Telangana High Court
M/S.East Coast Shipping Agency vs M/S.Godavari Fertilizers And ... on 21 May, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
Page 1 of 10
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
Civil Miscellaneous Appeal No.640 of 2005;
Civil Miscellaneous Appeal No.524 of 2006
and
Civil Revision Petition No.3630 of 2005;
COMMON JUDGMENT:
(per the Hon'ble Sri Justice P.SAM KOSHY)
Since the issue involved in the instant appeals is one and the same
and the appellant and respondents therein are also same, we proceed to
decide the instant appeals by way of this common judgment.
2. Civil Miscellaneous Appeal No.640 of 2005 is filed by the appellant
herein, viz., M/s. Coromandal Fertilisers Limited, (formerly known as
M/s.Godavari Fertilizers & Chemicals Limited) under Section 39 of the
Arbitration and Conciliation Act, 1940 assailing the common Judgment
and Decree dated 28.01.2005 in O.P.No.4 of 2001 passed by the III
Senior Civil Judge, City Civil Court, Secunderabad, rejecting the said
O.P., and confirming the impugned Award that had been passed by the
learned Arbitrator against the said appellant; and Civil Miscellaneous
Appeal No.524 of 2006 is filed by the appellant, viz., M/s.East Godavari
Coast Shipping Agency, under Section 39 of the Arbitration and
Conciliation Act, 1940 assailing the common Judgment and Decree dated
28.01.2005 in O.P.No.7 of 2001 passed by the III Senior Civil Judge, City
Civil Court, Secunderabad, in whose favour the Award had been passed
by the learned Arbitrator, and challenging that portion of the order
insofar as it relates to limiting the interest to 6% and rejecting to grant
18% interest (for short, the 'impugned common order').
3. The appellant in C.M.A.No.640 of 2005, i.e., M/s. Coromandal
Fertilisers Limited, had also filed Civil Revision Petition No.3630 of 2005
challenging the Award dated 12.03.2001 passed by the 2nd respondent /
sole arbitrator on merits, and which is also being taken up along with the
appeals to be decided by this Court.
4. Heard Mr.Shiv Rohan Singh, learned counsel representing Mr.
S. Ravi, learned Senior Counsel, appearing for the appellant in
C.M.A.No.640 of 2005; for the respondent No.1 in C.M.A.No.524 of 2006;
and for the revision petitioner in C.R.P.No.3630 of 2005. Mr.R.N.
Hemendranath Reddy, learned Senior Counsel appearing on behalf of
Ms.M.Siva Jyothi, learned counsel for the appellant in C.M.A.No.524 of
2006; learned counsel for respondent No.1 in C.M.A.No.640 of 2005;;
and for the respondent in C.R.P.No.3630 of 2005.
5. The challenge in the instant appeals is to the order passed by Trial
Court in O.P.No.4 of 2001 and O.P.No.7 of 2001, filed by the appellant
under Section 17 of the Arbitration Act, 1940, both of which stood
decided by the Trial Court vide the common order dated 28.01.2005.
O.P.No.4 of 2001 was filed by the appellant herein seeking for setting
aside the Award dated 12.03.2001 passed by the 2nd respondent / sole
arbitrator wherein the rate of interest awarded by the learned Arbitrator
stood modified from 18% to 6%. O.P.No.7 of 2001 was one which was
preferred by the respondent No.1-Shipping Company, praying the Trial
Court to confirm the Award dated 12.03.2001 passed by the learned
Arbitrator and to be made Rule of the Court, and also for a direction to
the appellant to pay the amount along with interest as awarded by the
learned Arbitrator.
6. Vide the common impugned order, the Trial Court rejected the
petition, viz., O.P.No.4 of 2001 which was filed under Section 17 of the
Arbitration Act, 1940, and simultaneously O.P.No.7 of 2001 was allowed
making the Award dated 12.03.2001 passed by the learned Arbitrator
Rule of the Court.
7. Aggrieved, the instant appeals were filed by the appellant herein.
8. The appellant in C.M.A.No.640 of 2005, i.e., M/s. Coromandal
Fertilizers Limited, has assailed the impugned common order, amongst
others, on the following grounds, viz., :
(a) that the learned Arbitrator failed to appreciate the scope
of enquiry and the manner in which the Trial Court had
proceeded to decide the case;
(b) that the learned Arbitrator had mis-conducted himself
in rejecting the preliminary objection on the ground that
it was not raised in the Written Statement.
9. Learned counsel for the appellant primarily contended that the
learned Arbitrator had not properly considered the Document Ex.B.2,
dated 22.06.1993, insofar as the same being a full and final settlement
and the claim raised by the claimant could not had been processed by
the learned Arbitrator beyond the said Ex.B.2 which was in the nature of
a full and final settlement. He further contended that the learned
Arbitrator has misconducted himself in allowing the claim of
Rs.10,06,006.17 ps. pertaining to shortage of cargo unload from M.V.
Aditya Prakash as the learned Arbitrator had in fact not properly
considered the fact that there was an actual receipt of Rs.6,83,279/-
from the Insurance Company. He further submitted that the challenge
to the Award was for an amount of Rs.4,32,526.44 ps. awarded by the
learned Arbitrator towards the cost of damage caused to HDPE sacks.
10. According to the learned counsel for the appellant, the burden was
upon the respondent No.1-Shipping Agency to establish that they had
paid Insurance Premium in respect of the HDPE sacks and the said
amount was not recovered from the account of the claimants. He further
contended that the learned Arbitrator has failed to consider the
documents produced before it, particularly Exs.B.2, B.5, B.6, B.9, B.10,
and B.11.
11. Per contra, learned Senior Counsel for the respondent No.1-
Shipping Agency, opposing the appeal preferred by the appellant,
contended that the Award passed by the learned Arbitrator in fact was a
well reasoned and duly considered Award, and that there was hardly any
scope of interference left. According to him, while passing the Award, the
learned Arbitrator has taken into consideration the terms and conditions
agreed upon between the parties and also the contentions put forth by
both parties, and all them have been dealt with by the learned Arbitrator
in the course of passing of the impugned Award, and which leaves no
room for interference by this Court under Section 39 of the Arbitration
and Conciliation Act, 1940. He further contended that since it is a well
reasoned and well considered Award, the case of the appellant also would
not fall within the permissible limits under which an Award, much less
even an order of the Court confirming the said order under Section 17 of
the Arbitration and Conciliation Act, 1940, can be interfered with; and
therefore, prayed for dismissal of the appeals.
12. In addition, learned counsel for respondent No.1 contended that in
the appeal that was filed by him, viz., C.M.A.No.524 of 2006, challenging
the order of the Trial Court insofar as modifying the rate of interest
awarded by the learned Arbitrator from 18% to 6%, since the parties had
agreed upon the same and the transaction being commercial in nature,
the Trial Court ought to have maintained the rate of interest of 18% as
awarded by the learned Arbitrator. He therefore contended that the said
modification by the Trial Court so far as rate of interest is grossly
erroneous and contrary to the legal position as it stood then. He
therefore prayed for modifying the impugned order to the extent of
restoring the rate of interest as awarded by the learned Arbitrator.
13. Having considered the contentions put forth on either side and
particularly taking into consideration the reasons assigned by the Trial
Court in the impugned common order, while deciding the above two
O.P.s under Section 17 of the Arbitration and Conciliation Act, 1940 filed
by either side, the Trial Court had in fact threadbare taken note of all the
contentions that have been advanced by both the parties. Therefore, we
are of the considered opinion that the grounds raised in the instant two
appeals also are the very same grounds which were agitated before the
Trial Court. Given the fact that the very same grounds which are raised
in the instant two appeals have been duly considered by the Trial Court
while deciding the appeals under Section 17 of the Arbitration and
Conciliation Act, 1940, the Trial Court further took note of the fact that
under Section 39 of the Arbitration and Conciliation Act, 1940, in the
course of hearing an appeal the only scope for interference is on the
ground of a misconduct being committed by the learned Arbitrator in the
course of passing of the Award or in the event of an error apparent on
the face of record. The learned Trial Court found that in fact there was a
contract executed on 02.05.1991 by the parties with an arbitration
clause in it, and the nature of contract was in respect of work of
unloading and clearing the cargo from the ships at Kakinada Port. In the
course of execution of the said contract, there was certain dispute which
arose between the parties, and therefore, the respondent No.1-Shipping
Agency had withheld certain amounts payable to the appellant, which led
to filing of the O.S.No.368 of 1993, wherein a sole Arbitrator was
appointed to adjudicate the dispute. The learned Arbitrator, after giving
extensive hearing to both sides, had finally vide Awarded dated
12.03.2001 directed the respondent No.1-Shipping Agency to pay an
amount of Rs.46,00,161.69 ps. to the appellant with simple interest @
18% p.a. from the date of Award till realization. The Trial Court, after
thoroughly going through the entire pleadings and evidence, found that
the entire arbitration proceeding was proceeded in a fair and reasonable
manner and that the learned Arbitrator has not committed any
misconduct by exercising powers that he has exercised as an 'Arbitrator'
and there was hardly any material to show that the learned Arbitrator
acted beyond the scope. The Trial Court also did not found any material
to show that the act on the part of the learned Arbitrator in the course of
passing the Award amounted to any misconduct. What is also pertinent
to take note of the fact is that in the course of scrutinizing the materials,
the Trial Court did find that the rate of interest awarded by the learned
Arbitrator was in fact on the higher side, and taking into consideration a
couple of judicial precedents the Trial Court had modified the Award to
the extent of making it applicable from the date of Award, i.e., from
12.03.2001 till the payment is made, by reducing the rate of interest
from 18% to 6%.
14. From a perusal of the instant appeals filed by both parties, we find
that the instant appeals are filed under the same facts and grounds
which were agitated by both sides before the Trial Court with the same
ground and with the same material, without there being prima facie
material to show that these grounds were not considered by the learned
Arbitrator or that the grounds have been considered with perversity so as
to bring the Award under the purview of a misconduct committed by the
learned Arbitrator in passing the Award. In the absence of any such
material, the scope of interference for this Bench at this stage gets
further reduced to the minimal.
15. Upon due consideration of the facts and circumstances of the case,
we do not find any strong case made out by the learned counsel for the
appellants in both the two appeals calling for interference to the
impugned common order. The appeals, being devoid of merit, deserve to
be and are accordingly dismissed. Since the two appeals stand decided
finally, there is hardly any scope left to adjudicate the Civil Revision
Petition No.3630 of 2005 and no orders therefore need be passed in the
said Civil Revision Petition No.3630 of 2005. Therefore, the Civil
Revision Petition No.3630 of 2005 stands closed. No costs.
16. As a sequel, miscellaneous petitions pending if any, shall stand
closed.
__________________
P.SAM KOSHY, J
_________________
N. TUKARAMJI, J
Date :: 21.05.2025
Ndr
