Dismissed

The Union of Inddia v. M/s.Pl Raju and Company

Andhra Pradesh HC8 Dec 2024CMA/428/2008

Case brief

AI extract

What is this about?

The High Court of Andhra Pradesh dismissed a civil revision petition and civil miscellaneous appeal challenging an arbitral award. The court rejected arguments that the arbitrator's retirement after passing an initial unreasoned award but before supplying reasons rendered the subsequent reasoned award invalid under Clause 70 of the contract or Section 14 of the 1940 Act.

What did the court decide?

The Civil Miscellaneous Appeal and Civil Revision Petition were dismissed with no order as to costs.

The Union of Inddia Vs M/s.Pl Raju and Company — Arbitration | Andhra Pradesh HC (2024)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATM^^;^^^\A\ x;

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MONDAY .THE NINTH DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO

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AND

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THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM

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CIVIL REVISION PETITION NO: 2684 OF 2007

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AND

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CIVIL MISCELLANEOUS APPEAL No. 428 OF 2008

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CIVIL REVISION PETITION NO: 2684 OF 2007

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Petition under Section 115 of C.P.C , against the order^{dateddated12-03-} 2001 made in O.P No.143 of 1993 on the file of the Principal Senior Civil Judge, Visakhapatnam.

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Between:

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The Deputy Director General and Chief Engineer, Director^General of Naval Project, Visakhapatnam

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...PETITIONER/RESPONDENT

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AND

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M/s. P.L.Raju Constructions Limited , Rep. By its Managing^Director,P.V Raju, S/o PL Raju, Age 51 years, Regd Office at Plot^{No.437,RoadNo.20} , Jubilee Hills, Hyderabad-500033

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CRP No.2684 of 2007 has been (Cause title of the Respondent in Court Order dated 12/10/2017 vide CRP No.8059 amended as per the of 2009.)

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...RESPONDENT/PETITIONER

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-1

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I.A. NO: 2 OF 2Q07(CRPMP- NO: 3467 OF 2007)

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Petition under Section 151 CPC praying that in the^{circumstancesstatedin} the affidavit filed in support of the petition, the^{HighCourtmaybepleasedto} stay all further proceedings in OP No. 143 of 1993, dt. 12-03-2001 pending disposal of the revision.

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Counsel for the Petitioner : SRI Y V ANIL KUMAR (CENTRAL

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GOVERNMENT COUNSEL)

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Counsel for the Respondent: DEPUTY SOLICITOR GENERAL^OFINDIA

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Counsel for the Respondent: SRI J PRABHAKAR

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CIVIL MISCELLANEOUS APPEAL NO: 428 OF 2008

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under Order 43 Rule 1 R/w Order 21. Rule 46 (H) of^CPC,against Appeal the order dated 12 March 2001 made in O.P No.241 of^{1993onthePrincipal} Senior Civil Judge, Visakhapatnam.

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Between:

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The Union of India, represented by Director General Naval^Project,The Director General Naval Project, Union of India, Visakhapatnam.

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...appellant/petitioner

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AND

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P.L Raju & Company, M/s. P.L.Raju Constructions Limited , formerly M/s. Rep. By its Managing Director, PV Raju. S/o PL Raju.^{Age51years,Regd} Office at Plot NO. 437, Road No.20 , Jubilee Hills,^{Hyderabad-500033}

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in CRP No.2684 of 2007 has been title of the Respondent in (Cause 21/12/2009 vide CRP.M.P the Court Order dated amended as per No.2278 of 2009.)

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...respondent/ respondent

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; SRI Y V ANIL KUMAR (CENTRAL Counsel for the Appellant government COUNSEL) I-. .ri t ■ nFPi ITY SOLICITOR GENERAL OF INDIA Counsel for the Respondent . DEPUTY buuui ^ ; SRI J PRABHAKAR Counsel for the Respondents COMMON ORDER : The Court made the following

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APHC010123852007 COURT OF ANDHRA PRADESH IN THE HIGH [3508] at amaravati a^s (Special Original Jurisdiction) W MONDAY THE NINTH DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT
JUSTICE R RAGHUNANDAN RAO
the honourable SRI
RAO KUNCHEANl
SRI JUSTICE MAHESWARA
the honourable
pftITION 2684/200_I
rivil, revision
Between: ...PETITIONER
General And Chief Engineer
The Deputy Director
AND
...respondent
M/s P L Raju And Company
Counsel for the Petitioner:
KUMAR (Central Government Counsel)
1.Y V ANIL
SOLICITOR GENERAL OF INDIA
2. DEPUTY
Counsel for the Respondent:
J PRABHAKAR
1.
APHC010109312008 in jHE HIGH COURT OF ANDHRA
PRADESH
[3508]
at ANIARAVATI
Original Jurisdiction)
(Special
MONDAY .THE NINTH
TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM

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CIVIL MISCELLANEOUS APPEAI NO- Aoannna

Between:

The Union Of India

...APPELLANT

AND

M/s PI Raju And Company

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...RESPONDENT

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Counsel for the Appellant:

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Y V ANIL KUMAR (Central Government Counsel) Counsel for the Respondent:

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1.J PRABHAKAR

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The Court made the following Common Order: (per Hon ble Sri Justice R. Raghunandan Rao)

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As both these cases arise out of a common arbitration, they are being disposed of, by way of this common order.

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The parties ot the present case, had ended into an agreement titled “Provision of Building No.17-A (Superstructure) at Naval Dockyard area. Visakhapatnam CA.No. DDG & CE (V) 30 of 1980-81. On account of disputes which arose in the execution of this agreement, the sole arbitrator was appointed by the Director General, Naval Project, Visakhapatnam, through his letter dated 13.08.1986.

under 12 different herein had filed its claim 3. The respondent after considering the submissions made on both sides, heads. The arbitrator rejecting eight of the claims while award, dated 12.06.1987, had passed an account of this, the respondent was claims 1,3, 4 and 6. On partly accepting District Judge, upon challenge to amount of Rs.3,73,536/-. The awarded an back to the arbitrator for supplying this award, had remanded the matter fresh order, dated the arbitrator passed a reasons Pursuant to this order 11.11.1992, giving out reasons.

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under the Arbitration Act, 1940, 4. As the award had been passed of 1993, for making the award the respondent herein had moved O.P.No.143 the appellant herein had filed rule of the Court. Similarly dated 16.11.1992, a said award, dated 16.11.1992. O.P.No.241 of 1993, for setting aside the

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the Principal Senior Civil were filed before 5. These two petitions Judge, Visakhapatnam. allowed Civil Judge, Visakhapatnam 6. The Principal Senior O.P.No.143 of 1993 while dismissing O.P.No.241 of 1993.

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the appollant/petitioner has 7. Aggrieved by these two orders of 2008 and CRP.No.2684 of 2007. moved CMA.No.428

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The case of the appellantfpetitioner is as follows;

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A) The requirement of clause 70 was that the arbitral proceedings would have to be conducted and an award would have to be passed by a Chief Engineer, who is in service whereas the learned arbitrator, appointed in this case was a serving Chief Engineer when the initial award of 12.06.1987 was made, but had retired by the time the reasons for the award were supplied on 16.11.1992. Consequently, the awards are without jurisdiction as the arbitrator in the matter had demitted office by virtue of his retirement from service.

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B) Section 14 of the Arbitration Act, 1940 requires the arbitrator, p rior to the pronouncement of the award, to intimate and inform the parties of the pronouncement of the award and the time and place where the award is to be passed. In the present case, the reasoned award of 16.11.1992 was passed without any notice being given to the appellant. Consequently, the said award has to be set aside.

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C) The arbitrator, would have to ai give reasons, while passing the award and in the absence of such reasons, the award would have to be set aside. In the present case, the arbitrator, has not given out any cogent or ciear reasons, even in the reasoned award of 16.11.1992 as such, the award has to be set aside.

wm
wm
' /
/
/

The learned counsel for the respondent would submit that the award is correct and consequently the Civil Court had allowed O.P.No.143 of 1993 and rejected O.P.No.241 of 1993.

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The contention of the appellant, that the award was passed by an incompetent arbitrator is incorrect. The arbitrator was initially appointed while he was i in service and has passed his award while he was in service. However, reasons were sought for such an award and these reasons were given after he had retired from service. It is only the initial award which would have to be taken i into account for determining whether the arbitrator had retired and consequently demitted the office of the arbitrator aiso. This rule is applicable only till the award was passed. Once the said award has been passed, the question of the arbitrator becoming incompetent, to give reasons upon remand by the trial Court would not arise.

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Similarly, notice of the reasons set out in the proceedings, dated 11.11.1992, would not ah arise as the award to which the provisions of Section 14 would apply to the award of 12.06.1987 and the proceedings of 11.11.1992 cannot be treated as delivery of award but only delivery of reasons in support of the earlier award passed on 12.06.1987.

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It Is settled law, under the provisions of the Arbitration Act, 1940, that the absence of reasons would not vitiate the award. It is also settled law that amended Section 17 of the Arbitration Act, 1940 only

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requires the matter to be remanded back to the arbitrator for assigning reasons. In such circumstances, the award cannot be held to be invalid.

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The admitted facts are that the arbitrator was appointed while he was serving Chief Engineer and made an initial award, dated 12.06.1987, while in service. It is also admitted that the arbitrator had retired, by the time he gave the reasoned award, dated 11.11.1992 The question that arises before this Court is whether the 2""^ award, dated 11.11.1992, is an award, to which clause 70 of the Arbitration agreement. requiring the arbitrator to be a serving officer, would be applicable.

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The initial award, dated 12.06.1987, did not contain reasons. However, the subsequent award, dated 11.11.1992, had some reasons. though the adequacy of such reasons, is challenged by the appellant. The erstwhile Judgment of the trial Court, would show that what was remanded was only the requirement of assigning reasons to the award which had already been passed, on 12.06.1987. In such circumstances, subsequent supply of reasons, cannot be treated as a 2"^ award, which has been passed after the arbitrator had demitted office, by virtue of his retirement from the service of the Government. Viewed from another angle, the award has been passed by the learned arbitrator and the reasons, for said award, when tl.tty are not set out in the award, would be within the knowledge of only the arbitrator himself. Any direction to any other arbitrator to give reasons, in support of an award which does not contain any reasons.

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would not be possible as the reasoning of the arbitrator,^{wouldbewithinhis} personal knowledge. In the circumstances, this ground has to be rejected.

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Section 14 of the Arbitration Act, 1940, requires a^noticetobe given to the parties before an award is pronounced. In the present case there is no dispute that the provisions of Section 14 had been complied while the award, dated 12.06.1987, has been passed.^{Thisawarddidnot} contain reasons and the matter was remanded back to the arbitrator to give reasons. In such circumstances, mere giving of reasons^{cannotamountto} the pronouncing of an award. Consequently, Section^{14oftheArbitration} Act, 1940 would not be applicable and this contention has to be rejected.

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The appellant took the stand that the reasons given in the award are vague and illusory apart from being inappropriate. However,^the Hon’ble Supreme Court made it amply clear that an unreasoned^award under the provisions of the Arbitration Act, 1940 would^alsobevalid. It is true that in the present case, in the earlier round of litigation, the matter was remanded for giving reasons. The reasons set out in the proceedings of 11.11.1992, are very concise. This is treated to be a ground for setting aside the award stating that the said reasons are vague and inappropriate. To the mind of this Court, reasons would not mean elaborate^reasonsbut reasons which set out the mind of learned arbitrator. We are satisfied that

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this condition has been complied.

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( ' I

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In view of the matter, both the Civil Miscellaneous Appeal and

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the Civil Revision Petition are dismissed. There shall be no order as to costs.

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As a sequel, pending miscellaneous applications, if any, shall stand

closed.

SOI- E.KAMESWARA RAO

JOINT REGISTRAR

//TRUE COPY//

SECTION OFFICER

To,

The Principal Civil Judge(Senior Division), Visakhapatnam, Visakhapatnam district (with records if any)

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One CC to Sri. Y V Anil Kumar (Central Government

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Counsel) Advocate [OPUC]

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One CC to DEPUTY SOLICITOR GENERAL OF INDIA [OPUC]

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One CC to Sri. J Prabhakar Advocate [OPUC]

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The Section Officer, VR Section, High Court of Andhra^Pradeshat Amaravathi

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THREE CD COPIES

stu

TAC

HIGH COURT

DATED:09/12/2024

COMMON ORDER + DECREE

¶108

CRP.No.2684 of 2007 & CMA No. 428 of 2008

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r
X 1 3 MAR 2025
a
^ . Currem Seciion

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DISMISSING THE CIVIL MISCELLANEOUS APPEAL AND CIVIL REVISION PETITION

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/ V

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

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MONDAY ,THE NINTH DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND

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THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM

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CIVIL MISCELLANEOUS APPEAL NO: 428 OF 2008

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Between:

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The Union of India, represented by Director General Naval Project, The Director General Naval Project, Union of India, Visakhapatnam.

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...APPELLANT/PETITIONER

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M/s. P.L.Raju Constructions Limited , formerly M/s. P.L Raju & Company, Rep. By its Managing Director, P.V Raju, S/o PL Raju, Age 51 years, Regd Office at Plot No. 437, Road No.20 , Jubilee Hills, Hyderabad-500033

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Cause title of the Respondent in CRP No.2684 of 2007 has been amended as per the Court Order dated 21/12/2009 vide CRP.M.P No.2278 of 2009.

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...RESPONDENT/ RESPONDENT

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Appeal under Order 43 Rule 1 R/w Order 21, Rule 46 (H) of CPC, against the order dated 12 March 2001 made in O.P No.241 of 1993 on the Principal Senior Civil Judge, Visakhapatnam.

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This appeal coming on for hearing and upon perusing^thegroundsof appeal, the judgment and Decree of the Lower Court^{andmaterialpapers} in the Suit and upon hearing arguments of Sri. Y V^{AnilKumar(Central} Government Counsel). Advocate for the Appellant and^{ofSriJPrabhakar,} Advocate for Respondent.

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This Court doth Order and decree as follows:

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That the Civil Miscellaneous Appeal be and is hereby^dismissed; 2. That there be no order as to costs in this Appeal.

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SD/- E.KAMESWARA RAO JOINT REGISTRAR

//TRUE COPY//

SECTION OFFICER

The Principal Civil Judge(Senior Division), Visakhapatnam Visakhapatnam district

¶133

THREE CD COPIES

TAC

HIGH COURT

DATED:09/12/2024

DECREE

CMA.No.428 of 2008

S;v
I 13 MAR 2025 toh
^ . Curreni Seciion . ^

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DISMISSING THE CIVIL MISCELLANEOUS APPEAL

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/ / .*

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

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4
t.,..
MONDAY ,THE NINTH DAY OF DECEMBER ^
TWO THOUSAND AND TWENTY FOUR jo I
lo '
P/

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PRESENT

¶145

THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO

¶146

AND

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THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM

¶148

CIVIL REVISION PETITION NO: 2684 OF 2007

¶149

Between:

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The Deputy Director General and Chief Engineer, Director^General of Naval Project, Visakhapatnam

¶151

...PETITIONER/RESPONDENT

¶152

AND

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M/s. P.L.Raju Constructions Limited , Rep. By its Managing Director, P.V Raju, S/o PL Raju, Age 51 years, Regd Office at Plot No. 437, Road No.20 , Jubilee Hills, Hyderabad-500033 Cause title of the Respondent in CRP No.2684 of 2007 has been amended as per the Court Order dated 12/10/2017 vide CRP No.8059 of 2009.

¶154

...RESPONDENT/PETITIONER

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Petition under Section 115 of C.P.C , against the order^{dateddated12-03-} 2001 made in O.P No. 143 of 1993 on the file of the Principal Senior Civil Judge, Visakhapatnam.

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This appeal coming on for hearing and upon perusing the grounds of appeal, the judgment and Decree of the Lower Court and material papers in the Suit and upon hearing arguments of Sri. Y V Anil Kumar (Central Government Counsel), Advocate for the Appellant and of Sri J Prabhakar, Advocate for Respondent.

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This Court doth Order and decree as follows:

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That the Civil Revision Petition be and is hereby dismissed;

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That there be no order as to costs in this Civil revision petition.

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SD/- E.KAMESWARA RAO JOINT REGISTRAR \

//TRUE COPY//

SECTION OFFICER

To,

y^The Principal Civil Judge(Senior Division), Visakhapatnam Visakhapatnam district

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THREE CD COPIES

¶166

TAC

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HIGH COURT DATED:09/12/2024

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DECREE

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CRP.No.2684 of 2007

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13 MAR 2025 eo7'
%
^ . Current Secuon ^

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DISMISSING THE CIVIL REVISION PETITION

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The Union of Inddia v. M/s.Pl Raju and Company

Case brief

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The Union of Inddia v. M/s.Pl Raju and Company

Case brief

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