Madras High Court
Malu Sleepers Ltd vs The Union Of India on 27 November, 2023
Author: D.Krishnakumar
Bench: D.Krishnakumar
O.S.A.(CAD) No.11 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.11.2023
CORAM
THE HONOURABLE MR. JUSTICE D.KRISHNAKUMAR
and
THE HONOURABLE MR. JUSTICE P.DHANABAL
O.S.A.(CAD) No.11 of 2022
Malu Sleepers Ltd.,
(Formerly Malu Sleepers Private Limited),
Rep. by its Managing Director,
No.8, 1st Main, Gandhi Nagar, Bangalore 560009. ...appellant
Vs.
The Union of India,
Rep. by the Chief Engineer,
Southern Railway, Park Town, Chennai 3. ...respondent
Prayer: Original Side Appeal filed under Clause -15 of Letters
Patent Act R/w Order-XXXVI Rule-1 of the O.S.Rules & Sec-37(1)(c) of
Arbitration & Conciliation Act 1996 against the fair and decreetal order of
this Court dated 25.10.2021 made in OP.No.421 of 2014.
For Appellant : Mr.P.S.Amala Raj
For Respondent : Mr.P.T.Ram Kumar
https://www.mhc.tn.gov.in/judis
Page No.1/6
O.S.A.(CAD) No.11 of 2022
JUDGMENT
[Judgment of the Court was delivered by D.KRISHNAKUMAR, J]
This appeal is filed against the fair and decreetal order of this Court
dated 25.10.2021 made in OP.No.421 of 2014.
2. It is the case of the appellant that they were awarded contract by
the first respondent for manufacture and supply of 5 lakhs BG PSC track
sleepers. The appellant had supplied the entire track sleepers before July
1997 i.e. before the original due date of 01.04.1999. During the currency of
contract, the Railways introduced new norms. Though the appellant
addressed a letter indicating that the revised norms cannot be effected from
28.03.1995 and the bill for the period prior to 01.12.1996 should be paid as
per the terms of the original contract and not in accordance with the revised
norms, the respondent proceed to enforce the revised norms with effect from
28.03.1995. Thereafter, by subsequent negotiations, resulted in
implementing new norms and rider agreement came to be executed between
the parties. As the dispute arose between the parties, the matter has been
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referred to a sole Arbitrator. The award passed by the Arbitrator was
challenged before this Court by both sides in OP.No.14 of 2005 and
OP.No.525 of 2005. This Court by order dated 13.08.2008 set aside the
award passed by the Arbitrator on the ground that the learned Arbitrator has
not interpreted the terms of the rider agreement and he has gone beyond the
agreement.
3. Subsequently at the request of the parties, a fresh Arbitrator was
appointed. The second Arbitrator blindly accepted the respondent's version
and rejected all the appellant's claims vide award dated 21.05.2014. The
appellant approached this Court and filed OP.No.421 of 2014 to set aside
the said award. The learned Single Judge vide order dated 25.10.2021 while
rightly setting aside the aforesaid award has directed the respondent to
nominate a fresh Arbitrator. The above said direction to the respondent to
appoint an Arbitrator is contrary to the well settled position of trite law and
hence, the present appeal is filed.
4. The learned counsel for the appellant submitted that the the order
of the learned Single Judge directing the respondent to unilaterally nominate
a fresh sole Arbitrator will only lead to a compromise of the cardinal
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principles of natural justice i.e. impartiality and neutrality. If the respondent
appoints an Arbitrator, he will only be biased in favour of the respondent
and against the appellant. Therefore, the learned Single Judge while setting
aside the order ought not to have granted direction to the respondent for
appointment of a fresh Arbitrator. Hence, said portion of the order is liable
to be set aside.
5. The learned counsel appearing for the respondent submitted that
the as per the direction of this Court, a second arbitrator has been appointed.
However, the learned counsel for the respondent fairly stated before this
Court that they are now ready to appoint a new arbitrator in accordance
with law.
6. The above submission is not controverted by the leaned counsel for
the appellant.
7. In view of the above submissions, we are inclined to set aside the
direction issued by the learned Single Judge directing the respondent to
nominate a fresh Arbitrator. Accordingly, the said portion of the impugned
order in this appeal is set aside. However, liberty is given to the parties to
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invoke arbitration clause in the agreement and seek appropriate remedy for
appointment of a new Arbitrator.
8. With the above directions, the appeal is allowed. No costs.
[D.K.K., J] [P.D.B., J]
27.11.2023
Index : Yes / No
Speaking order: Yes/No
pvs
To
The Chief Engineer,
The Union of India,
Southern Railway, Park Town, Chennai 3.
https://www.mhc.tn.gov.in/judis
D.KRISHNAKUMAR, J.
and
P.DHANABAL, J.
pvs
27.11.2023
https://www.mhc.tn.gov.in/judis
