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SUPREME COURT OF INDIA
J. Chelameswar, A.K. Sikri, JJ.
Y. SLEEBACHEN ETC. – APPELLANTS
VERSUS
SUPERINTENDING ENGINEER WRO/ PWD & ANR. – RESPONDENTS
CIVIL APPEAL NOS.7164-7166 OF 2014 (arising out of SLP (C) Nos. 23016-23018 of 2012)
Decided On : 04-08-2014
(1982) 2 SCC 463 – Relied upon
(b) Code of Civil Procedure, 1908 – Order III, rule 4 – Power of Attorney authorises an advocate to represent his client in the court and conduct his case – Order III, rule 1 expressly authorises an advocate to act on behalf of his client – A compromise signed by advocate shall be valid under Order XXIII, rule 3 – Instantly, Government Pleader was legally entitled to enter into a compromise with the appellant and his written endorsement on the Memo filed by the appellant can be deemed as a valid consent of the Respondent itself. (Para 17, 19)
(2011) 8 SCC 679; (2003) 11 SCC 372 – Relied upon
Facts of the case:
The appellant, an Engineering Contractor, was awarded three contracts by the respondents
Certain disputes and differences arose between the parties relating to all these contracts. The appellant raised his claims in respect of all the three contracts. Awards were passed in all the three cases by the arbitrators.
The respondent No.1 challenged all the awards by filing three petitions under Section 34 of the Act, seeking to set aside these awards.
Acting on compromise, the petitions were partly allowed and the awards of the Arbitrators were modified
The respondents, however, challenged the orders of the District Judge by filing appeals under Section 37 of the Act in the High Court, primarily on the ground that the Government had never agreed to the terms as endorsed by the Government Pleader, in as much as, he was never authorised for this purpose. It was argued that in the absence of any authorisation in favour of the Government Pleader, endorsement of the compromise given by him was not binding on the Government.
The High Court heard the matter and vide impugned judgment, set aside the orders of the Principal District Judge passed in the three petitions, directing it to decide on merits the applications filed by the respondents under Section 34 of the Act.
Finding of the Court:
Impugned judgment cannot be sustained.
JUDGMENT :
A.K. SIKRI, J.
1. Leave granted.
2. By the common judgment dated 29.02.2012, the Madras High Court has decided three Civil Miscellaneous Appeals filed under Section 37 (1) (b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). Those three appeals were filed by the respondents herein challenging the orders dated 28.04.2011 which were passed by the Principal District Judge, Tirunelveli, Tamil Nadu. The reasons for disposing of the appeals by one single order was the commonality of the parties as well as the issue involved in the said three appeals.
3. It so happened that the appellant, who is an Engineering Contractor, was awarded three contracts by the respondents herein particulars whereof are as under:
(i) For the rehabilitation and modernization of Gundar Reservoir system in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs.80,14,605/- under registered Agreement dated 02.04.1998 within a period of 15 months to complete the contract work.
(ii) For the rehabilitation and modernization of Karuppanadhi Reservoir system in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs.55,82,633/- under the Registered Agreement dated 20.07.1998 within a period of 18 months to complete the contracts work.
(iii) For the rehabilitation and modernization of Kannadian Anicut and Channel Reach - 1 in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs.69,24,038/- under registered agreement 28.07.1998 within a period of 26 months to complete the contract work.
4. Certain disputes and differences arose between the parties relating to all these contracts. According to the appellant, delays were caused by the Department in handing over the sites where the works were to be undertaken by the appellant and in addition, various other breaches were committed by the Department in not fulfilling its obligations under the three contracts. The appellant raised his claims in respect of all the three contracts. The Department appointed Mr. Velu as the Arbitrator in one case and Mr. S. Krishnamurthy was appointed as Arbitrator in other two cases. After adjudication of the disputes, awards were passed in all the three cases to the following effect:-
(i) Award dated 09.06.2006 by Mr. Velu in favour of the appellant in the sum of Rs.52,90,776/- together with interest at the rate of 18% p.a. from 09.06.2006 until payment or realisation.
(ii) Award dated 25.04.2006 vide which appellant was awarded a sum of Rs.39,74,964/- together with interest at the rate of 18% p.a. from the date of award until payment or realisation.
(iii) Award dated 25.04.2006 in favour of the appellant whereby respondent No.1 was directed to pay an amount of Rs.42,56,419/- together with interest at the rate of 18% p.a. from the date of the award until payment or realisation.
5. The respondent No.1 challenged all the awards by filing three petitions under Section 34 of the Act, seeking to set aside these awards. The appellant filed his replies contesting those petitions. All these petitions were listed before the Principal District Judge, Tirunelveli. While these proceedings were pending before the Principal District Judge, the Government Public Works Department issued letter dated 02.12.2008 whereby it directed its officers to negotiate with the appellant for settlement of arbitration awards amount.
Accordingly, there were meetings between the parties on 19.12.2008 and 09.01.2009 to negotiate out of court settlement. Officials, including the Superintending Engineer, had discussions with the appellant, wherein the appellant was requested to reduce 40% of the principal awarded amount for all the three works covered under the independent arbitration Awards. The contractor instead, came fo
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