High CourtsSingle Bench

The Superintending Engineer (Highways and Rural Works) and The Superintendent Engineer (Highways and Rural Works) vs Thiru D.G. Deivasigamani, Civil Engineering Contractors and Mr. Justice G. Ramanujam, Arbitrator (Retd. Judge of the High Court of Madras) <BR>Thiru T.G. Deivasigamani, Civil Engineering Contractors Vs The Superintending Engineer (Highways and Rural Works) and The Superintendent Engineer (Highways and Rural Works)

Madras High Court · Decided on 15 June 2007 · Citation: (2008) 1 ARBLR 380

HON’BLE JUDGES
S. Rajeswaran, J
ACTS & SECTIONS REFERRED
Arbitration and Conciliation Act, 1996 — Section 11(4), 16, 16(1), 16(2), 16(5)
RESULT
Allowed
CASE NUMBER
O.P. No. 780 of 2003 and Application No. 3131 of 2006
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242 paragraphs · 5,121 words

S. Rajeswaran, J.—Original Petition No. 780/2003 has Been filed u/s 34 of the Arbitration and Conciliation Act, 1996, hereinafter called

''the Act'', to set aside the award passed by the 2nd respondent dated 9.4.2003 in AC No. 3/2001.

2.

Application No. 3131/2006 has been filed by the 1st respondent to permit him to file additional counter statement in O.P.No. 780/2003.

3.

The Superintending Engineers of Guindy and Villupuram filed the above O.P., to set aside the award dated 9.4.2003 passed by the 2nd

respondent herein.

4.

The petitioners entered into an agreement dated 21.8.1997 with 1st respondent to execute the permanent restoration of the flood affected

Government Road, Villupuram District-Package-IV(A) Salem Ulundurpet Road K.M. 73/8-101/0(B) Salem Ulundurpet Road K.M. 101/0 to

117/6 Villupuram Division. The contract value is Rs. 4,74,67,357/- and the work has to be completed within a period of 9 months from 21.8.97,

i.e., on or before 20.5.98. However, the works were completed on 15.5.99 only. Disputes arose between the parties in relation to the said works

and they were referred to the decision of the sole arbitrator by an order dated 10.2.2001 by the then Hon''ble Chief Justice of this court. 1st

respondent herein as claimant filed a claim petition containing 9 claims including interest and cost before the sole arbitrator.

5.

The petitioners herein on the basis of Clause 53 of the agreement resisted the claim petition by contending that as the monetary value of the

claim petition exceeding Rs. 2 lakhs the same should be decided by a civil court and not by arbitrator. The petitioners also filed a writ petition in

W.P. No. 36569/2002 challenging the appointment of the arbitrator and stay was granted initially by the High Court. Subsequently the writ petition

was tagged along with W.A. No. 3518/2002 as the issue involved in both the writ petition and the Writ Appeal are one and the same. The Writ

Appeal and writ petition were posted for hearing on 14.1.2003 and stay had been extended and again on 29.1.2003 the matters were adjourned

by the Division Bench. Therefore the petitioners requested 2nd respondent/arbitrator to defer further hearing till the disposal of writ petition and

writ appeal. But they received a letter dated 10.4.2003 from 1st respondent informing that an award has been passed on 9.4.2003 itself. The

petitioners filed a petition on 14.5.2003 to set aside the ex parte award, but 2nd respondent refused to set aside the award by order dated

7.6.2003. They received the award copy on 25.8.2003 and thereafter they have filed the above petition u/s 34 of the Act, 1996.

6.

The petitioners assailed the award on the grounds that-

(1) the order passed by the arbitrator on 18.1.2002 rejecting the preliminary objections raised by them u/s 16(2) of the Act, 1996 questioning the

jurisdiction on the basis of Clause 53 of the agreement is contrary to the agreement and contrary to the orders passed by this court in a batch of

cases, where a similar clause like Clause No. 53 was interpreted to hold that claims exceeding the monetary value of more than Rs. 2 lakhs, have

to be decided by the civil court and not by the arbitrator;

(2) 2nd respondent/arbitrator ought not to have passed the award till the disposal of the writ petition and the writ appeal;

(3) 2nd respondent/arbitrator did not extend reasonable opportunities to defend the arbitral proceedings and

(4) 2nd respondent/arbitrator did not consider the matter in the right perspective while awarding a huge sum of Rs. 4,11,00,865/- with interest at

18% per annum.

7.

The 1st respondent entered appearance through his counsel and filed a counter statement, wherein it was stated that if Clauses 52 and 53 of the

agreement are read together, it would show that in respect of monetary claim less than Rs. 2 lakhs, the sole arbitrator is a Superintending Engineer,

and in respect of monetary claim exceeding Rs. 2 lakhs the agreement contemplates appointment of an arbitrator through courts. Therefore, 2nd

respondent/arbitrator has correctly decided the petition filed by the petitioners u/s 16(2) of the Act, 1996 questioning the jurisdiction of 2nd

respondent. Insofar as the writ petition is concerned it is stated by 1st respondent that as the stay granted initially was not extended after

5.12.2006, there was nothing wrong in passing the award by 2nd respondent/arbitrator. On merits, it was contended by the 1st respondent that

the above petition has been filed as if it was an appeal and therefore the same has to be dismissed.

8.

Heard the learned Special Government Pleader for the petitioners and the learned Counsel for 1st respondent. I have also perused the

documents filed and the judgments referred to by them in support of their submissions.

9.

The learned Special Government Pleader appearing for the petitioners vehemently contended that Clause 53 of the agreement is very clear and

according to which if the monetary value of the claim is less than Rs. 2 lakhs, it shall be referred for arbitration to a sole arbitrator and if the claims

exceed monetary value of more than Rs. 2 lakhs, the same shall be referred to the civil court for decision. Therefore according to the learned

Special Govt. Pleader, the order dated 18.1.2002 rejecting the preliminary objection filed by the petitioners u/s 16(2) of the Act is illegal and

contrary to the agreement. He relied on the decision of this court reported in 2006 (1) RAJ 609 (Mad) (Rajam Engineering Contractors v. State of

Tamil Nadu) decided in a batch of cases wherein the Hon''ble Chief Justice of this court after going through a similar clause like the present Clause

53 held that, if the monetary value of the claim exceeds Rs. 2 lakhs, the claim cannot be referred to arbitration. He would further urge that 2nd

respondent/arbitrator ought to have waited till the disposal of the writ petition as initially a stay of the arbitration proceedings was granted by this

court. On merits he contended that the petitioners were under the bona fide belief that the proceedings before 2nd respondent would be

suspended till the disposal of the writ petition and therefore they did not effectively participate in the arbitration proceedings. The learned Special

Govt. Pleader further referred to each claim of 1st respondent and submitted that the award granted by 2nd respondent is contrary to agreement

and not based on evidence before him.

10.

The learned Counsel for 1st respondent submitted that Clauses 52 and 53 of the agreement should be read together and not in isolation, and if

read together, it would only reveal that for claims less than Rs. 2 lakhs, the dispute is referred for arbitration to the Superintending Engineer and for

claims exceeding monetary value of more than Rs. 2 lakhs it has to be referred to the civil court for appointment of sole arbitrator. Therefore

according to the learned Counsel for 1st respondent, as the claim in the present case exceeds the amount of R. 2 lakhs, it was rightly referred by

this court for an appointment of an arbitrator and therefore 2nd respondent has correctly decided the jurisdiction issue. The learned Counsel further

urged that when there was no stay in the writ petition, the proceedings should go on before the arbitrator as the object of the Act, 1996 itself is for

a speedy remedy. On merits, the learned Counsel urged that under the guise of a petition u/s 34 of the Act, 1996 the petitioners are actually

agitating the matter as if it was an appeal.

11.

The 1st respondent has also filed an Application in A.No. 3131/2006 to permit 1st respondent to file additional counter statement in O.P. No.

780/2003. In the additional counter it was stated that 2nd respondent/arbitrator intimated about the passing of the award to 1st respondent by

letter dated 9.4.2003 and 1st respondent by letter dated 25.4.2003 intimated to the petitioners about the award passed by 2nd respondent. The

award was sent by 2nd respondent to the petitioners on 30.4.2003 and in the normal course it should have been received by the petitioners by the

2nd or 3rd May 2003, and if the starting point of limitation is 2nd or 3rd May 2003, the above petition filed on 8.9.2003 is hopelessly barred by

limitation.

12.

Since it is only a question of limitation that 1st respondent wanted to agitate, I allow Application No. 3131/2006.

13.

The learned Counsel for 1st respondent on the strength of the additional counter statement filed in A.No. 3131/2006 contended that the O.P.,

is to be rejected by this court on the ground of limitation alone.

14.

I have considered the rival submissions carefully with regard to facts and citations.

15.

First let me consider the submissions of the learned Special Govt. Pleader that 2nd respondent ought to have waited until orders are passed in

the writ petition filed by the petitioners herein challenging the appointment of 2nd respondent as arbitrator.

16.

It is not in dispute that the claim petition was filed by the 1st respondent for which a counter statement has also been filed by the petitioners

herein. It is also not in dispute that W.P.No. 36569/2002 was filed by the petitioners herein and there was a stay of the arbitration proceedings till

5.12.2002 and thereafter there was no stay. 2nd respondent/arbitrator referred to this fact in his award. As there was no stay after 5.12.2002, the

matter was taken up for enquiry by the 2nd respondent on 21.12.2002 after due notice to the petitioners. The petitioners did not attend the enquiry

on 21.12.2002 and again on 22.12.2002, 2nd respondent/arbitrator reserved the passing of the award on 22.12.2002. Thereafter, an order of this

court dated 14.1.2003 was received by 2nd respondent on 25.1.2003 stating that ""at request post on 22.1.2003. Interim order to continue in the

meantime"". Out of deference to the orders of this court dated 14.1.2003, 2nd respondent did not pass any award and a memo was filed by 1st

respondent before 2nd respondent stating that after 22.1.2003, there was no stay by the High Court and requesting the 2nd respondent to pass

award. As there was no stay after 22.1.2003 the award has been passed by the 2nd respondent on 9.4.2003.

17.

From the above facts it is very clear that the arbitration proceedings commenced and concluded only when there was no stay and the award

was also passed when the stay granted was not extended by this court. When the proceedings before the 2nd respondent were not stayed by this

court, there is nothing wrong in commencing the proceedings and passing award by 2nd respondent. The petitioners cannot expect 2nd respondent

to wait eternally until order is passed in the writ petition when the stay granted already had expired. In such circumstances, I do not accept the

contentions of learned Special Govt. Pleader in this regard and the same are rejected.

18.

Now let me consider the jurisdiction issue on which great emphasis was laid by the learned Special Govt. Pleader.

19.

The jurisdiction of the arbitral tribunal has been dealt with by Section 16 of the Act 1996 and the same is extracted below for better

appreciation:

16.

Competence of arbitral tribunal to rule on its jurisdiction: (1) The arbtiral tribunal may rule on hits own jurisdiction, including ruling on any

objections with respect to the existence or validity of the arbitration agreement, and for that purpose:

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the arbitral tribunal that the contracts is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defense; however, a

party shall not e precluded from raising such a plea merely because that he has appointed, or participated in the appointment of an arbitrator.

(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its

authority is raised during the arbitral proceedings.

(4) The arbitral tribunal may, in either of the cases referred to in Sub-section (2) or Sub-section (3), admit a later plea if it considers the delay

justified.

(5) The arbitral tribunal shall decide on a plea referred to in Sub-section (2) of Sub-section (3) and, where the arbitral tribunal takes a decision

rejecting the plea, continue with the arbitral proceedings and make an arbitral award.

(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34.

20.

From the above it is clear that the plea of lack of jurisdiction has to be raised u/s 16(2) of the Act and the arbitral tribunal shall decide the plea

u/s 16(5). If the arbitral tribunal takes a decision rejecting the plea, the tribunal can continue with the arbitral proceedings and make an arbitral

award. Any party aggrieved by such an arbitral award may make an application for setting aside the same in accordance with Section 34 of the

Act, 1996.

21.

In the present case it is not in dispute that a plea of jurisdiction has been raised by the petitioners u/s 16(2) of the Act, 1996, that too, before

filing their counter statement. 1st respondent has also filed a reply to the preliminary objections and the preliminary objections were elaborately

argued before the 2nd respondent and after hearing the arguments, the 2nd respondent passed an order on 18.1.2002 rejecting the preliminary

objections. In view of Section 16(6) of the Act, the order dated 18.1.2002 can very well be assailed on merits in the above petition filed u/s 34 of

the Act, 1996.

22.

Therefore before going into the merits of the case, let me consider whether the 2nd respondent has correctly rejected the preliminary

objections made, in the order dated 18.1.2002.

23.

u/s 16(1) of the Act the arbitral tribunal has got authority to rule on its own jurisdiction, including ruling on any objection with respect to the

existence or validity of the arbitration agreement.

24.

When a dispute has been referred to the arbitral tribunal by the parties without the intervention of the court, it poses no problem to the arbitral

tribunal to rule on its own jurisdiction u/s 16(1) of the Act. When the matter has been referred to the arbitral tribunal at the instance of the court u/s

11(4) of the Act, whether the power of the arbitral tribunal to rule on its own jurisdiction still exists or not is a question that posed difficulties. The

Hon''ble Supreme Court in the decision reported in 2007 (7) SCC 201 (Konkan Railway Corporation Ltd., v. Mehul Construction Co.) held that

the order of the Chief Justice of the High Court passed u/s 11(4) of the Act is only an administrative order and not a judicial one and therefore

notwithstanding the orders of the Chief Justice, the arbitral tribunal can still go into the question of jurisdiction u/s 16(1) of the Act, 1996. This was

confirmed by the Constitution Bench of the Hon''ble Supreme court in the judgment reported in Konkan Railway Corporation Ltd. and Another

Vs. Rani Construction Pvt. Ltd., . But the Hon''ble Supreme Court in a subsequent decision reported in S.B.P. and Co. Vs. Patel Engineering Ltd.

and Another, overruled the above decision, and held that the order of the Chief Justice passed u/s 11(4) of the Act is not an administrative order,

but it is a judicial order and once the Chief Justice gives findings with regard to jurisdiction, it is binding on the arbitral tribunal and the question of

jurisdiction cannot be gone into by the tribunal contrary to the orders of the Chief Justice. In this decision Hon''ble Supreme Court has further held

that the decision would operate prospectively and therefore the pending arbitration cases should be decided in accordance with the previous

judgment with regard to jurisdiction u/s 16 of the Act, by the arbitral tribunal itself.

25.

Admittedly, in the present case, the later judgment will not apply and therefore it cannot be said that as 2nd respondent was appointed u/s

11(4) of the Act, the question of jurisdiction could not be agitated before the 2nd respondent.

26.

The specific case of the petitioners before the 2nd respondent/arbitrator u/s 16(2) of the Act was that the 2nd respondent had no jurisdiction

to entertain the claim petition claiming a sum exceeding Rs. 2 lakhs as the arbitration Clause 53 contained in the agreement dated 21.8.1997 does

not cover a monetary claim exceeding Rs. 2 lakhs and 1st respondent''s remedy is to file a suit before a civil court.

27.

In his reply to the above preliminary objection, 1st respondent stated that the petitioners herein are estopped from raising any objection before

2nd respondent as 2nd respondent derived jurisdiction from the order of the Hon''ble Chief Justice passed in O.P.No. 824/2001. It is further

reiterated that on a proper interpretation of Clauses 52 and 53 of the agreement, it is to be said that for monetary claims less than Rs. 2 lakhs, it

should be referred to the arbitration of the Superintending Engineer and for the claims over and above Rs. 2 lakhs, it should be referred to

arbitration through civil court.

28.

The 2nd respondent by order dated 18.1.2002, held that the introduction of monetary limit of Rs. 2 lakhs is only to say that for small claims of

less than Rs. 2 lakhs there shall be an arbitration by a departmental authority, while for a higher claim there should be an arbitration through court.

2nd respondent further held that the petitioners could not raise this issue before him because, if there is no arbitration clause, the court could not

have appointed the arbitrator. Hence the 2nd respondent rejected the preliminary objection raised by the petitioners u/s 16(2) of the Act, 1996.

29.

Before proceeding further it is useful to refer to Clauses 52 and 53 of the agreement:

52.

STATEMENT OF DISPUTES

If any, dispute or difference of any kind whatsoever shall arise between the Engineer or Employer and the contractor in connection with, or arising

out of the contract of the execution of the works, whether during the progress of the works or after their completion and whether before or after

the termination, abandonment or breach of the contract, it shall, in the first place, be referred to and settled by the Engineer who shall, within a

period of thirty days after being requested by the contractor to do so, give written notice of his decision to the contractor. Upon receipt of the

written notice of decision of the engineer the contractor shall promptly proceed without delay to comply with such notices of decision.

If the Engineer fails to give notice of his decision in writing within a period of thirty days after being requested, or if the contractor is dissatisfied

with the notice of decision or the Engineer, the contractor may within thirty days after receiving the notice of decision appeal to the employer who

shall afford an opportunity to the contractor to be heard and to offer evidence in support of his appeal. Subject to arbitration, as hereinafter

provided, such decision of the Employer in respect of every mater so referred shall be final and binding upon the contractor and shall forthwith be

given effect to by the contractor, who shall proceed with the execution of the works with all due diligence whether he requires arbitration, as

hereinafter provided, or not. If the employer has given written notice of his decision to the contractor and no claim to arbitration has been

communicated to him by the contractor within a period of thirty days from receipt of such notice, the said decision, shall remain final and binding

upon the contractor. If the employer shall fail to give notice of his decision, as aforesaid, within a period of thirty days after being requested as

aforesaid, or if the contractor dissatisfied with any such decision, then and in any such case the contractor within thirty days after the expiration of

the first named period of thirty days, as the case may be, required that the matter or matters in dispute be referred to arbitration as hereinafter

provided.

53.

RESOLUTION OF DISPUTES

Settlement of claims by Arbitration

All disputes or differences in respect of which the decision is not final and conclusive, if the claims monetary value is less than Rs. 2.00 lakh

(Rupees Two Lakh) shall be referred for arbitration to a sole arbitrator. The Superintending Engineer (H&RW), Coimbatore or his successor in his

office.

The arbitration shall be conducted in accordance with the provisions of Indian Arbitration & Conciliation Act 1996 or any statutory modifications

thereof. The decision of the sole arbitrator shall be final and binds on the parties thereto. The arbitrator shall determine the amount of arbitration to

be awarded to either parties.

Performance under the contract shall continue during arbitration proceedings and payments due to the contractor by the owner shall not be

withheld, unless they are the subject matter of the arbitration proceedings,

All awards shall be in writing and such awards shall state reasons for the amounts awarded.

Neither party is entitled to bring a claim to arbitration if the Arbitrator has not been appointed before the expiration of thirty days after defect

liquidity period.

If the claims exceed monetary value of more than Rs. 2.00 lakh (Rupees Two lakh) the same shall be referred to the Civil Court having jurisdiction

for decision.

30.

A conjoint reading of the above two clauses would make it very clear that if the claim is for a sum which is less than Rs. 2 lakhs, the same shall

be referred for arbitration to a named sole arbitrator. (emphasis supplied) and the decision of the sole arbitrator is final and binding on the parties.

(emphasis supplied).

31.

If the claims exceed monetary value of more than Rs. 2 lakhs the same shall be referred to the civil court for decision,

(emphasis supplied).

32.

Therefore the only inevitable conclusion that could be arrived at on the basis of the above clauses is that (1) disputes of claims of monetary

value which is less than Rs. 2 lakhs alone are arbitrable and (2) disputes of monetary claim which is more than Rs. 2 lakhs are not arbitrable and

ought to be decided by the civil court having jurisdiction. Therefore I am satisfied that the preliminary objections raised by the petitioners are

sustainable as the 1st respondent claimed a sum of Rs. 5,56,08,833/- under seven heads, and therefore the 1st respondent should have

approached the civil court only for its decision. In such circumstances, the entire award is to be set aside on the ground that the 2nd

respondent/arbitrator has no jurisdiction to decide the dispute as the same is not arbitrable in terms of its monetary value under Clause 53 of the

agreement. I am supported by the decision of the Hon''ble Chief Justice in this regard in the case reported in 2006 (1) RAJ 609 (Mad) (cited

supra) wherein the Hon''ble Chief Justice after going through a similar clause contained in the agreement entered into with the very same Highways

department, held that a monetary claim of more than Rs. 2 lakhs is not arbitrable and such claim ought to be settled by the civil courts. The relevant

portion reads as under:

12.

In the present case, the petitioners seek to rely upon Clauses (i) to (iii) of the Governmental order wherein it is stated that the existing system of

referring the dispute between the contractor and the Department to the Arbitrator would continue and if the value is less than Rs. 2 lakhs it would

be referred to the departmental arbitration and if the value is more than Rs. 2 lakhs the matter should be referred to Court, which according to the

petitioners mean reference to Court for arbitration. If this interpretation is accepted it will mean that the Court should also function as an arbitrator.

This interpretation is clearly impermissible and disapproved by the Supreme court. The only interpretation which can be applied to this clause is

that the parties are free to approach Court having competent jurisdiction for adjudicating all their claims of above Rs. 2 lakhs.

13.

The reliance by the petitioners on the doctrine of issue estoppel is totally misconceived. This doctrine is explained in Thoday v. Thoday 1964

(1) All ER 341 in the following words:

Estoppel per rem judicatam is a generic term"" which in modem law includes two species. The first species, ''cause of action estoppel'', is that which

prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or

existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action

was determined to exist, i.e., judgment was given on it, it is said to be merged in the judgment, or for those who prefer Latin, transit in rem

judicatam. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. This is

simply an application of the rule of public policy expressed in the latin maxim, ''nemo debet bis vexari pro una at eadem causa''. In this application

of the maxim, causa bears its literal Latin meaning.

The second species, ''issue estoppel'', is an extension of the same rule of public policy. There are many causes of action which can only be

established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties

as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an

identical condition is a requirement common to two or more different causes of action. If in litigation on one such cause of action any of such

separate issues whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either on evidence or on

admission by a party to the litigation, neither party can, in subsequent litigation between them on any cause, of action which depends on the

fulfilment of the identical condition, assert that the condition was fulfilled if the Court has in the first litigation determined that it was not, or deny that

it was fulfilled if the Court in the first litigation determined that it was.

14.

Estoppel would arise, where in two different proceedings identical issues are raised, in which event, the latter proceedings between the same

party shall be dealt with similarly as that was done in the previous proceedings. Admittedly, the petitioners were not parties to the previous

proceedings, and therefore, the doctrine of issue estoppel has no application.

15.

As regards the principle of stare decisis the Supreme Court in Molar Mal (Dead) Through L.Rs. Vs. M/s. Kay Iron Works(P) Ltd., observed

that the Court will be failing in its duty, if the court does not declare an erroneous interpretation solely on the ground that it had stood the test of

time. Moreover, this is not a case where a decision has been followed for a long time and in fact, there are conflicting views expressed by the

learned single Judges of this Court. When the law is clearly laid down by the Supreme court it will be improper to follow the earlier decision merely

because it had remained for a considerable length of time, and the same cannot be permitted to continue so, when it is erroneous and brought to

the notice of the court.

33.

I am in respectful agreement with the above decision of the Hon''ble Chief Justice which is also binding on me.

34.

The other reason given by the 2nd respondent/arbitrator that as he was appointed by this court in O.P.No. 824/2001 filed u/s 11(4) of the

Act, the petitioners herein could not agitate the same before him is also unsustainable. The law of the land before S.B.P. Company case (cited

supra) is that an order passed u/s 11(4) of the Act is only an administrative order and notwithstanding such an order, the parties could raise the

question of jurisdiction before the tribunal and the tribunal could very well rule on its own jurisdiction on such question was raised before it.

Therefore the reasons adduced by 2nd respondent in rejecting the preliminary objection raised by the petitioners herein would not stand the

scrutiny of law and the order of the 2nd respondent/arbitrator dated 18.1.2002 is set aside and consequently the award dated 9.4.2003 is also set

aside for want of jurisdiction.

35.

The learned Counsel for 1st respondent relying on the additional counter filed by him in Application No. 3131/2006 submitted that the O.P., is

to be dismissed on the ground of limitation.

36.

I am unable to accept this contention of the learned Counsel for 1st respondent. It is specifically stated by the petitioners that they received the

award on 25.8.2003 and the O.P., was filed on 8.9.2003 and therefore the same is well within time. In support of their submission the petitioners

produced the original letter dated 19.8.2003 containing the seal of the office of the Superintending Engineer, Villupuram to show that it was

received on 25.8.2003 only. A perusal of the letter dated 19.8.2003 would show that the 2nd respondent enclosed a copy of the award dated

9.4.2003 as desired in the letter dated 14.7.2003 sent by the Special Govt. Pleader (CS). The 2nd respondent also explained the delay in sending

the copy of the award by stating that he was abroad for 2 months and returned only on 18.8.2003. Therefore I am not able to countenance the

arguments of the learned Counsel for 1st respondent that the O.P., is barred by limitation. Further the learned Counsel for 1st respondent is not

able to substantiate as to how the O.P., is barred by limitation when 2nd respondent himself sent a copy of the award on 19.8.2003, which was

received by the 2nd petitioner on 25.8.2003 and the O.P., was filed on 8.9.2003. Therefore I am of the considered view that the O.P., has been

filed in time as per Section 34(3) of the Act, 1996.

37.

In the result, the O.P., is allowed and the award dated 9.4.2003 passed by 2nd respondent/arbitrator in AC No. 3/2001 is set aside. No

costs.