# M/S Regenvo Mobile Pvt. Ltd. Lucknow & Anr v. M/S Siyogi Enterprises & Ors

- **Citation:** (2025) 12 ILRA 1079
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-12-12
- **Bench:** Arun Bhansali, C.J. Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-regenvo-mobile-pvt-ltd-lucknow-anr-v-m-s-siyogi-enterprises-ors-52790
- **Pages:** 18

## Text

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12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1079
affidavit in support of the present criminal
revision and filed it before this Court on
01.10.2025,
along
with
an
urgency
application, falsely seeking exemption for
filing the certified copy on the ground that
it had been misplaced, whereas the certified
copy was filed before the learned District
and
Sessions
Judge,
Kannauj
on
24.09.2025. Thereafter, the Hon'ble Chief
Justice considered the urgency and directed
listing of the revision on 02.10.2025, when
interim order was passed. Subsequently, on
06.10.2025,
the
revisionists
filed
an
application before the learned District and
Sessions Judge, Kannauj in Criminal
Revision No. 132 of 2025 seeking
withdrawal. As per practice, no order was
passed on the same date because the next
date was fixed as 03.11.2025, and the
application was ordered to be put up on the
date fixed.

22. All these facts and circumstances
clearly show that the revisionists filed the
present criminal revision before this Court
while
concealing
material
facts
and
misusing the process of law for their own
benefit, including seeking exemption from
the Hon'ble Chief Justice. Accordingly,
due to such concealment and misuse of the
legal process, the present revision is liable
to be dismissed, and it is dismissed with a
cost of Rs. 20,000/-. The cost shall be
deposited with the High Court Legal
Services Committee within 15 days.

23. As far as the order dated
07.11.2025
passed
by
the
learned
Additional Sessions Judge, Court No. 1,
Kannauj in Criminal Revision No. 132 of
2025 (Sanjay Singh and others versus State
of U.P. and another) dismissing the
revision as not pressed is concerned, the
same is not sustainable in the eyes of law.
The said criminal revision was duly
admitted and registered by the learned
District and Sessions Judge vide order
dated 24.09.2025. The Hon'ble Supreme
Court in Santosh versus State of U.P.,
(2010) 3 SCC (Criminal) 307 has held that
after admission of a criminal revision, there
is no procedure for dismissing it in default,
and even if the revisionist is absent, the
revision cannot be dismissed in default and
must be decided on merits. It is undisputed
that Criminal Revision No. 132 of 2025
was admitted and registered on 24.09.2025;
therefore, it could not be dismissed as not
pressed. It must be decided on merits.
Accordingly, the order dated 07.11.2025
passed by the learned Additional Sessions
Judge, Court No. 1, Kannauj in Criminal
Revision No. 132 of 2025 is hereby set
aside. Criminal Revision No. 132 of 2025
is restored to its original number. The
revisionists are directed to appear before
the concerned Court of the Additional
Sessions Judge, Court No. 1, Kannauj on
17.12.2025.

24. A copy of this order shall be sent
by e-mail to the learned District and
Sessions Judge, Kannauj, for compliance.
----------
(2025) 12 ILRA 1079
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 12.12.2025

BEFORE

THE HON'BLE ARUN BHANSALI, C.J.
THE HON'BLE JASPREET SINGH, J.

Appeal U/S 37 Of Arbitration & Conciliation Act
1996 No.- 75 of 2024

M/S Regenvo Mobile Pvt. Ltd. Lucknow &
Anr. ...Applicants
Versus
M/S Siyogi Enterprises & Ors.
 ...Respondents
1080 INDIAN LAW REPORTS ALLAHABAD SERIES
Issue for Consideration
Whether
the
Sole
Arbitrator
exceeded
jurisdiction by adjudicating and allowing claims
relating to work executed beyond the city of
Lucknow,
when
the
agreement
dated
01.08.2016 confined the engagement of the
respondents for advertisement services to the
city of Lucknow, and consequently whether the
Commercial Court erred in affirming the award
under Section 34 of the Arbitration and
Conciliation Act, 1996.

Headnotes
Arbitration and Conciliation Act, 1996 -
Sections
34
and
37
-
Scope
of
interference
-
Arbitration
clause
-
Interpretation - Area of operation of
agreement
-
Work
beyond
agreed
territorial scope - Patent illegality -
Award set aside.

Held:
The agreement dated 01.08.2016 expressly
recorded that the appellants were desirous of
engaging the services of an advertising agency
for advertisement of their products in the city of
Lucknow. The arbitration clause provided that
disputes arising out of or in relation to the
agreement shall be referred to arbitration. When
read together, the arbitration clause was
confined to disputes arising from work governed
by
the
agreement,
namely
advertisement
services within the city of Lucknow. [Paras 3437, 48-50]

The Sole Arbitrator held that the agreement did
not debar the respondents from working outside
Lucknow and, noticing that payments had been
made earlier for work done in other districts,
concluded that disputes relating to work done
across the State of U.P. were arbitrable.
However,
there
was
no
material,
correspondence, corrigendum or supplementary
agreement evidencing expansion or modification
of the principal agreement to enlarge the area
of operation or scope of the arbitration clause.
[Paras 41-43]

In absence of any evidence demonstrating
variation, modification or novation of the
agreement, the Arbitrator's conclusion that the
arbitration clause extended to disputes relating
to work beyond Lucknow was based on
presumption and amounted to reading into the
contract what was not agreed between the
parties. Such exercise was beyond jurisdiction
and rendered the award vulnerable. [Paras 43,
51, 53]

The
Commercial
Court,
while
exercising
jurisdiction under Section 34 of the Act, 1996,
failed to notice the distinction between the
agreed area of operation and the scope of the
arbitration
clause,
and
thereby
erred
in
upholding the award. The error fell foul of the
patent illegality test. [Para 52]

The Court examined the possibility of severing
claims relating to work done in Lucknow in light
of
Gayatri
Balasamy
v.
ISG
Novasoft
Technologies Limited but found
that the
guidelines laid therein were not satisfied.
Consequently, the award dated 31.12.2018 and
the order dated 06.11.2024 passed by the
Commercial Court were set aside in entirety.
[Para 54]

It was left open to the parties to have disputes
relating to money claims for work done in the
city of Lucknow settled through arbitration, and
to agitate other claims before the appropriate
forum. The appeal was allowed. [Paras 55-56]
(E-14)

Case Law Cited
UHL Power Co. Ltd. v. State of H.P., (2022)
4 SCC 116 - relied on; MMTC Ltd. v.
Vedanta Ltd., (2019) 4 SCC 163 - referred to;
K.
Sugumar
v.
Hindustan
Petroleum
Corpn. Ltd., (2020) 12 SCC 539 - referred to;
Dyna Technologies (P) Ltd. v. Crompton
Greaves Ltd., (2019) 20 SCC 1 - relied on;
Parsa Kente Collieries Ltd. v. Rajasthan
Rajya Vidyut Utpadan Nigam Ltd., (2019) 7
SCC 236 - referred to; South East Asia
Marine
Engg.
&
Constructions
Ltd.
(Seamec Ltd.) v. Oil India Ltd., (2020) 5
SCC 164 - referred to; Harsha Constructions
v. Union of India, (2014) 9 SCC 246 - relied
on; United India Insurance Co. Ltd. v.
Hyundai Engg. & Construction Co. Ltd.,
(2018) 17 SCC 607 - referred to; Oriental
Insurance Co. Ltd. v. Narbheram Power
and Steel (P) Ltd., (2018) 6 SCC 534 -
referred to; Indian Oil Corpn. Ltd. v. NCC
Ltd., (2023) 2 SCC 539 - referred to; Emaar
12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1081
(India) Ltd. v. Tarun Aggarwal Projects
LLP, (2023) 13 SCC 661 - relied on; Vidya
Drolia v. Durga Trading Corpn., (2021) 2
SCC 1 - referred to; Central Organisation
for Railway Electrification (CORE), 2024
SCC Online SC 3219 - referred to; Pam
Development Private Limited v. State of
West Bengal, (2024) 10 SCC 715 - referred
to; Gayatri Balasamy v. ISG Novasoft
Technologies Limited, (2025) 7 SCC 1 -
referred to
.

List of Acts / Statutes
Arbitration and Conciliation Act, 1996.

List of Keywords
Arbitration clause; Area of operation; Territorial
limitation in agreement; Patent illegality; Excess
of jurisdiction; Severability of claims.

Case Arising From
Judgment and order dated 06.11.2024 passed
by the Commercial Court No.1, Lucknow in
Arbitration Case No. 35 of 2019 (arising out of
award dated 31.12.2018 passed by the Sole
Arbitrator), whereby the petition under Section
34 of the Arbitration and Conciliation Act, 1996
was dismissed.

Appearance for Parties
For the Appellants: Shri Sumeet Kaul, Shri
Kaif Najmi, Shri Mohammad Rashid
For the Respondents: Shri Gyan Singh
Chauhan, Smt. Manju Devi
Shri Amitabh Singh Raikwar, Ms. Archana Kamal

For the State: Learned A.G.A.

(Delivered by Hon'ble Jaspreet Singh, J.)

1. The instant appeal preferred, under
Section
37
of
the
Arbitration
and
Conciliation Act 1996, by the appellants
assails the judgment and order dated
06.11.2024 passed by the Commercial
Court No.1, Lucknow in Arbitration Case
No.35 of 2019, whereby the petition
preferred by the appellants under Section
34 of the Arbitration and Conciliation Act
1996 was dismissed and as a consequence
the award passed by the Sole Arbitrator
dated 31.12.2018 was affirmed.

2. The controversy involved in the
instant appeal is ensconced in a narrow
compass. The core contention revolves
around the scope of the arbitration clause
vis-a-vis the area of operation of the
agreement dated 01.08.2016, containing the
arbitration clause.

3. In order to resolve the controversy,
it will be necessary to take note of certain
facts giving rise to the instant appeal.

4. The appellants are a Corporation
engaged in the sale and distribution of
mobile phones/handsets and accessories
under the brand of 'VIVO Mobile'. The
respondent no.1, on the other hand, is a
partnership firm of which the respondents
no.2 and 3 are the partners who are
engaged in the business of advertising and
providing marketing services.

5. On 01.08.2016, an agreement was
entered between the appellants and the
respondents and in furtherance of the said
agreement, the respondents had agreed to
act as an advertising agent for the
appellants. The agreement stated that the
appellants were the exclusive dealer of
'VIVO Mobile' Handsets and Accessories
for the State of Uttar Pradesh and it was
desirous to engage the services of an
advertising agency for advertising the
products in the city of Lucknow. The said
agreement also contained an arbitration
clause.

6. The agreement between the parties
was acted upon and accordingly the
appellants'
Corporation
assigned
advertising work to the respondents from
1082 INDIAN LAW REPORTS ALLAHABAD SERIES
time to time. Work Orders issued by the
appellants
was
executed
by
the
respondents, who in turn raised invoices for
the work done and the same was paid by
the appellants.

7. Certain disputes arose between the
parties and the appellants by means of its
email dated 28.03.2017 terminated the
agreement
dated
01.08.2016.
The
respondents invoked the arbitration clause
and the Indian Council of Arbitration
appointed Dr. Dharmesh Sharma as the
Sole Arbitrator.

8. On 27.06.2017, a statement of claim
was filed by the respondents which
contained claims relating to non payment
of the invoices for the work done by the
respondents not only within the city of
Lucknow but also in respect of work done
by the respondents in districts other than
Lucknow, however, within the State of
U.P. The appellants filed their statement of
defence before the Sole Arbitrator and inter
alia raised a defence, that in so far as the
claims raised by the respondents relating to
non payment of invoices for the work done
in the districts other than Lucknow was
concerned, it was beyond the scope of
arbitration clause and agreement.

9. It was also alleged that once the
agreement
dated
01.08.2016
was
terminated and the respondents were put to
notice then it should have desisted from
carrying out any further work. Moreover,
any work done by the respondents was
beyond the authority and any claim arising
there
from
was
not
admissible
for
adjudication nor the appellants could be
compelled to honour the same.

10.
The
Sole
Arbitrator
after
considering the pleadings, evidence and
contentions went on to make its award
dated 31.12.2018 and awarded a sum of
Rs.4,22,82,216/- towards the pending bills
and also awarded a sum of Rs.1,11,36,586/-
as interest. The Sole Arbitrator further
awarded a sum of Rs.3,14,915 towards the
tax deducted at source while making the
payments to the respondents but not
deposited
with
the
Income
Tax
Department. A sum of Rs.18,6,275/- was
awarded under the head of costs and as
such a total amount of Rs.5,55,39,992/-
was awarded and it was directed to be paid
within a week, failing which, the said
amount would attract interest at the rate of
15% per annum from the date of the award
till the date of actual payment.

11. This award was assailed by the
appellants by filing a petition under Section
34 of the Arbitration and Conciliation Act,
1996 before the Commercial Court No.1,
Lucknow which was registered as Case
No.1357 of 2019. The Commercial Court
No.1, Lucknow vide its judgment and order
dated 06.11.2024 did not find any error in
the award and it dismissed the petition,
upholding the award.

12. Being aggrieved, the appellants
have approached this Court by means of the
instant appeal under Section 37 of the
Arbitration and Conciliation Act, 1996.

13. Shri Sumeet Kaul, learned counsel
for the appellants alongwith Shri Kaif
Najmi and Shri Mohammad Rashid has
contended that the judgment and order
passed by the Commercial Court No.1,
Lucknow dated 06.11.2024 is patently
erroneous as it has ignored the relevant
clauses of the agreement which had
restricted the scope of disputes which could
be referred for arbitration as a result the
award was made in respect of the subject
12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1083
matter which was not covered by the
arbitration agreement.

14. Learned counsel for the appellants
has further urged that both the Sole
Arbitrator and the Commercial Court No.1,
Lucknow exceeded its jurisdiction in
allowing claims of the respondents which
did not fall within the four-corners of the
arbitration agreement.

15. Elaborating his submission, the
learned counsel for the appellants pointed
out that the scope of the agreement entered
between the parties dated 01.08.2016 was
confined to the advertisements and work
done within the city of Lucknow. Any
dispute arising between the parties relating
to unpaid bills if related to the city of
Lucknow could at best be adjudicated but
both
the
Sole
Arbitrator
and
the
Commercial Court No.1 overstepped its
jurisdiction by entering into the disputes
which fell beyond the limit of Lucknow
and the same was neither consented nor it
could be inferred by evidence that at any
point of time the appellants agreed to
enhance the scope of the arbitration clause
to include disputes relating to the work
done beyond the district of Lucknow.

16. It was further submitted that the
respondents had raised claims relating to
unpaid invoices, 67 in number, total
amounting to Rs.4,22,82,216/-. However,
only bill relating to the work done within
the city of Lucknow could have been
adjudicated and not in respect of bills
relating to the work done in districts other
than Lucknow.

17. It was also submitted that after
signing of the agreement dated 01.08.2016
there was no corrigendum/supplementary
agreement or any office note by which it
could be inferred or deciphered that the
parties had extended the scope of the
arbitration clause in the agreement dated
01.08.2016 and in absence thereof the Sole
Arbitrator as well as the Commercial Court
No.1,
Lucknow
committed
a
patent
illegality of having entered into a domain
of disputes which were not arbitrable and
were beyond the scope of the arbitration
agreement.

18. It was thus urged that the award
suffers from patent illegality and perversity
and the Commercial Court No.1, Lucknow
also committed a grave error in ignoring
this aspect and by affirming the award it
has given a seal of judicial acceptance to a
perverse award and this in itself is contrary
to law and public policy, hence the award
dated 31.12.2018 and the order passed by
the
Commercial
Court
No.1
dated
06.11.2024 deserve to be set aside.

19. Per contra, Shri Gyan Singh
Chauhan,
learned
counsel
for
the
respondents alongwith Smt. Manju Devi
submitted that it could not be disputed by
the appellant that it did not enter into an
agreement with the respondents which
contained an arbitration clause. It also
cannot be disputed by the appellants that in
furtherance
of
the
agreement
dated
01.08.2016, the appellants had issued work
orders to the respondents which was duly
executed and as and when the invoices
were raised, the same was paid to the
respondents and they related to the work
done not only within the city of Lucknow
but even relating to the work executed in
other districts of the State of U.P.

20. It was also urged that the
agreement dated 01.08.2016 envisaged the
concept of variation and a specific mention
was made and attention was drawn to
1084 INDIAN LAW REPORTS ALLAHABAD SERIES
clause 7 and 9 of the agreement dated
01.08.2016. It was urged that undisputedly
the appellants issued work orders even for
the work done beyond the city of Lucknow.
Part
payments
were
made
to
the
respondents and the work done by the
respondents was also approved. This would
indicate that the appellants as well as the
respondents clearly understood that the
agreement for advertising was not only
confined to the city of Lucknow but
extended to other districts of U.P. as well.

21. Whenever a work order was issued
for any place other than Lucknow, the
respondents executed the work and the
respondents would raise its invoices which
were paid and at no point of time any such
dispute or objection was raised by the
appellants. It is only when the agreement
dated 01.08.2016 was terminated and when
the appellants was required to settle the
outstanding bills that the appellants with a
malafide intent of not honouring the said
bills, as an afterthought, created this
dispute and refused to pay which forced the
respondents to invoke the arbitration
clause.

22. It was further urged that even
before the Sole Arbitrator no material or
evidence was placed which could indicate
that
the
parties
had
confined
their
transactions under the agreement dated
01.08.2016 only to the city of Lucknow.
On the contrary, both the parties clearly
understood that the agreement would
operate throughout the State of Uttar
Pradesh and it was evidenced from the
conduct as the bills raised by the
respondents relating to the work done
beyond the city of Lucknow were also
cleared by the appellants. Now during the
arbitral proceedings and to cause financial
harm to the respondents, the appellants
raised the objections relating to scope of
disputes which could be referred for
arbitration, which are not sustainable.

23.
Learned
counsel
for
the
respondents further urged that Section
28(3) of the Arbitration and Conciliation
Act, 1996 mandates adherence to the terms
of a contract keeping in mind the principle
of 'party autonomy'. It is urged that where
both the parties agreed to expand the scope
of the arbitration agreement, in such
circumstances, the Sole Arbitrator was
justified in giving a complete meaning to
the contract noticing the conduct of the
parties. In the instant case, the parties by
their own conduct had varied or modified
the terms of the agreement hence, the
Arbitrator was bound to take note of it and
applying
the
aforesaid
principle,
the
Arbitrator made his award which cannot
said to be bad in the eyes of law or patently
erroneous
which
may
require
the
intervention of the Court either in terms of
Section 34 of the Act, 1996 which needless
to say is a restricted jurisdiction and
moreover the scope of Section 37 of the
Act of 1996 is further restricted.

24. It was further urged by the counsel
for the respondents that the appellants do
not deny their liability to pay bills which
are 18 in number relating to the work done
in the city of Lucknow. However, in so far
as the bills other than that are concerned, it
is not disputed by them that the work was
not done or that the appellants did not issue
the work order for such work or the work
done was below par, in such circumstances,
where the quantum and the liability to pay
is not disputed but on technical ground of
territorial jurisdiction, the objections are
raised and they cannot be sustained in law.
Accordingly, the appeal deserves to be
dismissed with costs.
12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1085

25. The Court has heard the learned
counsel for the parties and also perused the
material on record.

26. At the outset, it will be relevant to
notice the scope of jurisdiction exercised
by this Court in terms of Section 37 of the
Act of 1996 which has been duly
considered and explained by the Apex
Court in UHL Power Co. Ltd. v. State of
H.P., (2022) 4 SCC 116, wherein the apex
court observed as under :-

"16. As it is, the jurisdiction
conferred on courts under Section 34 of the
Arbitration Act is fairly narrow, when it
comes to the scope of an appeal under
Section 37 of the Arbitration Act, the
jurisdiction of an appellate court in
examining an order, setting aside or
refusing to set aside an award, is all the
more circumscribed. In MMTC Ltd. v.
Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd.,
(2019) 4 SCC 163 : (2019) 2 SCC (Civ)
293], the reasons for vesting such a limited
jurisdiction on the High Court in exercise
of powers under Section 34 of the
Arbitration Act have been explained in the
following words : (SCC pp. 166-67, para
11)

"11. As far as Section 34 is
concerned, the position is well-settled by
now that the Court does not sit in appeal
over the arbitral award and may interfere
on merits on the limited ground provided
under Section 34(2)(b)(ii) i.e. if the award
is against the public policy of India. As per
the
legal
position
clarified
through
decisions of this Court prior to the
amendments to the 1996 Act in 2015, a
violation of Indian public policy, in turn,
includes a violation of the fundamental
policy of Indian law, a violation of the
interest of India, conflict with justice or
morality, and the existence of patent
illegality
in
the
arbitral
award.
Additionally,
the
concept
of
the
"fundamental policy of Indian law" would
cover compliance with statutes and judicial
precedents, adopting a judicial approach,
compliance with the principles of natural
justice,
and
Wednesbury
[Associated
Provincial
Picture
Houses
Ltd.
v.
Wednesbury Corpn., (1948) 1 KB 223
(CA)] reasonableness. Furthermore, "patent
illegality" itself has been held to mean
contravention of the substantive law of
India, contravention of the 1996 Act, and
contravention of the terms of the contract."

17. A similar view, as stated
above, has been taken by this Court in K.
Sugumar v. Hindustan Petroleum Corpn.
Ltd. [K. Sugumar v. Hindustan Petroleum
Corpn. Ltd., (2020) 12 SCC 539] , wherein
it has been observed as follows : (SCC p.
540, para 2)

"2. The contours of the power of
the Court under Section 34 of the Act are too
well established to require any reiteration.
Even a bare reading of Section 34 of the Act
indicates the highly constricted power of the
civil court to interfere with an arbitral award.
The reason for this is obvious. When parties
have chosen to avail an alternate mechanism
for dispute resolution, they must be left to
reconcile themselves to the wisdom of the
decision of the arbitrator and the role of the
court should be restricted to the bare
minimum. Interference will be justified only
in cases of commission of misconduct by the
arbitrator which can find manifestation in
different forms including exercise of legal
perversity by the arbitrator."

18. It has also been held time and
again by this Court that if there are two
plausible interpretations of the terms and
1086 INDIAN LAW REPORTS ALLAHABAD SERIES
conditions of the contract, then no fault can
be found, if the learned arbitrator proceeds
to accept one interpretation as against the
other. In Dyna Technologies (P) Ltd. v.
Crompton
Greaves
Ltd.
[Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1] , the limitations on
the Court while exercising powers under
Section 34 of the Arbitration Act has been
highlighted thus : (SCC p. 12, para 24)

"24. There is no dispute that
Section 34 of the Arbitration Act limits a
challenge to an award only on the grounds
provided therein or as interpreted by
various Courts. We need to be cognizant of
the fact that arbitral awards should not be
interfered with in a casual and cavalier
manner, unless the Court comes to a
conclusion that the perversity of the award
goes to the root of the matter without there
being
a
possibility
of
alternative
interpretation which may sustain the
arbitral award. Section 34 is different in its
approach and cannot be equated with a
normal appellate jurisdiction. The mandate
under Section 34 is to respect the finality of
the arbitral award and the party autonomy
to get their dispute adjudicated by an
alternative forum as provided under the
law. If the Courts were to interfere with the
arbitral award in the usual course on factual
aspects, then the commercial wisdom
behind
opting
for
alternate
dispute
resolution would stand frustrated."

19. In Parsa Kente Collieries Ltd.
v. Rajasthan Rajya Vidyut Utpadan Nigam
Ltd. [Parsa Kente Collieries Ltd. v.
Rajasthan Rajya Vidyut Utpadan Nigam
Ltd., (2019) 7 SCC 236 : (2019) 3 SCC
(Civ) 552] , adverting to the previous
decisions of this Court in McDermott
International Inc. v. Burn Standard Co. Ltd.
[McDermott International Inc. v. Burn
Standard Co. Ltd., (2006) 11 SCC 181] and
Rashtriya Ispat Nigam Ltd. v. Dewan
Chand Ram Saran [Rashtriya Ispat Nigam
Ltd. v. Dewan Chand Ram Saran, (2012) 5
SCC 306] , wherein it has been observed
that an Arbitral Tribunal must decide in
accordance with the terms of the contract,
but if a term of the contract has been
construed in a reasonable manner, then the
award ought not to be set aside on this
ground, it has been held thus : (Parsa Kente
Collieries case [Parsa Kente Collieries Ltd.
v. Rajasthan Rajya Vidyut Utpadan Nigam
Ltd., (2019) 7 SCC 236 : (2019) 3 SCC
(Civ) 552] , SCC pp. 244-45, para 9)

"9.1. ... It is further observed and
held that construction of the terms of a
contract is primarily for an arbitrator to
decide unless the arbitrator construes the
contract in such a way that it could be said
to be something that no fair-minded or
reasonable person could do. It is further
observed by this Court in the aforesaid
decision in para 33 that when a court is
applying the "public policy" test to an
arbitration award, it does not act as a court
of appeal and consequently errors of fact
cannot be corrected. A possible view by the
arbitrator on facts has necessarily to pass
muster as the arbitrator is the ultimate
master of the quantity and quality of
evidence to be relied upon when he delivers
his arbitral award. It is further observed
that thus an award based on little evidence
or on evidence which does not measure up
in quality to a trained legal mind would not
be held to be invalid on this score.

9.2. Similar is the view taken by
this Court in NHAI v. ITD Cementation
India Ltd. [NHAI v. ITD Cementation
India Ltd., (2015) 14 SCC 21 : (2016) 2
SCC (Civ) 716] , SCC para 25 and SAIL v.
Gupta Brother Steel Tubes Ltd. [SAIL v.
12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1087
Gupta Brother Steel Tubes Ltd., (2009) 10
SCC 63 : (2009) 4 SCC (Civ) 16] , SCC
para 29."

 (emphasis supplied)

20. In Dyna Technologies [Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1] , the view taken
above has been reiterated in the following
words : (SCC p. 12, para 25)

"25. Moreover, umpteen number
of
judgments
of
this
Court
have
categorically held that the courts should not
interfere with an award merely because an
alternative view on facts and interpretation
of contract exists. The courts need to be
cautious and should defer to the view taken
by the Arbitral Tribunal even if the
reasoning provided in the award is implied
unless such award portrays perversity
unpardonable under Section 34 of the
Arbitration Act."

21. An identical line of reasoning
has been adopted in South East Asia
Marine
Engg.
&
Constructions
Ltd.
(Seamec Ltd.) v. Oil India Ltd. [South East
Asia Marine Engg. & Constructions Ltd.
(Seamec Ltd.) v. Oil India Ltd., (2020) 5
SCC 164 : (2020) 3 SCC (Civ) 1] and it has
been held as follows : (SCC p. 172, paras
12-13)

"12. It is a settled position that a
court can set aside the award only on the
grounds as provided in the Arbitration Act
as interpreted by the courts. Recently, this
Court in Dyna Technologies (P) Ltd. v.
Crompton
Greaves
Ltd.
[Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1] laid down the scope
of such interference. This Court observed
as follows : (SCC p. 12, para 24)

'24. There is no dispute that
Section 34 of the Arbitration Act limits a
challenge to an award only on the grounds
provided therein or as interpreted by various
Courts. We need to be cognizant of the fact
that arbitral awards should not be interfered
with in a casual and cavalier manner, unless
the Court comes to a conclusion that the
perversity of the award goes to the root of the
matter without there being a possibility of
alternative interpretation which may sustain
the arbitral award. Section 34 is different in
its approach and cannot be equated with a
normal appellate jurisdiction. The mandate
under Section 34 is to respect the finality of
the arbitral award and the party autonomy to
get their dispute adjudicated by an alternative
forum as provided under the law. If the
Courts were to interfere with the arbitral
award in the usual course on factual aspects,
then the commercial wisdom behind opting
for alternate dispute resolution would stand
frustrated.'

13. It is also settled law that
where two views are possible, the Court
cannot interfere in the plausible view taken
by the arbitrator supported by reasoning.
This Court in Dyna Technologies [Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1] observed as under :
(SCC p. 12, para 25)

'25. Moreover, umpteen number
of
judgments
of
this
Court
have
categorically held that the Court should not
interfere with an award merely because an
alternative view on facts and interpretation
of contract exists. The Courts need to be
cautious and should defer to the view taken
by the Arbitral Tribunal even if the
reasoning provided in the award is implied
unless such award portrays perversity
unpardonable under Section 34 of the
Arbitration Act."
1088 INDIAN LAW REPORTS ALLAHABAD SERIES

27. Keeping the aforesaid principles
and scope for intervention in mind, it will
be appropriate now to consider the relevant
clauses of the agreement dated 01.08.2016,
on which the respective parties have based
their submissions.

28. The agreement dated 01.08.2016,
in its introductory covenants defines the
purpose and scope of the agreement which
is being reproduced hereinafter for ready
reference:-

"WHEREAS the company is
exclusive dealer in the State of Uttar
Pradesh for 'VIVO' mobile handsets and
accessories etc. hereinafter referred to as
"the said products" and desirous to engage
the services of an advertising agency for
the purpose of advertisement of their
products in the City of Lucknow.

AND WHEREAS the agency has
agreed to act as advertising agents for the
company on the terms and conditions
hereinafter mentioned."

29. The clauses of the agreement
relating to its workability which are
relevant for the present controversy are
clause 5, 6, 7, 9 and 10 which are being
reproduced hereafter under:-

"5.... Quality of the said product
should be as per specification mentioned in
Annexure-A if quality is not as per
standard, company is liable to cancel that
order and if occur twice, can cancel this
agreement also. Also the size should be
accurate and also installation is finely done.
If size and installation is not fine, agency
have to change it free of cost and will be
penalize to same amount of that issued
branding thing is not changed, also they
have to change it within three days if they
don't want to get penalized.

6. The work must be completed
whatever time is told by vendor and it must
be satisfactory, after that approval will be
given on email, if fall to give installation
within time, company have the right to
penalize them 1% per day.

7. In special cases if company
provide extra work to agency then they can
ask for more time and also need approval
for that. After approval given agency have
to provide the final date of installation, as
required.

* * * * *

9....
Whenever
the
company
offers any new product and launches the
same in the market for sale, the Agency
shall
undertake
special
advertisement
campaign for the said new product in
consultation with the company.

10. The Agency will have to
follow our guidelines while making our
product, if they falls, company has to the
authority not to accept that product."

30. The language of the arbitration
clause in the agreement is also important
and the said clause 11 reads as under:-

"11. All disputes between the parties
hereto arising out of this Agreement or in relation
thereto or regarding the interpretation of this
Agreement shall be referred to an arbitrator
appointed by the Indian Council of Arbitration
and the provisions of the Indian Arbitration and
Conciliation Act, 1996 or any statutory
modification thereof shall be applicable to such
reference."
12 All. M/S Regenovo Mobile Pvt. Ltd. Lucknow & Anr. Vs. M/S Siyogi Enterprises & Ors. 1089

31. The respondents invoked the
arbitration clause and after appointment of
the
Sole
Arbitrator
the
respondents
submitted its statement of claim, a copy of
which is on record as Annexure 5 with the
paper book. In the said statement of claim,
the respondents clearly raised its money
claims relating to unpaid invoices which
were relatable to the work done in the City
of Lucknow and also done in other districts
of U.P. Simply put, the claim as indicated
in the statement furnished before the
Arbitrator was that the respondents in
furtherance
of
the
agreement
dated
01.08.2016 had worked and provided the
necessary
services
to
the
appellants.
Invoices relating to the work orders were
furnished which remained unpaid apart
from the fact that the appellants had
arbitrarily terminated the agreement and in
the given circumstance the appellants were
required to pay the outstanding amount for
the work done to the respondents.

32. The appellants filed their statement
of defence wherein inter alia it had
specifically raised a plea that the agreement
dated 01.08.2016 was confined to engaging
the services of the respondents for
advertising in the City of Lucknow. The
Sole Arbitrator can only adjudicate the
disputes arising from the work allegedly
done in the City of Lucknow and all
additional claims which relate to the work
done outside the City of Lucknow and in
other districts cannot be clubbed nor could
be referred for arbitration.

33. In the aforesaid backdrop, the Sole
Arbitrator in its award considered the plea
of limited scope relating to the disputes to
be referred for arbitration, in the following
words
which
is
being
reproduced
hereinafter for clarity:-

"....Bare reading the agreement
shows that Regenvo is desirous to engage
services of an advertising agency for the
purpose of advertisement of their products
in the city of Lucknow. In the subsequent
narration, stipulating terms and conditions
of the agreement, it is not mentioned that
this agreement applied to work carried out
only in the city of Lucknow. This
agreement does not bar claimant to work
outside Lucknow. On the contrary para 9 of
agreement makes it mandatory to undertake
special advertisement campaign for the said
new products in consultation with the
Company, whenever the Company offers a
new product and launches the same in
market for sale. Further from the records, it
is quite evident that respondents have been
regularly
paying
the
bills
for
the
assignments, carried out in cities other than
Lucknow.
During
the
pendency
of
agreement, respondents did not raise this
issue and in fact respondents have been
granting approval of designs at site
locations all over the state. Regenvo
launched new products and carried out
special advertisement campaign in all cities
and towns. Thus it appears that respondents
plea regarding jurisdiction limited to
Lucknow city is an afterthought and is not
supported by any documentary evidence
and even agreement does not debar
claimant from working outside Lucknow
once an approval is granted.

Considering
facts
and
circumstances of case, I find no merit and
force in this argument and rule that
claimant was entitled to work all over the
state once an approval is accorded against
design at any location. Thus this plea of
respondents is rejected and claimant is
entitled for payment for work done by him
all over the State of U.P...."
1090 INDIAN LAW REPORTS ALLAHABAD SERIES

34. Having considered the rival
submissions and the relevant material
available on record including the relevant
terms and conditions, the pleadings as well
as findings returned by the Sole Arbitrator,
this Court finds that as far as the agreement
is concerned, it clearly indicated in the
introductory covenants that the appellants
were the exclusive dealer of 'VIVO
Mobiles' in the State of Uttar Pradesh and
the respondents were engaged for the
purposes of advertising and that too was
confined to provide such services in the
city of Lucknow.

35. In this context, at the cost of
repetition, this Court finds that it will be
gainful to notice that the said introductory
paragraph
and
the
arbitration
clause
together and both are being reproduced
hereinafter:-

"WHEREAS the company is
exclusive dealer in the State of Uttar
Pradesh for 'VIVO' mobile handsets and
accessories etc. hereinafter referred to as
"the said products" and desirous to engage
the services of an advertising agency for
the purpose of advertisement of their
products in the City of Lucknow."

"11. All disputes between the
parties hereto arising out of this Agreement
or in relation thereto or regarding the
interpretation of this Agreement shall be
referred to an arbitrator appointed by the
Indian Council of Arbitration and the
provisions of the Indian Arbitration and
Conciliation Act, 1996 or any statutory
modification thereof shall be applicable to
such reference."

36. If these two paragraphs, which
admittedly are part of the agreement dated
01.08.2016, are read together it would
indicate that as far as the status of the
appellants are concerned, they have been
clearly defined to be the dealer of 'VIVO
Mobiles' and handsets and accessories for
the State of Uttar Pradesh. In the very same
paragraph, it has clearly been indicated that
the appellant Corporation was desirous to
engage the services of an advertising
agency for the purposes of advertisement
for their products in the city of Lucknow.

37. Apparently, if the parties had
agreed for engaging the respondents for
advertising services for the entire State of
Uttar Pradesh, it could have very easily
mentioned it in the agreement itself but it
has been conspicuously left out and it has
been restricted only to the city of Lucknow.
It is in this context that the arbitration
clause provides that any dispute arising out
of this agreement or in relation thereto shall
be referred to arbitration and the Arbitrator
was to be appointed by the Indian Council
of Arbitration.

38.