Bangalore District Court
Jungle Lodges & Resorts Ltd vs ) M/S.Manjushri Constructions on 12 October, 2020
IN THE COURT OF THE VI ADDL. CITY CIVIL & SESSIONS JUDGE
AT BENGALURU CITY
(CCCH.11)
Dated this the 12th day of October, 2020
PRESENT: Sri.Rama Naik, B.Com., LL.B.,
VI Addl.City Civil & Sessions Judge,
Bengaluru City.
A.S.NO:44/2014; A.S.NO: 49/2014;
AND
A.S.NO:92/2014
PETITIONER/ JUNGLE LODGES & RESORTS LTD.,
PLAINTIFF Khanija Bhavan, Race Course Road,
Bengaluru -560 001.
[Common in all Reptd.by Managing Director -
the suits] Mr.Sanjai Mohan
[By Pleader Sri.G.D.Ashwathnarayana
in AS.44/2014 & 49/2014
By Pleader Sri.Muthun in AS.92/2014]
/Vs/
RESPONDENTS/ 1) M/S.MANJUSHRI CONSTRUCTIONS
DEFENDANTS PWD Contractors,
Reptd.by its Proprietor - Sri.K.Manjunath,
[Common in all No.70, 3rd Main, Gundappa Layout,
the suits] Gottigere, Bengaluru -560 053.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
2
[By Pleader Sri.S.K in AS.No.44/2014
By Pleader Sri.NGA in AS.No.49/2014
By Pleader Sri.MNH in AS.No.92/2014]
2) Hon'ble Sole Arbitrator,
Sri.M.V.S.Rao,
No.282, 7th Cross, Harikere Gate,
Lakshmi Layout, Bannerghatta Road,
Bengaluru -560 076.
[Arbitrator]
COMMON JUDGMENT
These three suits are filed by Plaintiff, who is
common in all the suits [Respondent in arbitral
proceedings] under Section 34 of the Arbitration
and Conciliation Act, 1996, for setting aside the
award dated 21.02.2014 and additional award
dated 19.06.2014, passed by sole Arbitrator/
Defendant No.2.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
3
2) All the above suits are taken up together for
passing common judgment, as the same are arising
out of common award.
3) In brief, Plaintiff's case is that, Plaintiff is a
Limited Company and Defendant No.1 is a
registered Contractor. In pursuance of the 'Tender'
for construction of 'Eco Tourism Resort' called for
by Plaintiff, Defendant submitted 'Tender Form',
which came to be accepted by Plaintiff. Plaintiff and
Defendant No.1 entered into Agreement dated
30.03.2009 for a tender value of Rs.5,77,55,690/-,
whereunder, Defendant No.1 agreed to complete
the work within 12 months from the date of issue of
Work Order excluding 4 months of monsoon. Work
Order was got issued to Defendant vide letter
dated 11.03.2009.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
4
4) It is stated that, Defendant No.1 did not
carry out its obligations as per the terms and
conditions of Work Order and Contract.
Performance Guarantee was not furnished within
the stipulated time and same was submitted
belatedly on 21.12.2009.
5) It is stated that, Defendant No.1 made a
reference vide letter dated 15.02.2013 for referring
the dispute raised by it and accordingly, sole
Arbitrator was appointed, who passed the
impugned award and additional award.
6) Aggrieved by the award, dated 21.02.2014,
Plaintiff has challenged the same on the following
grounds :
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
5
(1) Award has been passed based on
revised claim without giving any
opportunity to Plaintiff to rebut the same.
(2) Arbitrator has travelled beyond his
jurisdiction. His decision as to disputes
not referred to in arbitration reference
letter dated 29.04.2013 is in violation of
Section 21 of the Arbitration and
Conciliation Act, 1996.
(3) Arbitrator has deviated from its
own procedure as contemplated in
Section 19 of the Arbitration and
Conciliation Act, 1996.
(4) Suo moto inspection of spot by
Arbitrator on 19.01.2014 and 20.01.2014
is in violation of Section 26 of the
Arbitration and Conciliation Act, 1996.
(5) Award passed is in violation of the
terms and conditions of Contract.
(6) Section 55 of the Contract Act has
been wrongly made applicable to the
facts of the case.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
6
(7) Arbitrator ought to have awarded
counter claim of Plaintiff due to delay in
execution of project by Defendant No.1.
Rejection of counter claim is against the
terms of Contract.
(8) Arbitrator has misconducted
himself in passing the award.
7) Aggrieved by the additional award dated
19.06.2014, Plaintiff has challenged the same on
the following grounds :
(1) Additional award passed by
Arbitrator is beyond his jurisdiction and
same is against the provision of Section
33 of the Arbitration and Conciliation Act,
1996.
(2) Additional award has been passed
solely considering the evidence of
Defendant No.1. No documents dated:
02.06.2010, 04.05.2011, 17.01.2012,
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
7
29.08.2012 and 10.09.2012 produced by
Plaintiff have been considered.
For all these grounds, Plaintiff prays for
setting aside the award and additional award.
8) Defendant No.1, in its objection statement,
states that, scope for interference with the award
under Section 34 of the Arbitration and Conciliation
Act, 1996 is very limited. By filing the suits, Plaintiff
seeks to re-argue and re-open the arbitration
proceedings. Grounds urged by Plaintiff do not fall
within the ambit of Section 34 of the Arbitration
and Conciliation Act, 1996. After conducting the
trial, sole Arbitrator, after visiting the site and upon
hearing both sides, has passed the award in favour
of Defendant No.1. Sole Arbitrator, after due
consideration of Section 33 of the Arbitration and
Conciliation Act, 1996, has rightly made correction
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
8
in the award dated 21.02.2014, which requires no
interfere of this Court. Hence, prays for rejection of
suits.
9) Heard argument of learned Counsels for
Plaintiff and Defendant No.1. Perused the written
arguments submitted by both sides and also
perused the records.
10) Points that arise for my consideration are :
(1) Whether Plaintiff has made out
any of the grounds as
enumerated in Section 34 of the
Arbitration and Conciliation Act,
1996, to set aside the award
dated 21.02.2014 and additional
award dated 19.06.2014?
(2) What Order?
11) My answer to above points are :
Point No.1 - In the Affirmative;
Point No.2 - As per final order, for
the following :
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
9
REASONS
12) Point No.1 : By these suits, Plaintiff has
challenged the award dated 21.02.2014 passed by
learned Arbitrator, whereby, learned Arbitrator has
partly allowed the claim petition filed by Defendant
No.1 by awarding a sum of Rs.3,96,79,874/- and
rejected the counter claim made by Plaintiff.
Further, additional award dated 19.06.2014 has
been passed in favour of Defendant No.1 by
awarding a sum of Rs.1,01,29,244/-.
13) First and foremost ground that has been
urged by Plaintiff is that, learned Arbitrator has
violated the principles of natural justice by not
giving equal opportunity to both the parties.
14) It is contended that, learned Arbitrator
passed the award on the revised claim of
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
10
Rs.6,72,10,456/- submitted by Defendant No.1. No
opportunity was provided to Plaintiff to rebut the
revised claim. Plaintiff received revised claim notice
on 03.02.2014 after conclusion of final proceedings
on 02.02.2014. In the award, it is mentioned that,
full opportunity was given to Plaintiff. Contrary,
revised claim notice was served to Plaintiff on
03.02.2014.
15) Second important ground that has been
taken by Plaintiff is that, request for additional
award [correction to the original award dated
21.02.2014] has been entertained by learned
Arbitrator upon expiry of 30 days period. It is
contended that, soon after expiry of 30 days from
the date of passing the award, learned Arbitrator
becomes a 'functus officio' and thereafter, he has
no jurisdiction to entertain any plea raised by the
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
11
parties. It is contended that, additional award has
been passed in contravention of the provisions of
the Arbitration and Conciliation Act, 1996.
16) On the other hand, Defendant No.1 contends
that, scope of Section 34 is very limited. There is no
scope for re-assessing the evidence, which learned
Arbitrator has come across. The purpose of
Arbitration Law is to confer finality to the award.
Grounds urged by Plaintiff do not fall within the
ambit of Section 34.
17) Defendant No.1 has placed reliance upon the
following propositions of law laid down by the
Hon'ble Supreme Court.
(a) "Court must approach the award with a
view to support it" [AIR 1963 SC 1677].
(b) "Award of the arbitrator is not open to
challenge on the ground that the arbitrator
has reached a wrong conclusion or on the
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
12
ground that he has failed to appreciate
facts" [1986 (Supp) SCC 506].
(c) "Court should not set aside arbitral
award merely because they do not agree
with interpretation of the agreement given
by the arbitrator, rather it has to be shown
that tribunal's findings were based on no
evidence or irrelevant evidence or was
perverse.
Findings of the tribunal were pursuant
to a process of reasoning and discussion
and analysis of evidence and documents
presented before it, the scope of
interference under section 34 is minimal"
[(2015) 3 SCC 49].
18) At this stage, it is worthwhile to mention the
ratio laid down in Associate Builders vs. Delhi
Development Authority, [(2015) 3 SCC 49],
wherein, the Hon'ble Supreme Court was pleased
to elaborately discuss the heads of "Public Policy of
India". (1) Fundamental Policy of Indian Law; (2)
Interest of India; (3) justice and morality; and (4)
patent illegality are the heads of Public Policy of
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
13
India that have been discussed in the judgment
(supra).
19) In the judgment (supra), it is held that,
"Fundamental Policy of Indian Law" includes (i)
compliance with statutes and judicial precedents;
(ii) need for judicial approach; (iii) natural justice
compliance; and (iv) Wednesbury reasonableness.
20) Further, it is held that, (i) contravention of
substantive law of India; (ii) contravention of A & C
Act, 1996; and (ii) contravention of the terms of the
contract would be regarded as patent illegality.
21) In para-15 and 16, the Hon'ble Supreme
Court was pleased to hold as follows :
"15. This section in conjunction with
Section 5 makes it clear that an arbitration
award that is governed by Part I of the
Arbitration and Conciliation Act, 1996 can
be set aside only on grounds mentioned
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
14
under Sections 34(2) and (3), and not
otherwise. Section 5 reads as follows :
" 5. Extent of judicial
intervention.- Notwithstanding
anything contained in any other
law for the time being in force,
in matters governed by this
part, no judicial authority shall
intervene except where so
provided in this Part."
16. It is important to note that the 1996
Act was enacted to replace the 1940
Arbitration Act in order to provide for an
arbitral procedure which is fair, efficient
and capable of meeting the needs of
arbitration; also to provide that the tribunal
gives reasons for an arbitral award; to
ensure that the tribunal remains within the
limits of its jurisdiction; and to minimise
the supervisory roles of courts in the
arbitral process."
22) In para-28 and 30, the Hon'ble Supreme
Court was pleased to hold as follows :
"28. In a recent judgment, ONGC Ltd. v.
Western Geco International Ltd., this Court
added three other distinct and
fundamental juristic principles which must
be understood as a part and parcel of the
fundamental policy of Indian law. The
Court held : (SCC pp.278-80, paras 35 &
38-40)
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
15
" 38. Equally important and indeed
fundamental to the policy of Indian law is
the principle that a court and so also a
quasi-judicial authority must, while
determining the rights and obligations of
parties before it, do so in accordance
with the principles of natural justice.
Besides the celebrated audi alteram
partem rule one of the facets of the
principles of natural justice is that the
court/authority deciding the matter must
apply its mind to the attendant facts and
circumstances while taking a view one
way or the other. Non-application of
mind is a defect that is fatal to any
adjudication. Application of mind is best
demonstrated by disclosure of the mind
and disclosure of mind is best done by
recording reasons in support of the
decision which the court or authority is
taking. The requirement that an
adjudicatory authority must apply its
mind is, in that view, so deeply
embedded in our jurisprudence that it
can be described as a fundamental policy
of Indian law."
30. The audi alteram partem principle
which undoubtedly is a fundamental juristic
principle in Indian law is also contained in
Sections 18 and 34(2)(a)(iii) of the
Arbitration and Conciliation Act. These
sections read as follows :
" 18. Equal treatment of
parties.- The parties shall be
treated with equality and each party
shall be given a full opportunity to
present his case.
34. Application for setting
aside arbitral award - (1) * * *
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
16
(2) An arbitral award may be set
aside by the court only if -
(a) the party making the
application furnishes proof that -
***
(iii) the party making the
application was not given proper
notice of the appointment of an
arbitrator or of the arbitral
proceedings or was otherwise unable
to present his case; "
23) Thus, it is clear that, the Arbitration and
Conciliation Act, 1996 has been enacted in order to
ensure that the tribunal remains within the limits of
its jurisdiction and to minimize the supervisory
roles of courts in the arbitral process. Further, 'audi
alteram partem' principle is a fundamental juristic
principle in Indian law, which contained in Sections
18 and 34(2)(a)(iii) of the Arbitration and
Conciliation Act, 1996, which shall be followed by
the Arbitral Tribunal scrupulously while making the
award.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
17
24) Plaintiff's specific contention is that, learned
Arbitrator has violated the principle of natural
justice by not giving equal opportunity to both the
parties and award has been passed on the revised
claim of Rs.6,72,10,456/- without giving opportunity
to Plaintiff to rebut the revised claim.
25) In the backdrop of the contention of Plaintiff,
it is necessary to have regard to the proceedings
dated 02.02.2014. Proceedings dated 02.02.2014
make it clear that final proceedings were shown to
be concluded on 02.02.2014. Further, it has been
recorded that award would be published under
Section 31 of the Arbitration and Conciliation Act,
1996 and accordingly, learned Arbitrator made the
award on 21.02.2014 and sent the same to the
parties vide notice dated 21.02.2014.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
18
26) In the award, total amount claimed by
Defendant No.1 is shown as Rs.6,72,10,456/-. Claim
Statement dated 01.07.2013 filed by Defendant
No.1 goes to show that Defendant No.1 has
claimed a total sum of Rs.4,24,23,127.88 from the
Plaintiff with respect to the following claims :
(1) Revised rate due to change
in scope of work considering the
actual lead, lift and escalation in
cost of materials and labour
within original completion date.
(2) Revised rate after original
completion date.
(3) Additional over head
charges due to over stay on the
project.
(4) Loss of Profit.
(5) Legal charges and other
expenses.
(6) Interest at 18% per annum
on Claims No.1 to 6.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
19
27) At this stage, it is relevant to take notice of
the letter dated 02.02.2014 addressed by
Defendant No.1 to learned Arbitrator requesting to
make the award for revised claim. Letter dated
02.02.2014 reads as follows :
"Adverting to the above it is to submit
that, we have submitted our claims in our
statement of claims submitted on
01.07.2013. In our claim statement we
have claimed interest on our claims upto
31.05.2013. As the Arbitral proceedings is
in progress and is expected to be
completed by the end of February 2014.
As such we have revised our claims duly
taking into account the work done for the
period from 31.05.2013 to end of January
2014 and interest for the period from
01.06.2013 till 28.02.2014, for your kind
consideration and award."
28) Above letter is appended with 'Abstract
Statement of Claims', which reads as follows :
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
20
"
ABSTRACT STATEMENT OF CLAIMS
Cl. Description of the Claim Amount
No. claimed
1 Revised cost due to change in scope 2160614.75
work, Considering actual lead, lift and
escalation in cost of materials and
labour within original completion
dt.10.07.2010.
2 Revised rate after Orignal Completion 15544246.85
Date i.e. 10.07.2010
3 Additional Over Head Charges due to 12273082.00
over stay on the Project
4 Loss of Profit 12273082.00
5 Legal Charges and other Expenses 4,00,000.00
6 Interest Charges at 18% per annum 24403430.84
on Claims No.1, 2, 3, 4, 5 & 6
7 Claim Arising out of Counter claim 556000.00
raised by the Respondent
TOTAL CLAIM AMOUNT 67210456.44
"
29) Thus, it has been clear that, award has been
passed for revised claim of Rs.6,72,10,456.44 as
sought for in the letter dated 02.02.2014 and not
for the amount claimed in claim statement dated
01.07.2013.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
21
30) Now, the question is that, whether Plaintiff
was given sufficient opportunity to rebut the
revised claim made by Defendant No.1 in its letter
dated 02.02.2014?
31) Admittedly, arbitral proceedings were finally
concluded on 02.02.2014. Letter dated 02.02.2014
for revised claim was addressed to learned
Arbitrator by Defendant No.1 on 02.02.2014. There
is no mention in the proceedings dated 02.02.2014
with respect to letter dated 02.02.2014. However,
proceedings dated 02.02.2014 makes it clear that,
learned Arbitrator calculated the arbitration fees on
the revised claim of Rs.6.72 crores and award was
made in respect of revised claim and not for the
amount claimed in claim statement. Endorsement
made on the letter dated 02.02.2014 reveals that
copy of revised claim was served to Plaintiff on
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
22
03.02.2014. It prima facie goes to show that,
revised claim was not submitted by Defendant on
02.02.2014. It remained unexplained from the
arbitral records that, without there being recording
filing of revised claim dated 02.02.2014 in the
proceedings dated 02.02.2014, how learned
Arbitrator could have calculated the arbitration fees
on the revised claim? Had Defendant No.1 filed the
revised claim made under letter dated 02.02.2014
on the date of final conclusion of the arbitration
proceedings, same should have been recorded in
the proceedings dated 02.02.2014 and opportunity
should have been given to Plaintiff to meet the
revised claim. However, from the arbitral records, it
is abundantly clear that, no opportunity was given
to Plaintiff to meet the revised claim made by
Defendant No.1, which came to be received by
Plaintiff on 03.02.2014. It is to be noted that, after
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
23
conclusion of the arbitral proceedings on
02.02.2014, learned Arbitrator passed the award on
21.02.2014 on the revised claim made in the latter
dated 02.02.2014, whereas, arbitration
proceedings were finally concluded for the claim
mentioned in claim statement dated 01.07.2013.
32) It is to be noted that, in claim statement
dated 01.07.2013, Defendant No.1 claimed a lump-
sum amount of Rs.4,24,23,127.88 in respect of six
claims as stated above. In the letter for revised
claim, 1st Defendant claimed a total sum of
Rs.6,72,10,456.44 under different heads by
separately mentioning the amount claimed under
each head. Further, in the revised claim, 1 st
Defendant claimed seven claims as against the six
claims claimed in claim statement. In pursuance of
revised claim, no amendment was sought for by
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
24
Defendant No.1 in his claim statement. No
opportunity was given to Plaintiff to submit his
objection. No proceedings were held regarding the
revised claim. No opportunity was given to Plaintiff
to produce his evidence. Based on the proceedings
held for the claim made in statement of claim
dated 01.07.2013, learned Arbitrator made the
award for revised claim as claimed in letter dated
02.02.2014. It is surprise to note that, in the
revised claim, Defendant No.1 added a sum of
Rs.2,47,87,328.60 to the original claim as claimed
in its claim statement. Learned Arbitrator, without
giving any opportunity to Plaintiff to meet the
revised claim of 1st Defendant, made the award
for revised claim as against the one claimed in
claim statement based on the proceedings held for
the claim made in claim statement.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
25
33) 1st Defendant's only submission is that,
claims have not been revised or additional claim
has been added, but claims have been updated
and modified up to the end of 31.01.2014.
34) Be it revised claim or additional claim or
claim that has been updated or modified.
Whatever name be it called, one thing it is clear
that, by revising claim vide letter dated
02.02.2014, Defendant No.1 enhanced its claim up
to Rs 6,72,10,456.44 as against the sum of
Rs.4,24,23,127.88 as claimed in claim statement
and award was made for revised claim without
there being given any opportunity to Plaintiff. It
undoubtedly establishes that award has been
passed without there being compliance with natural
justice principle as contained in Sections 18 and
34(2)(a)(iii) of the Arbitration and Conciliation Act,
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
26
1996 and in this circumstance, award made by
learned Arbitrator cannot be held to be valid.
35) Next relevant and important contention that
has been raised by Plaintiff is that, additional award
passed by learned Arbitrator after 30 days from
receipt of the original award is null and void, as
learned Arbitrator is 'functus officio' after 30 days
from the date of receiving the award by the parties.
36) In AS No.92/2014, Plaintiff has challenged the
additional award dated 19.06.2014 made by
learned Arbitrator. Additional award dated
19.06.2014 has been styled as "Correction to the
Original Arbitral Award dated 21.02.2014 (made
under Section 33(7) of the Arbitration Act).
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
27
37) Original award was passed on 21.02.2014.
Plaintiff has specifically contended that, original
award was served to it on 27.02.2014. 1 st
Defendant wrote a letter to learned Arbitrator on
23.04.2014 requesting to pass an additional award
as per Section 33 of the Arbitration and Conciliation
Act, 1996. In the letter, it has been clearly
mentioned that Defendant No.1 received the award
on 25.02.2014. In pursuance of the request for
making additional award, learned Arbitrator issued
notice to Plaintiff on 27.04.2014. Plaintiff replied
the same on 06.05.2014 having taken the specific
contention that request made for additional award
is not maintainable under Section 33 of the
Arbitration Act, 1996, as 30 days time prescribed
for making the request for additional award has
already been elapsed. In spite of raising specific
objection by Plaintiff, learned Arbitrator again
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
28
issued notice to Plaintiff on 14.05.2014 to answer
the additional claim made by Defendant No.1.
Plaintiff by letter dated 16.05.2014, reiterated its
contention taken in reply dated 06.05.2014. Again,
by letters dated 23.05.2014, 06.06.2014 and
11.06.2014, Plaintiff requested the learned
Arbitrator to consider its preliminary objection
regarding the maintainability of request made by
Defendant No.1 for making additional award.
However, in spite of these letters, learned
Arbitrator, without deciding the objection as to
maintainability of the request made for making
additional claim, made additional award on
19.06.2014 styled as "correction to the original
arbitral award dated 21.02.2014".
38) From the above background of the case, it is
necessary to have regard to Section 33 of the
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
29
Arbitration and Conciliation Act, 1996. Section 33
reads thus :
"33. Correction and interpretation of
award; additional award.- (1) Within
thirty days from the receipt of the arbitral
award, unless another period of time has
been agreed upon by the parties -
(a) a party, with notice to the other
party, may request the arbitral
tribunal to correct any computation
errors, any clerical or
typographical errors or any other
errors of a similar nature occurring
in the award;
(b) if so agreed by the parties, a
party, with notice to the other
party, may request the arbitral
tribunal to give an interpretation of
a specific point or part of the
award.
(2) If the arbitral tribunal considers the
request made under sub-section (1) to be
justified, it shall make the correction or
give the interpretation within thirty days
from the receipt of the request and the
interpretation shall form part of the
arbitral award.
(3) The arbitral tribunal may correct any
error of the type referred to in clause (a) of
sub-section (1), on its own initiative, within
thirty days from the date of th arbitral
award.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
30
(4) Unless otherwise agreed by the parties,
a party with notice to the other party, may
request, within thirty days from the receipt
of the arbitral award, the arbitral tribunal
to make an additional aribtral award as to
claims presented in the arbitral
proceedings but omitted from the arbitral
award.
(5) If the arbitral tribunal considers the
request made under sub-section (4) to be
justified, it shall make the additional
arbitral award within sixty days from the
receipt of such request.
(6) The arbitral tribunal may extend, if
necessary, the period of time within which
it shall make a correction, give an
interpretation or make an additional
arbitral award under sub-section (2) of
sub-section (5).
(7) Section 31 shall apply to a correction
or interpretation of the arbitral award or to
an additional arbitral award made under
this section. "
39) Meaningful reading of Section 33 makes it
clear that, under clause (a) of sub-section (1), a
party with notice to other party, may request the
arbitral tribunal to correct any computation errors,
clerical or typographical errors or any errors of
similar nature occurring in the award. Apart from
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
31
this, under clause (b), a request can be made for
interpretation of a specific point or part of the
award. Provided that, such request for correction or
interpretation shall be made within 30 days from
the date of the receipt of the award by the party.
40) Admittedly, Defendant No.1 has not sought
for any correction or interpretation of the original
award within thirty days from the date of receipt of
the award. Hence, applicability of
Section 33(1) to the request made by Defendant
No.1 for making additional award does not arise.
41) Coming to sub-section (4) of Section 33, it is
clear that, a party with notice to other party, may
request the arbitral tribunal to make an additional
award for the claims presented in the arbitral
proceedings but omitted from the award. Provided
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
32
that, such request shall be made within 30 days
from the date of receipt of the award. Under sub-
section (5), if the request made under sub-section
(4) is justified, it is mandatory for the learned
Arbitrator to pass additional award within 30 days
from the date of receipt of the request.
42) Thus, it has been clear that, request for
correction in the original award or for making
additional award shall be made within 30 days from
the date of receipt of the award. Defendant has
specifically mentioned in the request letter dated
23.04.2014 for making additional award that it has
received the original award on 25.02.2014. In this
circumstance, request made for making additional
award after lapse of 30 days from the date of
receipt of the original award is forbidden by Section
33 of the Arbitration and Conciliation Act, 1996.
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
33
Learned Arbitrator ought not to have considered
such request. However, in spite of specific
objection raised by Plaintiff that request has been
made in contravention of Section 33, learned
Arbitrator, without deciding the objection of
Plaintiff, made the additional award dated
19.06.2014 for Rs.1,41,19,688.50 in the form and
style of 'correction to original award' in
contravention of Section 33 of the Arbitration and
Conciliation Act, 1996.
43) In Mcdermott International Inc. v. Burn
Standard Co. Ltd., [(2006) 11 SCC 181], the
Hon'ble Supreme Court was pleased to hold that,
upon satisfaction of the conditions in Section 33(4),
the additional award made by the Arbitrator will be
held justified. Conditions under Section 33(4) that
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
34
have been laid down by the Hon'ble Supreme Court
are that :
"1. There is no contrary agreement
between the parties to the reference;
2. A party to the reference, with notice to
the other party to the reference, requests
the arbitral tribunal to make the additional
award;
3. Such request is made within thirty days
from the receipt of the arbitral award;
4. The arbitral tribunal considers the
request so made justified; and
5. Additional arbitral award is made
within sixty days from the receipt of such
request by the arbitral tribunal. The
additional award, in our opinion, is not
vitiated in law."
44) In the instant case, original award was made
on 21.02.2014. Copy of the award was received by
Defendant No.1 on 25.02.2014. Request for making
additional award was made on 23.04.2014. After
lapse of 30 days from the date of receipt of the
award, Defendant No.1 made request for making
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
35
additional award. Learned Arbitrator, without
deciding the preliminary objection raised by Plaintiff
as to maintainability of the request for making
additional award and in contravention of Section
33(4) of the Arbitration and Conciliation Act, 1996
made additional award.
45) Further, it is to be noted that, request can be
made for making additional award under sub-
section (4) of Section 33 for claims presented in the
arbitration proceedings but omitted from the
arbitral award. In the instant case, Defendant No.1
made request for reconsidering Claim No.2 and for
making additional award in respect of Claim No.2. In
the original award, Claim No.2 was considered and
same was not allowed by learned Arbitrator by
holding that there is no clarity of the bills. In fact,
Defendant No.1 made request for additional award
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
36
in respect of the disallowed claim and learned
Arbitrator made the additional award as if it were
omitted from the arbitral award by contravening
Section 33(4) of the Arbitration and Conciliation Act,
1996.
46) Thus, it is apparent that, opportunity of being
heard was denied to Plaintiff while passing the
award dated 21.02.2014 and same was passed in
contravention of principles of natural justice
enshrined in Sections 18 and 34(2)(a)(iii) of the
Arbitration and Conciliation Act, 1996. Further, it is
clear that, additional award dated 19.06.2014 has
been made in contravention of Section 33(4) of the
Arbitration and Conciliation Act, 1996. Under such
circumstances, there is no reason to uphold the
award and additional award made by learned
Arbitrator. When fact being thus, this Court
AS.44/2014;
AS.49/2014;
&
AS. 92/2014
37
restrains itself from assailing other grounds raised
by Plaintiff and if it is done so, same would
influence the merits of the claims made by
Defendant No.1. In that view, award and additional
award vitiate and need to be set aside. Accordingly,
I answer the above point in the affirmative.
47) Point No.2 : In view of the foregoing
discussion and answer to Point No.1, I pass the
following :
ORDER
(1) Suits in AS.No.44/2014; AS.No.49/2014 and AS.No.92/2014 filed by Plaintiff under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the impugned award dated 21.02.2014 and additional award dated 19.06.2014, made by sole Arbitrator/Defendant No.2; are hereby allowed.
AS.44/2014;
AS.49/2014;
& AS. 92/2014 38 (2) Award dated 21.02.2014 and additional award dated 19.06.2014 passed by sole Arbitrator/Defendant No.2; are hereby set aside.
(3) No order as to costs.
(4) Keep the original of this judgment in AS.No.44/2014 and copies in AS.No.49/2014 and AS.No.92/2014 respectively.
[Dictated to the Judgment Writer directly on computer, typed matter corrected and then pronounced by me in open court, on this the 12th day of October, 2020.] [RAMA NAIK] VI Addl.City Civil & Sessions Judge Bengaluru City AS.44/2014;
AS.49/2014;
& AS. 92/2014 39