MADRAS HIGH COURT
Chitra Venkataraman
TAMIL NADU WATER SUPPLY AND DRAINAGE BOARD AND ANR.
v.
V. N. V. CONSTRUCTIONS AND ORS.
Transfer OP Nos. 450 and 467 of 2006
Decided on : April 9, 2008.
CHITRA VENKATARAMAN, J. :
These two OPs are preferred as against the award passed by the arbitrators dated 07.11.2000, one at the instance of the Tamil Nadu Water Supply and Drainage Board in Transfer OP No. 450 of 2006 under Sections 30 and 33 read with Section 31 of the Arbitration Act, 1940 and Order 43 Rules 1, 2, 6 and 7 of the O.S. Rules to set aside the said award dated 07.11.2000 made by the second and third respondents - arbitrators in respect of the claims made by the first respondent and Transfer OP No. 467 of 2006 is filed under Sections 14(2) and 17 of the Arbitration Act, 1940, by the contractor to direct the arbitrators, namely, respondent Nos. 3 and 4 therein, to file the original award dated 07.11.2000 into court along with all the connected papers and pass a decree in terms of the award. The status of the parties in OP No. 450 of 2006 is referred to for the purpose of considering the rival contentions.
The TWAD Board challenges the award passed by the arbitrators on the ground of limitation that on the date the first respondent filed the claim before the arbitrators, the claim was barred by limitation and hence, the arbitrators had no authority or jurisdiction to adjudicate upon the claim. The petitioners also challenge the award on the ground that the award was passed beyond the statutory time. The petitioners also question the award passed on the ground that there was no statutory delegation of the powers and functions of the Board or the Managing Director of the Board on the employees, consequently, the award passed without impleading the Board represented by its Managing Director as a party and without hearing the Board is illegal and a nullity as far as the Board is concerned.
It is seen that the first respondent, a civil contractor, submitted its tender to the petitioners herein for construction of 30 lakhs litres capacity clear water reservoir at the treatment work site at Pannaipatti, including supply of all pipes, special valies, etc. Accepting the tender submitted by the first respondent, an agreement was entered into between the TWAD Board and the first respondent under agreement dated 06.11.1991 for a contract value of Rs. 23,01,651. It was stated that the contract should be completed within 12 months from the taking over of the site.
It is admitted that the first respondent herein completed the work as per the conditions. However, no payment was made within the stipulated contractual period of 24 months. As per Clause 32, upon the certificate issued by the Executive Engineer on completion of the entire work, the contractor would receive the final payment of all the amounts due and payable to him under or by virtue of the contract except security deposit and a sum equal to 2 1/2% of the total value of the work done, provided there is no recovery or forfeiture. The amount withheld from the final bill would be paid to the contractor after a period of 24 months of the satisfactory performance of the entire civil work or soon after the expiry of such period of 24 months and on production of an indemnity bond for the said amount for a further period of three years beyond the above said two years. It is admitted that the first respondent sent a letter dated 07.09.1994 to the Executive Engineer, Maintenance Division, Madurai and called upon him to pay the amount as per the final bill. He also addressed a letter dated 03.10.1994 to the Superintending Engineer for taking further action. Since there was no response, he sent yet another letter dated 22.11.1994. It is the case of the petitioners that on 11.10.1994, the second petitioner sent a reply that as per the Annexure I the first respondent was not entitled to any amount. On 19.10.1994, the Superintending Engineer (first petitioner) sent a letter to the first respondent stating that the matter of payment was receiving consideration. Since no reply came after that from the petitioners herein, the first respondent sent a lawyer's notice on 25.12.1
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