High Court · 2025

O.P.No.780 of 2017In the High Court of Judicature at MadrasDated : 10.9.2025Coram :The Honourable Mr.Justice N.ANAND VENKATESHOriginal Petition No.780 of 2017The Tamil Nadu Civil SuppliesCorporation rep.by itsManaging Director, No.12,Thambusamy Salai,Kilpauk, Chennai-10....PetitionerVsM/s.Lakshmi Exprt, No.408, Rangai Gowda Street, II Floor,Kandasamy ShoppingCentre, Coimbatore.641001....RespondentPETITION under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the award made in Arbitration Case No. 13/2011/SV dated 29.9.2015 followed by the additional award in proceeding of the Arbitrator in Case No.01/2017/SV dated 20.6.2017 on the file of the Arbitrator namely Mr.S.Viswanathan, MBA, M.A., B.A.L., District Revenue Officer (Retired) in the matter between M/s.Lakshmi Export, Coimbatore and Tamil Nadu Civil Supplies Corporation, Chennai-10. 1/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 2017For Petitioner : Mr.M.K.Kabir, SC forMr.K.RaghuramanFor Respondent:Mr.C.D.Sugumar ORDERThis petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Act) against the award dated 29.9.2015 passed by the sole Arbitrator followed by the additional award dated 20.6.2017. 2. Heard both.3. The case of the petitioner is as follows :(i) The petitioner called for tenders for purchase of 6,000 Metric Tons (MTs) of toor dhal and the respondent also participated in the tender. As per the tender conditions, the respondent had to supply 1,500 MTs toor dhal at the rate of Rs.51,400/- per MT. This offer was accepted by the petitioner and the respondent was directed to remit security deposit and to execute an agreement. (ii) Pursuant to satisfying all the requirements, the petitioner issued a supply order dated 14.1.2011 and as per Clause 6 of the 2/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 2017supply order dated 14.1.2011 and Clause 6(iii) of the agreement dated 30.12.2010, the entire targeted quantity must be supplied on 02.2.2011. The respondent also commenced the supply of toor dhal. (iii) Later, the supply was not able to be made within the time stipulated due to various reasons and the respondent sought for extension of time. However, there was no response from the petitioner. Later, a show cause notice dated 17.3.2011 came to be issued by the petitioner calling upon the respondent to explain as to why penal action should not be initiated against the respondent. The petitioner also refused to release the payment for the quantity of toor dhal that was already supplied. (iv) In spite of the reply given by the respondent, an order came to be passed on 06.4.2011 by confirming the proposed penal action. The said show cause notice dated 17.3.2011 and the said order dated 06.4.2011 were put to challenge by the respondent by filing writ petitions in W.P.Nos.12584 & 12585 of 2011 before this Court. The said writ petitions were disposed of by a common order dated 04.8.2011 by directing the parties to agitate their disputes before the sole Arbitrator. 3/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 2017(v) Accordingly, the claim petition was filed by the respondent before the sole Arbitrator challenging the order dated 06.4.2011 passed by the petitioner and sought for a direction to the petitioner to pay the amount towards the quantity of toor dhal already supplied, to refund the amount given as security and to pay the loss suffered by the respondent. (vi) The claim made by the respondent was resisted by the petitioner. The petitioner justified the withheld dues on the ground that there was a violation of the terms of the agreement. (vii) The sole Arbitrator framed the following issues :(a) Whether the claims are justifiable ?(b) Whether it is correct to hold the dues of other completed contracts ?(viii) Ultimately, the sole Arbitrator rendered a finding that the order dated 06.4.2011 was bad and it was set aside. The sole Arbitrator further directed the petitioner (i) to pay a sum of Rs.86,06,467/- for the toor dhal supplied by the respondent; (ii) to refund the security deposit of Rs.38,55,000/- to the respondent; and (iii) to refund the withheld amount relating to the other completed contracts after verifying the accounts. Challenging the same, the 4/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 2017above petition has been filed.4. The learned Senior Counsel appearing on behalf of the petitioner submitted as follows :As per the relevant clause in the agreement, the supplier was not entitled to claim any extension of time. Even as per the terms of the agreement, the security deposit was liable to be forfeited for the failure to supply toor dhal as per the specification stipulated in the time schedule. Out of 1,500 MTs, the respondent was able to supply 138 MTs. But, all those issues were not properly appreciated by the sole Arbitrator and hence, the award suffers from patent illegality warranting the interference of this Court.5. Per contra, the learned counsel appearing for the respondent submitted as follows :The sole Arbitrator assigned reasons while passing the award. The award does not suffer from any of the illegalities pointed out under Section 34 of the Act. He ultimately sought for dismissal of this petition. 5/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 20176. This Court has carefully considered the submissions of the learned counsel on either side and perused the materials available on record and more particularly the impugned award.7. In the considered view of this Court, the sole Arbitrator took into consideration the fact that the petitioner did not even file a counter statement in spite of extending time repeatedly in this regard for years together. Only after a lot of persuasion, the written arguments were filed by the petitioner without filing a counter. The counsel, who appeared for the petitioner before the sole Arbitrator, did not appear during inquiry at least on four hearing dates. Therefore, the sole Arbitrator was forced to go through the materials available and pass the award. 8. Since there was no rebuttal against the claim made by the respondent, the sole Arbitrator had to necessarily rely upon the stand taken by the respondent and the documents filed and arrive at a conclusion. In the light of the above, this Court does not find the award passed by the sole Arbitrator falling foul of any of the 8 pigeon holes under Section 34 of the Act. 6/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 20179. The additional award dated 20.6.2017 is more in the nature of a corrigendum wherein certain corrections were carried out. 10. In the light of the above, this original petition is dismissed confirming the award dated 29.9.2015 and the additional award dated 20.6.2017. 10.9.2025RS7/8 https://www.mhc.tn.gov.in/judis O.P.No.780 of 2017N.ANAND VENKATESH,JRSO.P.No.780 of 201710.9.20258/8