The Bombay High Court dismissed an appeal challenging an arbitral award. The Court held that the impugned order of the Single Judge was correct, noting no error under Section 34 of the Arbitration and Conciliation Act, 1996 and applying the parameters set in Mahanagar Telephone Nigam Ltd. vs. Ram Builders.
No order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
VBC 1/2 appl890.12-15.7
IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J.
APPEAL (L) NO.890 OF 2012 IN
ARBITRATION PETITION NO.430 OF 2009
Mahanagar Telephone Nigam Ltd. Vs. M/s.Dolchand Kallaji.
...Appellant.
...Respondent.
.... Ms.S.I.Shah i/b. S.I. Shah & Co. for the Appellant. Ms.Bhadra N.Dalal for the Respondent.
CORAM : DR.D.Y.CHANDRACHUD AND S.C.GUPTE, JJ.
July 15, 2013 .
P.C. :
On the delay being condoned, the appeal has been taken on Board by consent and has been called out for admission.
-2. The appeal arises from a judgment of a Learned Single Judge dated 16 July 2012 by which a challenge to an arbitral award of a sole arbitrator has been rejected. The Respondent was appointed by the Appellant for carrying out the work of reinstatement of cable trenches in pursuance of an agreement dated 12 November 1997. The Appellant withheld the payment of certain bills principally on the ground of the pendency of investigations before the investigating agency. The Arbitrator held that the entire work was carried out under the supervision of the staff of the Appellant and was duly certified. The Arbitrator further noted that, in particular, the Appellant had ordered release of the deposit for the relevant year. All these aspects have been noted in the impugned judgment of the Learned Single Judge.
-3. The issue which has been urged in appeal is based on the provisions of Clause 29 of the Conditions of Contract, the relevant part of which provides as follows: “Whenever, any claim or claims for payment of a sum of money arises out of or under the contract against the contractor, the
VBC 2/2 appl890.12-15.7
Engineer-in-Charge shall be entitled to withhold and also have a lien to retain such sum or sums in whole or in part from the retention money/Performance Guarantee deposited by the contractor and for the purpose aforesaid, the Engineer-in-Charge or the MTNL shall be entitled to withhold the Performance Guarantee furnished as the case may be and also have a lien over the same pending finalisation on adjudication of any such claim.”
The provisions of Clause 29 has been interpreted in a judgment delivered on 8 July 2013 by the Division Bench in Mahanagar Telephone Nigam Ltd. vs. Ram Builders .1 This Court has held that the object and purpose of exercising a lien was to enable the Appellant to withhold payment pending finalisation on adjudication of any such claim. As in that case also, in the present case as well, the arbitral tribunal adjudicated upon the claim of the Respondent. The Appellant had asserted that since the issue has been investigated into by the investigating agency, it was entitled to exercise a lien under clause 29. This contention has been rightly rejected by the Arbitrator. The Learned Single Judge has, in our view, also noted that there was no counter claim by the Appellant. In this view of the matter, and having regard to the parameters of Section 34 of the Arbitration and Conciliation Act, 1996, the impugned order of the Learned Single Judge does not suffer from any error. The appeal is accordingly dismissed. There shall be no order as to costs.
( Dr.D.Y.Chandrachud, J.)
( S.C.Gupte, J. )
1 Appeal (L) 37 of 2013 in Arbitration Petition 432 of 2006
2 issues framed by the court
Whether the High Court exceeds its jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 in reviewing the arbitral award where no counter-claim by the Appellant was made.
Whether the lien under Clause 29 of the Conditions of Contract can be exercised to withhold payment pending adjudication of the contractor's claim when the claim has already been adjudicated.
Colour shows how this judgement treated each authority
Mahanagar Telephone Nigam Ltd. vs. Ram BuildersApplied¶17
Mahanagar Telephone Nigam Ltd. vs. Ram Builders
1 provisions across 1 enactments
Mahanagar Telephone Nigam Ltd.
M/s. Dolchand Kallaji
DR. D.Y. Chandrachud
S.C. Gupte
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
