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2015 DIGILAW 2584 (MAD)

State of Tamil Nadu, Tiruchirappalli v. K. R. Mohan

2015-07-22

V.M.VELUMANI

body2015
JUDGMENT Challenging the order of the learned III Additional Subordinate Judge, Tiruchirappalli, passed in Arbitration O.P.No.1 of 2001, dated 30.11.2004, the appellant/petitioner has filed the Civil Miscellaneous Appeal. 2. The appellant is the petitioner in Arbitration O.P.No.1 of 2001 on the file of the III Additional Subordinate Judge, Tiruchirappalli. The said Arbitration Original Petition was dismissed, by order dated 30.11.2004. Against the said order of dismissal, the present appeal has been filed. 3. The brief facts of the case is as follows: The appellant/petitioner called for competitive bidding for restoration of Sithyamalli Reservoir under the monetary assistance of the World Bank. The first respondent's father Ramasamy submitted his bid. The appellant accepted the said bid, as it was the lowest. As per the conditions of bid, the amount quoted will be valid for 90 days with grace period of further 60 days. After the expiry of 150 days, the escalation clause will operate. (ii) The said Ramasamy signed the contract on 02.05.1997. He did not adhere the original terms of contract in respect of commencement and completion of work. The appellant imposed fine on the contractor for slow progress of work in respect of I, II and III mile stones. The Executive Engineer cancelled the fine imposed for the III mile stone from 28.03.1998, as the delay was due to “force majeure”. (iii) The contractor referred the matter to the Adjudicator claiming compensation as per escalation clause and disputed the imposement of fine. The adjudicator accepted the contention of contractor regarding the cancellation of fine and the claim of compensation. The appellant did not accept the decision of the Adjudicator. By consent, the dispute was referred to the second respondent, for arbitration. The second respondent passed the award dated 14.07.2000, which was received by the appellant on 30.08.2000. (iv) The appellant filed Arbitration O.P.No.1 of 2001, praying either to remand the matter to the Arbitrator or to set aside the award of the Arbitrator. (v) The appellant contended that the award of Arbitrator suffers from legal infirmity and errors of law and errors of fact. (vi) The first respondent filed counter statement substantiating the award of the second respondent. 4. (v) The appellant contended that the award of Arbitrator suffers from legal infirmity and errors of law and errors of fact. (vi) The first respondent filed counter statement substantiating the award of the second respondent. 4. The learned Subordinate Judge considered all the materials on record, the award of the second respondent, the judgment relied upon by the first respondent and the arguments of the parties and dismissed the Arbitration O.P. No.1 of 2001, holding that the reasons given by the appellant are not as prescribed under Section 34 of the Arbitration and Conciliation Act, 1996. Against the said order dated 30.11.1994, the present Civil Miscellaneous Appeal has been filed by the appellant. 5. The learned Counsel for the appellant contended that (i) The contractor failed to complete the work within the time limit granted and the fine imposed is right and is as per agreement. (ii) The time granted for completion of work includes monsoon season also and the monsoon rain will not be “Force Majeure”. The contractor should have deployed the machineries which should withstand the intensity of monsoon rain. (iii) The award of the second respondent suffers from the legal infirmity and the same is not in consonance with the principle of law and the terms of agreement. For the above reasons, the learned Counsel for the appellant prayed for allowing this appeal. 6. Per contra, the learned Counsel for the first respondent contended that (i) The order of the learned Subordinate Judge is as per law, as the appellant had not made out any case for setting aside the award. (ii) The bid document forms part of the agreement. The contractor is entitled to escalation as per the terms of the bid documents. The appellant having accepted the bid of the contractor, after expiry of 150 days, viz., 225 days, has held that the contractor is entitled to escalation clause. (iii) The delay in completion of work is due to monsoon rain and the storage of water in reservoir. The actual quantity of concrete blocks dismantled was more than the quantity mentioned in the agreement. Therefore, the learned Counsel for the respondent prayed for dismissal of the Civil Miscellaneous Appeal. 7. I have heard the submissions made by the learned Counsel appearing on either side and I have also perused the materials available on record carefully. 8. The actual quantity of concrete blocks dismantled was more than the quantity mentioned in the agreement. Therefore, the learned Counsel for the respondent prayed for dismissal of the Civil Miscellaneous Appeal. 7. I have heard the submissions made by the learned Counsel appearing on either side and I have also perused the materials available on record carefully. 8. It is an admitted fact that as per the terms of agreement, the dispute that arises between the appellant and the contractor was referred to the second respondent, for arbitration. Before the second respondent, no oral evidence was let in by the parties. The document has been marked by consent. The second respondent, considering the materials, passed the award, dated 14.07.2000. The appellant filed Arbitration O.P.No.1 of 2001, to set aside the award. The said Arbitration O.P. was filed under Section 34 of the Arbitration and Conciliation Act, 1996. Section 34 of the said Act is as follows: “34. Application for setting a side arbitral award. – (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). Section 34 of the said Act is as follows: “34. Application for setting a side arbitral award. – (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the court only if- (a) The party making the application furnishes proof that- (i) A party was under some incapacity, or (ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) The arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) The court finds that- (i) The subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) The arbitral award is in conflict with the public policy of India. Explanation. -Without prejudice to the generality of sub-clause (ii) of clause(b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81. Explanation. -Without prejudice to the generality of sub-clause (ii) of clause(b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award. 9. The Power of Court to set aside the Arbitration Award is very limited. The Court can set aside the award only if a party satisfies the Court that as per Section 34(2) of the Act, the award is liable to be set aside. In the present case, the grounds raised by the appellant to set aside the impugned award of the second respondent are not as contemplated as per Section 34(2) of the Act. In the above circumstances, the order of the learned Subordinate Judge, dated 30.11.2004 is in provisions of Section 34(2) of the Arbitration and Conciliation Act, 1996. The learned Subordinate Judge has considered all the materials and law in a proper and perspective manner, Therefore, this Court does not find any reason to set aside the order of the learned Subordinate Judge, dated 30.11.2004. 10. In the result, this Civil Miscellaneous Appeal fails and the same is dismissed. There shall be no order as to costs.