IN THE HIGH COURT OF ORISSA, CUTTACK
BISWANATH RATH, J.
Mahanadi Coal Fields Limited - Appellant
Versus
Kishorilal Loomba and Sons - Respondent
Arbitration Appeal No. 2 of 2007
Decided On : 13-05-2019
Arbitration Appeal - Challenge to judgment of District Judge, Sambalpur in Arbitration Petition No.2 of 2004 - Arbitration and Conciliation Act, 1996, Section 37(1) - The court discussed the receipt of the final payment under protest and the entitlement of interest. The appellant challenged the validity of the award on the grounds that the contract had terminated upon receipt of the final bill without protest. The court found that the amount involving the final payment was received by the respondent under protest, and therefore, the contract was not concluded. The court also discussed the entitlement of interest and found that the District Judge's interference in the entitlement of interest was not justified. The court dismissed the Arbitration Appeal.
Fact of the Case:
The appellant challenged the validity of the award on the grounds that the contract had terminated upon receipt of the final bill without protest. The court found that the amount involving the final payment was received by the respondent under protest, and therefore, the contract was not concluded. The court also discussed the entitlement of interest and found that the District Judge's interference in the entitlement of interest was not justified. The court dismissed the Arbitration Appeal.
Finding of the Court:
The court found that the amount involving the final payment was received by the respondent under protest, and therefore, the contract was not concluded. The court also discussed the entitlement of interest and found that the District Judge's interference in the entitlement of interest was not justified. The court dismissed the Arbitration Appeal.
Issues: The issues involved the challenge to the validity of the award on the grounds that the contract had terminated upon receipt of the final bill without protest and the entitlement of interest.
Ratio Decidendi: The court found that the amount involving the final payment was received by the respondent under protest, and therefore, the contract was not concluded. The court also discussed the entitlement of interest and found that the District Judge's interference in the entitlement of interest was not justified.
Final Decision: The court dismissed the Arbitration Appeal.
JUDGMENT :
BISWANATH RATH, J.
1. Arbitration Appeal has been filed U/s.37(1) (b) of the Arbitration and Conciliation Act, 1996 and involves a challenge to the judgment of the District Judge, Sambalpur in Arbitration Petition No.2 of 2004 dated 27.11.2006 where the District Judge while dismissing the Arbitration Petition confirmed the award passed by the learned Arbitrator involving Arbitration Case No.2 of 2001.
2. Advancing his argument Shri S. Mohanty, learned counsel for the appellant confined his submission involving challenge to the Arbitration petition No.2 of 2004, thereby mostly restricted his submission to the extent that for the receipt of the payment on final bill without protest and having no claim any further involving the contract, whether the Arbitrator as well as the District Judge arrived in right conclusion involving the award and judgment therein? Of course in filing the written note of argument Sri Mohanty, extended his claim to interest part also.
For the limited nature of challenge involving both the award as well as the judgment involved herein, this Court need not go to all the factual aspects involved herein except the factual aspect which is relevant for determination of the question involved hereinabove.
3. Shri S. Mohanty, learned counsel for the appellant referring to the pleadings, the stand taken by the Company in their opposition before the Arbitrator, the evidence of the respective parties, findings therein involving the above dispute and further the judgment of the learned District Judge involved herein submitted that for the complete materials available therein establishing the receipt of final amount by the claimant the respondent herein without protest, the learned Arbitrator as well as the learned District Judge failed in appreciating the maintainability of the Arbitration proceeding. Shri S. Mohanty, learned counsel for the appellant taking this Court to a decision in the case of ONGC Mangalore Petrochemicals Ltd. versus ANS Constructions Ltd. and Ors., (2018) 3 SCC 373 involving Civil Appeal No.1659 of 2018 (arising out of Special Leave petition (C) no.12939 of 2015) submitted that the case of the appellant has support through the above judgment. It is, in the circumstance, Shri S. Mohanty, learned counsel for the appellant prayed this Court for interfering in the judgment as well as the award involved herein and setting aside both.
4. Even though there is appearance of a set of counsel on behalf of the respondent but at the time of hearing, a mention was made on behalf of the counsel for the respondent to delete their name from the cause list and as a consequence the matter is heard and reserved only hearing on the counsel for the appellant
5. Considering the submission of Shri S. Mohanty, learned counsel for the appellant and going through the statement of claim more particularly on the issue of receipt of final bill under protest or without protest, this Court from the statement of claim at paragraph nos.27.2, 27.3 and 28 finds as follows:
"(27.2) The claimant submits that claimant had no other option but to accept the final payment as wrongly paid by the respondent.
(27.3) The claimant submits that the respondent while paying the final bill has also taken a letter from one of the partner of the firm Mr. K.K. Loomba that claimant has no claim what so ever against this contract. Claimant submits that respondent threatened claimant that if this type of letter is not given respondent will never pay the final bill of this contract. Claimant submits that all the delays and breach of contract committed by respondent has made financial position of claimant very miserable and very vry bad as such there are no option for claimant except to write such letter and except the whatever payment was being released by respondent.
(28) The claimant submits that vide claimants letter dated 27.5.1999 (Annexure C27) claimant requested the respondent to register various claims and asked for their payment within 15
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