Bharat Sanchar Nigam Limited, Rep. by its Chief General Manager, Chennai v. Telecommunications Consultants India Ltd. , (TCIL), Represented by its Senior Manager, Chennai
2023-03-20
D.BHARATHA CHAKRAVARTHY, T.RAJA
body2023
DigiLaw.ai
JUDGMENT (Prayer: Original Side Appeal - Commercial Appellate Division filed under Section 13(1) the Commercial Court Act read with 37 of the Arbitration and Conciliation Act, 1996 to allow the Original Side Appeal by setting aide the order, dated 04.01.2022 passed in Arb.O.P (Com.Div) No.298 of 2021 in confirming the award passed in O.P.No.884 of 2018 and A.F.No.75 of 2019, dated 23.02.2021.) D. Bharatha Chakravarthy, J. 1. Challenge made in this intra-Court appeal is to the order of the learned Single Judge, dated 04.01.2022 in Arb.O.P (Com.Div) No.298 of 2021, whereby, the learned Single Judge rejected the prayer under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to ''A&C Act'') to set aside the award passed by the learned Arbitrator, dated 23.02.2021. 2. The brief facts leading to the present appeal are that pursuant to a Letter of Intent, dated 28.02.2001, an agreement, dated 08.06.2001 was entered into by the appellant and the respondent relating to cable works at Koyambedu and Kodambakkam Division of the appellants for the year 2000-2001. In relation to a dispute pertaining to non-payment for execution of the work, the respondent herein invoked the arbitration clause and made a monitory claim of principle outstanding of Rs.9,17,267/- along with interest thereon at 18% p.a. As a matter of fact, since similar claims were made with regard to sea sand filling and excess earth removal by cable laying contractors and PSUs, a Committee was set up by the appellants by its communication, dated 24.03.2004 and the said Committee also submitted its report recommending the release of such claims. Even thereafter, the amounts were not released. Therefore, the respondent raised a dispute and the same was referred to the sole Arbitrator, appointed by the appellants herein, who rejected all the claims of the respondent. The said award, dated 04.03.2013 was set aside by this Court by an order, dated 06.10.2016 and subsequently, de novo proceedings were ordered by appointing a learned Retired Judge of this Court as an Arbitrator. 3. In the second round of arbitration, the respondent filed a Claim Petition seeking to pass an award in terms of the amounts claimed by it under Annexure-A to the claim statement along with pendente lite and post award interest. A counter statement was filed by the appellants to the claim statement.
3. In the second round of arbitration, the respondent filed a Claim Petition seeking to pass an award in terms of the amounts claimed by it under Annexure-A to the claim statement along with pendente lite and post award interest. A counter statement was filed by the appellants to the claim statement. In the counter statement, the appellants contended that as per clause 3.7(a) of the specification for cable laying contract, the respondent is responsible for filling up the trenches with sea sand after laying cables. However, there was no mention in the work order about sea sand filling and excess earth removal and therefore, the DGM (O&M), Kodambakkam disallowed the amount. The next contention was that as per Clause-10.4, the emergent needs or shortage of specific items in Chennai Telephones store depot may be procured by the respondent after due approval from the appellant and the claims could be submitted for reimbursement. However, due to non-submission of proof of procurement of various items, the accounts relating to such bills were disallowed by the appellants. 4. On the strength of the pleadings, the parties went in for trial and on behalf of the claimant, C.W.1 was examined and Exs.C-1 to C-30 were marked. On behalf of the appellants, no oral evidence was let in, however, Exs.R-1 to R-4 were marked. The learned Arbitrator, after considering the pleadings of the parties and evidence on record, passed an award, dated 23.02.2021 awarding a sum of Rs.9,17,267/- along with 12% as pendente lite and post award interest. The claimant was also awarded costs. Aggrieved by the same, the appellants herein filed a petition under Section 34 of the A&C Act to set aside the award, inter alia, raising grounds that the learned Arbitrator (a) failed to appreciate the fact that no waybills / invoices / tax receipts for lifting sea sand from sea shore is produced along with the claim bills; (b) actual quantum of work carried out by the respondent was not ascertained while allowing the claim; (c) erred in awarding interest in the absence of a specific clause in the contract.
After considering the submissions made on either side, by the order, dated 04.01.2022, the learned Single Judge recorded that the factual findings on the basis of documents and work carried out by the respondent cannot be re-appreciated at the stage of filing of petition under Section 34 of the A&C Act. As far as interest is concerned, the learned Single Judge confirmed the rate of interest, since there is no prohibition in the contract for award of interest. Therefore, the learned Single Judge concluded that the award did not call for any interference in relation to the claim amount of Rs.9,17,267/- and pendente lite and post award interest at the rate of 12% per annum on the principal sum of Rs.9,17,267/-. Aggrieved by the same, the present appeal is filed before this Court. 5. Heard Mr.T.Ravi Kumar, learned Counsel for the appellants and Mr.Amalraj S.Penikilapatti, learned Counsel for the respondent. 6. Mr.T.Ravi Kumar, learned Counsel for the appellants contended that in spite of an order of this Court, in the earlier round of arbitration, setting aside petition between the parties, there was no finding on the quantum of work executed by the respondent. Secondly, as per Clause-10.4 of the agreement, dated 08.06.2001, all materials required by the respondent would be provided by the appellants and if any material has to be purchased, then the respondent shall do so only after getting prior approval from the appellants. However, their claim relating to procurement of alleged sea sand is not maintainable as no prior approval was obtained. He would contend that when there is no express provision in the contract to award interest, the learned Arbitrator erred in awarding the same. In support of his submissions, the learned Counsel relied upon a judgment of the Hon''ble Supreme Court of India in Sree Kamatchi Amman Constructions Vs. Divisional Railway Manager (Works), Palghat and Ors. ( (2010) 8 SCC 767 ), more particularly on paragraph No.19, to contend that unless the parties have agreed that interest shall be paid, no interest can be awarded by the learned Arbitrator. He would further place reliance on a judgment of the Hon''ble Supreme Court of India in Union of India Vs. Manraj Enterprises ( (2022) 2 SCC 331 ) to contend that certain concessions made by the counsel during the arguments shall not bind the parties. 7.
He would further place reliance on a judgment of the Hon''ble Supreme Court of India in Union of India Vs. Manraj Enterprises ( (2022) 2 SCC 331 ) to contend that certain concessions made by the counsel during the arguments shall not bind the parties. 7. Per contra, Mr.Amalraj S.Penikilapatti, learned Counsel for the respondent submitted that there are several arbitral proceedings in respect of work of similar nature between the appellants and other contractors. In orders passed in such proceedings, the Courts have consistently rejected the challenge on grounds similar to that raised by the appellants in this case. As regards the quantity of work, the respondent referred to paragraph No.13 of the award and contended that the relevant documents such as the duly certified completion certificates, general work orders, route diagram, acceptance certificate of AT wing, M-Book, sand calculation sheets and the consolidated project-wise check list signed by the appellants were submitted along with the bills. The respondent brought the notice of the Court that the M-Book was signed by the officials of the appellants Company and the signatures were not disputed. Therefore, the quantity of work completed by the respondent is also not disputed. 8. As a matter of fact, immediately after the bills were submitted, the appellants were not sure as to whether those amounts had to be paid or not. Therefore, they referred the matter to the Committee by their communication, dated 24.03.2004 and the said Committee has submitted its report only on 26.03.2004 and thereafter the bills were unpaid, a dispute is raised and arbitration is invoked. Therefore, there is no delay whatsoever on the part of the respondent and the claim is very much within the period of limitation. The learned Arbitrator has power to award pendente lite as there is no prohibition in the contract. Both the pendente lite and post award interest has been granted at the rate of 12% which is very much reasonable. He would submit that absolutely, no ground whatsoever has been made to interfere with the award under Section 34 of the A&C Act. 9. We have considered the rival submissions made on either side and perused the material records of the case. Firstly, it has to be seen that whether the failure of the Arbitral Tribunal to record findings on the quantum of work executed by the respondent is patently illegal.
9. We have considered the rival submissions made on either side and perused the material records of the case. Firstly, it has to be seen that whether the failure of the Arbitral Tribunal to record findings on the quantum of work executed by the respondent is patently illegal. Secondly, whether the award of interest is beyond the scope of the contract. 10. Under Section 34(2-A) of the A&C Act, the award shall not be set aside merely on the ground of an erroneous of application of law or by re-appreciation of evidence. The learned Single Judge decided the first issue by examining paragraph No.15 of the award. The said paragraph in the relevant part is set out below:- "15.... The Acceptance Test Report as well as entries in the M-book clearly prove that the work has been completed by the Contractor and as such even in the absence of any Work Order, these works were to be carried out to comply with the statutory requirement namely the code of conduct issued by the Corporation of Chennai. It is not in dispute that the code of conduct is applicable to all service departments including Chennai Telephones. Hence, in the considered view of this tribunal, the disallowance of the claim is not proper and correct ..... The Acceptance Test Report and the entries in M-book contains quantitative and qualitative measurement which have been certified by the responsible officers of BSNL regarding the various items of works completed by the Contractor .... " 11. It is evident from the paragraph that the evidence on record, particularly, the Acceptance Test-Report and the M-Book contained quantitative and qualitative measurements certified and signed by the officials of the appellants Company. Such conclusion, as decided by the learned Single Judge, is certainly based on a reasonable appraisal of the documentary evidence on record and therefore, do not warrant interference under Section 34 of the A&C Act. 12. Similarly, the question regarding interest is no longer res integra. The Hon''ble Supreme Court of India has categorically held in its judgment in Sree Kamatchi Amman Constructions Vs. Divisional Railway Manager (Works), Palghat and Ors. (cited supra), more particularly paragraph Nos.13 to 19 that only if the agreement between the parties expressly prohibits the award of interest, the same would be a bar for the learned Arbitrator to award pendente lite interest.
Divisional Railway Manager (Works), Palghat and Ors. (cited supra), more particularly paragraph Nos.13 to 19 that only if the agreement between the parties expressly prohibits the award of interest, the same would be a bar for the learned Arbitrator to award pendente lite interest. But, in this case, there is absolutely no clause whatsoever prohibiting the award of the interest and accordingly, no exception can be taken for the award of interest by the learned Arbitrator. 13. Therefore, we find that the order of the learned Single Judge, in rejecting the challenge to the award, is in order and therefore, this Original Side Appeal fails and is accordingly dismissed. There shall be no order as to costs. Consequently, the connected miscellaneous petitions are closed.