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2022 Supreme(Mad) 3176

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
M/s. Chennai Water Desalination Ltd., (CWDL) Rep. by its Manager, Chennai - Appellant
Versus
Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) Rep. by its Managing Director, Chennai - Respondent
O.P. No. 298 of 2019
Decided On : 26-07-2022

Advocates appeared:
For the Petitioner:Hema Srinivasan along with N. Umayaparvathi, Advocates. For the Respondent:P. Kumaresan, Additional Advocate General for Gautam S. Raman Standing Counsel for CMWSSB.

The main legal point established in the judgment is the application of limitation principles under the Arbitration and Conciliation Act to determine the timeliness of the counter claim and the rejection of the claim based on limitation.

Headnote:

Arbitration and Conciliation Act - Limitation - Section 34(2)(b)(ii) - Sections 5 and 7.4 of BWPA - Summary

Fact of the Case:

The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to partially set aside the arbitral award dated 09.10.2017, which rejected the counter claim of the petitioner. The main issue revolved around the limitation of the counter claim made by the petitioner.

Finding of the Court:

The court found that the counter claim of the petitioner was not time-barred and set aside the impugned award insofar as it rejected the counter claim of the petitioner. The court also upheld the rejection of the claim of the respondent on the ground of limitation.

Issues: The key issue was whether the counter claim of the petitioner was time-barred. The court also considered the rejection of the claim of the respondent on the ground of limitation.

Ratio Decidendi: The court applied the principles of limitation as per the Arbitration and Conciliation Act and relevant case laws to determine the timeliness of the counter claim. It also considered the concept of cause of action and cause of arbitration in arbitration matters.

Final Decision: The court partially set aside the arbitral award to the extent that it rejected the counter claim of the petitioner. The rejection of the claim of the respondent on the ground of limitation was upheld.

JUDGMENT

(Petitioner filed under Sections 34(2)(b)(ii) read with Explanations (ii) and (iii) of the Arbitration and Conciliation Act, 1996 (as amended) to partially set aside the award dated 09.10.2017 passed by the Arbitral Tribunal as far as it relates to the counter claim of the petitioner herein.

Captioned 'Original Petition' ['OP' for the sake of convenience and clarity] was presented in this Court on 08.01.2018 under Section 34 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity, assailing an arbitral award dated 09.10.2017 made by a three member Arbitral Tribunal.

2. This 09.10.2017 arbitral award being a unanimous award made by a three member 'Arbitral Tribunal' ['AT' for the sake of brevity] shall hereinafter be referred to as 'impugned award' for the sake of brevity, convenience and clarity.

3. There have been multiple listings of captioned main OP before this Court and proceedings made by me in the listing on 15.03.2021 captures the crux and gravamen of the captioned main OP. This 15.03.2021 proceedings reads as follows:

'Mr.R.Murari, learned senior advocate instructed by Ms.Hema Srinivasan, counsel on record for sole petitioner and Mr.S.R.Rajagopal, learned Additional Advocate General instructed by Mr.G.Janakiraman, Standing Counsel for Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) are before me.

2. The impugned award is dated 09.10.2017 and the same has been made by an 'Arbitral Tribunal' ('AT' for the sake of brevity) constituted by three Hon'ble Arbitrators. To be noted, it is an unanimous award.

3. The contractor, who was respondent before AT, is the petitioner in captioned OP and CMWSSB, the employer which was claimant before AT, is the respondent in captioned OP.

4. The fulcrum of the lis or in other words, the epicentre of the lis is an agreement dated 13.09.2005, which is described as 'Bulk Water Purchase Agreement' ('BWPA' for brevity).

5. The entire matter turns on limitation.

6. In a nutshell inter alia vide Paragraph 54 of the impugned award AT has held CMWSSB's claim to be time barred. The lis was therefore not examined on merits.

7. Likewise, vide Paragraphs 56 and 57, AT has held the counter claim of the contractor to be time barred. For convenience, it is recorded that in Paragraph 57 Hon'ble AT has extracted a paragraph from case law of Hon'ble Supreme Court and has mentioned that the same is an extract from Praveen Enterprises case law being law laid down by Hon'ble Supreme Court in State of Goa Vs. Praveen Enterprises reported in (2012) 12 SCC 581, but the extract is actually from Voltas Limited Vs. Rolta India Limited case law reported in (2014) 4 SCC 516. To be noted, what has been extracted in Paragraph 57 of the impugned a ward is not from P raveen Enterprises , but is part of paragraph 28 o f R olta Vs. Voltas.

8. There is no disputation or disagreement before this Court that CMWSSB, which was the claimant before AT, has not assailed the impugned award.

9. Likewise, case file placed before me reveals that captioned OP which is at the instance of the contractor, who was respondent before AT, is a limited challenge, limited to the AT dismissing the counter claim of the contractor as time barred. Learned senior counsel submits that this is based on J.G.Engineers principle, being principle laid down by Hon'ble Supreme Court in J.G.Engineers Private Limited Vs. Union of India and another reported in (2011) 5 SCC 758. Relevant paragraph in J.G.Engineers case law is paragraph 25.

10. In the aforesaid backdrop, learned senior counsel submitted that return of the bank guarantee is a sequittur to the claim of the employer CMWSSB being held to be time barred, but learned Additional Advocate General submits tha


























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