{"id":147089,"date":"2007-12-14T00:00:00","date_gmt":"2007-12-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-sri-swaminathan-construction-vs-sri-thirunavukkarasu-on-14-december-2007"},"modified":"2014-07-10T21:53:23","modified_gmt":"2014-07-10T16:23:23","slug":"ms-sri-swaminathan-construction-vs-sri-thirunavukkarasu-on-14-december-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-sri-swaminathan-construction-vs-sri-thirunavukkarasu-on-14-december-2007","title":{"rendered":"Ms.Sri Swaminathan Construction vs Sri Thirunavukkarasu … on 14 December, 2007"},"content":{"rendered":"
Madras High Court<\/div>\n
Ms.Sri Swaminathan Construction vs Sri Thirunavukkarasu … on 14 December, 2007<\/div>\n
       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT\n\n\nDATED : 14\/12\/2007\n\n\nCORAM:\nTHE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA\nand\nTHE HONOURABLE MR.JUSTICE S.PALANIVELU\n\n\nC.M.A.No.1592 of 2003\nand\nC.R.P.No.1635 of 2003\n\nC.M.A.No.1592\/2003:\n\n\nMs.Sri Swaminathan Construction,\nKumbakonam, a Regd.Partnership Firm,\nrep.by its Managing Partner\nK.Mathiyalagan,\nhaving Office at 14-A\/13, State Bank Colony,\nKumbakonam.\t\t\t\n\t\t\t\t\t... \tAppellant\n\t\t\t\t\t\tPetitioner\n\t\t\t\t\nvs.\n\n\n1.Sri Thirunavukkarasu Dhanalakshmi\n   Eduction & Charitable Trust,\n  Kumbakonam, rep.by its\n  Founder R.Thirunavukkarasu\n\n2.Anna University, Chennai,\n  rep.by Director of Technical\n   Education, anna University,\n  Chennai.\n\n3.The Secretary,\n  Tamilnadu Engineering Admissions,\n  Anna University Campus,\n  Chennai-25.\n\n4.Union Bank of India,\n  Kumbakonam, rep.by its\n  Branch Manager.\n\n5.City Union Bank Ltd.,\n  Kumbakonam Main Branch,\n  T.S.R.Big Street,\n  rep.by its\n  Branch Manager.\t\t\t... \tRespondents\n\t\t\t\t\t\tRespondents\n\n\nCRP NPD No.1635\/2003:\n\nSri Swaminathan Construction,\nKumbakonam, \t\t\t\t... \tPetitioner\n\t\t\t\t\t\tPetitioner\n\t\t\t\t\t\t\n\nvs.\n\n\n1.Sri Thirunavukkarasu Dhanalakshmi\n   Eduction & Charitable Trust,\n  Kumbakonam, rep.by its\n  Founder R.Thirunavukkarasu\n\n2.The Secretary,\n  Tamilnadu Engineering Admissions,\n  Anna University Campus,\n  Chennai-25.\t\t\t\t... \tRespondents\n\t\t\t\t\t\tRespondents\n\nC.M.A.NO.1592\/2003:\n\n\t\tCivil Miscellaneous Appeal under Section 37(1)(a) of the Arbitration\nand Conciliation Act, 1996 against the order of the Principal District Judge,\nThanjavur, dated 20.06.2003, made in A.O.P.No.71 of 2002.\n\n\nC.R.P. NPD No.1635\/2003:\n\n\t\tCivil Revision Petition under Article 227 of the Constitution of\nIndia against the fair and final order dated 01.08.2003 made in E.P.No.43 of\n2003 in Arbitration Award on the file of the Court of Principal District Judge,\nThanjavur.\t\n\n\n!For Appellant    \t...   \t\tMr.S.Parthasarathy for\nin CMA & Petr.\t\t   \t\tMr.T.V.Sivakumar\nin CRP\n\n\n^For Respondent No.1 \t...   \t\tMr.S.Silambanan,\nCMA & CRP\t\t\t\tSenior Counsel for\n\t\t\t\t\tM\/s.S.Silambanan \t\t\t\n\t\t\t\t\tAssociates.\n\n\t\t\n:JUDGMENT\n<\/pre>\n
F.M.IBRAHIM KALIFULLA,J.\n<\/p>\n
\t\t\tThe Civil Miscellaneous Appeal has been preferred by the
\nappellant\tagainst the order of the Principal District Judge, Thanjavur, dated
\n30.06.2003 in Arbitration Original Petition No.71\/2003 (in short “AOP
\nNo.71\/2003”).  The Civil Revision Petition has been preferred by the same
\nappellant as against the order of the same court passed in Execution Petition
\nNo.43\/2003 (in short “EP No.43\/2003”) in an Arbitration Award on 01.08.2003.\n<\/p>\n
\t\t\t2.The brief facts which are required to be stated are:\n<\/p>\n
\t\t\t(a)The appellant undertook a contract for construction of an
\nEngineering College for the 1st respondent under Agreement dated 07.02.2001.
\nOne Mr.M.N.Mohammed Rafi of M\/s.Rafi Associates of Kumbakonam was appointed as
\nthe Architech and Consultant of the 1st respondent.  The conditions of the
\ncontract contained a paragraph under the caption “General”, as per which,
\naccording to the appellant, in the event of any dispute or difference between
\nthe appellant and the 1st respondent, as contractor and owner, the same should
\nbe referred to the Consultant whose award would be final and binding on all
\nparties concerned.\n<\/p>\n
\t\t\t(b)According to the appellant, a sum of Rs.27,32,067.25 was
\ndue from the 1st respondent as per the Bill dated 21.05.2001 and that the
\nArchitect certified for payment of a sum of Rs.24,00,000\/-.  It is the case of
\nthe appellant that since the said amount and certain other sums were due and
\npayable by the 1st respondent in pursuance of the execution of the contract as
\nper the Agreement dated 07.02.2001, a claim petition was made by the appellant
\nbefore the Arbitrator seeking for an award in its favour.  The said claim
\nstatement was filed on 05.01.2002 for a sum of Rs.35,15,522.40, along with
\nannexures.\n<\/p>\n
\t\t(c)On behalf of the 1st respondent, the founder addressed a letter
\nto the Arbitrator on 15.02.2002 seeking for sufficient time to place the facts
\nbefore him.  Subsequently, a counter petition was filed by the 1st respondent
\nbefore the Arbitrator.  In the said counter petition, it was inter alia<\/p>\n
contended that the Arbitrator was not appointed in its true sense, that he was
\nonly an Architect and Consultant and that he has not attained the status of an
\nArbitrator.  On merits also, it was contended that nothing was payable.\n<\/p>\n
\t\t(d)Thereafter, the Arbitrator passed an Award on 08.03.2002.  The
\npreliminary objection as to the status of the Arbitrator, as raised by the 1st
\nrespondent, was rejected by the Arbitrator and he proceeded and passed the
\naward.  Ultimately, the Arbitrator held that the appellant was entitled for a
\nsum of Rs.27,23,214.97 on four different heads.  He also directed the 1st
\nrespondent to pay the said sum to the appellant on or before 31.03.2002, failing
\nwhich the said sum would carry interest at the rate of 18% per annum from the
\ndate of award till its realisation.  The said award has become final, since
\nneither the 1st respondent nor the appellant challenged the same in the manner
\nknown to law.\n<\/p>\n
\t\t(e)The 1st respondent, however, failed to comply with the direction
\nof the Arbitrator in the award dated 08.03.2002 by making the payment as awarded
\ntherein.  The appellant, therefore, preferred the present AOP No.71\/2002 on the
\nfile of the Principal District Judge, Thanjavur (Designated Court<\/p>\n
under the Arbitration and Conciliation Act, 1996 – Act No.26\/1996).  The said
\npetition was filed on 27.08.2002.  The appellant also moved the very same court
\nin EP No.43\/2003 seeking for an order of attachment under O.21 R.11(2) CPC for a
\nsum of Rs.32,53,682.31 out of the amount which was payable to the 1st respondent
\nby the 3rd respondent\/garnishee and forward the same to the Execution Court.\n<\/p>\n
\t\t(f)In AOP No.71\/2002 filed under Section 9(ii)(d) of the Arbitration
\nand Conciliation Act, 1996 (hereinafter referred to as “Act 26\/96”), the
\nappellant prayed for a prohibitory order as against the 2nd and 5th respondents\/
\ngarnishees from paying the amount lying to the credit of the 1st respondent as
\nper their accounts as found in the scheduled to the said AOP till the amount due
\nas per the award dated 08.03.2002 is fully discharged and for costs.  The said
\nAOP was resisted by the 1st respondent contending that under the Agreement dated
\n07.02.2001 the parties did not agree for the named Arbitrator, namely the
\nArchitect and the Consultant and therefore the award passed by him cannot be
\nheld to be an award passed under the Arbitration Act.  An objection was also
\nraised as regards the jurisdiction of the Principal District Judge, Thanjavur,
\nto deal with the said AOP.\n<\/p>\n
\t\t(g)By order impugned in this appeal dated 30.06.2003 passed in AOP
\nNo.71\/2002, the learned Principal District Judge, Thanjavur, rejected the
\ncontention of the 1st respondent as regards the lack of jurisdiction.
\nUltimately, the learned Principal District Judge held that Ex.P-2 (Award dated
\n08.03.2002) ceased to be an award, since it did not fall within the ambit of
\nSection 9(ii)(d) of Act 26\/96.  While dismissing the Original Petition, the
\nlearned Principal District Judge has held as under in paragraph No.29 of his
\norder.\n<\/p>\n
\t“29…… At the outset, I would like to point out that when viewing the
\nterms of Ex.P1 and Ex.P2, I am of the opinion that Mr.M.N.Mohamed Rafi is
\nneither clothed nor conferred that any legal status of being an Arbitrator in
\npassing the award dated 8.3.2002.  For the simple reason that in as much as he
\nis happened tobe a party in the said agreement under Ex.P1 and when viewing the
\nelaborate arguments putforth on the side of first respondent and viewing the
\naforestated well agitated reasons on legal aspects emphasised on the side of the
\nfirst respondent and the same are found to be applicable to the factors of the
\nnature of controversial issue arisen under this petition, I am of the concrete
\nopinion that Ex.P2 is ceased to be an Award since it does not fall within the
\nambit of section 9(ii)(d) of the Arbitration and Conciliation Act.  Since the
\nArchitect\/Consultant who passed the alleged award under Ex.P2 is found to be a
\nparty to the proceedings as referred in Ex.P1 in certain unambiguous terms, I
\ninclined to accept and approve the well agitated reasons emphasised in course of
\narguments on the side of the 1st respondent challenging the validity and binding
\nnature of the alleged Award under Ex.P2.”\n<\/p>\n
\t\t(h)In the light of the dismissal of AOP No.71\/2002, the learned
\nPrincipal District Judge by his order dated 01.08.2003 dismissed EP No.43\/2002
\nas unnecessary.\n<\/p>\n
\t\t\t3.Assailing the order of the learned Principal District Judge,
\nThanjavur, Mr.S.Parthasarathy, learned senior counsel appearing for the
\nappellant, after referring to the salient features of the provisions of Act
\n26\/96, contended that the 1st respondent, having failed to challenge the award
\nof the Arbitrator in the manner known to law under the provisions of the Act,
\nhad no right to question the same in an application preferred by the appellant
\nunder Section 9 of Act 26\/96.  Learned Senior Counsel then contended that the
\nclause contained under the caption “General” in the conditions of contract and
\nthe words contained therein empower the Arbitrator to entertain the dispute
\nbetween the appellant and the 1st respondent and therefore his Award dated
\n08.03.2002 was unassailable when the 1st respondent did not choose to challenge
\nthe same under Section 34 of the Act.  The learned Senior Counsel relied upon
\nthe following decisions in support of his submissions.\n<\/p>\n
\t(i)AIR 1981 SC 479 – Rukmanibai  v.  Collector, Jabalpur<\/a>;\n<\/p>\n
\t(ii)2002 (2) MLJ (SC) 175 – Bhatia International  v.  Bulk Trading S.A.<\/a>;\n<\/p>\n
\t(iii)1999 (2) SCC 479 – Sundaram Finance Ltd.  v.  NEPC India Ltd.<\/a>;\n<\/p>\n
\t(iv)(2003) 6 SCC 564 –  FCI  v.  Indian Council of Arbitration;\n<\/p>\n
\t(v)(2006) 11 SCC 181 – McDermott International Inc.  vs.  Burn Standard
\nCo.Ltd. and others<\/a>;\n<\/p>\n
\t(vi)(2007) 5 SCC 28 – Punjab State  v.  Dina Nath<\/a>;\n<\/p>\n
\t(vii)(2007) 6 MLJ SC 346 –  ACE Pipeline Contracts and (P) Ltd.  vs.
\nBharat Petroleum Corporation Limited<\/a>; and<\/p>\n
\t(viii)CDJ 2007 SC 1124 – The empire Jute Co. Ltd. & Others  vs.  the Jute
\nCorporation of India Ltd. & Another.\n<\/p>\n
\t\t\t4.As against the above submissions, Mr.S.Silambanan, learned
\nsenior counsel appearing for the 1st respondent, contended that under Section 9
\nof Act 26\/96, there was every scope for the Principal District Judge to examine
\nas to whether there was an enforceable award in order to grant any relief under
\nthe said provision and therefore the conclusion of the learned Principal
\nDistrict Judge as regards the competency of the Arbitrator in having entertained
\nthe arbitration proceedings was fully justified.  Learned Senior Counsel would
\ntherefore contend that where there was patent illegality in the arbitral
\nproceedings, as entertained by the Arbitrator, no fault can be found with the
\norder of the learned Principal District Judge in having rejected AOP on the
\nground of lack of jurisdiction in the Arbitrator himself in passing the award.
\nThe learned Senior Counsel relied upon the following decisions in support of his
\nsubmissions.\n<\/p>\n
\t(i)(1999) 2 SCC 479 – Sundaram Finance Ltd.  v.  NEPC India Ltd.<\/a> ; and<\/p>\n
\t(ii)AIR 1954 SC 340 – Kiran Singh  v.  Chaman Paswan.<\/a>\n<\/p>\n
\t\t\t5.Having heard the learned counsel for either parties, the
\nquestions to be decided in the civil miscellaneous appeal as well as the civil
\nrevision petition boils down to two aspects, namely<\/p>\n
\t(i)Whether in an Application under Section 9(ii)(d) of Act 26\/1996, the
\nlearned Principal District Judge had jurisdiction to go into the question as to
\nthe competence of the Arbitrator in having held the arbitral proceedings and set
\naside the award passed by him.\n<\/p>\n
\t(ii)Incidentally, to state whether there is an arbitration clause at all
\nin the Agreement dated 07.02.2001.\n<\/p>\n
\t\t\t6.We wish to delve into the second question in the first
\ninstance as that would throw more light for deciding the first question by
\nreferring to the various provisions of the Act 26\/1996.\n<\/p>\n
\t\t\t7.For deciding the question No.2, the relevant clause in the
\nAgreement dated 07.02.2001 requires extraction.  The said clause has been
\nmentioned in the conditions attached to the Agreement.  The clause has been
\nmentioned under the caption “General”, which reads as under:
\n\t“The Contractor shall abide by the
\ninstructions that may be issued by consultant from time to time during the
\nperiod of agreement.\n<\/p>\n
\tIn the event of any dispute or difference between the contractor and
\nemployer, the same shall be referred to the Consultant whose award shall be
\nfinal and binding on all parties concerned.”\n<\/p>\n
The Consultant has also been named in the very preamble to the Agreement,
\nwherein Thiru M.N.Mohamed Rafi of M\/s.Rafi Associates, has been appointed as
\nArchitect and Consultant.  In the preamble it is also stated that while the
\nowner is desirous of the construction of Arasu College of Engineering, Chennai
\nMain Road, Kumbakonam, the Contractor has agreed to execute and complete the
\nwork as per the drawings and specifications to the entire satisfaction of the
\nowner\/architect and consultant.\n<\/p>\n
\t\t\t8.By virtue of the Arbitration Clause, as provided in the
\nconditions of the contract, the appellant moved before the Arbitrator by filing
\nhis claim petition.  In
\nfact, the 1st respondent filed a reply letter dated 15.02.2002 in response to a
\nnotice said to have been issued by the Arbitrator fixing the hearing on
\n24.01.2002.  In the said petition, the 1st respondent wanted sufficient time to
\nappear and place the facts before the Arbitrator and therefore he should fix a
\ndate and communicate the same by RPAD.  The Arbitrator was thus requested to
\nfollow the procedure.  However, in the counter statement filed subsequently, the
\n1st respondent took the stand that the said Mohamed Rafi was only an Architect
\nand Consultant and as per the Agreement he was not named as an Arbitrator.  The
\ncounter also dealt with the merits of the claim made by the appellant.\n<\/p>\n
\t\t\t9.The Arbitrator in his Award dated 08.03.2002 considered the
\npreliminary objection raised by the 1st respondent about his status and ruled
\nthat the Agreement provided for the Arbitration Clause and that he was
\nspecifically named as an Arbitrator.  Thereafter, the Arbitrator determined the
\namount due and payable by the 1st respondent in a sum of Rs.27,23,214.97 under
\ndifferent heads.  Admittedly, the said award was not challenged in the manner
\nknown to law under the provisions of Act 26\/1996.  Therefore, there can be no
\ntwo opinion that the award dated 08.03.2002 has become final and conclusive and
\nis unassailable as on date.\n<\/p>\n
\t\t\t10.When we examine the arbitration clause, which has been
\nextracted in the earlier part of this judgment,<\/p>\n
a reading of the said clause makes it abundantly clear that it was nothing but
\nan arbitration clause and that though Mr.Mohamed Rafi was appointed as a
\nConsultant and Architect under the Agreement, nevertheless he was named as an
\nArbitrator to deal with any dispute or difference between the contractor and the
\nemployer and that his award would be final and binding on all parties concerned.
\nMerely because the word “Arbitrator” has not been specifically mentioned, it
\ncannot be held that it is not an Arbitration Clause.  Further, there is no
\nprohibition that the Consultant or the Architect or the Principal to act as an
\nArbitrator.\n<\/p>\n
\t\t\t11.In this context, the decision relied upon by the learned
\nSenior Counsel Mr.S.Parthasarathy reported in 2007 (5) SCC page 28 – Punjab
\nState  v.  Dina Nath,<\/a>   is apposite on this point.   In that case also, the
\nrelevant clause in the Work Order was to the following effect:\n<\/p>\n
\t\t“Any dispute arising between the department and the
\ncontractor\/society shall be referred to the Superintending Engineer, Anandpur
\nSahib, Hydel Circle No.1, Chandigarh for orders and his decision will be final
\nand acceptable\/binding on both the parties”.\n<\/p>\n
While dealing with the said clause, the Hon’ble Supreme Court has laid down the
\nlaw as under in paragraph 10 of its judgment.\n<\/p>\n
\t“10.We have already noted clause 4 of the Work Order as discussed herein
\nabove.  It is true that in the aforesaid clause 4 of the Work Order, the words
\n“arbitration” and “arbitrator” are not indicated; but in our view, omission to
\nmention the words “arbitration” and “arbitrator” as noted herein earlier cannot
\nbe a ground to hold that the said clause was not an arbitration agreement within
\nthe meaning of Section 2(a) of the Act.  The essential requirements as pointed
\nout herein earlier are that the parties have intended to make a reference to an
\narbitration and treat the decision of the arbitrator as final.  As the
\nconditions to constitute an “arbitration agreement” have been satisfied, we hold
\nthat clause 4 of the Work Order must be construed to be an arbitration agreement
\nand dispute raised by the parties must be referred to the arbitrator.  In
\nK.K.Modi  v.  K.N.Modi<\/a> [(1997) 3 SCC 573] this Court had laid down the test as
\nto when a clause can be construed to be an arbitration agreement when it appears
\nfrom the same that there was an agreement between the parties that any dispute
\nshall be referred to the arbitrator.  This would be clear when we read para 17
\nof the said judgment and Points 5 and 6 of the same which read as under: (SCC
\np.584)
\n\t\t“(5)that the agreement of the parties to refer their disputes to the
\ndecision of the tribunal must be intended to be enforceable in law, and lastly
\n\t\t(6)the agreement must contemplate that the tribunal will make a
\ndecision upon a dispute which is already formulated at the time when a reference
\nis made to the tribunal.”\n<\/p>\n
\t\t\t12.The said decision is the last word on the issue and
\ntherefore, we need not dilate much on this question, except to state that the
\nessential requirements (viz.) that the parties intended to make a reference to
\nan Arbitrator and treat the decision of the Arbitrator as final are satisfied
\nand therefore the clause under the head “General” contained in the conditions
\nannexed to the Agreement dated 07.02.2001 is nothing but an arbitration clause
\nand the consultant, namely Mr.Mohamed Rafi  having been named as an Arbitrator,
\nthe reference made by the appellant while making the claim before him as an
\nArbitrator was perfectly in order and the conclusion of the Arbitrator in
\nstating that the said clause is nothing but an arbitration clause authorising
\nhim to act as an Arbitrator was fully justified.\n<\/p>\n
\t\t\t13.Once we steer clear of the said position, the next question
\nfor consideration is whether the Principal District Judge had the jurisdiction
\nto go behind the Award dated 08.03.2002 and set at naught the same in an
\nApplication under Section 9(ii)(d) of Act 26\/1996.  When once we reached the
\nconclusion that the award was validly passed by the Arbitrator by virtue of the
\npowers vested in him under the provisions of the Agreement dated 07.02.2001, on
\nthat sole ground we hold that the learned Principal District Judge had no
\nauthority to go behind the said award and reject the application of the
\nappellant filed under Section 9(ii)(d) of Act 26\/1996.  We are also fortified by
\nour stand by virtue of the various provisions contained in Act 26\/1996.\n<\/p>\n
\t\t\t14.The provisions of Act 26\/1996 have been compartmentalised
\ninto four Parts.  Under Part-I, Sections 2 to 43 have been set out under 10
\ndifferent Chapters.  The relevant provisions are Sections 5, 9, 12, 13, 15, 16,
\n21, 31, 34, 35, 36 and 37.  Under Section 5, it is mandatorily stipulated that
\nin relation to matters governed by Part-I of the Act, no judicial authority can
\nintervene, except in the manner provided in the said Part.  It is a nonobstante
\nclause.  Section 9 is the provision by which a party can either before<\/p>\n
or during the arbitrarl proceedings or at any time after making an arbitral
\naward and before its enforcement, as contemplated under Section 36, apply to
\nthe court seeking for various interim orders, such as appointment of guardian
\nfor a minor or a person of unsound mind or for an interim measure of protection,
\nsuch as interim custody of sale of any goods which are subject matter of the
\narbitration agreement or for securing the amount in dispute in the arbitration
\nand such other matters which are incidental and connected with the main issue,
\ni.e. referred for arbitration.\n<\/p>\n
\t\t\t15.As regards the appointment of a person as an arbitrator,
\nany challenge to his appointment can be made under Section 12 mainly on the
\nground of his justifiable doubts as to his independence and impartiality.
\nSection 13 provides the procedure of challenge to be made under Section 12.
\nSection 16 of the Act prescribes the competence of the Arbitral Tribunal to rule
\nits own jurisdiction, such as the one in the case on hand, the very existence of
\nthe arbitration clause and the name of the arbitrator was raised as a
\npreliminary issue by the 1st respondent herein. Under Section 21, unless and
\notherwise agreed to by the parties, the arbitral proceedings in respect of a
\nparticular dispute commences on the date on<\/p>\n
which a request for that dispute to be referred to arbitration is received by
\nthe respondent.  The arbitral proceedings would terminate on the passing of the
\naward or in the circumstances specified under sub-section (2) of Section 32 of
\nthe Act.  Under Section 34, a party to an arbitral proceedings has got a right
\nto move the court against an arbitral award and for setting aside such an award
\nin accordance with sub-sections (2) and (3) of the said section 34.  Under
\nSection 35 of the Act, an arbitral award would become final and binding on the
\nparties and the same becomes enforcible after the expiry of the period specified
\nunder Section 34 for making an application to set aside the arbitral award.
\nThereafter, it can be enforced under the provisions of the Civil Procedure Code
\nas if the award is a decree of the court.  The only other mode by which a
\nchallenge can be made to the award is by filing an appeal as against an order
\ndeclining to interfere with the award or to set aside the award by approaching
\nthe appellate forum as prescribed under Section 37 of the Act.\n<\/p>\n
\t\t\t18.A conspectus reading of the above provisions makes it amply
\nclear that having regard to the prohibition contained in Section 5, unless a
\nparty to an arbtiral award challenges the award in the manner set out in Section
\n34 of the Act or in the event of not getting a favourable order in such an
\napplication under Section 34 by filing an appeal under Section 37 of the Act,
\nunder no other mode it is permissible for a party to the Arbitration Award to
\nseek for setting aside the same.\n<\/p>\n
\t\t\t17.In respect of the submission of Mr.S.Silambanan, learned
\nSenior Counsel appearing for the 1st respondent, based on the decision reported
\nin (1999) 2 SCC 479 – Sundaram Finance Ltd.  v.  NEPC India Limited,<\/a> at the
\noutset we wish to state that the said decision will not apply to a case where an
\napplication is filed under Section 9 of Act 26\/1996 after the passing of the
\naward.  The ratio laid down in the said decision in paragraph 19 would go to
\nshow that the statement of law held therein is in a case where an application is
\nfiled under Section 9 before the commencement of the arbitral proceedings.
\ntherefore, the ratio laid down in the said decision does not apply to the facts
\nof this case.\n<\/p>\n
\t\t\t18.Having regard to such a settled legal position, it will be
\ntoo much to state that in an application filed under Section 9(ii)(d) of the
\nAct, the Court dealing with such an application would be competent to set at
\nnaught an award otherwise validly made under the provisions of Act 26\/1996.\n<\/p>\n
\t\t\t19.In the light of our above said conclusion, we hold that the
\nlearned Principal District Judge has exceeded his jurisdiction in setting aside
\nthe award of the arbitrator dated 08.03.2002 in the application filed by the
\nappellant under Section 9(ii)(d) of Act 26\/1996.  The impugned order of the
\nlearned Principal District Judge is therefore liable to be set aside and the
\nsame is accordingly set aside.\n<\/p>\n
\t\t\t20.Once we set aside the order of the learned Principal
\nDistrict Judge, in the absence of any other formidable contentions to resist the
\nclaim of the appellant made in the application filed under Section 9(ii)(d) of
\nAct 26\/1996, the said application deserves to be allowed.  Therefore, the
\napplication shall stand allowed.  As a sequale to it, a prohibitory order is
\nbound to issue as against the 2nd and 5th respondents until the amounts due to
\nthe appellant as per the Award dated 08.03.2002 is fully discharged.\n<\/p>\n
\t\t\t21.When the civil miscellaneous appeal was entertained, an
\ninterim order was passed in CMP No.10297 of 2003 on 23.07.2003 in which an order
\nof temporary injunction was granted restraining the respondents 2 to 5 from
\nmaking or<\/p>\n
disbursing any amount to the 1st respondent from the fund lying with them to the
\nextent of the award amount now due i.e. Rs.33,74,000\/-.  Subsequently, the said
\ninterim order was modified by yet another order dated 19.04.2004 by which the
\ninjunction was restricted to an extent of Rs.27,23,214.97 which was also
\ndirected to be reinvested in fixed deposit in the very same nationalised bank in
\nwhich the 2nd respondent University was operating its accounts but to the credit
\nof AOP No.71\/2002.  The balance sum was directed to be refunded to the 1st
\nrespondent after furnishing a bank guarantee.\n<\/p>\n
\t\t\t22.In the light of the orders passed in the Civil
\nMiscellaneous Appeal, we set aside the orders passed in EP No.43\/2003 and
\nrestore the same to the file of the Principal District Judge, Thanajvur.
\nHowever, since the amount is already secured pursuant to the interim orders
\ndated 23.07.2003 and 19.04.2004, the 4th and the 5th respondents with whom fixed
\ndeposit of Rs.27,23,214.97 is invested are directed to disburse the same to the
\nappellant with accrued interest as on date on production of a copy of this
\njudgment.   If any further sum is due and payable by the 1st respondent to the
\nappellant, it is open to the appellant to work out the same in EP No.43\/2003.
\nThe Execution Petition shall be disposed of within four weeks from the date of
\nreceipt of the records from this court.   In the event of such sum being found
\ndue and payable by the 1st respondent, the same shall be recovered by enforcing
\nthe bank guarantee  directed to be furnished by the 1st respondent as per the
\norder dated 19.04.2004.  The 1st respondent and the other respondents who have
\nfurnished the bank guarantee shall therefore keep the bank guarantee alive till
\nfinal orders are passed in the Execution Petition.\n<\/p>\n
\t\t\t23.The Civil Miscellaneous Appeal stands allowed and the Civil
\nRevision Petition is ordered on the above terms.  There will be no order as to
\ncosts.\n<\/p>\n
gb.\n<\/p>\n
To:\n<\/p>\n
The Principal District Court,
\n(Designated Court under Act 26\/1996),
\nThanjavur.\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court Ms.Sri Swaminathan Construction vs Sri Thirunavukkarasu … on 14 December, 2007 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 14\/12\/2007 CORAM: THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA and THE HONOURABLE MR.JUSTICE S.PALANIVELU C.M.A.No.1592 of 2003 and C.R.P.No.1635 of 2003 C.M.A.No.1592\/2003: Ms.Sri Swaminathan Construction, Kumbakonam, a Regd.Partnership Firm, rep.by its Managing Partner […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-147089","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nMs.Sri Swaminathan Construction vs Sri Thirunavukkarasu ... on 14 December, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-sri-swaminathan-construction-vs-sri-thirunavukkarasu-on-14-december-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ms.Sri Swaminathan Construction vs Sri Thirunavukkarasu ... on 14 December, 2007 - 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