{"id":94412,"date":"2010-10-04T00:00:00","date_gmt":"2010-10-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-represented-by-vs-subbareddy-on-4-october-2010"},"modified":"2017-04-05T00:39:04","modified_gmt":"2017-04-04T19:09:04","slug":"union-of-india-represented-by-vs-subbareddy-on-4-october-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-represented-by-vs-subbareddy-on-4-october-2010","title":{"rendered":"Union Of India Represented By … vs Subbareddy on 4 October, 2010"},"content":{"rendered":"
Karnataka High Court<\/div>\n
Union Of India Represented By … vs Subbareddy on 4 October, 2010<\/div>\n
Author: K.L.Manjunath And B.Manohar<\/div>\n
I\nIN THE HIGH COURT OF KARNATAKA, BANGALORE\n\nDATED THIS THE 47\" DAY OF OCTOBER 2010\n\nPRESENT\n\nTHE HONBLE MRJUSTICE K.L.MANJUNAffH   D   \n\nAND   \n\nTHE HONBLE MR. JUSTICE     \n\nMFA.NO.963O OF  {AA}. % '    \nBETWEEN: ' D\n\nUnion of India, _ \u00bb\nRepresented by   V\nChief Administrative 0f_\ufb01'_cer,l;_ 1: \n\n     \nBangalore. ' O' .3'.  \" _'\"\"...APPELLANT\n\n(By Sri.N.S.S\u00e9anj ay \nAND:   A A\n\n1.41 \"\"Subb\u00e9ire,.ddy'-,.. \"\"\"\" \"\n\n No'.'8Q\u00a2i czfdss.\n\n1 I1  Nagar.\nBangal0re~756(}: O43.\n\n; GL Of'o\u00a7:1$;D.V O \n\n \n.. j'jT1fiV\u20ac2:;drurn- 19.\n\nM\n\n\n\n3. R.Se1Varaj,\nDFA\/CAO\/MTP.\nEgmore, Chennai 08.\n\n4. T. Ravindran,\nDCE \/ MT P,\n\nChennai-04.  ~ _ V\u00a5: \"  \n\n(By Sri.Somasundar Dixit 3: Sri.D.Shank--ar, :;Aa?vs\"iotra-R1)'   \n\nMFA \ufb01led U\/s. 37(1) of Arbitrat'iot1 and Coricii-iatio'ri\"Act,\nagainst the Order dated: 30.5.2006~paseed\u00b0in_A.SNo.1&5\/2003\non the \ufb01le of the VI Addif  Bangalore,\n(CCCH.No.11), dismissing  11178.34 of the\nArbitration and \" Qgtiehaltleffiging the award\ndated: 30. 12.2o0:2'iVpasa\u00e9'ti'-'bytt1ia%2:maitraia.;L.\n\nThis  \u00abhea_rd -and reserved and coming\non for pronourieeinerit~V.ot'~~;jud'geti1ent this day, B.MANOHAR\n\nJ . , deliveredthe  \n*V,j-fJUDGMENT\n\nV .V Ap\ufb01ellarit isiithe petitioner before the Court below, being\n\n order dated 3091 May 2006. made in AS.\n\n\n\n\n\nNo.19\/2003 passed by the VI Additional City Civil_J___udge,\n\nBangalore, preferred this appeal.\n\n2. The brief facts of the Case are as' foiiowsf_ _  V d\n\nAn agreement dated 8-l2\u00ab2(3{)5::'--_lV_\\AK'ras \n\nbetween the appellant and the iefsponderitsl for'; of V\n\ntransportation of rails front}  Section to\nTurnkur-Arasikere Seetionth Vharose between\nthe parties and  reference to the\narbitration as  in the agreement.\nThe responvdlenyts\ufb01fggtdi  and the appellant\nhas raised the matter was referred to the\nArbitral flribunal  by the General Manager,\n Vlllheddrespondents have filed their claim<\/pre>\n
stat’e.mxei1t’.i’ V”apjpellant had putforth its counter Claim<\/p>\n
V:v.Vp:””~”before the  The mbitral Tribunal after considering<\/p>\n
–\u00ab.il’.j’th\u00abg_Vcase of parties and holding necessary enquiry passed<\/p>\n
M<\/p>\n
the award. In the award, the Tribunal has awarded interest<\/p>\n
at the rate of 18% p.a. on the withheld amount.<\/p>\n
3. The appellant being aggrieved by the  ‘  <\/p>\n
interest on the withheld amount  <\/p>\n
under Section 34 of the Arbitration Act beforethev’City\u00b0’:(iixrii”=.p<\/p>\n
Court, Bangalore. The V1 Additlivonjal  after
\nconsidering the arguments partliesixand after
\nframing necessary issues,  was
\npleased to disniiss’  is no reason to
\ninterfere with   Tribunal. The
\ninterest at   by the Tribunal is
\nreasonable.  l V V  it  it<\/p>\n
   order made in A.S.No.19\/2003,<\/p>\n
the this appeal.\n<\/p>\n
 ‘.V.S1~i.N.SV.S.aniay Gowda, learned counsel appearing for<\/p>\n
‘[_”i:h_e{fappe}.l.ant contended that the contract entered into<\/p>\n
\/\u00a7.\/\u00ab<\/p>\n
I<\/p>\n
between the parties has clearly barred the payment of interest<\/p>\n
on any sums payable under the contract. Clause 52 <\/p>\n
empowers the Railways to withhold the amountdue\u00e9i .<\/p>\n
Railways in any other contract and in view. of this:claus\u20ac,’_’_the._ <\/p>\n
Tribunal ought not to have awarded’interelst\ufb02  <\/p>\n
passed by the Arbitral Tribunal is  to   Court ” it<\/p>\n
below without considering’._Clau:s’e -75:>.”l”‘aa_nd “64.5..~’of GCC
\ndismissed the suit and sought  setitinpgsaspide the same<\/p>\n
while allowing the  <\/p>\n
6. On the  Dixit, learned
\ncounsel appearinslor.  first”respondent contended that the
\ndispute raisedllby  in this appeal is only with
\nregard   interelsptwpportion awarded by the Arbitral<\/p>\n
Tribunal \u00abon\u00bb ,t41″1~ft3:’1.-“iI”l.1(3″L11’1t withheld by the appellant payable to<\/p>\n
 resp’ondle1;ifsVp’nnder various bills and under different<\/p>\n
coiitractsl  any justification. Clause 64.5 of GCC is<\/p>\n
‘j\ufb02notilfapplieable to the case of the appellant, since clause 64.5<\/p>\n
ll  come to effect subsequent 1996. Further, clause 52 of<\/p>\n
o<\/p>\n
6<\/span><\/p>\n
GCC is also not applicable. The said clauses clearly<\/p>\n
enunciate that Withholding is permissible only till its”.<\/p>\n
are cleared. In the present case, even after c1ea_rjin’g the<\/p>\n
claims, the appellant has failed to mreturny’ ‘\u00bb <\/p>\n
amount and thereby the appellant has <\/p>\n
substantial amount depriving tl\u00e9-‘e’\u00ab-respo1i.den_t  <\/p>\n
the same. Hence, the Arbitral ‘E’ri_3_:_3iu-n_al..lf1as.’ri~gl1’iVtly J\u00e9twarded
\nthe interest. Further, c1aus’el:~%34.’5  revised GCC
\nis not pressed into _eservice””befo:re” the  The new<\/p>\n
grounds cannot. riaisedl;b_efore.” this :lI?Illon’ble Court and<\/p>\n
sought for  The Hon’ble Supreme
\nCourt, in catena of \u00abhas held that awarding of<\/p>\n
interest atthe rate of V18-%A”p.a’.: is in accordance with law.
\n7; V.  We ‘l’2.av_e cvarefully*,.___gone through arguments addressed<\/p>\n
bv.”the.l’lear’nged;”vco”unsel for the parties and perused the<\/p>\n
ix”t.__jp,leadings”‘land  documentary evidence led by the<\/p>\n
– i.onipa\ufb01i\u00a2s-\n<\/p>\n
\u00e9\ufb02,<\/p>\n
8. It is not in dispute that as per the agreement’-tti’ate.d<\/p>\n
8~\u00ab12-1995 certain work was entrusted to the <\/p>\n
Since, there was some dispute, the V.i*esp–ond’ents to, 2<\/p>\n
refer the dispute to the Arbitration   <\/p>\n
Manager, Southern Railways   ‘V i<\/p>\n
Tribunal. The Tribunal after..ho1d.i1″igiineeessarya ef1’qu1i’y found
\nthat the respondents are entitled and the
\nappellant  the huge
\namount and  :t’G]Jpa3rtithewithheld amount with
\ninterest at    ‘ Thxetapzpellant being aggrieved
\nby the awatding of  the Civil Court in
\nA.s.No.19\/2.Q03;’t”   A   <\/p>\n
9.  after considering the matter held that<\/p>\n
t”wr”there is”-.no V__ir1iiifinity in awarding the interest on withheld<\/p>\n
 Without any authority of law and even after<\/p>\n
 of the dispute, the money has been wrongly<\/p>\n
\/to<\/p>\n
withheld by the appellant. Accordingly, dismissed the suit.<\/p>\n
The said order has been questioned in this appeal.<\/p>\n
10. The appellant has contended that the  ybara ” ‘V<\/p>\n
the payment of any interest on any S~um,’_”payable’~ <\/p>\n
Contract. In View of the SpECi’\ufb01,C Cla~:15\u20ac.  the\u00bb L’<\/p>\n
agreement, the payment of intere\u00e9.’t._   _.\u20acWithout
\nconsidering the agreement  the parties,
\nthe Tribunal has gxvar;led;:’ihtelf::sf:  of 1.8% p.a..
\nwhich is  parties.\n<\/p>\n
11. We  the  lnterest has been awarded
\ndue to the \u00abillegalof the amount by the appellant.
\nEl\ufb02  matter of the agreement. If the,<\/p>\n
appellantllviilevgallygwlthholds any amount, it cannot take any<\/p>\n
T’ ‘r”p1’otectiAo-n un’der.’.~’the agreement stating that it is not liable to<\/p>\n
lH”‘:payVV’theV,interest. The case of the appellant is that the rails<\/p>\n
not-A”deIivered, for which, the amount payable to the<\/p>\n
\u00a34<\/p>\n
9<\/span>
\nrespondents has been withheld. However, the Tribunal found<\/p>\n
that the rails have been actually delivered to the <\/p>\n
Hence, withholding of such amount by the appellant”is.fiil.e\u00a7a.l _<\/p>\n
and when it has iilegally withheld the arif1ount.~  ‘* <\/p>\n
to have been paid on such amount.\n<\/p>\n
12. The Hon’ble SupremesCourt_inj’a’ju_dg1r1’entV’_repbrted in<\/p>\n
2005 AIR sew -1966 berl\u00e9xzeei\ufb01p V%;e1,aAt;;\u00bbiwATH1 OXYGEN
\nLIMITED V\/s HIND\u00a3_IvSTAl:\\1~e–~–f.;2(:)P’\u00a7’–E_i\u00a7_  held that
\nawarding of interest? l\u00a7p.’a;; for pre-reference
\npendente  The arbitration
\nagreement   any payment of interest.\n<\/p>\n
However, _it_ ” wliithin “power of arbitrator to award
\niiiltere-st’  an: three  and the rate fixed on the ground<\/p>\n
thatthe.ad~;\u00a7\u00a7n_eell’was given to 1301. by HCL at 18% and the<\/p>\n
‘v.__A”award deservesno interference. Hence, We do not find that<\/p>\n
‘ insppangiizirlregularity in awarding interest on the illegally<\/p>\n
\/4(~\/<\/p>\n
withheld amount. The Court below has considered the rr_1_at.t.er<\/p>\n
in a, proper perspective and dismissed the petition.<\/p>\n
13. We find no ground to interfere with ” <\/p>\n
Accordingly, We dismiss the appeal.<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court Union Of India Represented By … vs Subbareddy on 4 October, 2010 Author: K.L.Manjunath And B.Manohar I IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE 47″ DAY OF OCTOBER 2010 PRESENT THE HONBLE MRJUSTICE K.L.MANJUNAffH D AND THE HONBLE MR. JUSTICE MFA.NO.963O OF {AA}. % ‘ BETWEEN: ‘ D Union […]<\/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":[8,20],"tags":[],"class_list":["post-94412","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nUnion Of India Represented By ... vs Subbareddy on 4 October, 2010 - 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\/union-of-india-represented-by-vs-subbareddy-on-4-october-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India Represented By ... vs Subbareddy on 4 October, 2010 - 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