Karnataka High Court
M/S Telecommunications ... vs M/S Krishil Capital Holdings Pvt ... on 10 December, 2021
Bench: B.Veerappa, K S Hemalekha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF DECEMBER, 2021
PRESENT
THE HON'BLE MR. JUSTICE B. VEERAPPA
AND
THE HON'BLE Mrs. JUSTICE K.S. HEMALEKHA
MISCELLANEOUS FIRST APPEAL No.1658/2019(AA)
BETWEEN:
1. M/S TELECOMMUNICATIONS
CONSULTANTS INDIA LTD.,
TCIL BHAVAN,
GREATER KAILASH-1,
NEW DELHI-110048.
REPRESENTED BY ITS AUTHORISED
SIGNATORY/SENIOR MANAGER,
Mr. N. SELVARAJ,
2. THE SENIOR GENERAL MANAGER (SR),
M/S TELECOMMUNICATIONS
CONSULTANTS INDIA LTD.,
NO.20, POTTERS STREET,
SAIDAPET, CHENNAI-600015
TAMIL NADU. ...APPELLANTS
(BY SRI BADRI VISHAL, ADVOCATE FOR
SRI H. SRINIVAS RAO, ADVOCATE)
2
AND:
1. M/S KRISHIL CAPITAL HOLDINGS PVT. LTD.,
(EARLIER KNOWN AS M/S KRISHI
PROJECTS PVT. LTD., )
A COMPANY INCORPORATED
UNDER THE PROVISIONS
OF THE COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE AT
NO.21/83, 1ST FLOOR, RAMACHANDRA ARCADE,
SOUTH END ROAD, BASAVANGUDI
BENAGLURU.
2. SHRI P. MURALI MOHAN,
ARBITRATOR,
DEPUTY GENERAL MANAGER (MTCE)
BHARAT SANCHAR NIGAM LTD.,
SOUTHERN TELECOM SUB-REGION,
VIJAYAWADA 520010. ...RESPONDENTS
(BY SRI S.SUBRAHMANYA, ADVOCATE)
....
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 37(1)(C) OF THE ARBITRATION AND CONCILIATION ACT,
1996, AGAINST THE IMPUGNED ORDER DATED 23.11.2018,
PASSED IN A.S.NO.1/2008 BY THE PRINCIPAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU, ALLOWING THE SUIT FILED
UNDER SECTION 34 OF ARBITRATION AND CONCILIATION ACT
1996.
THIS MISCELLANEOUS FIRST APPEAL COMING ON FOR
ADMISSION THIS DAY, B.VEERAPPA J., DELIVERED THE
FOLLOWING:
3
JUDGMENT
The present miscellaneous first appeal is filed by the
Telecommunications Consultants India Ltd., and its Senior General
Manager, against the impugned judgment and decree dated
23.11.2018 made in A.S.No.1/2008 by the learned Principal City
Civil and Sessions Judge, Bengaluru City, wherein the suit filed
under Section 34 of the Arbitration and Conciliation Act, 1996 by
the claimant was allowed and the award passed by the Arbitrator
was modified holding that respondent Nos.1 and 2 are liable to pay
a sum of Rs.35,76,317/- with interest at the rate of 12% per
annum from 27.3.2001 till payment of the entire amount to the
claimant.
2. It is the case of the appellants that respondent No.1- M/s
Krishil Capital Holdings Pvt. Ltd., was awarded a number of duct
construction works during the year 1999-2000 and out of 12
projects allotted to accused No.1, only 11 were completed.
However, one project was cancelled. As such, respondent No.1
claimed the expenditure incurred which was not entertained by
appellant No.1 for various reasons. Against non-payment of
expenditures, respondent No.1 filed CMP 137/2003 invoking the
arbitration clause for appointment of an Arbitrator and this Court by
the order dated 13.2.2004 appointed an Arbitrator. By the award
dated 29.8.2007, the learned Arbitrator directed appellant No.1 to
pay a sum of Rs.4,95,993/- (Rupees Four Lakhs Ninety Five
Thousand Nine Hundred and Ninety Three Only) to respondent
No.1 towards storage charges/handling charges for PVC pipes
supplied for Project BGT 22/2K on or before 30.9.2007 including
18% simple interest per annum from 1.8.2003 to 31.8.2007 on
principle amount of Rs.2,85,875/-, against which award,
respondent No.1 preferred an Arbitration Suit in A.S.No.1/2008
before the learned Principal City Civil and Sessions Judge,
Bengaluru, who while allowing the arbitral suit filed under Section
34 of the Arbitration and Conciliation Act, 1996, modified the said
award and directed the appellants to pay a sum of Rs.35,76,317/-
with interest at the rate of 12% from 27.3.2001 till payment of the
entire amount. Hence, the present miscellaneous first appeal is
filed.
3. We have heard the learned Counsel for the parties.
4. Sri Badri Vishal for Sri H. Srinivas Rao, learned Counsel for
the appellants contended that while exercising powers under
Section 34 of the Arbitration and Conciliation Act, learned Sessions
Judge while allowing the suit has modified the award passed by the
learned Arbitrator. As such, the impugned judgment and award
cannot be sustained. In support of his contention, he relied upon
the dictum of the Hon'ble Supreme Court in the case of Dakshin
Haryana Bijli Vitran Nigam Ltd., -vs- Navigant Technologies Pvt.
Ltd., reported in 2021 SCC OnLine SC 157 and thereby sought to
allow the miscellaneous first appeal.
5. Per contra, Sri S. Subramanya, learned Counsel for
respondents does not dispute the law laid down by the Hon'ble
Supreme Court to the effect that while exercising the powers under
Section 34 of the Arbitration and Conciliation Act, learned Sessions
Court has no power to modify the Arbitral award. The said fair
submission is placed on record.
6. In that view of the matter, without going into the merits
and demerits of the case and in view of the dictum of the Hon'ble
Supreme Court in the case of Dakshin Haryana Bijli Vitran Nigam
Ltd., -vs- Navigant Technologies Pvt. Ltd., reported in 2021 SCC
OnLine SC 157 wherein at paragraph-5(1)(f) it is held as under:
5(1)(f) In law, where the court sets aside the
award passed by the majority members of the
Tribunal, the underlying disputes would require to
be decided afresh in an appropriate proceeding.
Under Section 34 of the Arbitration Act, the
court may either dismiss the objections filed, and
uphold the award, or set aside the award if the
grounds contained in sub-sections (2) and (2-A)
are made out. There is no power to modify an
arbitral award.
the impugned judgment and award is liable to be set aside.
7. In view of the above, we pass the following:
ORDER
i) Miscellaneous First Appeal is allowed;
ii) The impugned judgment and decree dated 23rd
November, 2018 passed by the learned Principal City
Civil and Sessions Judge, Bengaluru in A.S.No.1/2008 is
hereby set aside; and
iii) The matter is remanded to the trial Court to decide the
Arbitration Suit in the light of the judgment stated
supra and pass appropriate orders in accordance with
law within a period of three months in view of the
submissions made by the learned Counsel for both
parties that the matter has to go back to the Original
Arbitrator and the both the learned Counsel are at
liberty to submit the same before the original
Arbitrator;
iv) The parties are directed to appear before the Trial
Court; and
v) In view of the disposal of the present miscellaneous first
appeal, the appellants are entitled for refund of entire
amount deposited before this Court by them which
would be subject to the result of the Arbitral Suit
proceedings.
8. In view of the above, the Registry is directed to refund an
amount of Rs.61,47,346/- deposited by the appellants to them on
proper identification.
Sd/-
Judge
Sd/-
Judge
Nsu/-
