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2010 Supreme(Mad) 2706

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE PRABHA SRIDEVAN & THE HONOURABLE MR. JUSTICE G.M. AKBAR ALI
Tamil Nadu Water Supply and Drainage Board
Versus
N. Abdul Kareem & Others
O.S.A. Nos.7,8,9 & 10 of 2007 and M.P.Nos.1 and 2 of 2007
Decided On : 07-07-2010

Advocates Appeared:
For the Petitioners:K. Alagirisamy, Senior Counsel for Ms. Sudarsana Sunder, Advocate.
For the Respondent:R. Murari, Advocate.

The main legal point established in the judgment is that the interpretation of the arbitration clause, the participation of the party in the arbitration proceedings, and the applicability of limitation are crucial factors in determining the court's decision under Section 34 of the Arbitration and Conciliation Act 1996.

Headnote:

Arbitration - Tamil Nadu Water Supply and Drainage Board - Arbitration and Conciliation Act 1996 (Section 34) - The court discussed the interpretation of the arbitration clause, jurisdiction of the arbitrator, and the issue of limitation. The court also considered the delay in refund of security deposit and the grounds for interference with the award under Section 34 of the Act.

Fact of the Case:

The Tamil Nadu Water Supply and Drainage Board filed appeals against the order made in Original Petition Nos.584, 626, 627, and 628 of 1999, seeking to set aside the awards passed by the Arbitrators under Section 34 of the Arbitration and Conciliation Act 1996. The disputes arose from four independent contracts with claimants between 1990-1992, and the main grounds raised by the Board were the lack of arbitration agreement, limitation, and delay in refund of security deposits.

Finding of the Court:

The court found that the arbitration clause referred to the appointment of an arbitrator based on the value of claims, and the participation of the party in the arbitration proceedings precluded them from questioning the jurisdiction of the arbitrators. The court also held that the claims were not barred by limitation and that the delay in refund of security deposit was justified. The court refused to interfere with the award under Section 34 of the Act.

Issues: The issues included the interpretation of the arbitration clause, jurisdiction of the arbitrator, the applicability of limitation, and the delay in refund of security deposit.

Ratio Decidendi: The court's decision was influenced by the interpretation of the arbitration clause, the participation of the party in the arbitration proceedings, and the applicability of limitation. The court also considered the delay in refund of security deposit and the parameters of the court's jurisdiction under Section 34 of the Act.

Final Decision: The appeals were dismissed, and no costs were awarded. The court refused to interfere with the award under Section 34 of the Act.

Judgment :

G.M.AKBAR ALI, J.

The appeals are filed against the common order made in Original Petition Nos.584, 626, 627and 628 of 1999 dated 26. 2006 passed by the learned single Judge of this Court.

2. The above four appeals are preferred by the Tamil Nadu Water Supply and Drainage Board, Chennai (hereinafter called as “Board”), who was the petitioner before the learned single Judge. The Board filed four original petitions seeking to set aside the award passed by the Arbitrators under Section 34 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as “the Act “). The 1st respondent in O.S.A. No. 7 of 2007 was the claimant/contractor before the Arbitrator. The 1st respondent in O.S.A Nos.8 to 10 was another claimant/contractor before the Arbitrator. In all the above four appeals, common set of question of law arises and therefore, we are deciding all the appeals under a common judgment.

.3. The Board had entered in to four independent contracts with the claimants between 1990-1992 in respect of four different works; After completion of works, disputes arose and the claimants filed original petitions before the Court for appointment of arbitrators for resolving the disputes. By order dated 20.8.1997, this Court was pleased to pass an order appointing Arbitrators and directed that the Arbitrators shall complete their Arbitration Proceedings and publish the award within a period of four months from the date of receipt of the order.

.4. The claimants filed separate claim statements on 12. 1997 claiming compensation under the following heads: i) Loss due to delayed Interim payments of bills ii) Losses due to added expenses on over heads and establishments iii) Losses due to idle labour iv) Loss due to idle machinery’s v) Interest on delayed lock-up of deposits vi) Loss due to omission of cable duct vii) Escalation viii) Interest on claims ix) Costs

5. The Arbitrators passed four separate awards directing the Board to pay certain amounts with interest. The Board filed original petitions before this Court to set aside the award under Section 34 of the Act on various grounds. The main grounds raised by the Board before the learned single Judge were as follows:

.(a) There was no Arbitration agreement between the parties: there is no dispute between the parties which could be referred to an arbitration and therefore, the arbitrators had no jurisdiction.

.(b) All the claims are barred by Limitation.

.(c) The awards have been published beyond the time limit of four months.

.(d) the Board is not liable to pay loss due to delayed refund of security deposits.

6. After elaborate consideration of the contentions, the learned single Judge passed an order which reads as follows:

“Therefore, I do not see any merits in the contention of the petitioner-Board that there is no arbitration agreement and thee is no jurisdiction for the Arbitral Tribunal to pass the award. Similarly, the question of limitation was raised for the first time before this Court and I have already held that specific pleading with necessary particulars with regard to the question of limitation could have been made before the Arbitral Tribunal. Limitation is a mixed question of fact and law. The Arbitral Tribunal is a final Court of facts. This Court cannot re-appreciate evidence and this Court is not an appellate Court. Therefore the petitioner-Board cannot raise the question of limitation for the first time before this Court under Section 34 of the Act. Insofar as the award of interest by the Arbitral Tribunal is concerned, the petitioner-Board is not able to show any clause which prohibits the payment of the past and future interest by the arbitrator. In the absence of such prohibition, the Arbitrators are well within their rights to award interest.”

Dissatisfied with the findings of the learned single Judge, the present appeals are filed on the same set of questions.

7. For better appreciation of the case, the following brief facts which are necess
















































































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