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2021 Supreme(Mad) 3605
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
Nadippisai Pulavar K.P. Ramasamy Co-OP, Sugar Mill' rep. By its Administrator Thalainayar Mayiladuthurai Taluk - Petitioner
Versus
M/s.Binny Engg. Ltd. & Ors. - Respondents
O.P. No. 866 of 2013
Decided On : 25-02-2021
For the Petitioner:Mr. S.R. Rajagopal, Additional Advocate General assisted by Mr. R. Bala Ramesh Special Government Pleader and Ms. Tanya Kapoor, Government Advocate.
For the Respondent: Mr. Rahul Balaji.
Headnote:
Arbitration - Section 34 challenge to an arbitral award - Impugned award challenged on the grounds of wandering, patent illegality, and limitation - Court held that the AT had not wandered outside the contractual perimeter and had not re-written the contract - Court also held that the AT had not committed any patent illegality and had correctly applied the limitation period - Challenge to the arbitral award dismissed.
Fact of the Case:
Binny, a contractor, entered into a contract with Sugar Mill for the expansion of the latter's sugar mill. The contract was governed by the Arbitration and Conciliation Act, 1996 (A and C Act). Disputes arose between the parties, and the matter was referred to arbitration. The arbitral tribunal (AT) passed an award in favor of Binny, granting it certain claims and disallowing the counterclaims of Sugar Mill. Sugar Mill challenged the award under Section 34 of the A and C Act, alleging wandering, patent illegality, and limitation.
Finding of the Court:
The court held that the AT had not wandered outside the contractual perimeter and had not re-written the contract. The court also held that the AT had not committed any patent illegality and had correctly applied the limitation period. The court dismissed the challenge to the arbitral award.
Issues: 1. Whether the AT had wandered outside the contractual perimeter and re-written the contract. 2. Whether the AT had committed any patent illegality. 3. Whether the AT had correctly applied the limitation period.
Ratio Decidendi: 1. Wandering: The court held that the AT had not wandered outside the contractual perimeter and had not re-written the contract. The court noted that the AT had considered the evidence and the provisions of the contract in reaching its decision. The court also noted that the AT had not ignored any specific covenants or recitals in the contract. 2. Patent illegality: The court held that the AT had not committed any patent illegality. The court noted that the AT had not ignored any vital evidence or taken into account any irrelevant evidence. The court also noted that the AT had not arrived at a perverse decision. 3. Limitation: The court held that the AT had correctly applied the limitation period. The court noted that the AT had taken the date of receipt of the trigger notice as the base date for the purpose of Section 21 of the A and C Act. The court also noted that the AT had correctly held that the counterclaim of Sugar Mill was barred by limitation.
Final Decision: The court dismissed the challenge to the arbitral award.
ORDER :
[Prayer: Petition filed under Section 34(2A) of the Arbitration and Conciliation Act, 1996 Order XXI Rules 2 and 3 of O.S. Rules of High Court praying to set aside the arbitration award dated 16.04.2012 against the petitioner with a cost of this petition and for further or other relief as this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice.]
PREFACE:
Captioned 'Original Petition' (hereinafter 'OP' for the sake of brevity) going by its year of registration (2013) and date of presentation (13.02.2012 to be precise) is clearly a vintage matter owing to time line stipulated in sub-section (6) of Section 34 of 'The Arbitration and Conciliation Act, 1996 (Act 26 of 1996)' and this statute shall hereinafter be referred to as 'A and C Act' for the sake of brevity. However on reading the case file, it comes to light that it may not just a vintage matter, it can even be described as ancient, as appointment of Hon'ble Sole Arbitrator was made by this Court more than one and half decades ago i.e., more than 15 years ago and it is actually more than 16 years ago, as 26.03.2004 is the date on which this Court made an order in O.P.No.909 of 2000 appointing a Hon'ble former Chief Justice of a High Court, who was also a former Hon'ble Judge of this Court, as Sole Arbitrator. This means that the trigger qua arbitration itself is in the previous millennium as the OP in which the sole Arbitrator was appointed is of the year 2000. A further careful perusal of the case file brings to light that the genesis of the matter is an agreement which was made more than quarter of a century ago. To be precise, the genesis of the matter is an agreement dated 25.08.1994 (Ex.C5 before the Arbitral Tribunal). To be noted, 'Arbitral Tribunal' from hereon shall be referred to as 'AT' for the sake of brevity. It is for this reasons that this Court has chosen to say that captioned OP can be described as not just a vintage matter, but it can be described even as an ancient matter.
2. Be that as it may, Hon'ble Sole Arbitrator made an 'arbitral award dated 16.04.2012' (hereinafter 'impugned award' for the sake of brevity). Hon'ble sole Arbitrator. who constituted the AT, was originally arrayed as second respondent in the captioned OP, but this Court following the procedure adopted by Hon'ble Supreme Court in Vinay Heavy Equipments case [Zonal General Manager, Ircon International Limited Vs. Vinay Heavy Equipments reported in (2015) 13 SCC 680] deleted the Hon'ble sole Arbitrator from the array of parties vide earlier proceedings dated 10.07.2020 (to be noted, deletion procedure is captured in order reported in 2007 SCC OnLine SC 4). Therefore, now there is a sole petitioner and a lone respondent in captioned OP. Sole petitioner in captioned OP was the respondent before AT and the lone respondent in captioned OP was the sole claimant before AT. Therefore, sole petitioner in captioned OP shall be referred to as 'Sugar Mill' and lone respondent (now) in captioned OP shall be referred to as 'Binny', both for the sake of brevity, convenience and clarity. The arbitral proceedings are mammoth, mountainous and a marathon of sorts. The reason is, post constitution of AT on 26.03.2004, pleadings were completed by Sugar Mill and Binny on 23.07.2005. Thereafter, as many as 415 documents, namely Exs.C1 to C415 were marked on the side of Binny as claimant, though only one witness was examined as CW1. On the side of Sugar Mill (as respondent before AT), as many as 541 documents were marked, namely Exs.R1 to R541 (series) and two witnesses deposed on behalf of Sugar Mill (RW1 and RW2). One Mr. S. Swaminathan deposed as CW1 on behalf of the claimant, one Mr. K.Rajendran, Senior Clerk of Sugar Mill deposed as RW1 and one Mr. S. Lakshmi Narayanan, Senior Manager (personnel & Administration) deposed as RW2. It is also clear that the
