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2021 Supreme(Mad) 2219

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. Sathish Kumar, J.
The Tamil Nadu Cements Corporation Ltd, Rep. by Manager (Materials) in Charge, Chennai – Petitioner
Versus
Unicon Engineers, Rep. by its Managing Partner, Coimbatore and Another – Respondents
O.P. Nos. 692 & 1030 of 2019 & A. Nos. 6755 of 2019, 363, 3004 & 3112 of 2020
Decided On : 09-09-2021

Advocates:
Advocate Appeared:
For the Petitioner:A. Sivaji, Advocate.
For the Respondent:E. Omprakash, Senior Counsel for M/s. B. Manoharan, Advocate.

Headnote:

M.S.M.E.D. Act - Section 15 & 16 - Arbitration and Conciliation Act 1996 - Section33,65,19,18,81,16 and 34 - Balance payment for - Erection - According to Claimant payment for erection & commissioning will be released six months after successful completion of erection & commissioning and balance payment for erection & commissioning will be released along with on submission of unconditional irrevocable Bank guarantee for same value with validity period of 6 months - First respondent raised number of invoices from to for a total However petitioner has paid of is still pending - Total Claim of first respondent is outstanding due payable by petitioner against terms of purchase order issued by them - AWARD PASSED BY M.S.E.F. COUNCIL - M.S.M.E.D. Act, second respondent Council held that petitioner is entitled to recover balance retention along with interest due to piecemeal releases of total retention money of with effect from and along with interest with effect from towards additional expenditure incurred by first respondent due to delay in execution of civil works by petitioner Corporation - Held, Having regard to above legal position and provisions of law itself makes it clear that application under Sec.34 of Act to set aside award cannot be entertained unless it is filed within a maximum period of 120 days as provided under Sec.34 of Act - Insofar as award of Council, it is contention of petitioner counsel that as conciliation is not fructified second respondent Council itself invoked arbitration proceedings though Council has not followed procedure contemplated under Act that cannot be gone into when application itself filed under Sec.34 of Act is not maintainable before Court on ground of limitation – Court May mention here that as per the scheme of the Act of 1996, the issues/claims that have been adjudicated by the interim award dated 12.10.2003 are final and the same issues cannot be gone into once again at the time of passing the final award - Reply given by arbitrator does not give any fresh cause of action to appellant so as to move an application under Section 34 (3) of Act - Award was passed only option with appellant was either to have moved an application under Section 34 within three months as required under sub-section (3) of Section 34 or within extended period of another 30 days - Original Petitions dismissed.

ORDER :

(Prayer IN O.P.No.692 of 2019: Original petition has been filed under Section 34 of the Arbitration and Conciliation Act 1996 to set aside the award passed by the second respondent Council, dated 04.6.2016 in Case No.M & SEFC.CBER 11 of 2016 and confirmed the order, dated 25.10.2016 in R.C.No.436/D3/2014, direct the first respondent to pay a sum of Rs.12,20,940/- as damages suffered by the petitioner, Rs.17,47,543/- incurred towards various heads including interest and for costs. Prayer IN O.P.No.1030 of 2019 Original petition has been filed under Section 34 of the Arbitration and Conciliation Act 1996 to set aside the award passed by the second respondent Council, dated 04.6.2016 and dated 25.10.2016 in Case No.M & SEFC.CBER 30 of 2016 passed by the second respondent Council, direct the first respondent to pay a sum of Rs.12,89,225/- paid towards 25% advance amount of Rs.7,17,500/- and interest Rs.5,71,725/- @ 14.25% p.a. from 1.6.2011 to 31.12.2016 and thereafter till the date of realization with 14.25% p.a.)

1. Since both the Original petitions are arising out of the award passed by the second respondent Council, dated 4.6.2016 and 25.10.2016 in favour of the first respondent, the aforesaid original petitions are disposed of by a common order.

FACTS OF THE CASE:

2. It is the case of the claimants/first respondent herein before the second respondent Council that pursuant to the work order, dated 16.4.2010, the first respondent supplied Electro Static Precipitators (E.S.P.) to the petitioner Corporation for a sum of Rs.7,13,10,343/- and a sum of Rs.37,50,200/- was fixed as erection and commissioning charges. According to the claimant, 90% payment for erection & commissioning will be released six months after successful completion of erection & commissioning and the balance 10% payment for erection & commissioning will be released along with Sl.No.VII-B (a) on submission of unconditional irrevocable Bank guarantee for the same value with validity period of 6 months. The first respondent raised number of invoices from 01.7.2010 to 25.12.2013 for a total sum of Rs.7,50,76,182/-. However, the petitioner has paid a sum of Rs.7,00,67,381/- and a sum of Rs.50,08,801/- is still pending. The total claim of the first respondent is Rs.2,66,80,157/- is outstanding due payable by the petitioner against the terms of purchase order issued by them. AWARD PASSED BY THE M.S.E.F. COUNCIL

3. Taking note of the Section 15 & 16 of the M.S.M.E.D. Act, the second respondent Council held that the petitioner is entitled to recover the balance retention amount of Rs.39,66,144/- along with interest due to piecemeal releases of the total retention money of Rs.1,17,57,399/- with effect from 31.3.2011 and (2) Rs.1,57,59,537/- along with interest with effect from 17.1.2014 towards additional expenditure incurred by the first respondent due to the delay of 3 years in execution of civil works by the petitioner Corporation.

4. Aggrieved by the said award passed by the second respondent Council in favour of the first respondent, the petitioner has filed a petition under Sec.33 of the Arbitration and Conciliation Act before the second respondent to recall the Award, dated 04.6.2016 in Case No.M & SEFC.CBER 30 of 2016 and the same was rejected by the Council, by order, dated 25.10.2016. Challenging the said Award and also rejection order, dated 25.10.2016 rejecting the request of the petitioner to recall the Award, the present O.Ps. are filed.

5. Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the first respondent and perused the materials available on record.

SUBMISSIONS OF THE COUNSEL FOR THE PETITIONER:

6. Though several grounds have been raised, the main contention of the learned counsel appearing for the petitioner before this Court is that to set aside the award passed by the Council, Section 34 of the Arbitration and Conciliation Act is not applicable, otherwise, it is the contention that the award has to be chal

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