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IN THE HIGH COURT OF JUDICATURE AT MADRAS
KRISHNAN RAMASAMY, J.
The Tamil Nadu Civil Supplies Corporation, Rep. by its Managing Director, Chennai, – Appellant
Versus
M/s. Lakshmi Export, Coimbatore & Another – Respondents
O.P. Nos. 780 & 927 of 2017
Decided On : 15-06-2023
Arbitration and Conciliation Act - Tamil Nadu Civil Supplies Corporation - Section 34
Fact of the Case:
The Tamil Nadu Civil Supplies Corporation filed Original Petitions under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the awards passed by the learned Arbitrator in two arbitration cases. The Corporation had allowed the awards to become final and moved an application under Section 33 of the Act seeking to modify the awards after a lapse of two years.
Finding of the Court:
The Court found that the petitioner Corporation had lost the opportunity to challenge the awards under Section 34 of the Act as it failed to do so within the prescribed time limit. The Court also noted that the applications under Section 33 of the Act, seeking to correct clerical errors, were moved beyond the limitation period and could not be entertained. The Court dismissed the Original Petitions.
Issues: The issues involved included the timeliness of the petitions, the validity of the applications under Section 33 of the Act, and the enforceability of the awards.
Ratio Decidendi: The Court held that once the arbitral award becomes enforceable after the prescribed time limit, no further application under Section 33 of the Act can be entertained. The Court emphasized that the parties cannot be permitted to extend the period of limitation for filing applications under Section 33 of the Act beyond the time limit prescribed under Section 34 of the Act.
Final Decision: The Court dismissed the Original Petitions, stating that the petitioner Corporation had not made out a case to challenge the awards and that the applications under Section 33 of the Act, moved after the limitation period, could not be entertained.
JUDGMENT
(Prayerin O.P.No.780 of 2017: Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996, praying to set the award passed by the learned Arbitrator, dated 29.09.2015 in Arbitration Case No.13 of 2011/SV followed by the additional award dated 20.06.2017 in Arbitration case No.01/2017 SV.
in O.P.No.927 of 2017: Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996, praying to set the award passed by the learned Arbitrator, dated 29.09.2015 in Arbitration Case No.04/2011/SV followed by the additional award dated 28.08.2017 in Arbitration case No.02/2017 SV.)
Common Order:
1. Original petition No.780 of 2017 has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (in short, ''the Act''), praying to set aside the award passed by the learned Arbitrator, dated 29.09.2015 in Arbitration Case No.13 of 2011/SV followed by the additional award dated 20.06.2017 in Arbtration case No.01/2017 SV.
Original petition No.780 of 2017 has been filed by the petitioner, praying to set aside the award passed by the learned Arbitrator, dated 29.09.2015 in Arbitration Case No.04/2011/SV followed by the additional award dated 28.08.2017 in Arbitration case No.02/2017 SV.
2. Since the facts, parties and the issues involved in the present Petitions are common, these Petitions are taken up together and being disposed of vide this common order.
3. The brief facts, which are necessary for disposal of the present Original Petitions, can be stated as under:
4. The petitioner is the Tamil Nadu Civil Supplies Corporation, established and controlled by the State Government of Tamil Nadu, for procuring and supplying essential commodities to the public through ration shops. Pursuant to the tender floated by the petitioner for supply of 6000 Mt.Toor Dhall and 2000 Mt Urid Dhall, the respondents, which are carrying on the business of import of pulses and food grains, entered into Supply Contract Agreements, dated 30.12.2010 and 11.02.2010 respectively. Consequently, the respondents also deposited EMD of Rs.38,55,000/- and Rs.52,00,000/- with the petitioner as required under Clause 7 of the Agreements. It appears that the respondents, during the execution of their contracts, had delayed the supply of the agreed quantities of Toor Dhall and Urid Dhall and after completion of the supplies, the respondents raised final bills which were not settled by the petitioner. Later, there was exchange of notices and reply notices between the parties, which, ultimatedly, lead to invoking the arbitration Clause contained in the agreements by the respondents and referred the matter to the arbitral tribunal.
5. The sole arbitrator entered the reference and issued notices to both parties. Both the parties have filed their statements of claim and counter claims and also filed statement of defense to the statement of claims filed by the opposite party. On conclusion of the evdience of both parties, matters were heard by the learned Arbitrator and passed the following separate awards, dated 29.09.2015.
In Arbitration Case No.13/2011, dated 29.09.2015:
1) The orders of the respondent in No.BS6/110707/2010 dated 06.04.2011 withholds by the corporation are hereby ordered to be set aside.
2) Since the impugned order dated 06.04.2011 passed by the respondent corporation is ordered to be set aside supra, the respondent is directed to pay a sum of Rs.86,06,467/- being the amount towards the supplied quantity of 168 MTS of Toor Dhall.
3) The respondent is also directed to refund security deposit of Rs.38,55,000/- (Rupees Thirty eight lakhs, fifty five thousand).
4) As regards release of amount, withheld in respect of other completed contracts it hereby ordered to refund the withheld amount relating to other completed contracts, after verifying the accounts within a period of 30 days from t
Scanned signed copy of the award/order of the Arbitral Tribunal to the parties would be a valid delivery as envisaged under Section 31(5) of the Arbitration and Conciliation Act, 1996.
The learned Arbitrator exceeded his jurisdiction in reviewing the Original Award under Section 33 of the Arbitration and Conciliation Act, 1996.
An application under Section 33 for correction of an arbitral award cannot extend the limitation period for challenging that award under Section 34 if it seeks a substantive review.
The court confirmed that arbitral awards can only be set aside under specific grounds outlined in the Arbitration and Conciliation Act, affirming the validity of the arbitrator's decision regarding l....
The court upheld limitations on condonation applications under the Arbitration and Conciliation Act, emphasizing adherence to statutory timelines.
The dismissal of a petition under Section 34 of the Arbitration Act was justified due to the petitioner's failure to meet limitation requirements, as procedural defects impeded timely filing.
The limitation period for setting aside an arbitral award starts from the disposal of a request under Section 33, excluding the time taken for communication of that decision.
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