Cormandal Fertilizers Limited v. 1. East Godavari Coast Shipping Agency

Counsel for the Appellant: Mr. R.N. HEMENDRANATH REDDY, (Senior Counsel)REPRESENTING FOR Ms. M. SIVA JYOTHI Counsel for the Respondent No.1 : Mr. SHIV ROHAN SINGI- REPRESENTING FOR SRI S. RAVI, SENIOR COUNSEL Counsel for the Respondent No.2: (ARBITRATOR) CIVIL REVISION PETITIO N NO: 3630 OF 2005 Petitron filed under Arlicle 227 of the constitution of lrrdia aggrieved by the order dated 28.04.2005 passed in o.P.No.7 of 2001 on the file of the court of the lll Senior Civil Judge, City Civil Court, Secunderabad. Between: M/s. Coromandel Fertilizers, (A merged entity of M/s. coromarrdel fertilizers and M/s. Godavari Fertilizers and chemicals Ltd.,) Having its Regislered office At 1-2-10 S.P.Road., Secunderabad 5OOO03, rep. by its General Mztnager (Legal) Mr P Varadarajan (C.T was Amended as per vide C.O. D1.24.04.20O8 in CMAMF' No 2245 of 2008 in CRP No.3630 of 2005) ...PETITIONER AND

1. East Godavari Coast Shipping Agency, Having its officer, at 41-8-17 ' Commercial Road, Kakinada, East Godavari District' Arrdhra Pradesh' 2. Koka Govinda Rao, District and Sessions Judge (Retd), R/o. 6-3-354-8/2C, Hindi Nagar, Panjagutta, Hyderabad-500034 ,..RESPONDENTS CRPMP. NO: 4900 OF 2005 Petitron under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased stay all further proceedings pursuant to the order passed by the lll Senior Civil Judge, City Civil Court Secunderabad in O.P No. 7 of 2001 dated 2B-0'1-2005. Counsel for the Appellant: Mr. SHIV ROHAN SINGH REPRESENTING FOR SRI S. RAVI, SENIOR COUNSEL Counsel for the Respondent No.1: Mr. R.N. HEMENDRANATH REDDY, REP. FOR Ms. M. SIVA JYOTHI Counsel for the Respondent No.2: ARBITRATOR The Court delivered the following: COMMON JUDGMENT THE HONOURABLE SRI JUSTICE P.SAIVI KOSHY THE HONOURABLE SRI JUSTICE N.TUT(ARAMJT AND Civil Miscellaneous Appeal No.64O of 2OO5: Civil Miscellaneous Appeal No.524 oti 2O06 Civil Revision Petition No.363O of COMMON JUDGMENT: (per the |{on'blc Sri Justice P.SAM IiOSIrY) Since the issue involved in the instant appeals i:; one and the same and the appellant and respondents therein are also sarne, we proceed to decide the instant appeals by way of this common judl3ment.

2. Civil Miscellaneous Appeal No.640 of 2005 is fr1:d by the appellant herein, viz., M/s. Coromandal Fertilisers Limited, (brmerly known as M/s.Godavari Fertilizers & Chemicals Limited) unde.- Section 39 of the Arbitration and Conciliation Act. 1940 assailing the :ommon Judgment and Decree dated 28.01.2005 in O.P.No.4 of 2OO1 passed by the III Senior Civil Judge, City Civil Court, Secunderabad, rejecting the said O.P., and conhrming the impugned Award that had .:een passed by the learned Arbitrator against the said appellant; and livil Miscellaneous Appeal No.524 of 2006 is frled by the appellant, viz., M/s.F:ast Godavari \ ; .1 Coast Shipping Agency, under Section 39 of the Arbitration and conciliation Act, 1940 assailing the common Judgment aI1d Decree dated

28.ol.2005ino.P.No.Tof2OOlpassedbytheIIISeniorCivilJudge,City civil court, Secunderabad, in whose favour the Award had been passed by the learned Arbitrator, and cha-llenging that portion of the order insofar as it relates to limiting the interest to 60/o and rejecting to grant 1B7o interest (for short, the 'impugned common order')'

3. The appeliant in C.M.A.No.64O of 2OO5, i'e', M/s' Coromandal Fertilisers Limited, had also Iiled civil Revision Petition No.3630 0f 2005 challenging the Award dated 12.03.200 1 passed by the 2"a respondent / sole arbitrator on merits, and which is also being taken up along with the appeals to be decided by this Court. tleard Mr. Shiv Rohan Singh, learned counsei representing Mr' 4. S. Ravi, learned Senior Counsel, appearing for the appellant in C.M.A.No.64oof20o5;fortherespondentNo.linC.M'A.No.524of2006; and for the revision petitioner in C.R.P.No'3630 of 2005' Mr'R'N' Hemendranath Reddy, learned Senior counsel appearing on behalf of Ms.M.Siva Jyothi, learned counsel for the appellant in C'M'A'No'524 of 2006; learned counsel for respondent No.1 in C.M'r\.No.640 of 2005;; and for the respondent in C.R.P.No.3630 of 2005.

5. The challenge in the instant appeals is to the or,1er passed by Trial Court in O.P.No.4 of 20O1 and O.P.No.7 of 2001, frled by the appellant under Sectio n 17 of the Arbitration Act, 1940, bo th of which stood decided by the Trial Court vide the common order dated 28.01.2005 O.P.No.4 of 2001 was frled by the appellart herein seeking for setting aside the Award dated 12.03.2001 passed by the 2"d respoqdent / sole arbitrator wherein the rate of interest awarded by the learned Arbitrator stood modified from lSoh to 6oh. O.P.No.7 of 2OO1 v/as one which was preferred by the respondent No.l-Shipping Company, praying the Trial Court to confirm the Award dated 12.03.2001 passed by the learned Arbitrator and to be made Rule of the Court, ald also for a direction to the appellant to pay the amount along with interest as awarded by the learned Arbitrator.

6. Vide the common impugned order, the Trial lourt rejected the petition, viz., O.P.No.4 of 2OOl which was filed unde:: Section 17 of the Arbitration Act, 1940, and simultaneously O.P.No.7 o 2OO1 was a-llowed I I l making the Award dated 12.03.200 1 passed by the learned Arbitrator Rule of the Court.

7. Aggrieved, the instant appeals were filed by the appellant herein.

8. The appellant in C.M.A.No.640 of 2005, i.e., M/s. Coromandal Fertilizers Limited, has assailed the impugned common order, amongst others, on the following grounds, viz., : (a) that the learned Arbitrator failed to appreciate the scope of enquiry and the manner in which the Trial Court had proceeded to decide the case; (b) that the learned Arbitrator had mis-conducted himself in rejecting the preliminar5r objection on the ground that it was not raised in the Written Statement.

9. Learned counsel for the appellant primarily contended that the learned Arbitrator had not properly considered the Document Ex.B.2, dated 22.06.1993, insofar as the same being a full and final settlement and the claim raised by the claimant could not had been processed by the learned Arbitrator beyond the said Ex'B.2 which was in the nature of a full and frnal settlement. He further contended that the learned ( Arbitrator has misconducted himself in allowin5; the claim of Rs.10,06,006.17 ps. pertaining to shortage of cargo rrnload from M'V' Aditya Prakash as the learned Arbitrator had in lact not properly considered the fact that there was an actual receipt of Rs.6,83,2791- from the Insurance Company. He further submitted that the challenge to the Award was for an amount of Rs.4,32,526.44 ps'. awarded by the learned Arbitrator towards the cost of damage caused tc, HDPE sacks.

10. According to the learned counsel for the appellanl, the burden was upon the respondent No. l-shipping Agency to establish that they had paid Insurance Premium in respect of the HDPE sa:ks and the said amount was not recovered from the account of the clairaants. He further contended that the learned Arbitrator has failed to consider the documents produced before it, particularly Exs.B.2, 8.5, 8.6, B.9, B.10, and 8.11.

11. Per contra, learned Senior Counsel for the -espondent No'l- Shipping Agency, opposing the appeal preferred [,y the appellant, contended that the Award passed by the learned Arbitrator in fact was a well reasoned and duly considered Award, and that there was hardly any scope of interference left. According to him, while pass:ng the Award, the .-r ! learned Arbitrator has taken into consideration the terms and conditions agreed upon between the parties and also the contentions put forth by bothparties,andatlthemhavebeendealtwithbythelearnedArbitrator in the course of passing of the impugned Award' and which leaves no roomforinterferencebythisCourtunderSection3goftheArbitration arrdConciliationAct,lg4o.Hefurthercontendedthatsinceitisaweil reasoned and well considered Award, the case of the appellant also rvould not fall within the permissible limits under which arr Award' much less even an order of the Court confrrming the said order under Section 1 7 of the Arbitration al1d conciliation Act, 1940, cal1 be interfered with; al1d therefore, prayed for dismissal of the appeals'

12. In addition, learned counsel for respondent No'1 contended that in theappealthatwasliledbylntn,v'u',C'M'A'No'524of2006'challenging the order of the Trial Court insofar as modiffing the rate of interest awarded by the learned Arbitrator from 18% to 60/o, since the parties had agreed upon the same and the tralsaction being commercial in nature' the Trial court ought to have maintained the rate of interest of 18%o as awarded by the learned Arbitrator. He therefore contended that the said modifrcation by the Trial court so far as rate of interest is grossly erroneous and contrar5z to the legal position as it stood then' He I therefore prayed for modifying the impugned order to the extent of restoring the rate of interest as awarded by the learned Arbitrator.

13. Having considered the contentions put forth on either side and particularly taking into consideration the reasons ass,igned by the Trial Court in the impugned common order, while deciding the above two O.P.s under Section 17 of the Arbitration and Concilial ion Act, 1940 frled by either side, the Trial Court had in fact threadbare tzLl<en note of aII the contentions that have been advanced by both the parties. Thprefore, we are of the considered opinion that the grounds raised in the instant two appeals also are the very same grounds which were ttgitated before the Trial Court. Given the fact that the very same grounds which are raised in the instant two appeals have been duly considered by the Trial Court while deciding the appeals under Section 17 of th: Arbitration and Conciliation Act, 1940, the Trial Court further took nc,te of the fact that under Section 39 of the Arbitration and Conciliation Act, 1940, in the course of hearing an appeal the only scope for intet'ference is on the ground of a misconduct being committed by the learne I Arbitrator in the course of passing of the Award or in the event of an error apparent on the face of record. The learned Trial Court found that in fact there was a contract executed on 02.05.199 1 by the parties with an arbitration \ clamse in it, and the natu-re of contract was in respect of work of unloading ald clearing the cargo from the ships at Kakinada Port' In the course of execution of the said contract, there was certain dispute which arose between the parties, and therefore' the respondent No' 1-Shipping Agency had withheld certain amounts payable to the appellant' which led to frling of the O.S'No'368 of 1993' wherein a sole Arbitrator was appointed to adjudicate the dispute' The leamed Arbitrator' after giving extensive hearing to both sides ' had finally vide Awarded dated l2.O3.2OOl directed the respondent No'l-shipping Agency to pay an amount of Rs.46,0O,161'69 ps' to the appellant with simple interest @ lsohp.a.fromthedateofAwardtillrealization.TheTrialCourt,after thoroughly going through the entire pleadings and evidence' found that the entire arbitration proceeding was proceeded in a fair and reasonable manner and that the learned Arbitrator has not committed any misconduct by exercising powers that he has exercised as an Arbitrator' and there was hardly any material to show that the learned Arbitrator acted beyond the scope' The Trial Court also did not found any materia-l to show that the act on the part of the learned Arbitrator in the course of passing the Award amounted to any misconduct' What is also pertinent totakenoteofthefactisthatinthecourseofscrutinizingthematerials, $ l, .l I I

1. I. PaBe 9 of 10 the Trial Court did find that the rate of interest awarrled by the learned Aibitrator was in fact on the higher side, and taking into consideration a couple of judicial precedents the Trial Court had mociifred the Award to the extent of making it applicable from the date of Award, i.e., from l2.O3.2OOl till the payment is made, by reducing the rate of interest from 187o to 60/". L4. From a perusal of the instant appeals filed by both parties, we hnd that the instant appeals are filed under the same fllcts and grounds which were agitated by both sides before the Trial Co'rrt with the same ground and with the same material, without there being prima facie material to show that these grounds were not considered by the learned t I Arbitrator or that the grounds have been considered wir.h perversity so as to bring the Award under the purview of a misconduct committed by the learned Arbitrator in passing the Award. In the abs,:nce of any such material, the scope of interference for this Bench at this stage gets further reduced to the minima-I.

15. Upon due consideration of the facts and circumstitnces of the case, we do not hnd any strong case made out by the learned counsel for the appellants in both the two appeals calling for interference to the .\ impugned common order' The appeals' being devoid of merit' deserve to be and are accordingty dismissed' Since the two appeals stand decided frnally, there is hardly any scope left to adjudicate the Civil Revisron Petition No.3630 of 2005 and no orders therefore need be passed in the said Civil Revision Petition No'3630 of 2005' Therefore' the Civil Revision Petition No'363O of 2005 stands closed' No costs' L6. As a sequel, miscellaneous petitions penciing if any' shall stand closed. To,

2. //TRUE COPY// S N'. T.TIRUMALA DEVI orpurY REGISTRAR / / SECTION OFFICER rabad. (with records if The lll Senior Civil Judge' City Civil Court' Secun 3?ll*, Govinda Rao' District and Sessions-J^udoe (Retd) ' R/o 6-3-354- 8/2C, Hindi Nagar' Panlagutta' Hyde-ra.bad-500034 6.""ii i" s,i5' Ravi' Advocate toPUCl 5'#6d i" rtrt rtlt Siva Jvothi' Advocate [OPUC] Two CD CoPies J 4 4 Ptp/gh t +. HIGH COURT DATED:2110512025 COMMON JUDGMENT CMA.Nos.640 of 2005 and 524 of 2006 And C.R.P.No.3630 of 2005 I \/ACATION COURT ll. t\r \, $ ) ,+ t B1 HE SI^q o ($ 01 JUt ztfi ,Sn^TC,rL-r- DISMISSING THE BOTH APPEALS AND CLOSING THE C.R.P. ,/b L z\