Supreme Court - Daily Orders
R. Padmanaban vs R. Natesan on 23 October, 2017
Bench: Rohinton Fali Nariman, Sanjay Kishan Kaul
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 16930 OF 2017
(Arising out of S.L.P. (C) No. 14694/2017)
R. PADMANABAN Appellant (s)
VERSUS
R. NATESAN Respondent(s)
O R D E R
1) Leave granted.
2) An ex-parte award, by a Sole Arbitrator dated 02.10.2009, was
passed stating that out of a sum of Rs.14,16,848/-, a sum of
Rs.98,577/- was deducted and a total compensation amounting to
Rs.13,18,271/- was awarded. It was further held that this was a
clear case of breach of trust and deficiency in service on the part of the petitioner and the petitioner was directed to handover vacant possession of the house in question.
3) This award was challenged in a Section 34 petition, which was unsuccessful as the District Judge dismissed the Section 34 petition, by a judgment dated 05.06.2013.
4) In an appeal to the Madras High Court, Madurai Bench, the impugned judgment dated 02.06.2016 found that the arbitration clause was a limited one and since it was so limited, damages could Signature Not Verified Digitally signed by not be awarded, being beyond the scope of arbitration. R.NATARAJAN Date: 2017.10.26 16:52:05 IST
Hence, the Reason: monetary part of the award was set aside. 2
5) In an appeal, by way of special leave, to this Court, Shri K.S. Mahadevan, learned counsel for the appellant has argued that the arbitration clause is not so limited, but extends to enforcing any payment of a claim. On the other hand, Shri Senthil Jagadeesan, learned counsel for the respondent, has argued that the High Court is correct. He has further argued that, in any event, interest granted is contrary to Section 31 of the Arbitration and Conciliation Act, 1996 and the sum of Rs.6,18,930/- as damages which includes mental agony cannot be awarded, being a commercial transaction. The arbitration clause reads as follows:-
“9. Any dispute or difference arising under this agreement with regard to interpretation and meaning of any of the terms and conditions and for enforcing any payment of claim or for enforcing completion of any work pending arising in to this agreement shall be referred to an Arbitrator who shall be appointed by the parties hereto by mutual consent.” It is very clear that any dispute or difference which arises under the agreement for enforcing any payment of claim is clearly covered under the said clause. This would certainly include damages.
6) We are, therefore, of the view that the High Court was incorrect in its view that the arbitration clause limited the parties to enforcing completion of work. Shri Jagadeesan's plea that interest awarded on the principal sum would be contrary to Section 31(7) of the Arbitration and Conciliation Act, 1996 also does not appeal to us because once the award is restored, interest can certainly be awarded on amounts that are payable as found under 3 the award. Also, his plea that an award on account of mental agony may not be given in a commercial contract situation obviously would not cover a case in which the builder is highly indifferent, lethargic and wrongfully retains a house belonging to another person. This is specifically stated to be the reason for awarding damages on this count in the arbitration award. Ultimately, we must never forget that it is an arbitration award which is being challenged, and the grounds for challenge are constricted.
7) In the circumstances, we are of the view that the High Court was incorrect in setting aside the monetary portion of the award.
This being so, we set aside the High Court judgment and restore that of the District Judge.
8) The appeal is allowed in the aforesaid terms.
.......................... J.
(ROHINTON FALI NARIMAN) .......................... J.
(SANJAY KISHAN KAUL) New Delhi;
October 23, 2017.
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ITEM NO.49 COURT NO.12 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 14694/2017
(Arising out of impugned final judgment and order dated 02-06-2016 in CMA No. 276/2014 passed by the High Court Of Judicature At Madras At Madurai) R. PADMANABAN Petitioner(s) VERSUS R. NATESAN Respondent(s) Date : 23-10-2017 This petition was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN HON'BLE MR. JUSTICE SANJAY KISHAN KAUL For Petitioner(s) Mr. K.S. Mahadevan, Adv.
Mr. Krishna Kumar, Adv.
Mr. Rajesh Kumar, AOR For Respondent(s) Mr. Senthil Jagadeesan, AOR Ms. Shruti Iyer, Adv.
Ms. Sonakshi Malhan, Adv.
Ms. Suriti Chowdhary, Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal is allowed in terms of the signed order. Pending applications, if any, stand disposed of.
(R. NATARAJAN) (SAROJ KUMARI GAUR)
COURT MASTER COURT MASTER
(Signed order is placed on the file)