Madras High Court
M/S. Kumar Transports vs The Senior Divisional Electrical ... on 15 July, 2021
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.07.2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
O.P.No.973 of 2019
M/s. Kumar Transports
Rep. by its Partner Mr.M.Sugumar
Bo.18, First Street,
Thillaipuram, Namakkal – 637 001. .. Petitioner
.Vs.
The Senior Divisional Electrical Engineer
Traction Distribution/Works
Southern Railway
Chennai Division,
Chennai – 600 003. .. Respondent
***
Prayer: Petition filed under Section 34 (1) of the Arbitration and Conciliation
Act, 1996 praying to set aside the part of the award dated 12.02.2019 passed by
the Sole Arbitrator with regard to the rejection of the claims No.4,5 and 6 made by
the petitioner before the Arbitral Tribunal and allow the claim Nos.4,5 and 6 made
by the petitioner before the Arbitral Tribunal with the cost of this proceedings.
***
For Petitioner : Mr.N.Premkumar
For Respondent : Mr.P.T.Ramkumar
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2
ORDER
This Petition has been filed challenging the Award dated 12.0.2019 passed
by the learned Arbitrator in negativing the claim of the petitioner, as far as the
claim Nos.4, 5 and 6 are concerned.
2. Brief facts leading to the filing of this application is as follows:
By a letter of acceptance dated 24.11.2014 and Tender
No.M/TRD/29/I/OT/2014-15/5 for “Hiring of diesel driven LMV breakdown
vehicle having 6 ton capacity 4 Nos for 24 months at 4 OHE depots located at
ACK, CGL, AB & AJJ in Chennai Division” was assigned to the claimant. As
dispute arose between the petitioner and the respondent, the respondent has issued
seven days notice and termination notice stated that 48 hours failing which
terminated the contract which resulted in referring dispute to the learned Sole
Arbitrator. The sole Arbitrator entered into the reference, originally the claimant
has claimed a return of bill amount and Earnest Money Deposit and performance
guarantee. However, he has raised additional claim in the claim statement towards
interest a sum of Rs.7,00,000/- as compensation and interest in the performance
guarantee. The learned Arbitrator passed an award, in which claim Nos.4,5 and 6
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have been negatived. Claim No.4 is in respect of claiming interest relying upon
the General Conditions of the Contract. Clause 16 (3) and 64.5 of the Contract
clearly indicates that interest portion was disallowed. Similarly, claim No.5 is
disallowed relying upon the same condition. Claim 7 is disallowed relying upon
the General Conditions of the Contract and the same has been rejected. Aggrieved
over the same, the present petition has been filed.
3. It is the contention of the learned counsel for the petitioner that he has
preferred this petition claiming interest. He relied on the judgment of the Division
Bench of this Court wherein it has been held that claim of interest has not disputed
by the Railways. Despite the specific Clause in the General Condition of Contract
which restricts the interest, still interest is payable in this regard. He also relied
upon the judgment of the Division Bench of this Court in O.S.A.No.279 of 2018
and order passed by this Court in O.P.No.290 of 2018 to that effect that the loss
towards anticipated profits ought to have been awarded by the learned Arbitrator.
The learned Arbitrator infact while allowing the claim for payment of bill
amounts, Earnest Money Deposit and return of performance of guarantee and
disallowed the interest portion alone.
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4. At the outset the Judgment relied upon by the learned counsel for the
petitioner in O.S.A.279 of 2018 is not applicable to the facts of the case. In the
above case, the issue of interest was never disputed and in fact, even no argument
was raised during the appeal stage. In such circumstances, this Court has held that
when the same has not been raised during the appeal stage, it amounts to
admission for payment of interest. Whereas in this case, the learned Arbitrator
invoked the provision in payment of interest as per General Condition of Contract.
Clause 61(2) and 61 (3) of the General Conditions of the Contract reads as
follows :
61 (2) Payment on Determination of Contract: Should the contract be
determined under Sub Clause (1) of this Clause and the Contractor claims
payment for expenditure incurred by him in the expectation of completing
the whole of the work, the Railways shall admit and consider such claims
as are deemed reasonable and are supported by vouchers to the
satisfaction of the Engineer. The Railway's decision on the necessity and
propriety of such expenditure shall be final and conclusive.
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61 (3) The Contractor shall have no claim to any payment of
compensation or otherwise, howsoever on account of any profit or
advantage which he might have derived from the execution of the work in
full but which he did not derive in consequence of determination of
contract.
5. The above Clauses makes it very clear that the parties have agreed not to
claim any interest for compensation. When the Clause itself is specifically barred,
the parties from claiming interest which has been agreed upon by the parties. Now,
it cannot be said that as far as interest for compensation is concerned, the
conditions of the contract is not applicable to the parties. A perusal of the award
passed by the learned Arbitrator and claim petition, it is seen that no documents
whatsoever have been filed to substantiate the so-called expenditure, as a result, it
suffered loss. Therefore, in view of the above, when a claim is made claiming
damages, the party has to establish actual loss. Admittedly, in the contract, there
is no estimated damages agreed upon as estimated damages. Hence, I do not find
any merits in this petition and this petition is liable to be dismissed.
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Accordingly, this Original Petition is dismissed. No costs.
15.07.2021
Index : Yes / No
Internet: Yes
Speaking/Non-speaking order
dh
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N. SATHISH KUMAR, J.
dh
order in:
O.P.No.973 of 2019
15.07.2021
https://www.mhc.tn.gov.in/judis/
