[Cites 3, Cited by 0]

Madras High Court

M/S.Jv Engineering Associate vs General Manager, on 9 April, 2026

Author: Senthilkumar Ramamoorthy

Bench: Senthilkumar Ramamoorthy

                                                                              OP No. 446 of 2019


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS
                                                DATED: 09.04.2026
                                                     CORAM
                       THE HON'BLE MR JUSTICE SENTHILKUMAR RAMAMOORTHY
                                                OP No. 446 of 2019

                M/s.JV Engineering Associat
                Civil Engineering Contractors,
                17, Kuttakattu Valasu,
                Elumathur (PO), Modakkurichi (via)
                Erode 638 104 (Tamil Nadu),
                Rep. by its Partner Mr.S.Jaikumar
                                                                                ..Petitioner
                                                        Vs
                General Manager,
                CORE, Allahabad, Represented by
                Deputy Chief Engineer, Railway Electrification,
                Chennai, Egmore.
                                                                              ..Respondent

                          Petition filed under Section 34(2)(b)(ii) of The Arbitration and
                Conciliation Act, 1996 to set aside the Award dated 07.11.2018 passed by
                Shri V.K.Manoharan, the Sole Arbitrator


                              For Petitioner:        Ms.Pavithra M
                                                     for M/s P.J.Rishikesh

                              For Respondent:        Mr. P.T. Ramkumar
                                                     Standing Counsel


                                                     ORDER

An arbitral award dated 07.11.2018 pertaining to a contract for the

construction of control room for Traction Sub Station (TSS), including

earth filling and retaining wall at Uppala and Thokur and construction of

OHE depot and tower wagon shed at Mangalore junction in Palakkad

Division of Southern Railway is the subject of challenge in this petition.

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The present challenge is the second round. In the first round, the

petitioner assailed the award on the ground that the arbitrator was

disqualified. Learned single Judge accepted the ground of challenge and

set aside the award. On appeal, a Division Bench of this Court, by

judgment dated 11.08.2021 in O.S.A.No.119 of 2021, concluded that the

petitioner had waived/consented in terms of Section 12(5) of the

Arbitration and Conciliation Act, 1996 (A & C Act) to the appointment of

the arbitrator. Therefore, the order of the learned single Judge was set

aside and the award was restored. The Supreme Court rejected the

special leave petition against said judgment. Matters were however

remanded to this Court for consideration on merits.

2. Learned counsel for the petitioner assails the arbitration award on

the following grounds:

2.1 Price variation was granted in respect of the first

three extensions of time. As regards the fourth extension, in

spite of the petitioner submitting rider agreement dated

12.12.2017 pertaining to another contract with the Railways,

wherein price variation was granted partly, the Arbitral

Tribunal disregarded such evidence;

2.2 The award is inadequately and improperly

reasoned. In Dyna Technologies Private Limited vs.

Crompton Greaves Limited [(2019) 20 SCC 1], the Supreme

Court interfered with an arbitral award on the ground that

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provision of reasons is mandatory under Section 31(3) of A

& C Act unless parties agree otherwise. Applying said

principle to this case, learned counsel contends that the

award is vitiated by inadequate or improper reasoning.

3. In response, learned standing counsel for the Railways submits

that the petitioner signed rider agreement dated 29.06.2017 for extension

of the agreement from 01.04.2017 to 31.07.2017 under Clause 17-A(ii) of

the General Conditions of Contract without applicability of price variation.

He referred to the counter statement before the Arbitral Tribunal in

support of his contention. Referring to the arbitral award, learned counsel

pointed out that the Arbitral Tribunal took note of the fact that the rider

agreement was executed in relation to the fourth extension without price

variation. As regards the reference to the submission of the rider

agreement pertaining to an unconnected contract, learned counsel

contends that price variation cannot be granted merely because it was

agreed to in another contract.

4. The claims made by the petitioner before the Arbitral Tribunal are

as under:

                         S.No.            Details of Claims               Claim Amount
                                                                              in Rs.
                        1         The PVC calculations have been            3,26,470/-
                                  made upto CC VII. For further bills

and final bill, clear instructions with regard to RBI indices are awaited from Railway Board

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S.No. Details of Claims Claim Amount in Rs.

2 Legal cost 1,00,000/-

(lumpsum) 3 Compensation for mental agony, 5,00,000/-

unnecessarily making me to run (lumpsum) pillar to post just to establish the genuineness of my claim 4 Interest for the delay in making the 19,588/-

                                  payment     of   PVC     (Unspecified, From 24.08.2017
                                  depending on the period of delay)       @ 12% simple
                                                                              interest
                                                  Total                     9,46, 058/-

5. Out of the above claims, the claims for legal cost and interest are

contingent on the petitioner succeeding in relation to the primary claims

for price variation and compensation for mental agony. A claim for

compensation for mental agony cannot be made in relation to a

commercial contract between parties. In any event, no evidence has been

adduced in support of the claim for mental agony. Therefore, no case is

made out to interfere with the rejection of said claim.

6. As regards the claim for price variation, learned counsel for the

petitioner contended that price variation was granted in respect of the

first three extensions of time. She also submitted that price variation was

granted in relation to an unconnected contract with the Railways with

price variation notwithstanding the rider agreement. The agreed position

is that the rider agreement was executed in the case at hand in relation to

the fourth extension without price variation. As a creature of contract,

the Arbitral Tribunal is bound by the terms of such rider agreement unless

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the petitioner were to establish that such rider agreement is either void or

voidable. There was neither pleading nor evidence to support and

establish that rider agreement was void or voidable. In those

circumstances, the Arbitral Tribunal examined the claim for price variation

and held as follows:

Reasons for the award:

On going through the relevant records, it is noticed

that the initial currency of this work was upto 18.04.2016.

Claimant had asked for 4 extensions and all 3 currency

extension were given with PVC and 4 th extension was

given without PVC and accordingly rider agreement was

also executed.

The respondent made it clear in his submission that

the PVC amount for the period upto 31.07.2017 for which

the extension was granted with PVC, the claimant is

eligible for PVC amount. However, the claimant not yet

submitted the claim for PVC amount. The 4th extension was

granted without PVC by the competent authority. Hence,

not eligible for any PVC amount. Moreover, claimant’s

claim of considering the PVC is mandatory if the extension

is granted under 17(A) or 17(B) as similarly done in some

other Railways, sufficient time was given to submit the

record of similar cases with other Railways, but claimant

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could not submit any proof to substantiate his claim. In

view of the above, claimant’s claim is not valid.