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2018 Supreme(Mad) 4374
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ABDUL QUDDHOSE, J.
K. Chellamuthu and Co - Appellant
Versus
Union of India, Coimbatore Central Division (CPWD) - Respondent
Original Petition No. 410 of 2009
Decided On : 25-07-2018
Advocate Appeared:
T.S. Baskaran, Adv., C.V. Ramachandra Murthy, Adv.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 34 - challenging the Arbitral Award - brief facts leading to the filing of the instant - no illegality - record and after hearing the submissions of the respective parties - Even after nine months time, the progress of work achieved by the petitioner was merely 18.98 %. After issuing show cause notice to the petitioner, the contract was terminated by the first respondent under clauses 3(a), 3(b) and 3(c) of the agreement and the balance work left undone by the petitioner was got executed by the first respondent through another agency at the cost and risk of the petitioner. The petitioner did not agree with the termination of the contract on the ground of the site being faraway, difficulty in obtaining water and also labour. Since there arose disputes between the petitioner and the first respondent, the dispute was referred to the arbitration and at the request of the petitioner – Held, petition was presented on 28.04.2008. The petitioner has calculated three months period from 28.01.2008 being the date of receipt of the Arbitral Award by the petitioners counsel - Under Section 34(3) of the Arbitration and Conciliation Act, 1996, the period of three months shall be calculated only from the date when the party receives the Arbitral Award and not from the date when the counsel for the party receives the Arbitral Award - As seen from the Arbitral Award, there is no reference to any counsel representing the petitioner in the arbitral proceedings. The Arbitrator has himself by his letter dated 06.03.2010, has clarified that no counsel for the petitioner was present at the time of hearing of the case at Coimbatore - In view of the above cited reasons, it is evident that the petition under Section 34 of the Arbitration and Conciliation Act, has been filed by the petitioner beyond the period of 90 days stipulated under Section 34(3) of the Arbitration and Conciliation Act, 1996. The period can be extended only by another one month, that too, with a condone delay application. It is settled law that Section 5 of the Limitation Act, is not applicable for an application under Section 34 of the Arbitration and Conciliation Act, 1996 - For the foregoing reasons, this Court is of the considered view that there is no merit in the instant petition. The findings of the Arbitrator are perfectly valid and no perversity is found in the findings of the Arbitrator. There is no illegality in the Arbitral Award - Scope for interference under Section 34 of the Arbitration and Conciliation Act, 1996 is very limited. Unless and until, the Award is in conflict with the public policy of India or the findings of the Arbitrator are perverse or the Arbitral Award is patently illegal, this Court cannot interfere under Section 34 of the Arbitration and Conciliation Act, 1996 - Honble Supreme Court in a Catena of decisions starting from Renusagar Power Company Ltd vs. General Electric Company, (1994) Supp1 SCC 644 to the recent Associated Builders Vs DDA, (2015) 3 SCC 49 has held only under the following grounds the Arbitral Award can be challenged under Section 34 of the Arbitration and Conciliation Act - Petition dismissed
JUDGMENT :
ABDUL QUDDHOSE, J.
1. The instant petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the Arbitral Award dated 31.07.2007 passed against the petitioner by the second respondent/Arbitrator.
2. The brief facts leading to the filing of the instant petition are as follows:
The petitioner is a civil contractor and he was awarded a contract for the construction of CPWD family quarters by the first respondent under an agreement No.8/CCD-11/96-97. Under the contract, the work was stipulated to be commenced on 14.06.1996 and to be completed on 13.12.1997. According to the first respondent, the work under the said agreement is a time bound work and it has to be completed within a period of 18 months. According to the first respondent, the petitioner did not proceed with the work with due diligence but also delayed the execution of the work. Even after nine months time, the progress of work achieved by the petitioner was merely 18.98 %. After issuing show cause notice to the petitioner, the contract was terminated by the first respondent under clauses 3(a), 3(b) and 3(c) of the agreement and the balance work left undone by the petitioner was got executed by the first respondent through another agency at the cost and risk of the petitioner. The petitioner did not agree with the termination of the contract on the ground of the site being faraway, difficulty in obtaining water and also labour. Since there arose disputes between the petitioner and the first respondent, the dispute was referred to the arbitration and at the request of the petitioner, the first respondent as per the terms of the contract appointed a sole arbitrator to decide the dispute on merits.
3. At the inception Mr.K.K.Mutreja was appointed as the sole arbitrator. After his resignation, the first respondent appointed Mr.A.K.Singhwal as the sole arbitrator. Mr.A.K.Singhwal also resigned and in his place Mr.J.B.Fadia was appointed as the sole arbitrator by the first respondent. Mr.J.B.Fadia, sole arbitrator also resigned and ultimately, Mr.R.Gopalakrishnan was appointed as the sole arbitrator by the first respondent who acted upon the reference and after issuing notice to the parties to the dispute and after considering the materials available on record and after hearing the submissions of the respective parties, passed the following Arbitral Award dated 31.07.2007.
S.No. Claim No. Amount of claim Award in Fig Award in words
1 1 33,17,860 33,17,860 Thirty three lakhs seventeen thousand Eight hundred and sixty only
2 2 14,33,985 2,55,394 Two Lakhs, fifty five thousand three hundred and Ninety four only
3 3 2,23,757 NIL NIL
4 4 13,50,214 NIL NIL
5 5 63,25,816 NIL NIL
6 6 Interest at 12% on the claims NIL NIL
7 7 10,000 NIL NIL
Counter claims
S.No. Claim No. Amount of claim Award in Fig Award in words
1 1 3,00,000 3,03,626 Three lakhs, three thousand six hundred and twenty six only
2 2 2,63,317 3,38,480 Three lakhs, thirty eight thousand four hundred and eighty only
3 3 27,828 27,828 Twenty seven thousand eight hundred twenty eight only
4 4 15,87,881 NIL NIL
5 5 6,23,225 3,40,000 Three lakh forty thousand only
6 6 1,73,010 1,73,010 One lakh seventy three thousand ten only
7 7 3,30,000 NIL NIL
8 8 Interest at 18% p.a pendentelite Simple interest as under at 10% p. annum from the dates mentioned below:
Claim no 1: From 1.4.2000 to the date of award
Claim no 2: From 23.10.2000 to the date of award
Claim no 3: From 1.02.97 to date of award
9 9 1,50,000 1,50,000 One lakh and fifty thousand only
As seen from the arbitral award, the first respondent had submitted seven claims, out of which, the Arbitrator had allowed only two claims i.e., claim nos. 1 and 2 and rejected the rest of the claims. The petitioner on its part has submitted nine counter claims, out of which, the Arbitrator has allowed seven counter claims i.e., counter claim nos.1,2,3,5,6,8 & 9 and disallowed the rest of the two counter claims i.e., claim nos.4 & 7.
4. Aggrieve
