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2005 Supreme(Mad) 32

Madras High Court
A. KULASEKARAN
T.N.State Construction Corporation - Appellant
Versus
Gardner Landscape Pvt.Ltd.Chennai - Respondent
Decided On : 01/07/2005

Advocates:
M/s. Aiyar and Dolia for Petitioner; Krishna Srinivasan for M/s. Rama-subramaniam Associates (for No.1) and D. Krishnakumar (for No. 2) for Respondents.

Final award instead of interim award passed by Tribunal.

Headnote:Arbitration and Conciliation Act (XXVI of 1996), Sec.34 -Final award passed by the Arbitrator after setting aside the reasons for in term award.

ORDER :- The Tamil Nadu State Construction Corporation Limited, who suffered an award in Arbitration Case No. 1 of 1998 and the interim award in Application No. 2 of 1998 in Arbitration Case No.1 of 1998 has preferred this Original Petition under Section 34 of the Arbitration and Conciliation Act, 1996.

2. The State Government of Tamil Nadu, Department of Information has issued G. O. Ms. No. 162 dated 10-6-1992 for construction of film city at Taramani, Chennai, thereby appointed the petitioner herein as Consultant and Contractor. The petitioner has issued work order on 23-6-1992 to the first respondent, which has commenced the work after furnishing bank guarantee on 15-7-1992. During the course of execution of work, the second respondent/ Government included additional works by issuing G. O. Ms. No. 16 and 17 dated 27-1-1994. There are 61 agreements entered into between the petitioner and the first respondent in respect of works covered in the above said three Government orders. It is an admitted fact that the work was completed and the film city was also inaugurated on 31-8-1994. Dispute arose between the petitioner and the first respondent, which was referred to the third respondent/Arbitral Tribunal.

3. The first respondent contended that it executed the works valued at Rs.11,53,02,308.40 between 2-3-1994 and 4-3-1995, but it was paid only a sum of Rs.797.43 lacs and the balance of Rs.3,54,80,000/- not paid despite repeated notice and requests. Pending arbitral proceedings, the petitioner filed I. A. No. 1 of 1998 to implead the Film City Corporation as second respondent, which was opposed by the first respondent on the ground that there is no privity of contract between the first respondent and the Film City Corporation. Ultimately, the Film City Corporation was impleaded. The first respondent filed application No.2 of 1998 for interim award of Rs.41.97 lacs being 5% of the bill amount withheld. The Arbitral Tribunal passed interim order on 16-7-1998 rejecting the petition of the petitioner stating that non compliance of work in full and failure to complete the work free from defects.

4. Before the Arbitral Tribunal, the first respondent has filed Exs. C1 to C60 and the petitioner herein has filed Exs. R1 to R24. After going through the pleadings, the following seven issues were framed by the Arbitral Tribunal with the consent of the counsel for both sides, which are as follows :-

"(i) Whether the claim has been made in time?

(ii) Whether the claimant is entitled to the claim amount of Rs.5,09,13,800/- as sought for in the claim statement? if not to what extent?

(iii) Whether the claimant is entitled to claim interest at 18% per annum pendent lite and till realisation of the claim amount?

(iv) Whether the claimant is entitled to the cost of the proceedings?

(v) Is the claimant entitled to invoke the arbitration clause in respect of the three alleged supplemental agreements?

(vi) What amount, if any, is the respondent liable to pay to the claimant and if so whether interest is payable and at what rate?

(vii) To what reliefs the claimant is entitled to ?

5. In addition to the above said seven issues, other material propositions of law namely (1) whether the 61 agreements entered into between the parties can be decided by the Arbitral Tribunal in a single arbitration (ii) whether the first respondent is entitled to costs of infrastructural facilities (iii) whether the first respondent herein is guilty of non-rectification of defects during the defect liability period and (iv) whether the petitioner can seek to deduct the amount of sales tax payable by the first respondent to the Sales Tax Department.

6. The Arbitral Tribunal has decided the four material propositions of Law before going into the issues involved that there were 61 agreements entered into between the petitioner and the first respondent herein in respect of various items of work in the very same Film City; that each agreement contains arbitration clause; that all the 61 ag

















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