Dismissed

The Commissioner v. M/s. Gammon India Ltd.

Madras HC24 Feb 2020OP/794/2014

Case brief

AI extract

What is this about?

In an application under Section 34 of the Arbitration and Conciliation Act, 1996, the Corporation of Chennai sought to set aside an award granting interest on a retention amount. The High Court dismissed the petition, holding that the arguments were untenable and the award stands confirmed.

What did the court decide?

Original Petition dismissed; award dated 01.11.2013 confirmed; no costs.

The Commissioner Vs M/s. Gammon India Ltd. — Arbitration | Madras HC (2020)

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O.P. No. 794 of 2014

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 24.02.2020

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CORAM

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THE HONOURABLE Ms.JUSTICE P.T.ASHA

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O.P.No.794 of 2014

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The Commissioner
Corporation of Chennai
Represented by
The Superintending Engineer (Bridges)
EVR Road, Ripon Building,
Chennai 600 003. ...Petitioner
/Vs/
1. M/s. Gammon India Ltd.,
Gammon House,
Veer Sarkar Marg,
Prabhadevi,
Mumbai 400 025.
2. Dr.D.Thirunakkarasu,
Arbitrator,
New No.60, Old No.56-B,
Anjugam Nagar, 3 rd Street,
Ashok Nagar, Chennai 600 083. ...Respondents

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PRAYER: This Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to setting aside the award dated 01.11.2013 passed by the learned Arbitrator and directing the 1^st respondent to pay the cost of this petition. For Petitioner : Mr.P.Vasudevan For Respondents : Mr.V.Srikanth

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O.P. No. 794 of 2014

O R D E R

The Petitioner is the Corporation of Chennai, who has challenged the

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award passed by the Sole Arbitrator, dated 01.11.2013, in and by which the learned Arbitral Tribunal has passed order and the operative portion of the said award is extracted here under:

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“9. Conclusion:

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9.1 Claim – 1: Claim towards interest for the delayed release of retention amount for the period from 13.11.2002 to 01.08.2012:

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In view of the forgoing arguments and decision, the claimant is entitled for the relief by way of interest for the said period from 29.01.2007 to 28.03.2011. The claimant requested interest at the rate of 18% per annum. An interest at the rate of 9% on Rs.31,35,101.00/- is allowed and an amount of Rs.11,74,245.00/- [Rupees Eleven Lakhs Seventy Four Thousands Two Hundreds and Forty Five Only] is awarded.

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9.2 Claim -2: Claim towards refund of amount deducted for the shortfall collection of Tamil Nadu Labour Welfare Fund with interest for the period from 13.11.2002 to 01.08.2012. The Award is Nil.

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9.3 Claim -3: Claim towards interest from the date of reference (01.08.2012) to date of award: The Award is Nil.

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9.4 Claim -4: Claim towards interest for the period from date of award to date of payment:

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A total amount of award of Rs.11,74,245.00/- will carry interest at the rate of 9% from 15-12-2013 till date of payment, if not paid before 15-12-2013.

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9.5 Claim -5: Claim towards Cost of Arbitration: The cost of Arbitration is to be shared equally by the parties and no amount is awarded.”

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The brief facts preceding the filing of the present petition under

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Section 34 of the Arbitration and Conciliation Act, 1996 is that the petitioner Corporation had decided to construct Mini Flyovers in Chennai at various important junctions. Work was entrusted to various contracters by floating tenders. The respondent herein was the successful bidder in respect of the work relating to the Flyovers to be constructed on Peters Road – Coronsmith Road Junction , Peters Road – Westcott Road Junction and Pantheon Road – Montieth Road – Casa Major Road Junction. The value of the contract was a sum of Rs.1153.06 lakhs and the period for completion was fifteen months from the date

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of commencement namely 15.03.1999.

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The work had been executed by the 1^st respondent and dispute arose

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between the petitioner and the 1^st respondent with reference to payment of interest on the retention amount and this was referred to arbitration. Ultimately, the Arbitrator had found in favour of the 1^st respondent herein. The petitioner had taken a stand that they were unable to release the money only on account of

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pendency of the criminal proceedings against the 1^st respondent by reason of which the entire records had been filed before the Court of Special Judge,

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O.P. No. 794 of 2014

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delayed the payment. Since, repeated requests of the 1^st respondent has not yielded any result, the 1^st respondent had invoked the jurisdiction of this Court and pursuant to the orders of this Court, the petitioner was directed to dispose of the representation of the 1^st respondent, and thereafter, the bills were ultimately

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paid.

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The only ground on which the present petition has been filed is that the 1^st respondent had received the payment of initial amount of 50% without any demur and that they had not claimed interest. However interest has been claimed on the retention amount for the first time only in the Arbitration proceedings. The petitioner would further submit that under the agreement interest and the retention amount is not contemplated and therefore the claim is contrary to the terms of the contract.

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The learned counsel for the petitioner Mr.P.Vasudevan, would

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reiterate the contentions put forth in the petition, challenging the award.

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respondents would submit that the above statement that the interest was claimed

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for the first time only in the arbitral proceedings is totally erroneous. The 1^st respondent has all along requested the payment of interest on the amounts due to

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O.P. No. 794 of 2014

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them, during the pendency of the writ petition proceedings as well as the contempt petitions proceedings thereafter.

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Heard the learned counsel for the petitioner and the learned counsel

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for the respondents and perused the records.

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The present petition has been filed by the Petitioner on the basis

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that the petitioner corporation has to pay interest as directed in paragraph No.15

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of the Award which is extracted hereunder that interest should be paid only after

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the defect liability period:

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“15. The petitioner submits that it once again made a representation on 30.10.2008 to the respondent No.1 requesting that it expedite the payment of the retention amount towards both Package I and Package II flyovers along with interest at the rate of 18% from the date of completion of the defect liability period.”

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This would clearly prove that the contention raised by the petitioner

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is absolutely untenable. Interest is payable only from the date of completion of the defect liability period. It is apparent that the petitioner has not made out any grounds as contemplated under Section 34 of the Arbitration and Conciliation Act, 1996, for granting any relief in the present petition.

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O.P. No. 794 of 2014

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In view of the above reasonings, this Original Petition is

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dismissed. The award passed by the Arbitral Tribunal, Chennai dated 01.11.2013

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stands confirmed. No costs.

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24.02.2020
1/2
ssi
Index: Yes/No

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O.P. No. 794 of 2014

The Commissioner, Corporation of Chennai, Represented by The Superintending Engineer (Bridges) EVR Road, Ripon Building,

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Chennai 600 003.

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M/s. Gammon India Ltd., Gammon House, Veer Sarkar Marg, Prabhadevi, Mumbai 400 025.

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Dr.D.Thirunakkarasu, Arbitrator, New No.60, Old No.56-B, Anjugam Nagar, 3^rd Street, Ashok Nagar, Chennai 600 083.

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O.P. No. 794 of 2014

P.T.ASHA,J. ssi

O.P.No.794 of 2014

24.02.2020 1/2

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The Commissioner v. M/s. Gammon India Ltd.

Case brief

What is this about?

What did the court decide?

The Commissioner v. M/s. Gammon India Ltd.

Case brief

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