Madras High Court
M/S.Hll Biotech Limited vs M/S.Eta Engineering Pvt.Ltd on 28 February, 2022
Author: M.Sundar
Bench: M.Sundar
Arb O.P.(Com. Div.)No.87 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 28.02.2022
Coram
THE HONOURABLE MR. JUSTICE M.SUNDAR
Arb O.P.(Com. Div.)No.87 of 2022
M/s.HLL Biotech Limited,
(Government of India Enterprise),
Rep. by its Chief Executive Officer,
having its registered office at
HLL Bhavan, Poojappura Post,
Thiruvananthapuram-695 012, Kerala.
Corporate Office at:
Integrated Vaccine Complex,
S.No.192 & 195, Melaripakkam (Post),
Thirukalukundram, Chengalpattu-603 003. ... Petitioner
vs.
M/s.ETA Engineering Pvt.Ltd,
Rep.by its Authorised Signatory,
Mr.Syed Murthuza Bukhari,
No.20/21, Razak Garden Main Road,
First Floor, Arumbakkam,
Chennai 600 106. ... Respondent
Prayer:
Arbitration Original Petition filed under Section 34(1), 34(2)(a)(iv)
and 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996, to set aside the
Award dated 18.09.2021, passed by the learned Arbitrator in the arbitral
proceedings between the Petitioner and Respondent.
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Arb O.P.(Com. Div.)No.87 of 2022
For petitioner : Ms.V.Kamala Kumar
ORDER
Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 15.12.2021.
2. A perusal of the petition in the captioned Arb OP brings to light that the captioned Arb OP has been presented in this Court under Sections 34(1), 34(2)(a)(iv) and 34(2)(b)(ii) of 'The Arbitration and Conciliation Act, 1996 (Act 26 of 1996)' [hereinafter 'A and C Act' for the sake of brevity, convenience and clarity]. There will be some discussions infra elsewhere in this order about the provisions that have been invoked.
3. Captioned Arb OP has been presented assailing an 'arbitral award dated 18.09.2021' [hereinafter 'impugned award' for the sake of convenience and clarity] made by 'Arbitral Tribunal' ['AT'] constituted by a sole Arbitrator. Sole respondent before AT is lone petitioner before this Court and claimant before AT has been arrayed as lone respondent in captioned Arb OP. For the 2/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 sake of convenience and clarity, petitioner in the captioned Arb OP shall be referred to as 'HLL' and respondent in captioned Arb OP shall be referred to as 'ETA'. HLL and ETA (post bid, offer and negotiations) had one purchase order and one service order (both dated 29.09.2015) as between them for values of Rs.3,69,29,065/- (a little over Rs.3.69 Crores) and Rs.54,70,302/- (a little over Rs.54.70 Lakhs) totalling Rs.4,23,99,367/- (a little over Rs.4.23 Crores). This 'purchase order and service order both dated 29.09.2015 together constitute a contract' [hereinafter 'said contract' for the sake of convenience and clarity] between HLL and ETA inter-alia for 'design, installation, fabrication, erection, testing and commissioning qua certain works at a place which goes by the name Integrated Vaccine Complex' [hereinafter 'said work' for the sake of convenience and clarity]. It is not necessary to dilate much on the nature of said work in this order as the challenge to impugned award is predicated on the terms of said contract and interpretation of the same in the impugned award by AT. This takes us to three provisions (alluded to supra elsewhere in this order) under which captioned Arb OP has been presented in this Court. First provision is Section 34(1) of A and C Act. This is generic as this merely says that one can take recourse to a Court against an arbitral award only by making an application 3/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 for setting aside the award either under sub-section (2) or sub-section (3) of Section 34 of A and C Act. Second provision is Section 34(2)(a)(iv) of A and C Act. This talks about the arbitral award dealing with a dispute not contemplated by or not falling within the terms of the submission to arbitration or containing decision on matters beyond the scope of the submission to arbitration. There is a proviso to this Section 34(2)(a)(iv) of A and C Act but it is not necessary to go into that owing to the nature of submissions that have been made. Third provision is Section 34(2)(b)(ii) of A and C Act. This provision turns on attacking an arbitral award on the ground that it is conflict with public policy of India. To be noted, there are two explanations to this Section 34(2)(b)(ii) of A and C Act which are very critical. There will be a reference to the same infra elsewhere in this order. Before proceeding further, it is made clear that the captioned Arb OP was taken up in the Admission Board in accordance with 'The Madras High Court (Arbitration) Rules, 2020' [hereinafter 'MHC Arbitration Rules' for the sake of convenience and clarity] and Rule 8 of MHC Arbitration Rules deals with procedure in relation to petitions under Section 34 of A and C Act. It (obviously) also deals with procedure qua petitions under Section 34 of A and C Act in the Admission Board.
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4. Though the captioned Arb OP is predicated on the aforesaid three provisions, arguments advanced in the Admission Board (notwithstanding very many averments and very many grounds in the petition and case file) bring to light that it turns heavily on Section 28(3) of A and C Act rather than the aforementioned three provisions. To be noted, Section 28(3) of A and C Act deals with assailing an arbitral award on the ground that it has been made without taking into account the terms of the contract. It is also to be noted that Section 28(3) also talks about assailing an arbitral award on the ground that it has been made without taking into account the trade usages applicable to the transaction but that is not relevant for the case on hand. It will suffice to examine the arguments in the Admission Board on whether the impugned award has been made without taking into account the terms of said contract.
5. Primary and sheet-anchor ground of attack turns on said contract and clause 2 thereat. Said contract is made up of a purchase order and work order which have been marked as Ex.C1 and Ex.C2 respectively. The definition of the expression 'Item of Work' in said contract is the bone of contention. Learned counsel submits that the expression 'Item of Work' read 5/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 in the context of agreed milestone payments has been wrongly interpreted in the impugned award by excluding certain components such as supply, packing and forwarding charges and transportation etc.,
6. Before proceeding further to examine this sheet-anchor submission, this Court deems it appropriate to set out a bird's eye view of the impugned award and also legal perimeter of Section 34 of A and C Act. The impugned award has been made after full contest, more particularly after oral and documentary evidence was let in by both sides. ETA as claimant had its Commercial Head examined as C.W.1 and as many as 125 exhibits namely, Ex.C1 to Ex.C125 were marked on the side of ETA. On the side of HLL as respondent before AT, the Chief Executive Officer of HLL was examined as R.W.1 and as many as 34 exhibits namely, Ex.R1 to Ex.R34 have been marked on the side of HLL. There has also been a counter claim before AT by HLL and this counter claim inter alia pertains to escalation charges and de-scoping of said contract. On the rival pleadings, AT had framed 10 issues in all and this is captured in paragraph No.29 of the impugned award. Of the 10 issues, last three issues (issue Nos.8, 9 and 10) which turn on interest, costs and typical residuary can be put in one basket. If these three issues are 6/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 categorised as usual or residuary issues in one bouquet, there are seven issues which actually turn on merits of the matter. For convenience, this Court deems it appropriate to extract and reproduce entire paragraph No.29 of the impugned award. To be noted, paragraph No.29 of the impugned award finds its slot under main paragraph numbered as 'VI' and captioned 'ISSUES FRAMED' which read as follows:
'VI. Issues Framed
29. Based on the pleadings and the draft issues submitted by the Claimant and the Respondent, the issues are framed as follows:
1. Whether the issuance of C-Forms by the respondent after commencement of arbitration proceedings is detrimental to the claiment and whether the delay in procuring the same from the State Tax Department is attributable to the respondent?
2. Whether the delay in completion of the work by the claimant and the reason for the subsequent de-scoping of the work was attributable to the claimant or the respondent?
3. (i) Whether the respondent has paid the claimant as per the payment schedule?
(ii) Whether the claimant has raised 12 RA bills pertaining to BOQ contract and 6 RA bills pertaining to service contract and whether the respondent has made the payments for all such RA bills?
(iii) Whether the mobilisation advance of Rs.36,92,907/- paid by the respondent can be adjusted as against the RA bills submitted by the claimant?
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(iv) Whether the respondent is entitled to the counter claim of excessive advance amount of Rs.11,06,883/-?
4. (i) Whether the respondent has notified the claimant on quantification of de-scoping of work and whether such information would be relevant to the facts of the case?
(ii) Whether the counter claim on this issue is barred by limitation?
5. (i) Whether the encashment of bank guarantee for a value of Rs.21,19,968/- on 20.12.2017 has been done as per contractual terms?
(ii) whether the invocation of bank guarantee stalls the counter claim by the respondent for refund of excessive advance amount?
6. Whether the respondent is entitled to the counter claim of escalation charges of Rs.23,20,853/- consequent to de-scoping of work and whether the same is barred by limitation? (Note: the amount of Rs.23,20,853/- may be read as Rs.17,11,927/- due to the restriction of this counter claim vide memo dated 13.08.2021)
7. (i) Whether the respondent is entitled to liquidated damages of Rs.21,19,968/- as per Clause II(c) of the Purchase Order?
(ii) Whether the quantification of liquidated damages is in accordance with the contractual terms?
(iii) Whether counter claim on this aspect of liquidated damages is barred by limitation?
8. Whether both parties are entitled to interests as respectively prayed for?
9. Whether both parties are entitled to costs as respectively prayed for?
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10. To what other reliefs the parties are entitled to?'
7. Issue No.1 was taken up first by AT and the same was answered inter alia by saying that HLL is directed to make sincere efforts with their assessment circle to procure C-Forms and submit to the claimant at the earliest. Therefore, that is outside the legal drill on hand. Thereafter, issue No.3 which has four sub-issues was taken up and sub-issues (i) and (ii) were partly allowed. The manner in which 4 sub-issues were answered by AT are as follows:
'i) The counter claim towards refund of excess mobilisation advance is PARTLY ALLOWED and restricted to Rs.10,24,075/-.
ii. a) Claim No.2 with regard to the unbilled excess supply of materials is PARTLY ALLOWED to the extent of Rs.50,23,062/-
ii. b) The amount of Rs.10,24,075/- shall be adjusted against the Rs.50,23,062/- payable to the claimant by the respondent. On adjustment of the refund of the excess mobilisation advance of Rs.10,24,075/-, which is the eligible counter claim No.1 of the respondent, the balance amount payable towards claim No.2 is Rs.39,98,967/- as shown in TABLE-B.
iii) The respondent herein is directed to make the payment of Rs.39,98,967/- through any viable modes of transfer within a period of four weeks from the date of receipt of the award.' 9/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022
8. Thereafter, issue Nos.2 & 7 were taken up together by AT and the claim for liquidated damages was dismissed based on Kailash Nath principle being law laid down by Hon'ble Supreme Court in M/s.Kailash Nath Associates vs. Delhi Development Authority and Anr., reported in (2015) 4 SCC 136 holding that pre-estimate of damage or loss can be awarded only when damage or loss is impossible to prove and not in a case of the present kind where damages can be easily quantified qua impugned award and the dispositive reasoning appears to be that this is a BOQ contract and HLL has failed to prove actual damages or losses suffered. In this regard, further examination on this aspect of the matter would tantamount to going into the arena of review of the matter on merits. This is owing to the factual matrix of this case. It will suffice to say that there is nothing to demonstrate before this Court that it is an implausible view. Therefore, that leaves us with the lone argument turning on definition of the expression 'Item of work' in said contract. To be noted, though it was argued that there is definition of this expression, this Court is of the considered view that there is only description of this expression in said contract as the excerpted parts of the same make it clear that they are elaborate nay verbose explanations rather than a precise definition with specificity.
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9. Before examining the sheet anchor contention, this Court reminds itself about the legal perimeter of Section 34 of A and C Act (as already alluded to supra). To be noted, this is also for better appreciation of this order.
10. This Court has repeatedly held that Section 34 is not an appeal. It is not akin to a legal drill under Section 96 of the 'Code of Civil Procedure, 1908 (Central Act V of 1908)' [hereinafter 'CPC' for the sake of brevity]. It is not a revision. It is not even a full-fledged legal review. It has been held by this Court repeatedly that it is a mere challenge to an award within the pigeon holes available in a challenge to an award and the pigeon hole one has to test in the case on hand is one limb of Section 28(3) of A and C Act which has already been alluded to supra. Be that as it may, as regards the legal perimeter of Section 34, it is a delicate balance between the sanctity of finality of arbitral awards under Section 35 of A and C Act read with minimum judicial intervention ingrained in Section 5 of A and C Act on one side and the due process of law principle of judicial review on the other side. In the case on hand, what is to be tested is whether the principle challenge fits into any one of pigeon holes of challenge available. If the answer is in 11/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 the affirmative, there will be judicial intervention and the award will be dislodged. If it is in the negative, there will be no intervention qua impugned award. In this regard, this Court deems it appropriate to extract Sections 5, 35 of A and C Act and reproduce the same. Section 5 of A and C Act 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.' Section 35 of A and C Act reads as follows :
'35. Finality of arbitral awards:- Subject to this part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.'
11. Before plunging into the discussion qua Section 28(3) of A and C Act (one limb of Section 28(3) of A and C Act) as there is a mention about Section 34(2)(b)(ii) of A and C Act, it is necessary to remind one self that the term 'Public Policy' was first explained in Renusagar case [Renusagar Power Co., Ltd., Vs. General Electric Co., reported in 1994 Supp (1) SCC 12/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 644] and reiterated in Saw Pipes case [Oil & Natural Gas Corporation Ltd., Vs. Saw Pipes Ltd., reported in (2003) 5 SCC 705]. Relevant paragraph in Saw Pipes case law (which captures Renusagar principle) is paragraph No.31 and the same is as follows:
'31. Therefore, in our view, the phrase “public policy of India” used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term “public policy” in Renusagar case [1994 Supp (1) SCC 644] it is required to be held that the award could be set aside if it is patently illegal. The result would be — award could be set aside if it is contrary to:
(a) fundamental policy of Indian law; or
(b) the interest of India; or
(c) justice or morality, or
(d) in addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public 13/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.'
12. Thereafter, the expression 'public policy' was statutorily explained on and from 23.10.2015 vide Explanation (1) to Section 34(2)(b)(ii) of A and C Act. In this regard, it is deemed appropriate to extract Explanations (1) and (2) to Section 34(2)(b)(ii) of A and C Act which read as follows:
'34. Application for setting aside arbitral award.
1. ....
2. .... An arbitral award may be set aside by the Court only if-
(a)....
(i) ...........
(ii) ..........
(iii) .........
(iv)..........
(v) ..........
(b) the Court finds that -
(i)...........
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if -
(i)..........
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(ii) .......
(iii) .......
Explanation 2- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.'
13. To be noted, Western Geco case [ONGC Ltd. v. Western Geco International Ltd., reported in (2014) 9 SCC 263], Associate Builders case [Associate Builders Vs. Delhi Development Authority reported in (2015) 3 SCC 49] and Ssangyong principle [Ssangyong Engineering and Construction Company Limited Vs. National Highways Authority of India reported in (2019) 15 SCC 131] are the long line of authorities. In paragraph Nos.28 and 29 of Associate Builders case, paragraph Nos.35 and 38 to 40 of Western Geco case were extracted and reiterated. Therefore, paragraph Nos.28 and 29 of Associate Builders case are extracted hereunder and the same read as follows:
'28. In a recent judgment, ONGC Ltd. v. Western Geco International Ltd. [(2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] , 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) 15/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 “35. What then would constitute the ‘fundamental policy of Indian law’ is the question. The decision in ONGC [(2003) 5 SCC 705 : AIR 2003 SC 2629] does not elaborate that aspect. Even so, the expression must, in our opinion, include all such fundamental principles as providing a basis for administration of justice and enforcement of law in this country. Without meaning to exhaustively enumerate the purport of the expression ‘fundamental policy of Indian law’, we may refer to three distinct and fundamental juristic principles that must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a court or other authority that affects the rights of a citizen or leads to any civil consequences, the court or authority concerned is bound to adopt what is in legal parlance called a ‘judicial approach’ in the matter. The duty to adopt a judicial approach arises from the very nature of the power exercised by the court or the authority does not have to be separately or additionally enjoined upon the fora concerned. What must be remembered is that the importance of a judicial approach in judicial and quasi-judicial determination lies in the fact that so long as the court, tribunal or the authority exercising powers that affect the rights or obligations of the parties before them shows fidelity to judicial approach, they cannot act in an arbitrary, capricious or whimsical manner. Judicial approach ensures that the authority acts bona fide and deals with the subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. Judicial approach in 16/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 that sense acts as a check against flaws and faults that can render the decision of a court, tribunal or authority vulnerable to challenge.
***
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.
39. No less important is the principle now recognised as a salutary juristic fundamental in administrative law that a decision which is perverse or so irrational that no reasonable person would have arrived at the same will not be sustained in a court of law. Perversity or irrationality of decisions is tested on the touchstone of Wednesbury [Associated Provincial Picture Houses Ltd. v. 17/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] principle of reasonableness. Decisions that fall short of the standards of reasonableness are open to challenge in a court of law often in writ jurisdiction of the superior courts but no less in statutory processes wherever the same are available.
40. It is neither necessary nor proper for us to attempt an exhaustive enumeration of what would constitute the fundamental policy of Indian law nor is it possible to place the expression in the straitjacket of a definition. What is important in the context of the case at hand is that if on facts proved before them the arbitrators fail to draw an inference which ought to have been drawn or if they have drawn an inference which is on the face of it, untenable resulting in miscarriage of justice, the adjudication even when made by an Arbitral Tribunal that enjoys considerable latitude and play at the joints in making awards will be open to challenge and may be cast away or modified depending upon whether the offending part is or is not severable from the rest.” (emphasis in original)
29.It is clear that the juristic principle of a “judicial approach” demands that a decision be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective.' 18/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022
14. Most relevant paragraphs in Ssangyong case law {rendered post 'public policy' being statutorily explained} in this regard (public policy) are Paragraphs 34 to 36 which read as follows:
'34. What is clear, therefore, is that the expression “public policy of India”, whether contained in Section 34 or in Section 48, would now mean the “fundamental policy of Indian law” as explained in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] i.e. the fundamental policy of Indian law would be relegated to “Renusagar” understanding of this expression. This would necessarily mean that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] expansion has been done away with. In short, Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 :
(2014) 5 SCC (Civ) 12] , as explained in paras 28 and 29 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as contained in Sections 18 and 34(2)(a)(iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in para 30 of Associate Builders [Associate Builders v.
DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] .
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35. It is important to notice that the ground for interference insofar as it concerns “interest of India” has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. This again would be in line with paras 36 to 39 ofAssociate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
36.Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paras 18 and 27 of Associate Builders[Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , or secondly, that such award is against basic notions of justice or morality as understood in paras 36 to 39 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] . Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] , as understood in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , and paras 28 and 29 in particular, is now done away with.'
15. As far as Section 34(2)(a)(iv) of A and C Act is concerned, it would be appropriate to test on Section 28(3) of A and C Act, as it is nobody's case 20/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 that the impugned award has dealt with disputes not contemplated or not falling within the terms of the submission. Regarding public policy, from the submissions it is clear that 'absent' review on the merits of the dispute, there is no ground and therefore, it is a non starter. On the expression 'Item of Work' which is described/explained in said contract, the narrowed down bone of contention is, while the impugned award places reliance on sub- clause (7) of Clause 2.3.9.2, the protagonist of captioned Arb OP places reliance on sub-clause (2) of Clause 2.3.9.2. To bring out the point with clarity, it would be appropriate to extract and reproduce paragraph No.69 of the impugned award and paragraph No.6 under the heading 'GROUNDS' in the captioned Arb OP. Paragraph No.69 of the impugned award reads as follows:
'69. Further Clause 2.3.9.2 titled as “preamble” to schedule of quantities is referred herewith. Sub clause 7 of this Clause states that “supply of materials shall mean supply of materials at site. The rate for supply shall include all taxes, octroi and insurance (Except supply & erection), packing and forwarding charges, transportation, unloading at site.” Thus, the term 'supply of materials' which is found on the face of the tax invoice could only mean supply of materials per se and nothing more. Clause 7.6 at page 321 of the claimant's first typed set 21/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 of papers states that each item of plant and materials when delivered to site becomes the property of the employer.'
16. Paragraph No.6 under the caption 'GROUNDS' (paragraph No.IV of petition) reads as follows:
'6.The learned Arbitrator has lost sight of the definition of 'Item of Work' as set out in sub-clause-2 of Clause 2.3.9.2 of the Tender document (Exhibit C-2), which precisely adumbrates that the rate for each item of work, includes 'Commissioning and installation'. Sub- clause-2 is reproduced hereunder for better appreciation;
“2. The rate of each item of work included in the bill of quantities shall unless expressly stated otherwise include costs of :-
a) All materials, fixing, materials, accessories, hardware, operations, tools, equipment, consumable, civil works wherever involved and incidentals required in preparations for in the full and entire execution and completion of the work, called for item and as per specification and drawings completely.
b) Wastage on materials and labour.
c) All taxes, duties, octroi, including works contract tax, sales tax, insurance (except supply & erection) packing and forwarding charges, loading, transportation, unloading, handling, hoisting to all levels. Setting and fixing in position, disposal of debris and all other labour necessary in accordance with contract documents, good practice and recognized principles.
d) Liabilities, obligations and risks arising out of conditions of 22/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 contract.
e) Liaison service charges.” '
17. Though said contract has not been placed before this Court as relevant, sub-clauses which constitute the bone of contention are available as excerpted portions of said contract a careful perusal of the above makes it clear that the view taken by AT is not an implausible view. Only if it is an implausible view, this Court would judicially intervene in a Section 34 of A and C Act legal drill.
18. In the light of the discussion and narrative thus far which capture the essential facts, legal position and also set out dispositive reasoning of this Court, it follows as a sequitur that the captioned Arb OP is one where a case has not been made out for Admission or for issue of notice.
19. Sequitur is captioned Arb OP is dismissed. There shall be no order as to costs.
28.02.2022 Speaking/Non-speaking order Index : Yes / No Internet : Yes / No mk/nsa 23/24 https://www.mhc.tn.gov.in/judis Arb O.P.(Com. Div.)No.87 of 2022 M.SUNDAR. J mk/nsa Arb O.P.(Com. Div.)No.87 of 2022 28.02.2022 24/24 https://www.mhc.tn.gov.in/judis