Madras High Court
The Union Of India vs M/S.J.Venkatesan on 26 April, 2021
O.S.A.No.170 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.04.2021
CORAM :
THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
O.S.A.No.170 of 2021
1. The Union of India,
rep. by the General Manager,
Southern Railway,
Park Town, Chennai – 600 003.
2. The Divisional Railway Manager/Works,
Southern Railway, Park Town,
Chennai – 600 003. ... Appellants
Vs.
1. M/s.J.Venkatesan,
No.25/16, 3rd Street, T.Nagar,
Arakonam,
Vellore District.
2. Hon'ble Justice K.M.Natarajan,
Sole Arbitrator,
136, L.B.Road,
Kamraj Nagar, Chennai. ... Respondents
PRAYER: Appeal filed under Order XXXVI Rule 1 of the Original Side
Rules, 1956 read with Clause 15 of the Letters Patent and Section
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O.S.A.No.170 of 2021
13(1) of the Commercial Courts Act against the order dated
15.07.2019 passed in O.P.No.72 of 2011.
For Appellants : Mr.M.Vijay Anand
For Respondents : Mr.Amalaraj S.Penikilapatti
for respondent No.1
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
Only two grounds have been urged on behalf of the railways in
challenging the judgment and order of July 15, 2019 rendered on a
petition challenging an arbitral award dated April 20, 2008.
2. The second respondent is the arbitrator, who has been
needlessly impleaded.
3. By the impugned order, the quantum awarded by the
arbitrator has been reduced. It is submitted on behalf of the first
respondent that following the first respondent's concession before the
arbitration Court that the first respondent was not entitled to
pendente lite interest in view of clauses 64.5 and 16.2 of the general
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O.S.A.No.170 of 2021
conditions governing railway contracts, such reduction was made. The
first respondent is willing to accept the modified award.
4. The two grounds raised by the railways are that the
arbitrator failed to appreciate the documents that were carried by the
railways before him and the arbitrator failed to recognise that the
first respondent contractor had abandoned the work and had left the
site without issuing any notice, even though a mandatory notice in
such regard was required to be issued.
5. It is evident that the value of the work to be executed in
terms of the contract dated April 29, 2005 was in excess of Rs.1.64
crore. The work pertained to the collection and supply of stone
ballast bearing 50MM size and included the loading and unloading
charges. The tenure of the contract ran out by January 28, 2006, but
the railways purported to terminate the contract in January, 2007
upon the contractor allegedly not completing the work.
6. The railways seek a re-assessment of the matter at this
level, which is impermissible. It is evident from the judgment
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O.S.A.No.170 of 2021
impugned that the contention of the railways before the arbitration
Court was that the arbitrator had not considered the general
conditions of the contract and that the arbitrator failed to notice that
the contractor had violated the contract and not discharged the
obligations as per the contract. It was also asserted before the first
Court that the arbitrator had not considered the entire evidence and
allowed the claim without any or adequate material in support
thereof.
7. The arbitration Court found that the arbitrator had referred to
the facts and the evidence before the arbitrator and sufficient reasons
were apparent from the award which justified the same. The
arbitration Court recorded that it was not for a Court in seisin of a
petition under Section 34 of the Arbitration and Conciliation Act, 1996
to re-assess the matter and only the grounds made out had to be
looked into. The exercise undertaken by the railways at this
appellate stage is the same. No case has been made out that the
award is opposed to public policy or otherwise unconscionable or
palpably erroneous. On the basis of the facts as the arbitrator
noticed, the arbitrator found in favour of the contractor and indicated
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O.S.A.No.170 of 2021
cogent reasons to justify the findings.
8. The Court of the first instance applied the appropriate
principles and found that no legal grounds had been made out under
Section 34 of the Act to interfere with the award. The Court deleted
the award of pendente lite interest on the concession of the
contractor. More than this, the arbitration Court could not have
interfered with the award in the light of the prevailing law and the
limited authority available under Section 34 of the Act.
9. The judgment and order impugned dated July 15, 2019 do
not call for any interference. It is recorded that the first respondent
has no grievance against the award as modified by the order
impugned.
10. O.S.A.No.170 of 2021 is dismissed. C.M.P.No.7498 of 2021
is closed. There will be no order as to costs.
(S.B., CJ.) (S.K.R., J.)
26.04.2021
Index : No
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O.S.A.No.170 of 2021
bbr
To:
1. The General Manager,
Union of India,
Southern Railway,
Park Town, Chennai – 600 003.
2. The Divisional Railway Manager/Works,
Southern Railway, Park Town,
Chennai – 600 003.
3. The Hon'ble Mr. Justice K.M.Natarajan,
Sole Arbitrator,
136, L.B.Road,
Kamraj Nagar, Chennai.
Copy to:
The Sub Assistant Registrar,
Original Side,
High Court, Madras.
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O.S.A.No.170 of 2021
THE HON'BLE CHIEF JUSTICE
AND
SENTHILKUMAR RAMAMOORTHY, J.
bbr
O.S.A.No.170 of 2021
26.04.2021
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