IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.01.2026 CORAM THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH

1.The Managing Director, Tamil Nadu Civil Supplies Corporation, Head Office (Marketing), No.12, Thambusamy Road, Kilpauk, Chennai – 600 010.

Now presently at CMRL Admin Building, Poonamallee High Road, Koyambedu, Chennai – 600 107.

2.The Regional Manager, Tamil Nadu Civil Supplies Corporation, Dindigul Region, Collectorate Campus, Thadikombu Road, Dindigul – 624 005. .... Petitioners Vs.

B.Renuka .... Respondent Arbitration Original Petition (Com.Div.) filed under Section 34 of the Arbitration and Conciliation Act, 1996, praying to set aside the Arbitral Award dated 18.07.2024 bearing No.02/2022 VB passed by the Arbitrators.

For Petitioners : Mr.M.K.Kabir, Senior Counsel for Mr.R.Siddharth *****

ORDER

This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 [for brevity ‘the Act’], challenging the award passed by the Arbitral Tribunal dated 18.07.2024.

2. The respondent participated in the tender conducted by the Tamil Nadu Civil Supplies Corporation in respect of transportation of commodities from Dindigul to Kodaikanal for a total distance of 97 kms. The respondent was a successful bidder in the tender conducted during the period from 1996-1997 upto the year 2001-2002. Agreements were entered into between the parties in this regard.

3. The total distance of 97 kms. were divided into two paths viz., plain path and hill path. The rates were approved by the Corporation as per the tender condition in which the plain path covered distance of 46 kms. and it was calculated as per the slab rate. The remaining distance of 51 kms., which was the hill path, was calculated at the rate of double the plain path rate from the slab “Distance/Slab in Kms. – 41 to 60 Kms.”.

4. All the payments and dues were settled by the Corporation in favour of respondent.

5. The audit was conducted by the Indian Audit and Accounts Department and certain errors were identified in the calculation of transportation charges paid to respondent. Accordingly, the Head Office was instructed to revise the charges and recover the excess amount paid to respondent. The AG (Audit) party gave a formula to calculate the charges and after adopting the said formula, proceedings were issued for recovery of the excess charges and a show cause notice was issued to respondent on 29.09.2003 calling upon the respondent to show cause as to why the excess payment amount should not be recovered. On 17.10.2003, an explanation was sent by the respondent and since the Corporation was not convinced with the explanation, recovery orders were passed on 19.11.2003 with a direction to respondent to remit the excess amount received by them.

6. The respondent, aggrieved by the same, filed W.P.No.38161 of

2003 before this Court. Since the agreement between the parties contained an arbitration clause, the parties were directed to work out their remedy before the Arbitral Tribunal. Insofar as recovery of the amount is concerned, interim protection was granted and it was directed to be continued till the final award was passed.

7. The Arbitral Tribunal, through award dated 18.07.2024, came to a conclusion that the recovery proceedings initiated against the respondent cannot be sustained and whatever amount has already been recovered shall be refunded. Aggrieved by the same, the present petition has been filed before this Court.

8. Heard Mr.M.K.Kabir, learned Senior Counsel appearing for petitioners and carefully perused the materials available on record. This Court also carefully perused the award passed by the Arbitral Tribunal.

9. The short issue that arises for consideration is as to whether the reasoning assigned by the Arbitral Tribunal suffers from any perversity and/or patent illegality warranting interference of this Court in exercise of its jurisdiction under Section 34 of the Act.

10. The main ground urged on the side of petitioners is that Clause

51 of the a