ZONAL GENERAL MANAGER Vs. VINAY HEAVY EQUIPMENTS

JUDGEMENT

(1.) M/s. Ircon International Limited (a Government of India Undertaking), Chennai, aggrieved by the Common Order, dated 09. 09. 2005, made in O. P. Nos. 107 and 108 of 2004 and Application Nos. 2651 and 2652 of 2004, filed for setting aside the award of the Arbitrator/second respondent, dated 06. 10. 2003, made under A. C. Nos. 1 and 2 of 2001, filed the above Original Second Appeals on various grounds.

(2.) BRIEF facts are narrated here-under:-The appellant herein - IRCON, being the successful tenderer, entered into a contract with SIPCOT (not a party to the present proceedings) for construction of Internal Road for the Industrial Complex at Irungattukottai, Sriperumpudur Taluk, Kanchipuram District, Tamil Nadu. The contract was entered into between them on 10. 07. 1997 for a value of Rs. 13,06,60,587/ -. The appellant in turn entered into a contract with the 1st respondent herein (the claimant) in respect of C1 and C2 packages for laying of Roads including WBM (Water Bound Macadam ). Open tenders were invited and on the basis of the said tenders, the said contract was finalised. C1 package was awarded to the 1st respondent on 28. 7. 1997 (date of agreement being 13. 5. 1998) for a contract sum of Rs. 3,20,64,752/- and C2 package was on 29. 12. 1997 for Rs. 1,67,01,821/ -. The total value of the said two contracts (C1 and C2 packages) is Rs. 4,87,66,573/ -. The 1st respondent had only done 67% (approx.) of the work and subsequently abandoned both the works. This forced the appellant to cancel the contract under C1 and C2 packages and have the work completed through other agencies. The value of 67% of C1 and C2 packages comes to Rs. 3. 23 crores approximately, out of which, the 1st respondent was paid a sum of Rs. 2. 62 crores. The balance amount of Rs. 61 lakhs is due to be paid by the appellant. Consequent to the disputes raised by it, the 1st respondent resorted to arbitration. The 2nd respondent herein was appointed as the sole arbitrator. The appellant also raised their claims against SIPCOT in respect of C1 and C2 packages awarded to the 1st respondent by the appellant and the said matter was also referred to arbitration. The same learned Arbitrator was appointed to arbitrate the dispute between the appellant and SIPCOT. The learned Arbitrator/the 2nd respondent herein passed a common award in respect of C1 and C2 packages awarding a sum of Rs. 7,87,21,820/- for C1 package and a sum of Rs. 1,38,78,139/- for C2 package, and the said amounts carry interest @ 12% per annum from 4. 3. 2000 till the date of payment. Therefore, the total amount, as per the award, payable by the appellant to the 1st respondent comes to Rs. 9,25,99,959/-, besides interest. The award includes a sum of Rs. 61. 50 lakhs being the balance amount admitted to be payable by the appellant in respect of the 67% of the work done by the contractor. The appellant filed two petitions challenging the common award dated 06. 10. 2003 in respect of both the sub-contracts viz. , C-1 and C-2, under Section 34 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as 'the Act') passed by the 2nd respondent, in OP Nos. 107 and 108 of 2004. The 1st respondent herein filed two applications in the said original petitions viz. , Application Nos. 2651 and 2652 of 2004, contending that while IRCON was objecting to the Award in favour of VHE, it had, in fact, pressed the claims of VHE as their own in their arbitration against SIPCOT. By common order dated 9. 9. 2005, the learned single Judge, after considering the rival contentions, dismissed O. P. Nos. 107 and 108 of 2004 and allowed Application Nos. 2651 and 2652 of 2004. Questioning the said common order, IRCON has filed the above appeals.

(3.) HEARD Mr. V. T. Gopalan, learned Additional Solicitor General for appellant in both the appeals and Mr. R. Murari, learned counsel for the first respondent.