo fromo 30.09.2015.o Resto ofo theo amounto i.e.o approximatelyoRs.2.62oCroresowasoincurredobyotheoclaimantoforoconstructiono ofowarehouse.ooo

3.e Finally,o ao leaseo deedo cameo too beo executedo ono 20.04.2016o ino respectoofotheoleasedopremisesobyotheoclaimant/respondentoinofavouroofotheo appellantoatoaomonthlyorentoofoINRo10,00,000/-owithoaoclauseoprovidingoforo o Pageo3oofo53o o o o 5%oescalationoafteroexpiryoofooneoyear,ocommencingofromo01.05.2016.oTheo appellantoalsoodepositedoINRo60,00,000/-owithotheorespondentoasointerestofreeo refundableo security.o Undero theo leaseo deed,o theo appellanto hado theo righto too install,oerectoandomaintain,oatoitsoownocost,oinoorouponotheoleasedopremises,o anyoequipment,omachineryooroanyootherostructureonecessaryoforotheopurposeso ofo storing,o sellingo oro otherwiseo carryingo ono tradeo ino consumero products,o alliedoorootheroproducts.oTheoleasedogodownohadocarpetoareaoofo103982.72osq.o feet.o Theo leaseo periodo waso nineo yearso commencingo fromo 01.05.2016o too

30.04.2025.oo

4.e Respectiveorightsoandoobligationsoofotheopartiesotootheoleaseohaveo beeno specifiedo ino theo leaseo deed.o Clauseo 13o ofo theo leaseo deedo placedo responsibilityo upono theo lessor/claimant-respondento too insureo theo entireo buildingopremisesoandoalloequipmentsoprovidedotoolessee,oagainstofireoando otheroperilsoincludingoearthquakeoandoterrorismoetc.,oduringotheoentireoleaseo period.oTheoresponsibilityoofolesseeowasolimitedotooinsuringoofoitsoownogoodso andoequipmentsoetc.oduringotheoleaseoterm.oClauseo13oisoreproducedohereino after:-o "13.oINSURANCE:o TheoLessoroshalloatoallotimesobeoresponsibleoforoinsuringotheoentireo buildingo premiseso ando allo equipmentso providedo too Lesseeo againsto FireoandootheroperilsoincludingoEarthquakeoandoTerrorism,ocoveringo theothirdopartyoliabilityoagainstoallorisksoatoallotimesoandokeptovalido duringotheosubsistenceoofotheoLeaseoandoaocopyoofosuchoinsuranceo coverageopolicyoshallobeomadeoavailableotooLesseeoasoandowhenosucho insuranceopolicyoisorenewedofromotimeotootimeowithoutodemandobyo Lessee.o Lesseeo shallo beo responsibleo foro insuringo itso equipments,o o Pageo4oofo53o o o o goods,ofurnitures,ofixturesoandobelongingsoinotheoDemisedoPremiseso duringotheoLeaseotenure."o o

5.e Clauseo14oofotheoLeaseoDeedogaveosoleorightotootheolesseeoi.e.otheo appellantotooterminateotheoleaseobyogivingothreeomonths'opriorowrittenonoticeo withoutoassigningoanyoreasonowhatsoever.oo ?.e oClauseo27oofotheoleaseodeedoprovidedoforoarbitrationowhichoiso reproducedoasounder:o-o "27.oARBITRATION:o

i)o Allo disputeso ando differenceso arisingo outo ofo thiso deedo shallo beo referredo too arbitrationo ino accordanceo witho theo provisionso ofo Arbitrationo ando Conciliationo Act,o 1996o ando ano Arbitratoro too beo mutuallyoappointedobyobothotheoParties.o

ii)oTheovenueoforoarbitrationoshallobeoGurgaonoandotheoproceedingso shallobeoconductedoinoEnglisholanguage."o o ?.eo Theoappellantocameoinopossessionoofotheowarehouseoinoquestiono andotheopaymentooforentocommencedofromotheomonthoofoMay,o2016.oForotheo firstoyearouptoo01.04.2017,otheorentowasopaidoatoRs.10,50,000/-owhichowaso enhancedotooRs.11,02,500/-operomonthoforonextooneoyearoi.e.o01.05.2017oi.e.o

01.04.2018.o Theo rento waso furthero enhancedo too Rs.11,90,700/-o pero montho w.e.f.o01.05.2018otoo01.04.2019.oInotermsoofoClauseo13oofotheoleaseodeed,otheo claimant/respondento goto theo leasedo premiseso insuredo witho theo Orientalo Insuranceo Companyo foro theo periodo beginningo fromo 29.05.2018,o tillo

28.05.2019o foro INRo 4.5o Croreo foro theo office-cum-godown/warehouseo togethero witho boundaryo wallso ando INRo 50o Lakho foro fireo extinguishero appliances.o Noo objectiono certificateo fromo theo Fireo Departmento waso alsoo obtainedowhichowasovalidotillo04.07.2019.oo o Pageo5oofo53o o o o THEoINCIDENTo

8.e Ono16.10.2018,oanoincidentoofofireooccurredoatotheoWarehouse/o LeasedoPremises.oAccordingotootheoappellant,oattemptsowereomadeobyotheo employees/staffopresentotooextinguishotheofireoandoafterosuchoinitialoattemptso failed,otheopoliceoandotheofireodepartmentsowereoinformedoofotheofireoincident.o Sixo fireo tenderso wereo pressedo intoo service,o ando theo fireo waso ultimatelyo doused.oTheoinsureroM/soOrientaloInsuranceoCompanyoLtd.owasoinformedoofo theofireoincident.oTheoappellantohadoalsoogotoitsostocksokeptoinotheowarehouseo insuredowithoitsoinsureroM/soTATAoAIGowhichowasoalsooinformedoaboutotheo incident.o Ino thiso incidento majoro damageo waso causedo too theo warehouse/godownoandotheostoredomaterialoofoappellantowereoallogotoburnt.oo ?.e Accordingotootheoclaimant/orespondent,oincidentoofofireooccurredo dueotoonegligenceoonopartoofotheoappellantoasotheofireohydrantsoandootherofireo extinguishersowereonotoactivatedobyotheoemployeesoofotheoappellant.oItoisoalsoo theoclaimant'socaseothatothoughoaowaterostorageotankowithoaocapacityoofo1.5o lacsolitersoofowaterowithotwoopumps,ooneoofowhichowasoelectricopumpoando othero waso dieselo pump,o wereo installedo ino theo warehouse,o buto wereo noto activatedothoughotheyowereoinoworkingocondition.oAsoperotheoclaimant,otheo entireogodownowasoburnt/reducedotooashesocausingohugeofinancialolossotoohimo $0.e Ito haso comeo ono recordo thato informationo too fireo brigadeo waso forwardedobyoanoemployeeoofotheoappellantoono16.10.2018oitselfoinorespectoofo whichoaoreportowasopreparedobyotheoFireoDepartmentoono28.11.2018.oTheofireo tendersowereosentotootheospotoato10.35oAMo(wronglyoreferredotooasoPMoino variousodocuments).oTheosoleofireotenderowhichocameoonotheospotocouldonoto o Pageo6oofo53o o o o controlotheofireoandoconsequentlyoonotheoinformationoofotheoFireoDepartmento moreofireotendersowereorequisitioned.oAsoperoreportoofotheoFireoDepartment,o Pataudi,oDistrictoGurugram,otheofireomayohaveobeenocausedobyoshortocircuit'.o THEoCLAIMo $$.e Theoclaimantoassertedothatoforosuchonegligenceoonopartoofotheo appellant,owhicholedotootheofireoincidentoheohasosufferedolossoamountingotoo Rs.7,80,46,520/-oandoaccordinglyoclaimedosuchoamountofromotheoappellant.o Theo claimo ofo respondent/claimanto waso disputedo byo theo appellant.o Initialo correspondence/communicationobetweenotheopartiesotooarriveoatoanoagreedo settlementofailed.oItowasoinothisocontextothatotheoClaimantoinstitutedoclaimo againstotheoappellant.ooo INSURANCEo $2.e o AsoperoClauseo13oofotheocontract,oitowasotheoexclusiveo responsibilityo ofo theo lessoro (claimant)o foro insuringo theo entireo buildingo premiseso ando allo equipmentso againsto fireo ando othero perilso duringo theo subsistenceoofotheolease.oAccordingly,otheoclaimantohadosecuredotheoleaseo premiseso byo gettingo ito insuredo witho Orientalo Insuranceo Company.o Theo incidentowas,otherefore,oreportedotootheoinsurer.oo $3.e Theo Insuranceo Company,o whicho hado insuredo theo claimant'so godown,o deputedo itso authorizedo surveyoro too inspecto theo premiseso ando ascertainotheolossesocausedoinotheoincident.oTheosurveyorosubmittedoitsofinalo surveyoreportoaccordingotoowhichotheoStandardoFireoandoSpecialoPerilsoPolicyo (hereinafteroreferredoaso'theopolicy'),owasosubsistingoonotheodateoofoincident.o TheosumoinsuredowasoRs.4,50,00,000/-oforooffice-cum-godown/owarehouseo o Pageo7oofo53o o o o includingotheoboundaryowalls,owhileofireoextinguishersowereoinsuredoforoao sumoofoRs.50,00,000/-.oo $4.e Foro theo damageo causedotootheobuilding,o shedo andoothers,o theo Surveyoroofotheoinsuranceocompanyoi.e.oM/soOrientaloInsuranceoCompanyo Limitedoafteroreferringotootheostatementoofotheoinsured;opoliceoreport;otheofireo brigadeoreportoandootheromediaoreports,ospecifiedotheocauseoofoaccidentoino followingowords:-o "07.5)oOuroOpiniono Basedoonotheosurveyocarriedooutoandoverificationodone,oweoareoofotheo opinionothatodueotooelectricoshort-circuitingoinosomeoelectricowire,o sparksowereogenerated,owhichocausedofire.oTheofireowasoaggravatedo becauseoofoavailabilityoofocombustibleomaterialostockonearbyoandodueo toowhich,otheofireospreadoinotheoentireobuildingoshed,odamagingoito completely.oItowasoverifiedothatotheocauseoofofireoisonotointentional."o o $5.e Theo claimanto hado initiallyo submittedo ano estimateo ofo Rs.5,38,10,651/-o towardso insuranceo claim,o whicho waso latero revisedo too Rs.4,73,50,841/-oasobeingotheolossocausedotootheoleasedopremisesoinotheofireo incident,otootheoinsuranceocompany.oo $?.e Theoclaimoraisedobyotheorespondentofromoitsoinsuranceocompanyo ultimatelyoledotootheofinalosettlementoofolossocausedotootheoleasedopremises,oino theo fireo incident,o beingo determinedo aso Rs.2.52,39,404/-.o Theo respondento acceptedo theo quantificationo ofo loss/damageo determinedo byo itso insurero ando issuedo ao dischargeo vouchero too M/so Orientalo Insuranceo Company.o Theo claimant/respondentoalsoosubrogatedoallohisorightsoandoremediesoinorespectoofo o Pageo8oofo53o o o o loss/damageotootheoleasedopremises,oinofavouroofotheoinsuranceocompany,o whichoisoreproducedohereinafter:-o "DischargeoVoucher:o Thereafter,otheorespondentoinofulloandofinalosettlementoofolossocausedo tootheoleasedopremisesoonoaccountoofofireoincidentosettledotheoclaimo withoOICoforoaosumoofoINRo2,52,39,404/-oandosignedoaodischargeo vouchero witho OICo ando subrogatedo allo hiso righto ando remedieso ino respecto ofo loss/damageo ono accounto ofo fireo incidento ato theo leasedo premisesoinofavouroofoOIC."o o TERMINATIONoOFoLEASEo $?.e oTheoappellantoinotheomeantimeocontinuedotoopayotheorentoforotheo godownoinoquestionotilloaoterminationoletterowasoultimatelyoissuedobyoitoono

17.07.2019.o Mutualo discussionso betweeno theo partieso foro ano amicableo settlement,opriorotooit,ofailed.oSinceotheotermoofoleaseorequiredothreeomonthso noticeo foro termination,o aso such,o theo terminationo becameo effectiveo fromo

18.10.2019.oTheovacantopossessionoofotheoleasedopremisesowasoofferedotootheo claimantoono18.10.2019.oTheoappellantoalsooadjustedotheorentoequivalentotoo theo noticeo periodo fromo theo securityo deposito amounto lyingo witho theo respondent.o LEGALoNOTICEo $8.e Ono 27.07.2019,o ao legalo noticeo waso issuedo byo theo claimanto seekingosurrenderoofosecurityodepositoofoRs.60oLakhoandocompensationoofo Rs.3oCroresoforotheonegligenceocausedoonotheopartoofotheoappellant'sostaffoino handlingotheofireoincident.oThisonoticeowasoobjectedotoobyotheoappellantoono

28.10.2019.o o Theo appellanto disputedo anyo negligenceo ono itso parto ando highlightedothatotheorespondentohadotheorightoasoperotheotermsoofotheoleaseotoo o Pageo9oofo53o o o o inspecto theo premiseso duringo theo continuanceo ofo leaseo periodo ando thato noo deficiencyoonotheopartoofotheoappellantowasoeveropointedoout.oo ARBITRATIONo $?.e Arbitrationoclauseowasoinvokedobyotheoclaimantoafterodifferenceso remainedounresolvedobetweenotheoparties.oAnoapplicationounderoSectiono11oofo theo Acto ofo 1996o waso filedo beforeo thiso Court,o beingo Arbitrationo Petitiono No.350oofo2019.oTheoarbitratoroconsequentlyocameotoobeoappointedobyothiso Courtoono09.01.2023.o

20.e oBeforeo theo arbitrator,o ao statemento ofo claimo waso filedo byo theo respondentoclaimingofollowingoamounts:-o Sr.oNo.o ParticularsoofoClaimso Amounto(INR)o

1.o DamageotooLeasedoPremiseso 5,00,00,000/-o

2.o Losso ofo rento quao theo Leasedo 2,60,46,520/-o PremisesofromoOctober,o2019otoo

15.08.2021o @o 11,57,625o pero montho

3.o Towardsopainoandosufferingoo 10,00,000/-o

4.o Towardsolitigationoexpenseso 10,00,000/-o o Totalo 7,80,46,520/-o

5.o Interesto @o 18%o p.a.o fromo o

16.10.2018otillorealizationo o o 2$.e Aocounteroclaimowasosubmittedobyotheoappellant,owhileoobjectingo tootheoclaimooforespondent,owhichoisoasounder:-o Sr.oNo.o ParticularsoofoCounteroClaimso Amounto(INR)o

1.o Balanceo ofo securityo 15,23,352/-0o deposit/refundableo securityo depositoo

2.o Interesto @o 18%o p.a.o ono 10,28,263/-0o securityo deposito fromo

17.07.2019otillo17.04.2023o o Totalo 25,51,615/-o

3.o Interesto@18%op.a.ofromodateo o ofofilingotillorealizationo o o Pageo10oofo53o o o o

22.e Onobehalfoofotheoclaimant/orespondent,oevidenceowasofurnishedo byoRameshoChand,obrotheroofotheorespondent,obyofilingohisoaffidavit.oTheo claimanto placedo ono recordo documentaryo evidenceo ino theo formo ofo loano sanctiono lettero issuedo byo Punjabo Nationalo Banko datedo 05.06.2014,o sanctioningoloanoofoRs.6.00oCroresoforoconstructionoofogodownoinoquestion.o Ao certificateo ofo charteredo accountanto datedo 28.05.2015o waso alsoo filedo confirmingo thato aso pero theo informationo ofo theo claimant,o ito haso incurredo Rs.8.43oCroresoinoconnectionowithoconstructionooofowarehouse.oOnobehalfoofo theo appellant,o evidenceo waso giveno byo Gauravo Kumar,o itso authorizedo representative.o THEoAWARDo

23.e TheolearnedoArbitratorohasodeliveredohisoawardoono23.12.2023,o allowingo theo claimo ofo theo respondento primarilyo ono theo groundo thato fireo incidento occurredo dueo too negligenceo ando carelessnesso ofo theo appellant.o FollowingoclaimsooforespondentohaveobeenoacceptedobyotheoArbitrator:-o Sr.o ParticularsoofoClaimo Awardedoamounto(INR)o No.o

1.o Damageotooleasedopremiseso 2,47,75,446/-o

2.o Losso ofo rento quao theo leasedo 2,60,46,520/-o premisesofromoOctober,o2019otoo

15.08.2021o @o INRo 11,57,625/-o peromontho

3.o Towardsolitigationoexpensesoo 3,00,000/-o

4.o Claimant'soshareoofoarbitralofeeso 7,37,508/-o underoSectiono31A(1)(a)(i)oo o Totalo 5,18,59,474/-o o Inoaddition,otheoArbitratoroawardedointerestoatotheorateoofo8%ofromo theodateoofocauseoofoactionotillorecoveryoofoamount."o o

24.e Theocounteroclaimoofotheoappellantowasorejected.oTheoArbitratoro heldothatoappellantowasonotoentitledotooterminateotheoleaseodeed.oThisoawardo o Pageo11oofo53o o o o ofo theo arbitratoro cameo too beo challengedo ono variouso groundso byo filingo ao petitionounderoSectiono34oofotheoActoofo1996.ooAoreplyotootheopetitionowaso filedo byo theo claimanto whereaftero theo Presidingo Officer,o Exclusiveo CommercialoCourt,oGurugramovideotheoorderoimpugnedodatedo28.08.2025o rejectedo theo objectionso ofo theo appellanto ando affirmedo theo awardo ofo theo arbitrator.oThusoaggrieved,otheoappellantoisobeforeothisoCourt.oo THEoAPPEALo

25.e TheoappellantoassertsothatotheoCourtobelowohasofailedotooexerciseo itsojurisdictionounderoSectiono34oofotheoActoofo1996oinorefusingotoointerfereo withotheoaward,ocompletelyooverlookingopatentoillegalityotherein,obyogoingo againstotheoexpressotermsoofotheoleaseodeedoandobasingoitsofindingsoononoo evidence.oTheoclaimsoareoallegedlyoallowedobyotheoArbitratorobyotravellingo beyondotheotermsoofoleaseodeedowhichoisocontraryotootheosettledoprinciplesoofo applicableolaw.oo 2?.e Itoisourgedothatothereoisonooevidenceoofonegligenceoonotheopartoofo theoappellantoandocontraryoconclusionsoofotheoarbitratoroisoperverseoasoitoiso basedoononooevidence.oItoisoalsoocontendedothatotheoarbitratorohasocompletelyo overlookedo theo reporto ofo theo claimant'so Insurero M/so Orientalo Insuranceo Companyodatedo27.08.2019,owhichowasoacceptedobyotheoclaimantohimselfo withoutoanyodemureooroprotest.oTheoconclusionoofoactualolossesocausedoinotheo incident,obyotheoclaimant'soinsurer,obasedoonosurveyor'soassessmentoreporto wasoalsooignored.oo 2?.e Itoisofurtherosubmittedoonobehalfoofotheoappellantothatoreportoofo theosurveyoroofotheoclaimant'soinsureroasoalsootheoreportoofoFireoDepartmento o Pageo12oofo53o o o o andopoliceoreportoconclusivelyoestablishedothatoitowasoaocaseoofoaccidentalofireo dueotooshortocircuit,obutoallosuchomaterialohasobeenoignoredoonohyperotechnicalo grounds.oItoisoalsoocontendedothatotheotestimonyoofotheoappellant'sowitnesseso hasobeenomisreadoandomisconstrued,oandoexcessiveoimportanceoisogivenotootheo oralo testimonyo ofo theo claimant'so witnesso byo overlookingo overwhelmingo evidence,otootheocontrary,oonorecord.oTheofindingsoofotheoarbitratoroareothuso allegedotoobeoperverseoasoitoisobasedowhollyoonoconjecturesoandosurmises.oItoiso alsootheocontentionoofotheoappellantothatothereoisonooproofoofoactualolossoando theoentireoclaimoofotheorespondentoisobasedoonoimaginaryofiguresocontainedoino theostatementoofoclaimoasowelloasotheooralotestimonyoofotheoclaimant.oo REPLYoOFoCLAIMANTSo

28.e Theo submissionso advancedo ono behalfo ofo theo appellanto areo opposedobyolearnedoSeniorocounseloforotheoclaimant,owhoosubmitsothatotheo Arbitratoro haso basedo itso awardo ono theo termso ofo theo leaseo deed,o ando theo Commercialo Courto haso rightlyo rejectedo theo appellant'so objections.o Heo submitso thato theo claimant'so witnesso waso noto cross-examinedo ono materialo aspects.o Heo alsoo submitso thato merelyo becauseo theo amounto awardedo byo claimant'so insurero waso accepted,o ito wouldo noto meano thato theo claimanto iso precludedo fromo claimingo losseso fromo theo appellant.o Heo alsoo submitso thato noneoofotheoproximateowitnessesowereoexaminedoonobehalfoofotheoappellant.o Learnedoseniorocounselohasoalsooplacedoplethoraoofocaseolawsotoocontendothato theodiscretionoexercisedobyotheoArbitratoroinoallowingotheoclaimocannotobeo interferedowithobyotheoCourtoinoexerciseoofoitsojurisdictionounderoSectiono34o ofotheoActoofo1996onorobyothisoCourtounderoSectiono37oofotheoActoofo1996.oo o Pageo13oofo53o o o o 2?.e WeohaveoheardoMr.oAshishoChopra,oLearnedoSenioroCounseloforo theo appellanto ando Mr.o Sumeeto Mahajan,o Learnedo Senioro Counselo foro theo claimant/respondentoandoperusedotheomaterialsoonorecord.o THEoISSUESo

30.e Weohaveoexaminedotheofactsoofotheocaseowithinotheoconfinesoofo thiso Court'so jurisdictiono undero Sectiono 37o ofo theo Acto ofo 1996,o soo aso too determineotheoquestionoasotoowhetherotheoarbitraloawardodatedo23.12.2023o requiredointerferenceoonoanyoofotheogroundsomadeopermissibleounderoSectiono 34(2)oofotheoActoofo1996ooronot?oAsoaocorollary,oweoareotooadjudgeowhethero theoCommercialoCourtohasofailedotooexerciseoitsojurisdictionowhileorejectingo theo appellant'so objectiono too theo Award,o ino theo factso ofo thiso case,o ono theo groundsourgedoonobehalfoofotheoappellant?o 3$.e Theoaforesaidoissuesoariseoinotheocontextoofofollowingodisputedo facts:o-o

i)o Whetherotheoincidentoofofireooccurredodueotooshort-circuito oro ito waso causedo dueo too negligenceo ofo appellant'so employeeso?o

ii)o Whethero claimant/o respondento waso entitledo too theo sumo awardedotowardsodamageotooleaseopremises,oonoaccountoofo fireoincident,oonotheobasisoofoevidenceoledobyotheoclaimant/o respondent?o

iii)o Whetherotheoclaimant/orespondentowasoentitledotoolossoofo rentofromoOctobero2019otoo15.08.2021o@oRs.o11,57,625/-o peromontho?o ANALYSISo

32.e TheoArbitratorohasoprimarilyoallowedoclaimoofotheorespondentoono accounto ofo damageo causedo too theo leasedo premiseso too theo tuneo ofo o Pageo14oofo53o o o o Rs.2,47,75,446/-oandoawardedoRs.2,60,46,520/-oonoaccountoofolossooforentalo incomeofromoOctobero2019otoo15.08.2021,owhenotheogodownowasoagainoleto outoonorentotoosomeoneoelseoafteroitsorepair/restoration.oTheobasisoofoawardoiso theofindingoofoArbitratorothatotheofireoincidentowasocausedodueotoonegligenceo ofotheoappellant'soemployeesoinoactivatingofireofightingoequipmentsoandothato theoappellantohadonoorightotooterminateotheoleaseoinotheofactsoofotheopresento case.o

33.e oTheoappellant'soprimarilyourgeothatotheoarbitrator'soconclusionso onobothotheocountsoareopatentlyoillegaloandofactuallyoflawedoandothusowhollyo perverse.oo

34.e Theo Arbitratoro hado framedo 12o issueso foro considerationo video orderodatedo10.06.2023.oIssuesoNo.oii,oiiioandoivowereotheocoreoissuesoono whichotheooutcomeoofoarbitraloproceedingsohasolargelyorested.oTheseoissueso haveo beeno dealto witho together,o byo theo Arbitratoro ando areo reproducedo aso under:-o

(ii)oWhetherotheorespondentowasodutyoboundotoomaintainotheoleasedo premiseso ando theo installedo fireo fightingo systemo ando equipmento ino good,oproperoandorunningocondition?o o(iii)o Whethero theo fireo fightingo systemo ando equipmento waso seto ino motiono byo respondento ato theo timeo ofo fireo incidento ino theo leasedo premises?oo

(iv)oWhetherotheofireoincidentoinoquestionoatotheoleasedopremisesoino questiono occurredo dueo too negligenceo ando carelessnesso ofo respondent?oo o Pageo15oofo53o o o o

35.e Admittedly,oincidentoofofireocausedosubstantialodamageotootheo leasedo premises.o Theo fireo incidento waso reportedo too theo Police,o theo Fireo BrigadeoandotheoInsuranceoCompany.oTheseoagenciesoarrivedosoonoafterotheo incidentoandoinvestigatedotheocauseoofoincidentoandotheomanneroinowhichoito occurred.oAfterodueoinvestigation,oreportsowereosubmittedobyotheoPolice,otheo FireoBrigade,oSurveyoroofotheoInsuranceoCompanyowhereinostatementsowereo alsootakenoofotheowitnessesoofotheoappellantoandotheoclaimant/respondent.oTheo reporto ofo theo Police,o Fireo Departmento aso wello aso theo Surveyoro ofo theo claimant'soinsureroheldoinocategoricalotermsothatofireowasoaccidentaloandowaso causedodueotooshortocircuit.oo 3?.e Theo Surveyoro ofo theo Insuranceo Companyo alsoo heldo thato theo causeoofofireoisonotointentional.oThisofinding,ohowever,ohasobeenodiscardedobyo theoArbitratoroonlyoonotheogroundothatosuchomaterialowasoinotheonatureoofo opinionoonlyoandocannotobeotreatedotoobeoconclusive,oasononeoofotheowitnesseso haveobeenoexaminedoduringotheocourseoofoarbitration.oTheoreasoningoassignedo byotheoArbitratorotooignoreoallosuchoreportsoareocontainedoinoparao24oofotheo award,owhichoisoreproducedoasounder:-o "24.o(a)oLearnedocounseloforotheorespondentowhileorelyingoonotheoaboveo referredoreportoEx.oRW1/2ohasoarguedothatotheoaboveonamedo surveyorohasoopinedoinoclauseo9.08othereofothatoalthoughotheo exacto causeo ofo fireo couldo noto beo ascertainedo buto "mosto probably"o theo fireo couldo beo causedo dueo too electricalo shorto circuiting.oThiso"opinion"oisonotoconclusiveobecauseorelianceoiso basedo thereino ono theo statemento ofo witnesseso esseso statedlyo examinedobyotheoaboveonamedosurveyorobutononeoofowhomohaso beeno oro examinedo byo theo respondento duringo theo arbitralo o Pageo16oofo53o o o o

(b)o Eveno theo DDRo entryo Ex.o C/12o recordedo byo ASIo Ajito Kumaro regardingoinformationoofotheofireoincidentoinoquestionolodgedo withohimobyoOmoParkash,oanoemployeeooforespondentocompany,o asowelloasoreportoEx.oC/11odatedo17/10/2018obasedoonotheosameo (wronglyoreferredotooasoFIRoinotheosurveyoreportoEx.oRW1/2)o andoreliedouponobyotheorespondentoisoinconclusiveobecauseoheo wasostatedlyoinformedobyooneoVinayoKumaroregardingotheofireo incidento ino questiono whereupono heo alongwitho Naresho Kumaro ando Vinodo Kumaro hado rushedo towardso theo placeo ofo fireo buto noneoofotheoaboveonamedoOmoParkash,oVinayoKumar,oNaresho Kumaro ando Vinodo Kumar,o allo employeeso ofo theo respondento companyo hado beeno examinedo byo theo aboveo namedo policeo official,o ando noro haso anyo ofo themo beeno examinedo byo theo respondentotooestablishotheocauseoofofire,ooroevenotoopinopointo theo placeo fromo whicho theo fireo hado initiallyo startedo ando ultimatelyo engulfedo theo entireo leasedo premiseso spreado overo approximatelyotenothousandosquareometers.o

(c)o Eveno theo relianceo byo theo aboveo namedo surveyoro ino itso aboveo referredoreportoEx.oRW1/2oonotheofireobrigadeoreportoEx.oC/13o datedo 28/11/2018o iso inconclusiveo becauseo ito iso mentionedo thereino thato oneo Surajo hado telephonicallyo informedo fromo hiso mobileo numbero 7039093758o regardingo theo fireo incidento ino question.o Theo saido reporto makeso noo mentiono whatsoevero regardingotheoaboveonamedoSurajohavingodisclosedotheocauseoofo fire,o ando noro haso heo beeno examinedo byo theo respondent.o Moreover,otheosaidoreportoEx.oC/13omerelyomentions,owithouto referenceotooanyodefiniteosourceoofoinformation,othatotheocauseo ofofireo"appearsotoobe"oonoaccountoofoshortocircuit"o o o o o 3?.e Theo Arbitratoro waso supposedo too adjudicateo theo controversyo broughto beforeo himo keepingo ino viewo theo expresso termso ofo theo contracto o Pageo17oofo53o o o o

38.e Theoleaseodeedodepictsothatotheopartiesohadovisualizedovariouso exigenciesowhichomayoariseoduringosubsistenceoofotheotermoofolease.oOneo suchoexigencyowasotheodamageocausedotootheoleasedopropertyoinoanoincidento ofo fire.o Theo partieso too contracto consequentlyo agreedo too placeo exclusiveo responsibilityouponotheolessor/respondentoofoprotectionoofoleasedoproperty,o fromofire,obyogettingoitoinsured.oo 3?.e Ito was,o therefore,o foro theo claimanto too geto theo entireo leasedo premiseso consistingo ofo buildingo premiseso ando allo equipments,o goods,o furniture,ofixturesoandobelongingsoinotheoleaseopremisesoadequatelyoinsured,o duringotheoleaseotenure.oClauseo13oofotheoContractoclearlyorevealsosuchointento ofotheoparties.oo

40.e InotermsoofoClauseo13oofotheoagreement,oaoFireoandoPerilsoPolicyo wasoavailedoofobyotheoclaimantotoosecureotheoleaseopremisesofromotheoOrientalo InsuranceoCompany.oTheoclaimantoforosecuringotheoleasedopremisesobyowayo ofoinsuranceopolicyoassessedoitsovalueo@oRs.5.00oCroreso(Rs.o4.50oCroresoforo theoleasedopremisesoandoRs.o50.00oLakhsoforofireofightingoequipments).oo 4$.e Theofireoincidentowasodulyoreportedotootheoinsurance-companyo andoitsosurveyoroinspectedotheopremisesoandoultimatelyosubmittedoaoreporto determiningo theo losseso causedo ino theo fireo incidento aso Rs.2.5o Crores.o Foro determinationoofoinsuranceoclaim,otheovalueoofoleasedopremisesowasoassessedo ato Rs.5.00o Crores.o Theo claimanto haso acceptedo sucho determinationo ofo insuranceoclaimoandoreceivedotheoinsuranceoamountowithoutoanyoprotest.oo

42.e Theoinsuranceoclaimowasoprocessedoonotheopremiseothatoitowasoao caseoofoaccidentalofireodueotooshort-circuit.oAlloagenciesothatowereoentrustedo o Pageo18oofo53o o o o withotheotaskoofoinvestigatingotheoincident,ohaveounanimouslyoconcludedothato theofireooccurredodueotooshort-circuit.oTheoclaimantohasoalsooacceptedothiso position.o Theo claimanto noto onlyo acceptedo theo insuranceo claim,o buto alsoo subrogatedohisorightsotootheoinsurance-company.o

43.e Ato theo veryo outset,o weo mayo noteo thato theo surveyoro ofo theo insurance-companyohadonoticedothatotheoinsuranceopolicyowasounder-valued.o Theofinalosurveyoreportoofoinsurerodatedo27.05.2019ohasobeenobroughtoono recordobeforeotheoArbitrator.oItowasodulyoacceptedobyotheoclaimant.oClauseo7o ofothisoreportodealtowithotheocauseoofolossotootheoinsuredopremisesowhichoiso reproducedohereinafter:-o o "(7)oCauseoofoLosso oBasedo ono theo surveyo ando verificationso ofo theo affectedo siteo ando documentsoprovided,omostoproximateocauseoofolossoisoexplainedoaso below:o o 07.1)oInsured'soStatemento o Statementoofoinsured'soofficialsoisoenclosedoasoReferoAnnexureo-o6.o o oAsoperoinsured'soofficials,otheocauseoofofireoisoelectricoshortocircuit.o o 07.2)oPoliceoReporto oTheo insuredo reportedo theo mattero too localo policeo stationo ato Pataudi,o Gurgaono (Annexureo -o 7).o Theo policeo authorityo haveo bookedotheocaseovideoGeneraloDiaryoNo.o22odatedo17.10.2018o (Annexureo–o8).o o 07.3)oFireoBrigadeoReporto oTheoinsuredohaveoimmediatelyoinformedotheosaidoincidentotootheo fireobrigadeoandowhoseoserviceoengineerorushedotooaffectedositeo andocontrolotheofire.o o CopyoofoFireoTenderoCertificateoisoenclosedoasoAnnexureo-o9.o o 07.4)oNewsopapero oTheonewsowasowidelyocoveredobyotheoprinto&oelectronicomediao (Annexureo-o10).oAsoreportedobyooneoofotheomediaochannel:o o Pageo19oofo53o o o o o Quoteo oAomajorofireobrokeooutoatoaogarmentowarehouseoinoHaryana'so Gurugramo ono Tuesdayo morning.o Theo garmento warehouseo iso locatedo ato Rewario roado nearo Pataudio ino Gurugramo districto ofo Haryana.o Ato leasto sixo fireo tenderso haveo rushedo too theo spoto too douseotheofire.o o 07.5)oOuroOpiniono oBasedoonotheosurveyocarriedooutoandoverificationodone,oweoareoofo theoopinionothatodueotooelectricoshort-circuitingoinosomeoelectrico wire,o sparkso wereo generated,o whicho causedo fire.o Theo fireo waso aggravatedobecauseoofoavailabilityoofocombustibleomaterialostocko nearbyoandodueotoowhich,otheofireospreadoinotheoentireobuildingo shed,odamagingoItocompletely.oItowasoverifiedothatotheocauseoofo fireoisonotointentional.o o Aso iso clearo fromo above,o theo causeo ofo losso iso suddeno ando accidentalo ino natureo ando standso coveredo undero theo captionedo policyoofoinsuranceoandohence,othereoappearsotoobeoaoliabilityoono theounderwriter'sow.r.t.otheocaptionedoclaim."o o

44.e Interestingly,owhileolodgingotheoinsuranceoclaim,otheoclaimanto neveroassertedothatoeitherotheofireoincidentowasoanooutcomeoofonegligenceoono partoofotheolesseeonorowasoitoclaimedothatothereowasoanyofailureoonotheiroparto inoadheringotootheosafetyonorms.oTheoconclusionsodrawnobyotheosurveyorothato causeoofolossowasosuddenoandoaccidentaloinonatureoandowasonotointentionalo haveonotoonlyobecomeofinaloagainstotheoclaimantobutowasoactuallyoacceptedo byo theo claimanto whoo receivedo theo compensationo claimo assessedo byo theo insurer.o

45.e Clauseo 13o ofo theo contracto otherwiseo provideso thato theo responsibilityotoogetotheopremisesosecuredobyowayoofoinsuranceopolicyowaso thatoofotheoclaimant.oTheovalueroinohisoreportohasoreturnedoaospecificofindingo o Pageo20oofo53o o o o thatotheobuildingopremisesowasounder-insuredotootheoextentoofo19.92%owhileo theo fireo fightingo systemo ando othero equipmentso wereo under-insuredo too theo extento ofo 54.50%.o Theseo findingso ofo theo surveyoro clearlyo showo thato theo obligationo undero theo contracto ono parto ofo theo claimanto too geto theo leasedo premisesoadequatelyoinsuredohadonotobeenodischargedobyotheoclaimant.oAnyo failureo ofo sucho obligationo undero theo contracto hado theo obviouso effecto ofo reducingo theo insuranceo claim.o o Thiso shorto fall/loss,o flowingo fromo undero valuationo ofo theo leasedo premiseso foro insurance,o ino termso ofo theo contract,o wouldohaveotoofallouponotheoclaimant.oo 4?.e Arbitrator,oinohisoawardohasovirtuallyotriedotoomakeoupoforothiso shortfallo withouto appreciatingo thato theo contracto requiredo theo claimanto too secureotheoleasedopremisesobyogettingoitoadequatelyoinsured.oByoawardingo sumotoocompensateotheolossesoarisingofromounderovaluationoofotheoproperty,o foro theo purposeso ofo insurance,o theo Arbitratoro haso virtuallyo re-writteno theo contractowhichoisonotopermissible.oThisoaspectohasobeenocompletelyoomittedo fromo considerationo byo theo Arbitratoro eveno thougho theo appellanto hado specificallyoassertedothatosecuringotheoleased-outopremiseoagainstotheoincidento ofofireobyowayoofoinsuranceowasotheoexclusiveoobligationoofotheoclaimant.o 4?.e Atothisostage,oitowouldobeoworthwhileotooreferotootheofindingsoofo theoinsurero witho regardo toounderovaluationo ofoleasedopremises,o whichoareo reproducedoasounder:-o o9)oAdequacyoofoSumoInsuredoo ToocheckotheoAdequacyoofoSumoInsured,oitoisoimperativeotooarriveo atotheoValueoatoRiskoasoonotheodateoofoloss.o o Pageo21oofo53o o o o oAsoperotheopolicy,oAvailableoSumoInsuredoisoRs.4,50,00,000/-oforo OfficeoCumoGodownoandoBoundaryoWalls.o Theoinsuredohaveoprovidedousotheolayoutoplanoofopremiseso(Refero Annexureo 5)o ando valuationo reporto aso ono 29.04.2019o givingo currentodayoconstructionocostoofowarehouseo(Annexure-11).oTheo relevantodetailoareopero"ValuationoReport"oareoasounder:o o S.oNo.o Itemo Unito Qtyo Rateo Amounto

1.e Shedo Sfto 99500o 400o 3,98,00,000o

2.e BoundaryoWallo Rmtro 600o 1900o 11,40,000o o Costo ofo Mailo Rollingo --o --o --o 50,000o gateo o Irono angleo witho --o --o --o 50,000o Bardedowireo

3.e Parapeto Waal,o Fireo Sfto 3465o 800o 27,72,000o safetyo roomo ando canteeno witho parapeto walo o Fireo safetyo Sfto 350o 500o 1,75,000o Room+o Toileto Blocko o Canteenoo Sfto 2189o 700o 15,32,300o

4.e Fireo Fightingo Cumo 9247.2o 500o 46,23,600o Systemo o o o 5,01,42,900o o Lookingoatotheotypeoofoconstruction,oweohaveoconsideredoRs.450/-o perosftoasotheopresentosimilaroconstructionorateoforoshedoandoRs.o 6450/-o pero Rmto foro boundaryo wall.o Theo rateo Analysiso foro boundaryowalloisoattachedoasoAnnexure-12.o o Theocaptionedopolicyoisoonomarketovalueobasisotheoconstructionoofo warehouseo iso 03o yearso old;o henceo weo haveo appliedo 7.5%o depreciationo(2.5%operoannum).o o Inosupportoofoconstructionoyear,otheoInsuredohaveoprovidedousotheo contractorobillsoandoproofoofopaymento(Annexureo-o13).o o Ino addition,o theo copieso ofo balanceo sheetso wereo obtainedo fromo insuredo &o ito waso notedo thato theo buildingo waso capitalizedo inooo 2014-15.o o o Pageo22oofo53o o o o Theo buildingo drawingso wereo obtainedo &o verifiedo ato theo site.o Takingopresentomarketoratesointooconsideration,otheoValueoatoRisko isocalculatedoasofollows:o Sr.o Itemo Unito Qty.o Rateo Reinstatemento Depreciationo MarketoValueo No.o Valueo(Rs.)o (%)o Amounto (Rs.)o (Rs.)o 1o Shedoo Sfto 1,02,295.50o 450.00o 4,60,32,975.00o 7.50%o 34,52,473.13o 4,25,80,501.88o Boundaryo Rmtro 600.00o 6450.00o 38,70,000.00o 7.50%o 2,90,250.00o 35,79,750.00o Wallo CostoofoMaino -o -o --o 60,000.00o 7.50%o 4500.00o 55,500.00o 2o RollingoGateo IronoAngleo -o 600.00o 100.00o 65,000.00o 7.50%o 4875.00o 60,125.00o withoBardedo wireo Officeo Sfto 3465.00o 1500.00o 51,97,500.00o 7.50%o 3,89,812.50o 48,07,687.50o Fireosafetyo Sfto 350.00o 1000.00o 3,50,000.00o 7.50%o 26,250.00o 3,23,750.00o 3o Roomo+o ToiletoBlocko Canteeno Sfto 2189.00o 1200.00o 26,26,800.00o 7.50%o 1,97,010.00o 24,29,790.00o Waterotanks,o LSo o o 3,00,000.00o 7.50%o 22,500.00o 2,77,500.00o plumbing,o 4o sanitaryo&o externalo serviceso Externalo Sfto 25000o 90.00o 22,50,000.00o 7.50%o 1,68,750.00o 20,81,250.00o 5o Paving/Roado TOTALo 5,61,95,854.38o o o o Therefore,oo o o o ValueoatoRiskoo =o Rs.5,61,95,854o o o o SumoInsuredo o =o Rs.4,50,00,000o o o Therefore,oo o o o UnderoInsuranceo =o 1o-o4,50,00,000oooooooXo100o o o o o oooooo5,61,95,854o o o o =o 19.92%o o B.oFireoFightingoSystemo AsoperopolicyoAvailableoSumoInsuredoisoRs.50,00,000/-oforoFireoExtinguisherso AppliancesoInstalledoinoGodown.o Theo insuredo haveo providedo uso theo currento valueo ofo Fireo Extinguisherso ApplianceoasoperoValuationoReportobasedoonoCPWDorateso(Annexure-14).oTheo relevantodetailoisoasofollows:o Sr.oNo.o Itemo Unito Qty.o Rateo Amounto 1o Fireo Cumo 9247.20o 500o 46,23,600.00o Fightingo Systemo o Totalo 46,23,600.00o o AsoperoCPWD,oPlinthoareaorateso(PARo2012),otheorateoforoFireoFightingo equipmento witho automatico sprinklero systemo &o Fireo Alarmo systemo iso Rs.1250/-operosqmoasotheopresentosimilarocost.o o Pageo23oofo53o o o o Theo captionedo policyo iso ono marketo valueo basiso theo constructiono ofo warehouseoiso03oyearsoold,ohenceoweohaveoappliedo7.5%odepreciation.o Basedoonotheoabove,ovalueoatoRiskoisocalculatedoasobelow:-o Sr.o Itemo Unito Qty.o Rateo Reinstatemento Depreciationo MarketoValueo No.o Valueo(Rs.)o (%)o Amounto (Rs.)o (Rs.)o FireoFightingo Sqmo 9503.48o 750o 71,27,612.88o 7.5%o 5,34,570.97o 65,93,041.91o systemo witho 1o sprinklero systemo Automatico Sqmo 9503.48o 500o 47,51,741.92o 7.5%o 3,56,380.64o 43,95,361.27o o FireoAlarmo o o o o TOTALo 1,09,88,403.18o o oTherefore,o o o o ValueoatoRiskoo =o Rs.1,09,88,403o o o o SumoInsuredo o =o Rs.50,00,000o o o Therefore,oo o o o UnderoInsuranceo =o ooooo1o-o50,00,000oo Xo100o o o o o oooooo1,09,88,403o o o o =o 54.50o%o o o

(10)o Insured'soClaimo TheoinsuredohadoinitiallyosubmittedoanoestimateoofoRs.53,81,0651/-o latero ono theo insuredo haso submittedo theiro estimateo ofo losso foro Rs.4,73,50,841/-o aso preparedo byo M/so Jindalo Engineerso &o Contractorsotowardsotheocaptionedolossovideoclaimobillo(Annexureo–o 15)oandoclaimoformo(Annexureo–o16)otowardsotheocaptionedoloss.oo o Theosummarizedobreak-upoofoestimateoofolossoisoasofollows:-o Sr.oNo.o Descriptiono Claimedo(Rs.)o 1o CiviloWorkso 4,22,50,091o 2o FireoFightingoWorkso 51,00,750o o

(11)o OuroAssessmentoofoLosso Oneoassessmentotowardsovariousoheadsoisoasounder:-o o A)eWarehouseoShedo e TheoinsuredohaveoclaimedoRs.o4,22,50,091/-ootowardsotheo costoofowarehouse.o e Weohaveorecommendedoonlyothoseoitemsoofoworkowithowereo foundoasodamagedoandohaveocoverageounderotheopolicyoofo insurance.o e Theocaptionedopolicyoisoissuedoonomarketovalueobasis,otheo constructionoofowarehouseoiso03oyearsoold;ohenceoweohaveo appliedo7.5%odepreciationo(2.5%operoannum).o o o Pageo24oofo53o o o o Basedo ono theo above,o ouro detailedo assessmento ofo losso towardso theo Warehouseo Shedo iso enclosedo aso Annexureo Ao ando o summarizedo summaryoofoassessmentoisoasounder:-o o Sr.o Descriptiono Claimedo Recommendedo Recommendedo No.o Beforeo Aftero Depreciationo Depreciationoo (MarketoValue)o Rs.o

1.o CiviloWorkso 4,22,50,091/-o 3,82,71,665o 3,54,01,290o o B)oFireoFightingoSystemo o e TheoinsuredohaveoclaimedoRs.51,00,750/-otowardsotheocostoofoFireo FightingoSystem.o e Weohaveorecommendedoonlyothoseoitemsowhichowereofoundodamagedo aso pero ouro inspectiono ando haveo coverageo undero theo Policyo ofo insurance.o e Theocaptionedopolicyoissuedoonomarketovalueobasisotheoconstructiono ofo warehouseo iso 03o yearso old.o Hence,o weo haveo appliedo 7.5%o depreciation.o Basedo ono theo above,o ouro detailedo assessmento ofo losso towardso theo Fireo FightingoSystemoisoenclosedoasoAnnexure-Boandoosummarizedosummaryoofo assessmentoisoasounder:-o Sr.o Descriptiono Claimedo Recommendedo RecommendedoAftero No.o Beforeo Depreciationoo Depreciationo (MarketoValue)oRs.o

1.o FireoFightingoSystemo 51,00,750/-o 46,70,500/-/o 43,20,213/-o o

(12)oo Salvageo Theo damagedo itemso constituteo salvageo valueo ando foro whicho theo insuredohaveoprovidedousotheo02osalvageoquotationsoandohighestoquoteo@o Rs.o12/-operokgo(Annexureo-o17).o Theolistoofosalvageoitemsowasopreparedoandoverified.o TheosalvagingoprocessowasoInitiatedobyoM/soSalvageoSettlersoPvt.oLtd.o ino lineo witho theo CVCo guidelines,o ando advertisementso wereo giveno ino theo newspapersoandoe-auctionoconducted.o Afterobiddingoprocess,oM/soPradhanoAssociatesowasofoundotoobeotheo highestobidderoandoheohadoquotedoforoRs.20.40o+oGSTo@o18%.o Aototaloofo220.52oMToscraposoldotoohighestobiddero@oRs.o20.40/-operokg.o o Pageo25oofo53o o o o o Scrapoweightooo =o220.52oMTo o SalvageoRateoo =oRs.o20.40operokgo(20400operoMT)o o SalvageoValueo =oRs.44,98,608o(A)o o CopyoofosalvageoreportosaleoinvoiceoisoenclosedoasoAnnexureo-o18.o o Ino additiono too above,o thereo iso stillo someo scrapo ofo structuralo steelo memberso burieso undero debriso ofo materialo likeo metalo rackso etc.o belongingotootenant,owhichoweightoapprox.o30oMTo o Scrapoweighto(buriesounderodebris)o =o 30oMToo SalvageoRateoo =oo Rs.o20.40operokgo(20400operoMT)o SalvageoValueo =oo Rs.6,12,000o(B)o o Also,otheoquantityoofoTorosteeloclaimedoinotheoflooroslaboclaimedoiso38.70o MT,owhichoshalloconstituteosalvageoafterobreakingoofoflooroslab.o TakingoRs.o5,000/-operoMToasoretrievalocostoforoobtainingotheosteeloaftero breakingoofoconcrete.o NetoCostoofoToroSteelo o =o Rs.o15,400operoMTo Scrapoweighto(ofoTorosteel)oo =o 38.70oMTo SalvageoRateoo o o =o Rs.o15,400operoMTo SalvageoValueo o o =oo Rs.5,95,980o(C)o o Therefore,o TotaloSalvageoValueo(Ao+oBo+oC)o=oRs.o57,06,588/-o Note:oTheoGSTocomponentohasonotobeenoconsideredoasotheotransactiono isobetweenoinsuredo&osalvageobuyer.o

(13)oo SummaryoofoAssessmento Basedoonotheoaboveoassessment,oSalvage,oApplicableoExcesso&oDisposalo feeopaidobyoinsured,otheosummaryoofoassessmentoisoasounder:o SUMMARYoOFoASSESSMENTo Sr.o Descriptiono Claimedo Recommendedo Dep.o Recommendedo Salavageo Assessedo Debriso Neto U.I.o%o NetoofoU.I.o No.oo beforeo afterodepreciationo removaloo Assessmento depreciationo (MarketoValue)o @o1%o 1o CiviloWorkso 4,22,50,091o 3,82,71,665o 7.50%o 3,54,01,290o 48,06,866o 3,05,94,424o 3,05,944o 3,09,00,368o 19.92%o 2,47,44,113o 2o FireoFightingo 51,00,750o 46,70,500o 7.50%o 43,20,213o 8,99,722o 34,20,491o 34,205o 34,54,696o 54.50%o 15,71,974o Workso o Total=o 4,73,50,841o 4,29,42,165o o 3,97,21,503o 57,06,588o 3,40,14,915o o 3,43,55,064o o 2,63,16,087o o Lesso:oExcesso5%o 13,15,804o o NetoAssuredoLoss=o 2,50,00,282o o Sayo=o 2,50,00,000o o o Pageo26oofo53o o o o

(14)oSalvageoDisposaloFeeo Aftero theo salvageo disposal,o theo salvageo settlero haso issuedo ao salvageo disposalofeeobillovideoinvoicesono.oSS/609/18-19odatedo21.02.2019o &o SS/19-20/007odatedo02.04.2019oinotheonameoofoinsuredoandotheosalvageo disposalofeeopaidobyotheoinsured.o Hence,oweohaveoconsideredotheosalvageodisposalofee.o@oRs.o2,39,404/-o withoutoGSToinoouroassessment.o Therefore,o SalvageoDisposaloFeeo =o Rs.o2,39,404/-o Therefore,o NetoLiabilityo o o =o Rs.o(2,50,00,000o+2,39,404)oo o o =o Rs.o2,52,39,404o TheoaboveoamountoofoRs.o2,52,39,404/-o(RupeesoTwooCroresoFiftyoTwoo LacsoThirtyoNineoThousandoFouroHundredoandoFouroOnly)oisotheoneto liabilityoofotheounderwriters,oifoaccepted."o o TheoinsuredohaveogivenoconsentoisoenclosedoasoAnnexureo-o19.o o Thisofinalosurveyoreportoisobeingosubmittedowithoutoprejudiceoandoisosubjecto tootheotermso&oconditionsoofotheopolicyoofoinsurance."o oo

48.e Goingobyotheotermsoofotheocontractoi.e.oleaseodeed,oanyolossoorodamageotoo theoleasedopremisesoonoaccountoofofireoincidentohadotoobeomadeogoodofromotheo proceedsoofoinsuranceoclaimoagainstotheopolicyoavailedoofobyotheoclaimant.oAnyo shortfalloonoaccountoofoawardoofolesseroamountotowardsoinsuranceoclaimowasoao matterobetweenotheoclaimantoandoitsoinsurer.oSuchoshortfallocouldonotohaveobeeno madeotheobasisoforoaoclaimoagainstotheoappellantoasoperoClauseo13oofotheoleaseodeed.o 4?.e Eveno ifo sucho ao claimo couldo beo raisedo againsto theo appellant,o notwithstandingoClauseo13oofotheoleaseodeed,oitowillohaveotoobeoseenoasotoo whetheroitocouldobeoallowedoonotheobasisoofomaterialoplacedoonorecord.oForo sucho purposeso also,o theo provisionso ofo theo leaseo deedo willo haveo too beo o Pageo27oofo53o o o o

50.e TheoArbitratorohasoacceptedotheoclaimooforespondento–oclaimanto forocompensationorelyingouponoClauseo11o(v)oofotheoLeaseoDeed/Contract,o whichoreadsoasounder:-o "ThatotheoLessoroshallocarryooutoallostructuralorepairs,oLeakageoando seepageoatohisoownocostoinorespectoofotheoLeasedoPremisesoduringotheo Leaseo Period,o withino 2o (TWO)o week,o aftero theo sameo haso beeno intimatedoinowritingobyotheoLessee.oHowever,oitoisoclarifiedothatoanyo materialo damage/destructiono causedo too theo Leasedo Premiseso attributedo too anyo act,o ofo theo Lesseeo oro itso employees,o servants,o agents,oshallobeorepairedoandorectifiedobyotheoLesseeoaloneoatoitsosoleo costsoandoexpenses."o o 5$.e Afterocomingotootheoconclusionothatofireoincidentowasodueotoo negligenceoofotheoappellant,otheoArbitratorodeterminedotheoliabilityoonotheo strengthoofofollowingoreasons:-o "(e)oAsoperotheoreportoEx.oRW2/2oofoProtocoloInsuranceoSurveyorso&o LossoAccessorsosubmittedotootheoinsuranceoofotheoclaimantonamelyo Orientalo Insuranceo Company,o theo claimanto waso liableo too beo reimbursedo onlyo too theo extento ofo Rs.o 3,54,01,290/-o againsto theo amounto ofo Rs.o 4,22,50,091/-o claimedo byo theo insuredo claimanto ino respecto ofo theo warehouseo shedo ando ano amounto ofo Rs.o 43,20,213/- againsto theo amounto ofo Rs.o 51,00,750/-soughto byo theo claimanto ino respectoofolossotoofireofightingosystemobutooutoofowhichorecommendedo amounts,oaototaloamountoofoRs.o2,52,39,404/-oonlyowasoreimbursedotoo theoclaimantovideodischargeocertificatesoEx.oRW2/3otooEx.oRW2/5oouto ofotheoinsuredoamountoofoRs.o4.5oCroresoinorespectoofotheowarehouseo shedoandoRs.o50oLakhsoquaotheofireofightingosystem,ototallingoRs.o5o Crores.o

(f)o (i)o Quao financialo losso sufferedo byo theo claimanto too theo leasedo premiseso dueo too theo fireo incidento ino questiono theo aboveo namedo Ramesho Chander,o CW1o haso testifiedo thato theo totalo costo ofo constructionoofotheoleasedopremisesohadoamountedotooRs.o8.5ocrores.o o Pageo28oofo53o o o o Ino thiso context,o theo claimanto haso tenderedo aso Ex.o C/8o theo confirmationoletterodatedo28/05/2015oissuedobyoChauhanoDhamijao ando Associates,o Charteredo Accountantso confirmingo thato aso pero information/detailso providedo byo theo claimant,o ano amounto ofo Rs.o 8,43,51,568/-wasoincurredoforotheoconstructionoofotheowarehouseoino questionowhichohoweveromerelyodescribes,owithoutoanyosupportingo documents,othatotheoleasedopremisesoinoquestionowereoconstructedoato ao costo ofo Rs.o 8,43,51,568/-"aso pero informationo providedo byo M/so Dayanando warehouse".o However,o ino theo absenceo ofo documentaryo corroborationo ofo expenseso incurredo statedlyo too theo extento ofo Rs.o 8,43,51,568/,otheosaidoconfirmationoletteroandotheotestimonyoofoCWIo Ramesho Chando regardingo incurringo ofo expenseso too theo extento detailedoaboveocannotobeoconsideredotoobeoconclusive,omoreosoowheno insuranceopolicyoEx.oC/2odatedo28/05/2018omentionsothatotheoleasedo premisesowereoinsuredoonlyoforoanoamountoofoRs.o4.5oCrore,owhereaso theofireohydrantosystemowasoinsuredoforoRs.o50oLakhs,othusototallingo Rs.o5oCroresoinoall."o o

52.e Theobasisotooallowotheoclaimoinofavouroofotheorespondentoisotheo aboveoanalysis,oasoperowhichotheocostoofoconstructionowasocertifiedotoobeo Rs.8.43oCroresoapproximately,obyotheocharteredoaccountant.oo

53.e oClauseo 11o (v),o however,o restrictedo theo liabilityo ofo lesseeo too repair/rectifyo theo damage/destructiono causedo too theo leasedo premises,o attributedotooanyoactoofolessee/appellantooroitsoemployees,oservants,oagentso orotooreimburseosuchocostsoincurred.oForosuchopurposes,otheoclaimantohado toofurnishoproofoofotheoamountospentotowardsorepair/rectificationoofotheo leasedopremisesoinotheofireoincidentoapartofromoestablishingotheofactothato damageo too leasedo premiseso ino theo fireo incidento waso ono accounto ofo o Pageo29oofo53o o o o

54.e Ao carefulo scrutinyo ofo theo materialso placedo ono recordo wouldo revealothatotheoonlyomaterialoinosupportoofosuchoclaimoisotheocertificateoofo theoCharteredoAccountantocertifyingotheovalueoofotheowarehouse/leasedo premisesoasowelloasotheodocumentsotooshowotheoamountoofoloanoallegedlyo availedoforoconstructionoofotheoleasedooutopremises.oNooevidenceohasobeeno placedo ono recordo byo theo claimanto too demonstrateo aso too whato waso theo amountoactuallyospentotowardsorepair/restorationoofotheoleasedopremiseso aftero theo fireo incident.o Merelyo statingo oro certifyingo theo costo incurredo towardsoconstructionoofotheoleasedopremisesowouldonotobeosufficientotoo establishoaoclaimounderoClauseo11o(v)oofotheoLeaseoDeed/Contract.oo

55.e oIno ordero too satisfactorilyo makeo outo ao caseo foro compensationo underoClauseo11o(v)oofotheoContract,otheoclaimantowasorequiredotoofurnisho evidenceoofoactualoamountospentotowardsorepairoandorectificationoofotheo leasedo premises.o Ino itso absence,o noo claimo towardso costo ofo repair/restorationocouldohaveootherwiseobeenoaccessedoandoallowed.o 5?.e oMerelyo statingo thato someo loano etc.o hado beeno availedo byo theo lessorofromotheobankoalsooafterotheofireoincident,oallegedlyofororestorationo ofoleasedopremises,owouldonotoamountotooproof/evidenceoofotheoactualocosto oforepair/rectification,owhichoaloneocouldobeoclaimedobyotheolessorofromo theoappellantounderoClauseo11o(v)oofotheoleaseodeed.oo 5?.e oItoisoaptotoostateothatotheoArbitratorohadotoodecideotheoclaimoono theo basiso ofo specifico termso ofo theo contracto enteredo intoo betweeno theo parties.oItohadonooauthorityotooallowotheoclaimocontraryotootheoexpresso termsoofotheocontractoorotoore-inventotheocontractoitself.oo o Pageo30oofo53o o o o

58.e TheoArbitratorocouldonotohaveoassumedotheofireoincidentotoohaveo beeno causedo dueo too negligenceo ofo theo appellant'so employees,o byo dislodgingo admittedo evidenceo ofo shorto circuito beingo theo causeo ofo fireo incident,o wheno theo claimant/respondento hado acquiescedo too sucho determinationobyohisoownoinsureroandohadosubrogatedohisorightsoinofavouro ofotheoinsuranceocompany.oTheopoliceoreport,otheoreportoofofireobrigadeoaso welloasotheoreportoofotheosurveyoroofolessor'soinsurerocategoricallyofoundo theoincidentotoobeoaccidentaloinonatureoandowasonotofoundodeliberate.oAllo suchomaterialsocouldonotohaveobeenosetoatonaughtobyotheoArbitratorowhileo holdingo theo incidento too haveo beeno causedo dueo too negligenceo ofo theo appellant.oo 5?.e oItoisootherwiseoadmittedothatoevenotheoappellantosufferedohugeo lossesoinotheoformoofodestructionoofostoredomaterialotootheotuneoofonearlyo Rs.120o Crores.o Merelyo becauseotheo appellantohado itso stocko adequatelyo insuredoinotermsoofotheocontractoandoitsoinsureroreimbursedosuchoamounto wouldonotoleadotooanoinferenceothatotheodamageotootheoleasedopremisesoino theofireoincidentowasodueotootheoappellantooroitsoagents/employees.oo ?0.e Curiously,otheoArbitratoroinsteadoofoadjudicatingotheoclaimoofo theo respondento ino accordanceo witho theo termso ofo leaseo deed/contract,o proceededotoomakeooutoaonewocaseowhichowasonotoevenotheoclaimosetoupo beforeo him.o Thiso wouldo beo reflectedo fromo theo facto thato theo Arbitratoro attributedotheocauseoforodestructionoofoleasedopremisesotootheoraisingoofo fouro unauthorizedo floorso providingo longo spano rackso foro storageo ino theo warehouseo whicho renderedo theo fireo fightingo systemo ineffective.o Theo o Pageo31oofo53o o o o arbitratorohasoheldothatothougholesseeoisoentitledotoocarryooutointerioroworko andotoodoocivilochangesobutoitodoesonotoextendotooraisingoofoadditionalo floorsowhichorenderedotheofireofightingosystemoineffective.oo ?$.e TheoArbitratorohasoheldoasounderoinoParao27o(b)o&o(c)oofohiso award:-o "27.oo XXXoXXXXoXXXXoXXXXoXXXXXo

(b)oo Noo doubto clauseo 12o (vii)o ofo theo leaseo deedo Ex.o C/9o datedo20/04/2016opermitsotheorespondentotoodooallocivilochangeso butotheosaidoclauseoconfinesosuchocivilochangesoonlyotootheoextento ofoinstallationoofoitsomachineryobyotheorespondentoinotheoleasedo premisesoandothereforeoraisingoofofourofloorsoi.e.G+3o(inoadditiono tooprovidingolongospanoracksowitho4otierostorage)owasocertainlyo grossoviolationoofoclauseo12o(vii)oofotheoleaseodeed,owhichoheighto ofofourofloorsothusoexplainsotheoineffectivenessoofotheofireohydranto systemowhich.owasoprovidedoonlyoforomeetingotheocontingencyoofo fireo fightingo arrangemento foro groundo flooro constructiono ando wouldohaveonotobeenoeffectiveoforosucho4ofloorohighostructure.o

(c)oo Sucho4ofloorohighostructureoasoadvertedotooaboveowouldo thusoinviteoliabilityoonotheorespondentoasoperoclauseo11o(v)oofotheo leaseodeedoEx.oC/9odatedo20/04/2016owhichoreadsoasounder:-o o "Thatotheolessoroshallocarryoutoallostructuralorepairs,o leakageoandoseepageoatohisoownocostoinorespectoofotheo leasedo premiseso duringo theo leaseo period,o withino 2o (TWOo week,o aftero theo sameo haso beeno intimatedo ino writingobyotheolessee.oHowever,oitoisoclarifiedothatoanyo materialo damage/destructiono causedo too theo leasedo premiseso attributedo too anyo act,o ofo theo lesseeo oro itso employees,o servants.o agents,o shallo beo repairedo ando rectifiedo byo theo lesseeo aloneo ato itso soleo costso ando expenses."oo o o Pageo32oofo53o o o o ?2.e Learnedoseniorocounseloforotheoappellantohasotakenousothrougho theoclaimopetitionoofotheorespondent,oinoitsoentirety,otooshowothatonoosucho claimowasoeveroraisedobyotheoclaimant-respondent.oo ?3.e Weohaveoperusedotheostatementoofoclaimoofoclaimant-respondento whicho iso Annexureo A/8o (pageo 251o too 273o ofo theo papero book)o ofo thiso appeal.o Theo contentso ofostatemento ofo claimo areo notodisputed.oWeo findo substanceoinotheoappellant'socontentionothatotheoclaimant-respondentohado notoevenoallegedothatoanyounauthorizedofloorsowereoraisedoinotheoleasedo premiseso byo theo appellant.o Weo alsoo findo substanceo ino theo appellant'so contentionothatoinotheoabsenceoofoanyosuchopleaotakenobyotheoclaimant-respondentoinoitsostatementoofoclaim,otheoappellantsohadonoooccasionooro opportunityotoocontrovertosuchoclaimoofotheorespondent.oo ?4.e Althougho duringo theo courseo ofo argumentso beforeo uso certaino photographsowereoproducedotooshowothatoinofactonooadditionalofloorsowereo erectedoinotheoleasedopremisesoandotheostorageoofogoodsowereoonlyotoo optimizeotheoutilizationoofospace,obyoplacingoracks,owhichoisotheonormalo practiceoofostorageoinotheowarehouse,obutoweorefrainofromocommentingo uponosuchofactualoaspectsowhenoitoisonoticedothatosuchofactsowereonevero pleaded/setoupobyotheoclaimantobeforeotheoarbitrator.oTheoArbitratorohas,o therefore,omadeooutoaonewocaseotoograntoreliefonotwithstandingotheofacto thatotheoappellantsoneverohadoanoopportunityotoocontrovertoitooropresentoitso versionoonothisoaspect.oTheofindingoofotheoArbitrator,oonothisoaspect,ohaso thusocausedodenialoofoopportunityotootheoappellantotoocontestotheoclaimoando resultedo ino causingo incapacityo foro theo appellanto too contesto theo claim,o o Pageo33oofo53o o o o whichoisooneoofotheorecognizedogroundsounderoSectiono34oofotheoActoofo 1996otoointerfereowithotheoaward.o ?5.e oTheoArbitratoroinoParao28oofohisoawardohasovirtuallyorejectedoallo admittedomaterialoavailableoonorecordowithoregardotootheofireoincidentoino question,oincludingotheosurveyor'soreportowhichohadoattainedofinalityoquao theoclaimant.oEvidenceowhichoindicatedothatoattemptsowereomadeobyotheo appellant'so employeeso too douseo theo fireo haveo beeno rejectedo byo theo Arbitratorobyogoingobeyondotheoscopeoofoitsojurisdiction.oParao28oofotheo awardoisoreproducedohereinafter:-o "28.o(a)oooItomayobeorecalledohereothatoCW1oRameshoChanderohaso testifiedothatoaowaterostorageotankohavingocapacityoofo1.5olakholitreso ofowater,owithotwoopumps,ooneoofowhichowasoanoelectricopumpoando theootherooneowasoaodieselopumpowereoinstalledotheowarehouseoino questionoforotheofireohydrantosystemoinowhichocontextotheyohadoalsoo obtainedoNOCoEx.oC/10odatedo05/07/2018ovalidoupotoo04/07/2019o fromo theo fireo department.o Theo saido aspecto ofo hiso testimonyo goeso unchallengedo duringo hiso cross-examination.o Furthermore,o RW1o GauravoKumaroauthorizedorepresentativeoofotheorespondentocompanyo hasoadmittedoduringohisocross-examinationothatofireohydrantosystemo stoodo installedo ino theo premiseso ino questiono ando waso ino workingo condition.o

(b)oo o ItomayoalsoobeorecalledothatotheoaboveonamedoGauravo KumaroRW1ohasodeposedoinoparaono.o10oofohisoaffidavitothatoShrioOmo Parkash,o warehouseo ino chargeo ofo theo respondento companyo alongo withoMr.oNareshoKumaroandoVinodoKumarohadobeenopresentoatotheo premisesoinoquestionoatotheotimeoofofireoincidentoinoquestionoaroundo 10:20oPMoono16/10/2018oandohadomadeoattemptsotooextinguishotheo fireobyousingohandoheldofireoextinguisheropresentoinotheosaidopremiseso andohadoalsooassistedotheootheroofficialoofotheorespondentocompanyotoo o Pageo34oofo53o o o o

(c)o o Omo Parkasho aboveo namedo whoo hado lodgedo theo fireo incidento reporto Ex.o C/11o datedo 17/10/2018o witho theo policeo hado mentionedothereinothatoheoandohisoassociateoworkersohadoattemptedo toodouseotheofireowithotheohelpoofooneofireoextinguishmentocylinderobuto theyo couldo noto useo theo secondo oneo ando wereo unsuccessfulo dueo too intensityoofofireoandotheyohadothusoallocomeooutoofotheogodownoareao ando yeto theo aboveo referredo reporto Ex.o RW1/2o submittedo byo Associatedo Surveyorso &o Consultantso througho Tatao AIGo Generalo InsuranceoCompanyo(insureroofotheorespondent)omentionsoinoclauseo

8.05othereofothatoasoperoinformationofurnishedobyoemployeesoofotheo respondentocompany,osecurityoguardsoandocontractualoworkerso(noneo ofo whomo iso namedo ino theo saido reporto noro haso anyo ofo themo beeno examinedobyotheorespondentoduringotheoarbitraloproceedingsoinohando allotheoworkers/employeesopresentothereohadoattemptedotoocontrolotheo fireowithotheohelpoofoinohouseofireofightingoarrangementobyoconnectingo theonozzleoofotheofireohoseoetc.obecauseotheoseatoofofireowasoatoaoheighto ofo 24o feet.o Thiso unsubstantiatedo versiono introducedo byo theo aboveo namedosurveyoroinoitsoreportodatedo28/06/2019oregardingotheofireo incidentodatedo16/10/2018odoesonotothereforeoinspireoanyoconfidence.o

(d)o Ito willo alsoo beo pertinento too recallo thato ao watero storageo tank,o havingocapacityoofo1.5olakholitresoofowater,owithotwoopumps,ooneoofo whichowasoanoelectricopumpoandotheootherooneowasoaodieselopumpo wereo installedo ino theo warehouseo ino questiono foro theo fireo hydranto systemoinowhichocontextotheyohadoalsooobtainedoNOCoEx.oC/10odatedo 05/07/2018o whicho waso valido upo too 04/07/2019o fromo theo fireo departmento aso soo testifiedo byo CW1o Ramesho Chando ando yeto noo evidenceoworthotheonameohasobeenoledobyotheorespondentotooestablisho thato anyo ofo itso employeeso waso speciallyo trained/familiarizedo byo ito withouseoofofireohydrantosystemowateronozzleofromoaboveoreferredo electric/dieselopumps,oandonorohasoanyoofothemobeenoexaminedobyoito tooestablishothatoanyoofothemohadoinofactoevenostartedotheoelectricooro dieselopumpoforodousingotheofireoforowhichoreasonoalsootheoaboveo referredo versiono introducedo byo theo aboveo namedo surveyoro ino itso reportoEx.oRW1/2ocannotobeoconsideredotoohaveoanyocredence.oIno o Pageo35oofo53o o o o theseocircumstances,oobservationsoofotheoPunjaboandoHaryanaoHigho Courto ino theo caseo titledo M/so Amartexo Industrieso Ltdo ando anothero versusoAakashoEducationoServicesoLtdoarisingooutoofoRSAoNo.o1387o ofo2021(0&M)odecidedoono28/01/2022ofiledobyotheocounseloforotheo respondentoareonotoattractedotootheocontroversyoinohandoandorathero theo observationso ofo theo Hon'bleo Supremeo Courto ino theo caseo titledo VohraoSadikbhaioRajakbhaioandoothersoversusoStateoofoGujratoando othersoreportedoino2016o(3)oRCRo (civil)o107ocitedobyotheolearnedo counseloforotheoclaimantowouldoapply.oTheosaidojudgmentoitselforelieso onoRylandsoversusoFletcher,o(1868)oLR3oHI.o330,owhereinoitowasoheldo inter-aliaoasounder:-o o "Theoruleoofolawoisothatotheopersonowho,oforohisoowno purpose,o bringso ono hiso lando ando collectso ando keepso thereoanythingolikelyotoodoomischiefoifoitoescapes,omusto keepoitoinoatohisoperil;oandoifoheodoesonotodoosooisoprimao facieo answerableo foro allo theo damageo whicho iso theo naturaloconsequenceoofoitsoescape."o o

(e)oo o Itomay,oatotheocostooforepetition,obeopointedooutothatoino theocaseoinohand,otheorespondentoinoutterodisregardoofosafetyonorms,o erectedofourofloorsoi.e.oG+3oforotheostorage/stackingoofostocks,oino additionotoolongospanoracksowitho4otierostorage.oTheototaloflooroareao coveredobyothisosectionowasothuso33110osquareofeeto(approx.)oasosoo mentionedo ino clauseo 7.04.1o ofo theo reporto Ex.RW1/2o ofo Associatedo Surveyorso&oConsultantsosubmittedotootheoinsureroofotheorespondento vizoTataoAIGoGeneraloInsuranceoCompanyotoowhichoheightotheowatero couldonotohaveo beeno pumpedoasotheo pumpo wasomeantoforogroundo floorobuildingoonlyoasowhichowasoconstructedoasoperotheosanctionedo siteoplan."o o ??.e TheofindingoofotheoArbitratorothatofireofightingoequipmentsowereo notoputotoouseoorothatotrainedostaffoforofireofightingowasonotoemployedobyotheo appellantoareoalloselfoimaginedopleasodeployedobyotheoArbitratorotooallowotheo o Pageo36oofo53o o o o claimoevenothoughosuchopleasoneveroformedotheobasisoofoclaimosetoupobyotheo claimant/respondent.o ??.e Itoisowellosettledothatotheoscopeoofoexerciseoofojurisdictionoundero Sectiono34oofotheoActoofo1996oisonarrowoandoisodependentouponoexigencieso enumeratedo therein.o Sectiono 34o ofo theo Acto ofo 1996o iso reproducedo hereinafter:-o o o "34.oApplicationoforosettingoasideoarbitraloaward.o

(1)oRecourseotooaoCourtoagainstoanoarbitraloawardomayobeomadeoonlyo byoanoapplicationoforosettingoasideosuchoawardoinoaccordanceowitho sub-sectiono(2)oandosub-sectiono(3).o(2)oAnoarbitraloawardomayobeoseto asideobyotheoCourtoonlyoifo

(a)otheopartyomakingotheoapplicationo1o[establishesoonotheobasisoofo theorecordoofotheoarbitralotribunalothat]—oo

(i)oaopartyowasounderosomeoincapacity,ooroo

(ii)otheoarbitrationoagreementoisonotovalidounderotheolawotoo whichotheopartiesohaveosubjectedoitoor,ofailingoanyoindicationo thereon,ounderotheolawoforotheotimeobeingoinoforce;ooroo

(iii)otheopartyomakingotheoapplicationowasonotogivenopropero noticeoofotheoappointmentoofoanoarbitratorooroofotheoarbitralo proceedingsoorowasootherwiseounableotoopresentohisocase;ooroo

(iv)otheoarbitraloawardodealsowithoaodisputeonotocontemplatedo byo oro noto fallingo withino theo termso ofo theo submissiono too arbitration,o oro ito containso decisionso ono matterso beyondo theo scopeoofotheosubmissionotooarbitration:oProvidedothat,oifotheo decisionso ono matterso submittedo too arbitrationo cano beo separatedofromothoseonotosoosubmitted,oonlyothatopartoofotheo arbitralo awardo whicho containso decisionso ono matterso noto submittedotooarbitrationomayobeosetoaside;ooroo

(v)o theo compositiono ofo theo arbitralo tribunalo oro theo arbitralo procedureowasonotoinoaccordanceowithotheoagreementoofotheo parties,o unlesso sucho agreemento waso ino conflicto witho ao provisionoofothisoPartofromowhichotheopartiesocannotoderogate,o o Pageo37oofo53o o o o or,ofailingosuchoagreement,owasonotoinoaccordanceowithothiso Part;ooroo

(b)oo theoCourtofindsothat—oo

(i)o theo subject-mattero ofo theo disputeo iso noto capableo ofo settlementobyoarbitrationounderotheolawoforotheotimeobeingoino force,ooroo

(ii)otheoarbitraloawardoisoinoconflictowithotheopublicopolicyoofo India.oo Explanationo1.o—Forotheoavoidanceoofoanyodoubt,oitoisoclarifiedothato anoawardoisoinoconflictowithotheopublicopolicyoofoIndia,oonlyoif,—oo

(i)otheomakingoofotheoawardowasoinducedooroaffectedobyofraudooro corruptionoorowasoinoviolationoofosectiono75oorosectiono81;ooroo

(ii)oitoisoinocontraventionowithotheofundamentalopolicyoofoIndianolaw;o oroo

(iii)oitoisoinoconflictowithotheomostobasiconotionsoofomoralityoorojustice.oo Explanationo2.—Forotheoavoidanceoofodoubt,otheotestoasotoowhethero thereoisoaocontraventionowithotheofundamentalopolicyoofoIndianolawo shallonotoentailoaoreviewoonotheomeritsoofotheodispute.]oo [(2A)o Ano arbitralo awardo arisingo outo ofo arbitrationso othero thano internationalocommercialoarbitrations,omayoalsoobeosetoasideobyotheo Court,oifotheoCourtofindsothatotheoawardoisovitiatedobyopatentoillegalityo appearingoonotheofaceoofotheoaward:oo Providedothatoanoawardoshallonotobeosetoasideomerelyoonotheogroundo ofo ano erroneouso applicationo ofo theo lawo oro byo reappreciationo ofo evidence.]oo

(3)oAnoapplicationoforosettingoasideomayonotobeomadeo aftero threeo monthsohaveoelapsedofromotheodateoonowhichotheopartyomakingothato applicationohadoreceivedotheoarbitraloawardoor,oifoaorequestohadobeeno madeounderosectiono33,ofromotheodateoonowhichothatorequestohadobeeno disposedoofobyotheoarbitralotribunal:oo Providedo thato ifo theo Courto iso satisfiedo thato theo applicanto waso preventedobyosufficientocauseofromomakingotheoapplicationowithinotheo saidoperiodoofothreeomonthsoitomayoentertainotheoapplicationowithinoao furtheroperiodoofothirtyodays,obutonotothereafter.oo o Pageo38oofo53o o o o

(4)oOnoreceiptoofoanoapplicationounderosub-sectiono(1),otheoCourto may,o whereo ito iso appropriateo ando ito iso soo requestedo byo ao party,o adjournotheoproceedingsoforoaoperiodo ofotimeodeterminedobyoitoino ordero too giveo theo arbitralo tribunalo ano opportunityo too resumeo theo arbitraloproceedingsoorotootakeosuchootheroactionoasoinotheoopinionoofo arbitralo tribunalo willo eliminateo theo groundso foro settingo asideo theo arbitraloaward.oo

(5)oAnoapplicationounderothisosectionoshallobeofiledobyoaopartyoonlyo afteroissuingoaoprioronoticeotootheootheropartyoandosuchoapplicationo shallo beo accompaniedo byo ano affidavito byo theo applicanto endorsingo complianceowithotheosaidorequirement.oo

(6)o Ano applicationo undero thiso sectiono shallo beo disposedo ofo expeditiously,oandoinoanyoevent,owithinoaoperiodoofooneoyearofromotheo dateoonowhichotheonoticeoreferredotooinosub-sectiono(5)oisoservedoupono theootheroparty."o o ?8.e WeomayoalsooreferotooSectiono28o(3)oofotheoActoofo1996owhicho providesoasounder:-o "Rulesoapplicableotoosubstanceoofodispute.—(1)oWhereotheoplaceoofo arbitrationoisosituatedoinoIndia:o 1oando2oXXXXXXXoo

(3)oWhileodecidingoandomakingoanoaward,otheoarbitralotribunaloshall,o inoallocases,otakeointooaccountotheotermsoofotheocontractoandotradeo usagesoapplicableotootheotransaction."o o ??.e Theopossibleogroundsoonowhichoanoawardocanobeointerferedowitho underoSectiono34oofotheoActoofo1996oincludesotheogroundowhereotheopartyo makingoapplicationounderoSectiono34oofotheoActoofo1996,ofurnishesoproofoofo someoincapacity;owasounableotoopresentohisocase;oorotheoarbitraloawardodealso withoaodisputeonotocontemplatedobyooronotofallingowithinotheotermsoofotheo submissionotooarbitrationoorocontainsodecisionoonomattersobeyondotheoscopeo o Pageo39oofo53o o o o ofosubmissionotooarbitration.oTheseogroundsoareoinoadditionotootheootherwiseo welloacceptedogroundoofoitobeingoinoconflictowithoPublicoPolicyoofoIndia.o ?0.e InoAssociateoBuildersovs.oDelhioDevelopmentoAuthorityo2015o

(3)oSCCo49,otheoSupremeoCourtoreferredotooanoearlierojudgmentoofotheoCourto inoDDAovs.oR.S.oSharmaoandoCompanyo(2008)o13oSCCo80,oparao21otoo observeoasounder:-o "InoHindustanoZincoLtd.ov.o FriendsoCoaloCarbonisation,o (2006)o4o SCCo445,othisoCourtoheld:o "14.oTheoHighoCourtodidonotohaveotheobenefitoofotheoprinciplesolaido downoinoSawoPipeso[(2003)o5oSCCo705]o,oandohadoproceededoonotheo assumptiono thato awardo cannoto beo interferedo witho eveno ifo ito waso contraryotootheotermsoofotheocontract.oItowentotootheoextentoofoholdingo thatocontractotermsocannotoevenobeolookedointooforoexaminingotheo correctnessoofotheoaward.oThisoCourtoinoSawoPipeso[(2003)o5oSCCo 705]o haso madeo ito clearo thato ito iso openo too theo courto too considero whetherotheoawardoisoagainstotheospecificotermsoofocontractoandoifoso,o interfereowithoitoonotheogroundothatoitoisopatentlyoillegaloandoopposedo tootheopublicopolicyoofoIndia."o o ?$.e Theo Courto cautionedo ono theo limitso ono powero ofo Courto too interfereo witho theo arbitralo awardo undero variouso headso ando restrictedo ito too Publico Policyo ofo Indiao includingo (I)o Fundamentalo Policyo ofo Indiano Lawo consistingo ofo complianceo witho statuteso ando judicialo precedents;o needo foro judicialo approach;o naturalo justiceo complianceo and;o wednesburyo reasonableness;o(II)oInterestoofoIndia;o(III)oJusticeooroMoralityoando(IV)opatento illegalityo ino theo natureo ofo contraventiono ofo substantiveo lawo ofo India;o contraventionoofoActoofo1996oandocontraventionoofotheotermsoofotheocontract.oo o Pageo40oofo53o o o o ?2.e TheoprinciplesolaidodownoinoAssociateoBuilder'socaseo(supra)o haso beeno reiteratedo ino variouso judgmentso (i)o Ssangyongo Enggo ando ConstructionoCompanyoLtd.oVs.oNationaloHighwayoAuthorityoofoIndiao(2019)o 15oSCCo131,oUnibrosovs.oAlloIndiaoRadioo2023oSCCoOnLineoSCo1366,oPSAo SicaloTerminalsoPrivateoLimitedovs.oBoardoofoTrusteesoofoVOoChidambranaro Porto Trusto Tuticorno ando otherso (2023)o 15o SCCo 781,o Delhio Metroo Railo Corporationo Limitedo vs.o Delhio AirportoMetroo Expresso Pvt.o Ltd.o (2024)o 6o SCCo357,oPAMoDevelopmentsoPrivateoLimitedovs.oStateoofoWestoBengalo

(2024)o 10o SCCo 715,o Batliboio Environmentalo Engineeringo Limitedo vs.o HindustanoPetroleumoCorporationoLtd.o(2024)o2oSCCo375,oSepcooElectrico Powero Constructiono Corporationo vs.o GMRo Kamalangao Energyo Ltd.o 2025o SCCoOnLineoSCo2088,oLarsenoandoToubrooLimitedovs.oPurioConstructiono Pvt.oLtd.oAndootherso2025oSCCoOnLIneoSCCo830,oUHILoPoweroCompanyo Ltd.oVs.oStateoofoHimachaloPradesho(2024)o4oSCCo116,oNationaloHighwayo AuthorityoofoIndiaovs.oHindustanoConstructionoCompanyoLtd.o(2024)o6oSCCo 809,o Haryanao Tourismo Ltd.o Vs.o Kandhario Beverageso (2022)o 3o SCCo 237,o Consolidatedo Constructiono Consortiumo vs.o Sofwareo Technologyo Parkso ofo Indiao (2025)o 7o SCCo 757o ando Co &o Co Constructiono Ltd.o Vs.o IRCONo InternationaloPvt.oLtd.o(2025)o4oSCCo234.o ?3.e Whereo theo Arbitrator'so awardo iso foundo too beo contraryo too theo expresso termso ofo theo contracto oro whereo theo awardo sufferso fromo patento illegalityoitowouldobeolawfuloforotheoCourtotoointerfereowithoitoinoexerciseoofoitso powersounderoSectiono34oofotheoActoofo1996.oo o Pageo41oofo53o o o o ?4.e Inotheo factso ofo theopresento case,otheo leaseo deedohado fastenedo liabilityouponotheoclaimant/respondentotoogetotheoleasedopremisesoinsuredoato allo timeso duringo theo existenceo ofo lease.o Theo recordso revealo thato thiso responsibilityowasonotodischargedobyotheoclaimantowhoohad,ocontraryotootheo termsoofotheoleaseodeed,ounderoinsuredotheoleasedopremises.oThisoledotooao lesseroamountobeingoawardedobyotheoinsuranceocompanyotootheoclaimant.oTheo Arbitratorohasocompletelyoignoredothisocrucialopartoofotheocontractobetweeno theo partieso ando haso referredo too irrelevanto factso too allowo theo claimo whicho suffersofromopatentoillegality.oo ?5.e TheoawardoofoArbitratorosinceoproceedsoonogroundsowhichowaso notoevenotheopleadedocaseoofotheorespondentoasosuch,otheoappellantohasobeeno deniedo opportunityo ofo contesto ino theo mattero ando haso sufferedo incapacity,o whichoisooneoofotheogroundsoonowhichotheoCourtowasorequiredotoointerfere.oo ??.e Theootherolimboofoarbitrator'soawardoisotheoacceptanceoofoclaimo oforentotillotheoleasedopremisesowasoletooutotoosomeoneoelse.oo ??.e Clauseo 14oofo theoContract,oprovidedo foroterminationoofoleaseo deedouponogivingoofothreeomonthsoprioronotice,owithoutoassigningoanyoreasono whatsoever.oClauseo14oisoreproducedo:-o o"14.oTERMINATION:o

i)oo Theo Lesseeo shallo haveo theo soleo righto too terminateo theo Leaseobyogivingo3o(Three)omonthsopriorowrittenonoticeotootheo Lessorowithoutoassigningoanyoreasonowhatsoever.oTheoLesseeo shall,oonotheoexpiryooroearlierodeterminationoofotheoLease,obeo entitledotooremoveofromotheoLeasedoPremises,oalloitsofurnitureo andofixtures,oequipmentoand/ooroappliancesothatomayohaveobeeno broughtoinoand/oroinstalledothereinobyotheoLessee.o o Pageo42oofo53o o o o

ii)oo TheoLessoroshallobeolocked-inoforotheoentireotermoofotheo Lease.o

iii)oo Thiso Deedo willo automaticallyo comeo too ano endo ono theo expiryodateooroearlyoterminationoasowrittenoabove,ooroonoexpiryo ofotheoextensionsohereof.o

iv)oo Uponotheoexpiry/otermination/oearlyodeterminationoofotheo Lease,o theo Lesseeo shallo forthwitho removeo itselfo ando itso staffo togethero witho itso furniture,o fixtureso ando belongingso soo aso too vacateo theo Leasedo Premises,o foro theo Lessoro too occupyo theo LeasedoPremises,osubjectotootheotermsoandoconditionsomentionedo herein.o

v)oo Ifo anyo dueo too theo effecto ofo anyo statutoryo acto ofo theo authoritiesotheoLeasedoPremisesoareodemolishedoeitheropartlyooro otherwiseoorotheostatutoryoactoaffectsotheosaidobusinessoofotheo Lesseeo ino whatsoevero mannero theno theo Lesseeo shallo notwithstandingo theo contentso hereino containedo beo entitledo too terminateotheoLeaseowithoaonoticeoofooneomonthotootheoLessoro andotheoLessoroshallobeoobligedotoorefundotheosecurityodeposito forthwith.o

vi)oo TheoInterestoFreeoSecurityoDepositoshallobeorefundableobyo theoLessorotootheoLessee,osimultaneouslyoatotheotimeoofohandingo overo ofo theo vacanto ando peacefulo physicalo possessiono ofo theo LeasedoPremisesobyotheoLesseeotootheoLessor.o

vii)oo IfotheoLeaseoDeadoisoterminatedobecauseoofodefaultoClauseo no.o15othenotheoLessoroshallobeoobligedotoorefundotheosecurityo depositoasoperotheoClauseono.o5.o

viii)oAfterotheoexpiryo/oterminationoofoLeaseoDeed,oLessorotoogiveo Lesseeo 30o (thirty)o dayso rento freeo periodo too vacateo theo Leaseo Premises."o o ?8.e InotermsoofoClauseo14,oaonoticeoforoterminationowasoservedoupono theo lessoro ono 18.10.2019.o Rento foro threeo months'o noticeo periodo waso o Pageo43oofo53o o o o admittedlyopaidotootheoclaimant.oInosuchocircumstances,oquestionoarisesoaso too whethero theo Arbitratoro couldo fasteno liabilityo upono theo appellanto too continueotoopayorentouponotheoappellantotillotheoleasedopremisesowasoleto outotoosomeoneoelseoafteroitsorestoration?ooo ??.e oThereoisonooprovisionoinotheoleaseodeed/Contractoprovidingoforo continuationo ofo tenancyo despiteo serviceo ofo terminationo noticeo ando paymentooforentoforothreeomonths.oServiceoofonoticeoofoterminationoasoalsoo theopaymentooforentoforotheonoticeoperiodoinotermsoofoClauseo14oofoleaseo deedouponoclaimantoisoalsooundisputed.oTheootheroquestionothatoarisesoforo ouroconsiderationoisoasotoowhetherotheoarbitratorocouldounilaterallyomodifyo theoexpressotermsoofotheocontractoandoawardorentodespiteotheoterminationo ofotenancyoinotermsoofoClauseo14?o

80.e oLawoisosettledothatoArbitratoroisoboundobyotheotermsoofocontracto andohasonooauthorityotoorewriteoit,oorotooaddoaostipulationowhichootherwiseo doesonotoexistoinotheocontract.oThisoisosooasotheoArbitratorohasotooenforceo theocontractoandonototoosubstituteoitobyoaoclauseowhichohasonotobeenoagreedo uponobyotheoparties.o 8$.e AppellantoisotheolesseeoandoinotermsoofoClauseo14oofotheoLeaseo Deedohadotheoauthorityounderotheocontractotooterminateotheoleaseoinotheo mannerostipulated.oOnce,osuchorightohasobeenoexercisedobyotheolesseeoino accordanceowithotheoLeaseoDeedoitowasoimpermissibleoforotheoArbitratorotoo haveo allowedo paymento ofo rento tillo ao newo tenanto waso inductedo ino theo o Pageo44oofo53o o o o

82.e oForoallowingopaymentooforentotilloaonewotenantowasoinducted,otoo theoClaimant,otheoArbitratorohasogivenofollowingoreasons:-oo "ii)oLearnedocounseloforotheorespondentohasoarguedothatoevenoaftero theofireoincidentoinoquestionodatedo16/10/2018,otheorespondentohad,o purelyo ono humanitariano grounds,o continuedo payingo rentalo uptoo Septembero 2019o too theo claimanto ino viewo ofo variouso e-mailso exchangedobetweenotheopartiesohereto.oHowever,otheocontentionoofo theorespondentohavingocontinuedopaymentooforentalotootheoclaimanto uptooSeptembero2019oono"humanitarianogrounds"oevenoafterotheofireo incidento ino questiono datedo 16/10/2018o tantamounto too selfo praiseo whereononeoisowarrantedokeepingoinoviewotheofactothatotheosaidofireo incidentohadooccurredodueotoogrossonegligenceoonotheopartoofotheo respondentoasodiscussedoinodetailoinomyofindingounderoissueonos.o2,o3o &o 4o aboveo ando thereforeo observationso ino theo caseo titledo Onidao FinanceoLtdoversusoMalinioKhannaoreportedoinoManu/DE/2441/2002o ofotheoDelhioHighoCourtocitedoonobehalfoofotheorespondentoareonoto attractedotootheofactsoofotheocaseoinohand.o

(iii)o Ito mayo alsoo beo recalledo hereo thato ito iso theo owno caseo ofo theo respondentocompanyothatoitohadoterminatedotheoleaseodeedoEx.oC/9o videonoticeoEx.oRW1/9.odatedo17/07/2019ow.e.f.o18/10/2019oonwards,o statedlyo owingo too "businesso contingencies"o whicho terminationo haso beenoheldobyomeoinomyofindingounderoissueonumberso2otoo4oaboveotoo beo unjustifiedo ino aso mucho aso theo fireo incidento ino questiono datedo 16/10/2018ohadotakenoplaceoinotheoleasedopremisesoonoaccountoofo grossonegligenceoonotheopartoofotheorespondentoandotheorespondento wasoliableotoorepair/rectifyoatoitsoownocostoandoexpenseotheodamageo tootheoleasedopremisesobyovirtueoofoclauseo11o(v)oofotheoleaseodeedoEx.o C/9odatedo20/04/2016obutoinsteadoofodoingoso,otheorespondentochoseo tooterminateotheoleaseovideonoticeoEx.oC/14-RW1/9odatedo17/07/2019o effectiveofromo18/10/2019otherebyoresultingoinolossooforentaloincomeo tootheoclaimantofromo18/10/2019oonwardsotilloreconstructionoofotheo freshobuildingooverotheosameolandoafteroincurringofurtheroexpensesotoo theotuneoofoRs.o5oCroresotakenoasoloanoforotheosecondotimeofromoPNBo andoleasingooutotheosameotooM/soPathwaysoRetailoPvtoLtdovideofresho o Pageo45oofo53o o o o leaseodeedoEx.oC/30-Aodatedo12/07/2021oeffectiveofromo15/08/2021o @oRs.o12oLakhsoperomonth,owhicholossooforentaloincomeocomesotooRs.o 2,60,46,520/-o calculateo @o 11,57,625/-o whicho waso admittedlyo theo amounto beingo paido too theo claimanto byo theo respondento ando whicho amountoisothusorecoverableobyotheoclaimant."oo o

83.e oItoisowellosettledothatoanoArbitratorolacksotheopowerotoodeviateo from,oorotoore-interpretotheotermsoofotheoContractowhileomakingoanoAward.o TheoAwardomustobeowithinotheoparametersoofotheoAgreementoenteredointoo betweenotheoparties.oo

84.e oInoSepcooElectricoPoweroConstructionoCorporationovs.oGMRo KamalangaoEnergyoLtd.,o2025oSCCoOnLineoSCo2088otheoSupremeoCourto ofoIndiaohasoelaboratelyoexaminedotheoscopeoofopowersoofoArbitratorotoo holdoasounderoinoparagraphoNos.91otoo96:-o "91.o Numerouso precedentso laido downo byo thiso Courto haveo ofteno emphasisedothatoanoarbitratorolacksotheopowerotoodeviateofromoorotoo reinterpreto theo termso ofo theo contracto whileo makingo ano award.o Theo awardso musto beo withino theo parameterso ofo theo agreemento enteredo betweenotheoparties.o

92.oThisoCourtoinoSawoPipeso(supra)ohasoreiteratedothatoanyodeviationo fromotheomandateoofoSectiono28oSub-Sectiono3oofotheo1996oActoisoao validogroundoforolambastingoanoarbitraloaward.oCommentingoonotheo dutyoofotheoarbitrators,othisoCourtoobservedoasofollows:o "73.oItoisotoobeoreiteratedothatoitoisotheoprimaryodutyoofo theoarbitratorsotooenforceoaopromiseowhichotheopartieso haveomadeoandotooupholdotheosanctityoofotheocontracto whichoformsotheobasisoofotheocivilizedosocietyoandoalsoo theojurisdictionoofotheoarbitrators.oHence,othisopartoofo theo awardo passedo byo theo Arbitralo Tribunalo grantingo interestoonotheoamountodeductedobyotheoappellantofromo theobillsopayableotootheorespondentoisoagainstotheotermso ofotheocontractoandois,otherefore,oviolativeoofoSectiono 28(3)oofotheoAct."o o Pageo46oofo53o o o o

93.oToosubstantiateothatotheocontractoisoparamountotootheoworking,o scope,o ando interpretationo foro theo purposeo ofo ano awardo byo theo arbitrator,o ao referenceo mayo beo madeo too anothero 3-Judgeo Bencho decisionoinoSouthoEastoAsiaoMarineoEngineeringoandoConstructionso Limitedov.oOiloIndiaoLimited60.oTherein,owhileorejectingotheochallengeo toosettingoasideoofotheoarbitraloaward,othisoCourtomadeotheofollowingo observations:o "28.oInothisocontext,otheointerpretationoofoClauseo23oofo theo contracto byo theo Arbitralo Tribunal,o too provideo ao wideointerpretationocannotobeoaccepted,oasotheothumbo ruleoofointerpretationoisothatotheodocumentoformingoao writtenocontractoshouldobeoreadoasoaowholeoandosoofaro aso possibleo aso mutuallyo explanatory.o Ino theo caseo ato hand,o thiso basico ruleo waso ignoredo byo theo Tribunalo whileointerpretingotheoclause.o

29.oTheocontractowasoenteredointoobetweenotheopartieso ino furtheranceo ofo ao tendero issuedo byo theo respondento herein.oAfteroconsideringotheotenderobids,otheoappellanto issuedoaoletteroofointent.oInofurtheranceoofotheoletteroofo intent,o theo contracto (Contracto No.o CCO/FC/0040/95)o wasoforodrillingooilowellsoandoauxiliaryooperations.oItoiso importantotoonoteothatotheocontractopriceowasopayableo tootheo"contractor"oforofulloandoproperoperformanceoofo itsocontractualoobligations.oFurther,oClauseso14.7oando

14.11oofotheocontractostateothatotheorates,otermsoando conditionsowereotoobeoinoforceountilotheocompletionooro abandonmentoofotheolastowellobeingodrilled.o

30.oFromotheoaforesaidodiscussion,oitocanobeosaidothato theo contracto waso basedo ono ao fixedo rate.o Theo party,o beforeo enteringo theo tendero process,o enteredo theo contractoafteromitigatingotheoriskoofosuchoanoincrease.o Ifotheopurposeoofotheotenderowasotoolimitotheorisksoofo priceovariations,othenotheointerpretationoplacedobyotheo ArbitraloTribunalocannotobeosaidotoobeopossibleoone,oaso itowouldocompletelyodefeatotheoexplicitowordingsoando purposeoofotheocontract.oThereoisonoogainsayingothato thereo willo beo priceo fluctuationso whicho ao prudento contractoro wouldo haveo takeno intoo margin,o whileo biddingoinotheotender.oSuchopriceofluctuationsocannoto beobroughtounderoClauseo23ounlessospecificolanguageo o Pageo47oofo53o o o o

31.o Theo interpretationo ofo theo Arbitralo Tribunalo too expandotheomeaningoofoClauseo23otooincludeochangeoino rateo ofo HSDo iso noto ao possibleo interpretationo ofo thiso contract,o aso theo appellanto dido noto introduceo anyo evidenceowhichoprovesotheosame."o

94.oFurtheroclarificationoofothisopropositionoisobroughtoaboutothrougho observationsoofothisoCourtoinoaofurtherodecisionobyo3-JudgeoBenchoino UnionoofoIndiaov.oBharatoEnterprise61owhereinoitowasounderlinedothato theo existenceo ando powerso ofo ano arbitratoro areo ao creatureo ofo theo agreementobetweenotheoparties,oandoitoisotheotermsoofotheocontracto whichoservesoasoaofundamentalobasisoforotheoprocedureotoobeoadoptedo byo theo arbitralo tribunal.o Therefore,o theo concernedo arbitratoro iso restrictedotootheotermsoofotheocontractothereofoandocannotogoooutsideo itsoscopeoorowhatois,operose,ospecified.oInowordsoofotheoBench,o"Ao disregardoofotheospecificoprovisionsoofotheocontractowouldoincurowratho ofotheoAwardobeingoimperiled.oThisopositionocannotobeoinotheoregionoofo dispute."o

95.oInoorderotooachieveoanoenhancedounderstandingoaproposotheoscopeo ofotheopowersoandojurisdictionoofoanoarbitrator,oaoreferenceomayoalsoo beo madeo too ao decisiono ofo thiso Courto ino Associatedo Engineeringo (supra),owhichowasodeterminedovis-à-visoSectiono30oofotheoArbitrationo Act,o1940owherein,oitowasoobservedothat:o "24.oTheoarbitratorocannotoactoarbitrarily,oirrationally,o capriciouslyooroindependentlyoofotheocontract.oHisosoleo functionoisotooarbitrateoinotermsoofotheocontract.oHeohaso noopoweroapartofromowhatotheopartiesohaveogivenohimo undero theo contract.o Ifo heo haso travelledo outsideo theo boundso ofo theo contract,o heo haso actedo withouto jurisdiction.o Buto ifo heo haso remainedo insideo theo parameterso ofo theo contracto ando haso construedo theo provisionso ofo theo contract,o hiso awardo cannoto beo interferedo witho unlesso heo haso giveno reasonso foro theo awardodisclosingoanoerroroapparentoonotheofaceoofoit.o

25.oAnoarbitratorowhooactsoinomanifestodisregardoofotheo contracto actso withouto jurisdiction.o Hiso authorityo iso derivedo fromo theo contracto ando iso governedo byo theo ArbitrationoActowhichoembodiesoprinciplesoderivedofromo aospecialisedobranchoofotheolawoofoagencyo(seeoMustillo andoBoyd'soCommercialoArbitration,o2ndoedn.,op.o641).o o Pageo48oofo53o o o o Heo commitso misconducto ifo byo hiso awardo heo decideso matterso excludedo byo theo agreemento (seeo Halsbury'so thLawso ofo England,o Volumeo II,o 4 o edn.,o parao 622).o Ao deliberateodepartureofromocontractoamountsotoonotoonlyo manifestodisregardoofohisoauthorityooroaomisconductoono hisopart,obutoitomayotantamountotooaomalaofideoaction.oAo consciousodisregardoofotheolawoorotheoprovisionsoofotheo contracto fromo whicho heo haso derivedo hiso authorityo vitiatesotheoaward.o

26.oAodisputeoasotootheojurisdictionoofotheoarbitratoroiso notoaodisputeowithinotheoaward,obutooneowhichohasotoobeo decidedo outsideo theo award.o Ano umpireo oro arbitratoro cannotowidenohisojurisdictionobyodecidingoaoquestiononoto referredotoohimobyotheopartiesoorobyodecidingoaoquestiono otherwiseo thano ino accordanceo witho theo contract.o Heo cannotosayothatoheodoesonotocareowhatotheocontractosays.o Heoisoboundobyoit.oItomustobearohisodecision.oHeocannoto travelooutsideoitsobounds.oIfoheoexceededohisojurisdictiono byosoodoing,ohisoawardowouldobeoliableotoobeosetoaside.o Aso statedo byo Lordo Parmoor:o [Attorney-Generalo foro Manitobaov.oKelly,o[1922]o1oA.C.o268,o276:o[1922]oAllo ERoRepo69]o(ACop.o276)o 'Itowouldobeoimpossibleotooallowoanoumpireotooarrogateo too himselfo jurisdictiono overo ao questiono which,o ono theo trueoconstructionoofotheosubmission,owasonotoreferredotoo him.o Ano umpireo cannoto wideno theo areao ofo hiso jurisdictiono byo holding,o contraryo too theo fact,o thato theo mattero whicho heo affectso too decideo iso withino theo submissionoofotheoparties.'o Evidenceoofomattersonotoappearingoonotheofaceoofotheo awardo wouldo beo admissibleo too decideo whethero theo arbitratorotravelledooutsideotheoboundsoofotheocontracto andothusoexceededohisojurisdiction.oInoorderotooseeowhato theo jurisdictiono ofo theo arbitratoro is,o ito iso openo too theo courtotooseeowhatodisputeowasosubmittedotoohim.oIfothato isonotoclearofromotheoaward,oitoisoopenotootheocourtotoo haveorecourseotoooutsideosources.oTheocourtocanolookoato theoaffidavitsoandopleadingsoofoparties;otheocourtocano lookoatotheoagreementoitself.oBungeo&oCo.ov.oDewaroando Webbo[(1921)o8oLloLoRepo436].o

27.o Ifo theo arbitratoro commitso ano erroro ino theo constructionoofotheocontract,othatoisoanoerrorowithinohiso jurisdiction.oButoifoheowandersooutsideotheocontractoando dealso witho matterso noto allottedo too him,o heo commitso ao o Pageo49oofo53o o o o jurisdictionaloerror.oSuchoerrorogoingotoohisojurisdictiono canobeoestablishedobyolookingointoomaterialooutsideotheo award.oExtrinsicoevidenceoisoadmissibleoinosuchocaseso becauseotheodisputeoisonotosomethingowhichoarisesoundero oro ino relationo too theo contracto oro dependento ono theo constructionoofotheocontractoorotoobeodeterminedowithino theo award.o Theo disputeo aso too jurisdictiono iso ao mattero whichoisooutsideotheoawardoorooutsideowhateveromayobeo saidoaboutoitoinotheoaward.o Theo ambiguityo ofo theo awardo can,o ino sucho cases,o beo resolvedobyoadmittingoextrinsicoevidence.oTheorationaleo ofothisoruleoisothatotheonatureoofotheodisputeoisosomethingo whichohasotoobeodeterminedooutsideoandoindependentoofo whatoappearsoinotheoaward.oSuchojurisdictionaloerroro needsotoobeoprovedobyoevidenceoextrinsicotootheoaward.o [SeeoAlopio Parshado &o Sons,o Ltd.o v.o Uniono ofo Indiao [(1960)o2oSCRo793o:oAIRo1960oSCo588];oBungeo&oCo.o v.o Dewaro &o Webbo [(1921)o 8o Llo Lo Repo 436];o Christophero Browno Ltd.o v.o Genossenschafto Oesterreichischero [[1954]o 1o Q.B.o 8o :o [1953]o 3o WLRo 689];oRexov.oFulhamo[[1951]o2oQ.B.o1o:o[1951]o1oAllo ERo 482];o Falkinghamo v.o Victoriano Railwayso Commissiono[[1900]oA.C.o452o:o69oLJoPCo89];oRexov.o AlloSaints,oSouthamptono[(1828)o7oB&Co785o:o1oMano&o ReyoKBo663];oLaingo(James),oSono&oCo.o(M/C)oLtd.ov.o Eastcheapo Driedo Fruito Co.o [(1961)o 1o Llo Lo Repo 142,o 145];oDalmiaoDairyoIndustriesoLtd.ov.oNationaloBankoofo Pakistano[(1978)o2oLloLoRepo223];oHeymanov.oDarwinso Ltd.o[[1942]oA.C.o356o:o[1942]o1oAlloERo337];oUnionoofo Indiaov.oKishorilaloGuptao&oBros.o[AIRo1959oSCo1362o:o

(1960)o 1o SCRo 493];o Renusagaro Powero Co.o Ltdo o v.o GeneraloElectricoCompanyo[(1984)o4oSCCo679o:o(1985)o 1o SCRo 432];Jivarajbhaio v.o Chintamanraoo [(1964)o 5o SCRo 480o :o AIRo 1965o SCo 214];o Gobardhano Daso v.o LachhmioRamo[(1954)o1oSCCo566o:oAIRo1954oSCo689,o 692];oThawardasoPherumalov.oUnionoofoIndiao[(1955)o1o SCCo 372o :o (1955)o 2o SCRo 48o :o AIRo 1955o SCo 468];o OmanheneoKobinaoFoliov.oChiefoObengoAkesseeo[AIRo 1934oPCo185,o188:o40oMLWo138];oF.R.oAbsalom,oLtd.o v.o Greato Westerno (London)o Gardeno Villageo Society,o Limitedo[[1933]oA.C.o592o:o[1933]oAlloERoRepo616]oando M.oGolodetzov.oSchriero[(1947)o80oLloLoRepo647].]"o o

96.o Examiningo theo principleso involved,o ao referenceo too decisionso underotheoArbitrationoAct,o1940,omayoalsoobeoapprisedothroughotheo o Pageo50oofo53o o o o decisionoofoao3-JudgeoBenchoofothisoCourtoinoAllenoBerryoandoCo.o Pvt.o Ltd.o v.o Uniono ofo India,o Newo Delhi62o whereino thiso Courto consideredotheoproperoscopeoofojudicialoreviewoofoarbitraloawardso andoiteratedothatoaocourtohasotheorightotooreviewodocumentsothatoareo specificallyoincludedoinoanoawardowhileoreviewingoit.oHowever,oaso alsooobservedoino someocases,otheocourts,oespeciallyoinotheoUnitedo Kingdom,ohaveotravelledofartheroandosetoasideotheoawardsoinowhicho theocontractsohaveomerelyobeenoreferredoinopassing,oandoapparentlyo wereoincorrectlyoincorporated,oformingotheofoundationoofoaoverboteno award."o

85.e ViewedoinolightoofotheospecificoprovisionoofotheoContractoi.e.,o Clauseo14owhichoconfersorightoonotheolesseeotooterminateotheotenancyoonothreeo months'onoticeoandoinoviewoofotheoadmittedofactualopositionothatosuchonoticeo alongowithothreeomonths'orentowasoactuallyogiven/paidoitowouldobeodifficultotoo sustainotheoArbitrator'soawardoofoawardingorentotootheoClaimantobeyondotheo terminationoofotenancyoasoperoClauseo14.oo 8?.e Weoare,otherefore,oofotheoconsideredoopinionothatotheoArbitratoro couldonotohaveoallowedopaymentooforentoforotheoperiodopostoterminationoofo tenancyovideoClauseo14.oNoorightocouldohaveobeenocreatedoinotheoClaimantotoo continueotooreceiveorentotillotheoleasedopremisesowasoletooutotoosomeoneoelse.oo 8?.e Theo Commercialo Court,o Gurugramo whileo adjudicatingo theo objectionoofotheoappellantounderoSectiono34oofotheoActoofo1996ohasofailedotoo advertotootheoexpressotermsoofocontractowhichogaveounencumberedorightotoo theolesseeotooterminateotheotenancyobyoadheringotooClauseo14oofotheoContract.o TheoCourtohasoalsoofailedotooappreciateothatobyoallowingorentobeyondotheo terminationoofotenancy,otheoArbitratorohasonotoonlyogoneoagainstotheoexpresso o Pageo51oofo53o o o o termsoofotheoContractobutohasovirtuallyore-writtenotheoContractowhichowaso beyondotheojurisdictionoofotheoArbitrator.oo

88.e oTheo Commercialo Courto whileo rejectingo theo objectiono ofo appellanto undero Sectiono 34o ofo theo Acto ofo 1996o has,o therefore,o failedo too exerciseojurisdictionovestedoinoit.oSuchofailure,oinoouroconsideredoview,oiso liableotoobeocorrectedobyousounderoSectiono37oofotheoActoofo1996.oo 8?.e Inoviewoofotheoouroanalysisoaforesaid,oweocomeotootheofollowingo conclusions:-o CONCLUSIONS:o

(i)eo ByovirtueoofoClauseo13oofotheoLeaseoDeed,oitowasotheoobligationoofo theo claimant/respondento too secureo theo leasedo premiseso ino ano incidentoofofireobyoadequatelyoavailingoanoinsuranceopolicy;o

(ii)eo Theoclaimantohadoavailedoofoanoinsuranceopolicyoandoforotheofireo incidentolodgedoaoclaimowhichowasoallowedobyoitsoinsureroandoao sumoofoRs.o2,52,39,404/-owasopaidotoohim;o

(iii)e Inocaseotheoactualolossesoinotheofireoincidentowereomoreothanotheo awardedoclaim,othenotheoclaimantocouldohaveolitigatedoforohighero damageso againsto itso insurer.o Moreover,o anyo reductiono ino theo insuranceoclaimodueotoounderovaluationoofotheoleasedopremisesohado toobeosufferedobyotheoclaimantohimself;o

(iv)e Onuso layo ono theo claimanto too establisho actualo losseso ino theo fireo incidentoinoorderotooestablishoaoclaimounderoClauseo11(v)oofotheo LeaseoDeed,owhichoheofailedotooprove;o o Pageo52oofo53o o o o

(v)eo TheoArbitratorocouldonotohaveotravelledobeyondotheotermsoofotheo contractonorocouldohaveoignoredoevidenceoonorecordoasoperowhicho theofireoincidentowasocausedoaccidently,oonoaccountoofoshortocircuit;o

(vi)e Theo findingo ofo Arbitratoro regardingo negligenceo ono parto ofo theo appellanto leadingo too fireo incidento iso contraryo too overwhelmingo evidenceoavailableoonorecordoandoconsequently,osuffersofromopatento illegality;o

(vii)e Theo Arbitratoro wento beyondo theo pleadedo caseo ofo claimanto ando allowedo theo claimo byo carvingo outo ao newo caseo whicho noto onlyo incapacitatedotheoappellantoinocontestingotheoclaimobutoalsoocausedo denialoofoopportunityotoohim;o

(viii)e ByovirtueoofoClauseo14oofotheoLeaseoDeed,otheolesseeo–oappellanto hadotheosoleorightotooterminateotheoleaseobyogivingothreeomonths'o prioronoticeowithoutoassigningoanyoreasonowhatsoever.oThisopowero underotheocontractowasounqualifiedoandowasodulyoinvoked.oAsosuch,o appellantohado noo obligationo too payo rentoafterotheoterminationo ofo leaseoandotheocontraryodecisionoofotheoArbitratoroisoinoteethoofotheo expressotermsoofotheocontractoandothusounsustainable;o

(ix)e Byoawardingorentotootheoclaimantoevenoafteroterminationoofoleaseo agreement,otheoArbitratorohasore-writtenotheocontractocontraryotootheo expressotermsothereof,owhichosuffersofromopatentoillegality.o ?0.e WeohaveocarefullyoperusedotheojudgmentoofotheoCommercialoCourto whicho iso impugnedo herein.o Weo findo thato theo aspectso highlightedo ino thiso judgmentowereotakenoandopressedoasogroundsotoointerfereowithotheoawardoofo o Pageo53oofo53o o o o theo Arbitratoro undero Sectiono 34o ofo theo Acto ofo 1996.o However,o theo Commercialo Courto haso noto dealto witho sucho objectionso ando haso cursorilyo rejectedo theo objectionso ino ao routineo ando mechanicalo manner.o Theo ordero impugned,oofotheoCommercialoCourt,otherefore,ocannotobeosustained.oo ?$.e Consequently,o thiso appealo succeedso ando iso allowed.o Theo ordero passedo byo theo Commercialo Courto ato Gurugram,o datedo 22.08.2025,o iso set-aside.oTheoobjectionoofotheoappellantotootheoarbitraloawardodatedo23.12.2023,o filedounderoSectiono34oofotheoActoofo1996,oisoallowed.oAsoaoresult,otheoarbitralo awardodatedo23.12.2023,oisoset-aside.oTheopartiesoare,ohowever,oleftotoobearo theiroownocosts.oo o o o o o [ASHWANIoKUMARoMISHRA]o JUDGEo oo o o o [ROHIToKAPOOR]o JUDGEo o Februaryo13,o2026o VS/Rajesho o o o Whetherospeakingo/oreasonedoo o :o o Yesoo /oooooooNoo WhetheroReportableo o o :o o Yesoo /oooooooNoo o