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2013 DIGILAW 1430 (MAD)

Tata Projects Limited v. Gnanaprakasam

2013-03-26

M.JAICHANDREN, M.M.SUNDRESH

body2013
JUDGMENT M.M. Sundresh, J. 1. As both the Original Side Appeals have been arisen against the common order dated 30.03.2012 passed by the learned single Judge in O.P.Nos.274 of 2011 and 949 of 2010, they have been taken up together and common order is passed. 2. For the sake of brevity, the appellant in OSA No.315 of 2012 is referred to as the "appellant" and the first respondent in the said appeal is referred to as the "first respondent". 3. The first respondent is a Sub-Contractor of the appellant herein. The appellant obtained a contract from the Railways for gauge conversion. In pursuant to the said contract, a sub contract was entered into between the parties on 28.02.2007 for the construction of casti-in-situ Minor Bridges. The contract price was Rs.15,12,450/-. The first respondent was said to have carried out dismantling and earth work and thereafter, the parties negotiated with each other and settled the price for Item No.1 from Rs.180/m3 to Rs.95/-. On 16.05.2007, the appellant issued an amendment to the work order dated 28.02.2007, according to which, the size for bridges have been increased. The contract price was also increased to Rs.32,69,750/-proportionately without any increase in the item rates. The first respondent pointed out certain defects for the slow progress. Thereafter, the appellant extended the completion period by 10 months by way of a second amendment dated 19.11.2007. Another amendment was also made by the appellant on 06.03.2008 and the said third amendment sent to the first respondent only in the month of July 2008. 4. The appellant handed over the work assigned to the first respondent in view of the dispute arose between the parties. The first respondent, in and by the letters dated 20.08.2008 and 10.09.2008, demanded the payment for the work done. A lawyer's notice was also issued on 23.09.2008. Two more letters were sent on 04.10.2008 and 16.10.2008 requesting for the payment due. A request was also made to refer the matter to the Arbitration. Thereafter, the appellant terminated the contract under Ex.R10 dated 12.01.2009. The respondent filed an application in O.P.No.281 of 2009 before this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. In pursuant to the order passed by this Court on 12.02.2010, the learned Arbitrator was appointed to adjudicate upon the dispute. 5. The leaned Arbitrator framed six issues for determination. The respondent filed an application in O.P.No.281 of 2009 before this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. In pursuant to the order passed by this Court on 12.02.2010, the learned Arbitrator was appointed to adjudicate upon the dispute. 5. The leaned Arbitrator framed six issues for determination. Issue No.6 was as to Whether the termination of the contract is valid. It also includes the consequences that would follow in the event of such termination. The other issues framed by the learned Arbitrator are as follows: "1. Whether the claimant had performed his part of the contract as per the terms and conditions of the work order dated 28.02.2007 and the consequent amendments thereto? 2. Whether claimant is entitled to the claim made by him in his claim statement on various headings as per the terms of the contract with the respondent? 3. Whether reasons cited by the claimant for not performing his part of the contract are true, correct and genuine? 4. Is not the claimant stopped from claiming different amounts of compensation at different points of time? 5. Whether the respondent is liable for the claims not provided under the contract?" 6. Before the learned Arbitrator, the parties marked the documents by consent. The first respondent filed his claim petition seeking a sum of Rs.20,00,000/-. However, he made a claim only for Rs.17,40,000/-. After framing of the issues and reply given, the first respondent claimed a sum of Rs.20,90,350/-. The learned Arbitrator, after noting that the first respondent has initially claimed a lessor amount, thereafter, claimed a higher amount, was pleased to reject the subsequent enhanced claim. After going through the entire materials available on record, a detailed award was passed on other issues, granting a sum of Rs.16,15,105/-, less the amount already paid. 7. Challenging the award passed by the learned Arbitrator, the appellant has filed O.P.No.274 of 2011. Similarly the first respondent/claimant filed O.P.No.949 of 2010. The learned single Judge, by a common order dated 30.03.2012, was pleased to dismiss both the petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996. Challenging the said common order, the present Original Side Appeals have been filed by both the parties. 8. The learned counsel appearing for the appellant would submit that the amount has been wrongly awarded by the learned Arbitrator. The contract has been validly terminated under Ex.R-10. Challenging the said common order, the present Original Side Appeals have been filed by both the parties. 8. The learned counsel appearing for the appellant would submit that the amount has been wrongly awarded by the learned Arbitrator. The contract has been validly terminated under Ex.R-10. There are no sufficient materials produced by the first respondent while claiming amount on different heads. The materials belonging to the appellant were under the custody of the first respondent and therefore, corresponding value have not been taken into consideration. A further submission has been made that in so far as the repayment of the security deposit is concerned, a sum of Rs.25,000/-has already been made, which has not been given credit. Hence, he submitted that the award as confirmed by the learned single Judge will have to be set aside. Similarly he submitted that the appeal filed by the first respondent will have to be dismissed as devoid of merits. 9. Per contra, the party-in-Person, being the first respondent, has submitted that the award will have to be enhanced as the documents submitted by him has not been considered properly. As the learned Arbitrator has found the termination bad in law, the appeal filed by the appellant cannot be sustained. The amendments have been made by pressurising the first respondent. He also submitted that adequate compensation has not been awarded for the materials supplied by him. Therefore, the party-in-person submitted that his appeal will have to be allowed and the appeal filed by the appellant will have to be dismissed. 10. A mere perusal of the award passed by the learned Arbitrator would make it very clear that all the relevant materials have been taken into consideration while passing the award. The learned Arbitrator has answered all the six issues. The documents filed by the parties have been considered. While considering the claim No.5, the learned Arbitrator took into consideration Exs.R8 and R9. The attending circumstances were taken into account and the amount has been fixed. Similarly, for Claim No.4 pertaining to the fabrication charges, a sum of Rs.30,000/-has been fixed and for claim No.6, a sum of Rs.12,76,685/- has been fixed. In so far as claim No.7 is concerned, the Earnest Money Deposit made by the first respondent was directed to be withdrawn. 11. Similarly, for Claim No.4 pertaining to the fabrication charges, a sum of Rs.30,000/-has been fixed and for claim No.6, a sum of Rs.12,76,685/- has been fixed. In so far as claim No.7 is concerned, the Earnest Money Deposit made by the first respondent was directed to be withdrawn. 11. The learned single Judge has also passed the order after considering the submissions made by both sides and taking note of the scope and ambit of Section 34 of the Arbitration and Conciliation Act, 1996. The claim of the appellant that the value of the materials given by them has not been accepted for the reason that such a plea had not been raised by way of counter affidavit. Similarly, insofar as the claim made by the first respondent is concerned, the learned Arbitrator has considered the same on merits. The learned Arbitrator has rejected the higher amount claimed in view of the contrary stand taken by the first respondent at different point of time. We are also not inclined to accept the contention of the appellant regarding Rs.25,000/-as Earnest Money Deposit in favour of the first respondent, as the said issue was not raised before the learned Arbitrator. Therefore, we do not find any reason to interfere with the findings of fact, based upon which the award was passed and confirmed by the learned single Judge. There are no sufficient materials for this Court to exercise power under Section 34(2) of the Arbitration and Conciliation Act, 1996. Therefore, both the Original Side Appeals are devoid of merits, accordingly, the same are dismissed. No costs.