JUDGMENT :- (per Hon’ble Sri Justice V.V.S.Rao) 1. This Civil Miscellaneous Appeal under Section 37(1) of the Arbitration and Conciliation Act, 1996 (Arbitration Act, for brevity), is filed by M/s.R.R.Constructions Company (RRCC) against Union of India represented by its Officials of South Central Railway of Secunderabad. RRCC is aggrieved by the judgment dated 15.03.2005 passed by the XIV Additional District Judge, City Civil Court (Fast Track Court), Hyderabad, in O.P.No.1340 of 2003, whereby and whereunder the Award dated 28.02.2003 passed by the Arbitrator to resolve the dispute between RRCC and Union of India was allowed in part. Be it noted, Union of India filed the O.P under Section 34 of the Arbitration Act against the Award. 2. In view of the subsequent events referred to herein infra it is not necessary to elaborately summarize the pleadings and the background of the case. Suffice to mention that South Central Railway entrusted work of earthwork and track work to RRCC between Vikarabad and Godamgura. During the execution of the contract disputes arose between the employer and the contractor. RRCC sought for arbitration, in vain. They then moved this Court and the designate of the Chief Justice appointed an Arbitrator. RRCC raised six claims, namely, i) Extra expenditure of Rs.7,87,900/-, ii) Under Payment of Rs.3,75,457.38, iii) Idling charges of Rs.13,18,800/-, iv) Idling charges of Rs.13,32,150/- for machinery, v) Interest amount from the date of notice till Award at 18% and vi) Return of security deposit. The learned Arbitrator passed a reasoned Award on 28.02.2003. Claim No.1 was allowed. Claim No.3 was also allowed. The other claims were rejected and interest was awarded. In the O.P filed by Union of India, however, while dismissing the O.P insofar as claim No.1 is concerned, the learned civil Court rejected claim No.3 and interest. Aggrieved by the same, the present appeal is filed. 3. Learned Counsel for RRCC submits that while exercising power under Section 34(2) of the Arbitration Act, the Court cannot reappreciate the evidence. Secondly, he would urge that the amendment made to condition 64.5 of General Conditions of Contract came into existence after the execution of contract, and therefore, it has no application disentitling RRCC for interest.
3. Learned Counsel for RRCC submits that while exercising power under Section 34(2) of the Arbitration Act, the Court cannot reappreciate the evidence. Secondly, he would urge that the amendment made to condition 64.5 of General Conditions of Contract came into existence after the execution of contract, and therefore, it has no application disentitling RRCC for interest. Per contra, the learned Standing Counsel for South Central Railways relies on Pooran Chand Nangia v National Fertilizers Limited (2003) 8 SCC 245 and D.Narasimha Reddy v Union of India 2008 (1) ALT 505 (DB) and submits that when the party accepted the Award as confirmed by the civil Court a further appeal under Section 37(1)(b) of the Arbitration Act would not lie. In reply, the learned Counsel for RRCC relies on National Insurance Company Limited v M/s.Bhogara Polyfab Private Limited 2008 (4) CCC 1 (SC) and Associated Construction v Pawanhans Helicopters Private Limited 2008 (2) Arb. LR 473 (SC), and submits that when there was no acceptance of the Award as confirmed by the civil Court with free consent, an appeal would lie. 4. In Pooran Chand Nangia (supra) the appellant entered into an agreement with National Fertilizers Limited (NFL) for construction of roads, bridges, etc. When a dispute arose a sole Arbitrator was appointed who gave an Award. The same was made rule of the Court. Pooran Chand accepted the Award and received amounts, but filed an objection before the civil Court raising the question of jurisdiction of the Arbitrator. The civil Court rejected the same and the ensuing appeal was also dismissed by the High Court of Madhya Pradesh. Before the Supreme Court NFL raised an objection that Pooran Chand having accepted the Award, it is not open to challenge the same on the ground that Arbitrator has no jurisdiction. Accepting the submission, the Supreme Court laid down as under. So far as the first question is concerned, it is not disputed that the appellant had received the money which was due to him under the award and once the appellant had submitted to the award unequivocally and without reservation, it is not open to him to challenge the award. We have looked into the record and find that the appellant had submitted unequivocally to the jurisdiction of the arbitrator. He also accepted the awarded amount without any reservation.
We have looked into the record and find that the appellant had submitted unequivocally to the jurisdiction of the arbitrator. He also accepted the awarded amount without any reservation. Had the appellant desired to challenge the award, he could have reserved his right to do so, but no such reservation was made in the letters sent by him. In this view of the matter, there remains no manner of doubt about the fact that the appellant had submitted to the award and it does not lie in the mouth of the appellant to challenge the award. For these reasons, we reject the first argument of the learned Counsel for the appellant. 5. In D.Narasimha Reddy (supra) the Division Bench of this Court followed Pooran Chand Nangia (supra) and observed as under. Learned Standing Counsel for the respondent-Railways has drawn our attention to the decision of the Supreme Court in Pooran Chand Nangia v. National Fertilizers Ltd ((2003) 8 SCC 245) wherein it was held that when once the person concerned/contractor received the money which was due to him under the award and once the contractor had submitted to the award unequivocally and without reservation, it is not open to him to challenge the award. If he desired to challenge the award, he should have reserved his right to do so, which he did not. 6. In the instant case, the contractor had received the money and not reserved his right to challenge the same. He cannot now be permitted to agitate that he is entitled to disallowed claims having accepted the money due under the award without demur at the relevant time or under protest. In the above circumstances and following the ratio laid down in the above decision of the Apex Court, we find no merit in the appeal. In the case on hand there is no dispute between the following facts. The Award was passed on 28.02.2003. RRCC filed O.P on 03.05.2003. The same was disposed of on 15.03.2005. South Central Railway accepted the Award and sent a communication on 21.04.2005 to RRCC which reads as under. SOUTH CENTRAL RAILWAY Head Quarters Office, Secunderabad. Dt. 21.04.2005 N. W.Con.29/B/135 M/s.R.R. Constructions, No.102, Kamalagiri Towers, F-56, Madhura Nagar, Hyderabad – 500 038. Sir(s), Sub: In the matter of Arbitration of Claims/Disputes arising out of VKB – TDU DL – EW, Track Laying and Linking Works, other Misc. works bet.
SOUTH CENTRAL RAILWAY Head Quarters Office, Secunderabad. Dt. 21.04.2005 N. W.Con.29/B/135 M/s.R.R. Constructions, No.102, Kamalagiri Towers, F-56, Madhura Nagar, Hyderabad – 500 038. Sir(s), Sub: In the matter of Arbitration of Claims/Disputes arising out of VKB – TDU DL – EW, Track Laying and Linking Works, other Misc. works bet. VKB and Godamguda Stns. In Reach – II. Agt. No.64 / CAO / C / SC / 98 Dt. 05-05-98. Ref: OP – 1340/03. * * * With reference to the Arbitration Award, this is to advise you that the Competent Authority has accepted the Award as per the Orders of the H’ble Court in OP – 1340/03. In view of the above you are hereby advised to submit an “UNCONDITIONAL NO CLAIM CERTIFICATE” for arranging the payment. XXXXX DY. CE/C/Plg. For Chief Admn. Officer/Con., S.C.Rly., Secunderabad. 7. In response thereto, RRCC through its Managing Partner communicated their consent to accept the Award and submitted unconditional no claim certificate. The said letter of RRCC reads as under. Date: 21.04.2005 To The CHIEF ADMN. OFFICER/Con., S.C.Railway, Secunderabad. Respected Sir, Sub:Arbitration Award rendered in AA – 65/99. VKB – TDU DL – EW, and other works bt. VKB – Godamguda Srns.Agt. No.64/CAO/C/SC/98 Dt.05-05-98. Ref: 1)OP – 1340/2003 filed in City Civil Court. 2) Your Lr. No.W.Con. 29/3/135, Dt.21.04.05. * * * FURTHER TO THE REFERENCES CITED ABOVE, WE HEREBY SUBMIT THE “UNCONDITIONAL NO CLAIM CERTIFICATE” IN OP-1340/03 WITHOUT ANY COERCION, DURESS OR FORCE AND DECLARE THAT WE SHALL NOT CONTEST THE AWARD ENFORCED UNDER SEC. 36 OF ARBITRATION & CONCILIATION ACT, 1996 OR ANY OTHER LAW IN FORCE FOR THE TIME BEING. THANKING YOU SIR, YOURS FAITHFULLY, XXXXX (D.BASAVAPURNAIAH) MANAGING PARTNER. 8. After receiving the letter the Deputy Chief Engineer communicated Memorandum of Sanction dated 25.04.2005 whereunder an amount of Rs.8,88,731.50 ps. was sanctioned and it was received. 9. No further correspondence subsequent thereto has been brought to our notice nor it is denied that RRCC accepted the entire payment presumably towards claim No.1. In that view of the matter, we are convinced that this appeal is not maintainable. At the cost of repetition we may observe that if a party to arbitration waives his right to seek set aside or right to appeal at any stage of the proceedings, no set aside proceedings can be initiated at the instance of such party. It would be abuse of process of law.
At the cost of repetition we may observe that if a party to arbitration waives his right to seek set aside or right to appeal at any stage of the proceedings, no set aside proceedings can be initiated at the instance of such party. It would be abuse of process of law. We may also observe that 1996 Arbitration Act is an attempt to introduce and enforce some sort of disciplined expediency to alternative disputes resolution and the spirit of arbitration cannot be lost while entertaining a petition under Section 34 of the Arbitration Act or an appeal under Section 37 of the Arbitration Act. 10. The Civil Miscellaneous Appeal is misconceived, and the same is accordingly dismissed with costs.