Interim Award-Case Law

BEFORE THE HON’BLE ARBITRAL TRIBUNAL
COMPRISING OF:
(1) HON’BLE MR. JUSTICE V.B. GUPTA …PRESIDING

ARBITRATOR
Former Judge, Hon’ble High Court of Delhi
(2) MR. K.K. JALAN ...MEMBER

ARBITRATOR Indian Administrative Service (Retd.)
(3) MR. R.K. SRIVASTAVA ...MEMBER

ARBITRATOR
Indian Administrative Service (Retd.)
IN THE ARBITRATION BETWEEN:
CLAIMANT RESPONDENT
M/s BSC-C&C JV. Chief Engineer, PWD -Highway (NH)

6-2-913/914 Progressive Tower Lauchumere
Khairatabad, Hyderabad Shillong,
Telangana – 500 004 Meghalaya – 793 001
COMPLIATION LAW COMPILATION

INDEX
S.No Title Citation Paras Pg No.

1. Numero Uno International Ltd. 2008 Supp (2) 4-5 1-4
Vs. Arb LR 543
Prasar Bharti (Delhi)
2. Numero Uno International Ltd. 2008 (101) DRJ 8 5-10

Vs. 479 (DB)
Prasar Bharti
3 Uttam Singh Duggal & Co. Ltd. (2000) 7 SCC 120 12-17 11-20
Vs.
United Bank of India and ors.
4. Nimbus Communications Ltd. Vs. 2015 SCC OnLine 37, 21-42

Prasar Bharti and Anr Del 8583 49
5. Gammon India Ltd. 2010 (1) L.W. 325 23,30 43-56

Vs. ,31
Sankaranarayan Construction
(Bangalore) Pvt. Ltd.
6. Gammon India Ltd. 2011 SCC OnLine 17-24 57-65

Vs. Mad 2266 (DB)
Sankaranarayan Construction
(Bangalore) Pvt. Ltd.
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2007 sec Online Del 1117 : 2008 Supp {2) Arb LR 543 (Delhi)
Delhi High Court

(BEFORE S.N. AGGARWAL, J.)
Numero Uno International Ltd.

Versus
Prasar Bharati
OMP No. 434 of 2007
Decided on August 20, 2007
Page: 544
The judgment of the court was delivered by

S.N. AGGARWAi, J.:- The learned senior counsel appearing on behalf of the
petitioner has submitted that he could not trace out any case-law to show that the
learned arbitrator was incompetent to pass an interim award on the basis of
admission.
2. Remaining admission arguments have been heard.
3. The petitioner has filed the present petition under Section 34 of the Arbitration
and Conciliation Act, 1996 seeking to challenge the interim award passed by the
learned arbitrator against it in the sum of Rs. 7.69 crores. The petitioner was the
respondent before the arbitrator in arbitration proceedings pending before him.
Hon'ble Mr. Justice S.C. Aggarwal, former judge of the Supreme Court of India is the
sole arbitrator in the matter. The interim award that petitioner seeks to challenge is for
an amount of Rs. 7.69 crores based
Page: 545
upon its admissions contained in its letters dated 17.05.2001 and 31.05.2001 and also
in its ledger book for the relevant year produced before the arbitrator. Though the
interim award has been challenged on various grounds but during arguments the
learned senior counsel appearing on behalf of the petitioner has restricted his
arguments only on the following two points:
1. The learned arbitrator could not have passed an interim award only on the basis
of alleged admissions of the petitioner contained in its letters dated 17.05.2001
and 31.05.2001 particularly when the petitioner had disputed its liability in reply
filed to the claim; and
2. The learned arbitrator could not have passed an interim award relying upon the
provisions of Order XII Rule 6, CPC as according to the learned counsel, the
provisions of CPC are not applicable to arbitration proceedings. It is further
contended by the learned counsel that the arbitrator could not have dealt with
the matter in piecemeal.
4. I have carefully gone through the impugned interim award and have considered
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the submissions made by the learned senior counsel. The arbitrator has given cogent
reasons for passing of an interim award in favour of the respondent. The contention of
the petitioner that the learned arbitrator could not have relied upon the provisions of
Order XII Rule 6, CPC appears to have no merit because even if the provisions of Order
XII Rule 6, CPC are strictly not applicable to the arbitration proceedings still there is
no bar for the arbitrator to pass an interim award on the basis of admissions of the
parties contained either in their pleadings or in the correspondence that exchanged
between them. The contention of the petitioner's learned counsel that the learned
arbitrator could not have passed an interim award when the claim of the respondent
was disputed by the petitioner in its reply to the claim, also appears to be without any
merit. It is generally believed that a man can lie but not the circumstances. The
learned arbitrator has adequately considered not only the pleadings of the parties but
also the correspondence that exchanged between them before the dispute actually
arose. The relevant portions of the letters of the petitioner written to the respondent
on 17.05.2001 and 31.05.2001 are extracted below:
Letter dated 17.05.2001
"We can only repay the dues by putting our programmes 'Kranti' and 'Karan Ka
Mahabharat' on air as early as possible.
Further, we would like to draw your attention to our earlier letter dated 20th
February, 2001 wherein we have brought to your notice the excess billing of Rs.
1,96,87,500 by Doordarshan @ Rs. 7,87,500 per episode for 'Jai Hanuman' being
the difference in gross amount chargeable of Rs. 58.50 lakhs and the amount
actually charged in your bills of Rs. 66.38 lakhs from Episodes 157 to 181. We
have yet to get the credit against the said amount.
After considering the above amount your outstanding would be Rs. 8.39
Page: 546
crores-
Month June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Totals
Year 01 01 01 01 01 01 01 01 02 02
Amount 50 50 75 75 75 125 125 125 139 839
(Rs. in
lakhs)
We now humbly request you to accept our payment schedule and also assure you
that we will not leave any stone unturned to keep our commitments.
Thanking you
Yours Faithfully
Sd/-
HORMUZDA B. DA VAR
Chief Executive Officer"
Letter dated 31.05.2001
"At the outset, let me state that we are completely committed to adhering to the
payment plan to clear the backlog of the dues on 'Jal Hanuman' and 'Shohrat'
amounting to Rs. 8.39 crores, stipulated and committed vide our letter dated 17th
May, 2001. As stated in our meeting, we are making arrangements with our bank
based on the slotting letter of 1857-Kranti to increase our bill discounting facilities,
and once the same happens for Maharathi Karan, we shall be able to get further
limits from them. Taking into account the advance payments which we would be
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making for both these serials till the time the earlier backlog is cleared, we commit
to making the payments on the 15th of every month as detailed below:
Month Amount (Rs. in /akhs)
15th June, 2001 50.00
15th July, 2001 50.00
15th August, 2001 75.00
15th September, 2001 75.00
15th October, 2001 75.00
15th November, 2001 125.00
15th December, 2001 125.00
15th January, 2002 125.00
15th February, 2002 139.00
Total Rs. 839.00
We would request you to accept the following commercial and payment terms for
1857-Kranti and Maharathi Karan.
1. For the curtain raiser, we would pay an amount of Rs. 6.00 lakhs gross, being the
telecast fee, and shall be allotted 180 seconds of FCT.
2. For each of the Episodes 1, 2, 3 and 4, we would pay an amount of
.-... --- .. - - - -.... -.... -......... -... -. -. -. -.. - - . - -- . - - -----... --. --.... -- .... ---. ----. - . -. - . - - - -.. - - - . -. --..... -- -. ---
"
Page: 547
Rs. 6.00 lakhs gross, being the telecast fee, and shall be allotted 180 seconds of FCT,
3. For each of the Episodes 5, 6, 7 and 8, we would pay an amount of Rs. 26.88
lakhs gross, being the telecast fee and the cost of 2 trenches of ASB, and be
allotted 540 seconds of FCT.
4. From Episode 9, we would buy the complete 3 trenches of ASB; Therefore, we
would pay Rs. 36.34 lakhs gross till Episode 13 and be allotted 720 seconds of
FCT.
5. We shall pay the amounts agreed to above, 2 days in advance of the telecast.
6. On completion of the payment of the current arrears, the credit terms would be
restored for all the programmes which we have on air.
7. On the announcement of the new rate card, the rates applicable would be recast
prospectively.
We are, extremely grateful to you and your colleagues for your invaluable support
and understanding, which would help and motivate us to continue to provide you
better and more effective programming. We have already effected a major
advertisement and publicity blitz, on which we have spent more than Rs. 75 lakhs,
and we are confident that not just our programme, but also your channel will
benefit in a major way by this.
Thanking you, I remain
Very cordially yours,
For Numero Uno International Ltd.,
Sd/-
Sanjay Khan
Chairman"
5. In view of above candid admissions made by the petitioner in its correspondence
addressed to the respondent, it cannot be said that the admission was in anyway
qualified. As far as disputed claims and counter-claims of the parties are concerned,
4

the same are yet to be adjudicated by the learned arbitrator.

6. In view of the above, this court is of the considered view that the objections filed
by the petitioner against the interim arbitral award do not fall within the ambit of
Section 34 of the Arbitration and Conciliation Act, 1996. Thus, this petition is devoid of
any merit and is, therefore, dismissed but without any order as to costs.
Dls:d;ilmer: Whlle every effort !s made to zivold ;:my mistake or omission, thls <:asenot¢/ headnote/ judgment/ a<:t/ rule/ regulat!on/ circular/
notlfic<1tion is being circuleted on the condfti,;,n and undcrstonding tlrnt the publisher· would not be liable in ,my monner by feason of a11y misttJkc
or emission c,r for any act/en taken or omitted tc ba Wken oraclvlcc rcndi::recl or acc!:pted on the b<1sls of this casenote/ headnote/ judgment/ vet/
rule/ rc9ulation/ circular/ notification. All disput!Js will be subj,:,ct exclusively to jurisdiction ol c<.lurts, trlbunnls ,ind forums at Lucknow only. Th~
authenticity of this text must be verified from the original source,
© EBC Publishing Pvt.Ltd., Lucknow.

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Numero Uno International Ltd. v. Prasar Bharti 479

17. I am, thus, of the considered view that the charges cannot be framed
and the criminal prosecution cannot be permitted to continue against the
petitioners once the adjudication proceedings on merits have been found in
favour of the petitioners.
18. In the end, it must be observed that in view of the findings of the
adjudicatory process, it was a fit case where the Department ought to have
conceded the matter on the b!lflis of the settled legal position. The Department
had failed in the adjudicatory process against the petitioners and yet continued
to contend that the criminal proceedings must go on. The legal system by which
we are governed is adversarial in nature, but there is a special responsibility on
the Government and public authorities to act reasonably and in a fair manner.
The over-burdened legal system cannot be further burdened by unnecessary cases
or contest in the form of luxury litigation on the part of the Government
authorities. Learned counsel for the respondents, in fact, pleaded that no one had
even come to instruct him after the brief had been handed over to him, which
itself shows the lack of seriousness on the part of the Department in defending
the present case. It appears that only the formality of a seal of approval from
the Court is sought to be obtained without the Department acting in a just
and fair manner resulting in unnecessary wastage of time of the Court. I,
thus, .deem it appropriate to burden the respondents with costs of the present
petition and it is open to the Department to recover the same from any
Officer, who may be negligent in the performance of his duties.
19. The petition is accordingly allowed, the impugned order of framing
charges is quashed and the petitioners are discharged. The petitioners shall
be entitled to costs from the respondents quantified at Rs. 20,000/-. Cr!. M.
A. No. 3150/2007 IN CRL. REV. P. No. 160/2007 The application does not
survive for consideration in view of disposal of the main petition.
Application stands disposed of.
2008 (101) DRJ 479(DB)

HIGH COURT OF DELHI
FAO(OSJ 507 /2007
Numero Uno International Ltd ..... .' .......Appellant
Versus
Prasar Bharti ............ Respondent

T.S. Thakur, J.
Veena Birbal, J.
Decided on 08,02,2008
Arbitration and Conciliation Act, 1996
Section 34-Interim award-Admission.ofthe parties contained
either in the pleadings or in the correspondence exchanged
between the parties -There is no reason why the payment of what
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480 f!ELHI REPORTED JUDGMENTS 2008 (101) DRJ ....
is admittedly due should await the determination of other disputes

which may take years before they are f"mally,resolv'ed - Interim
award, affirmed.
Case Referred :
Cofex Exports Limited v. Canara Bank AIR 1997 Delhi 355:
1997 (43) DRJ 754 (DB)
PRESENT: Mr. Arun Jaitley, Sr. Adv. with Ms. Bina Madhvan, Mr. Hemal K
Sheth, Advs. for the Appellant.
Mr. Rajeev Sharma, Mr. Abhishek Birthray, Mr. N.R. Mahapatra,
Advs. for the Respondent. ·
Thakur,J.
Based entirely on the admissions ofthe appellant company, Justice S.C.
Aggarwal, a former Judge of the Supreme Court oflndia has, acting as sole
arbitrator, passed an interim award directing the appellant herein to pay to
the respondent Prasar · Bharti the admitted amount of Rs. 7 .69 crores
outstanding against the former. Aggrieved by the said interim award, the
appellant filed a petition under Section 34 of the Arbitration and
Conciliation Act, 1996 before a Single Judge of this Court who has dismissed
the same by his order dated 20th August, 2007. The learned Single Judge
was of the opinion that the arbitrator had given cogent reasons for making
an interim award in favour of the respondent. He repelled the contention
urged on behalf of the appellant that the provisions of Order 12 Rule 6 of
the CPC were not applicable and declared that the arbitrator was competent
to make an interim award on the admissions of the parties contained either
in the pleadings or in the correspondence exchanged between the parties.
The Court relied upon two letters, one dated 17th May, 2001 and the other
dated 31st May, 2001 to hold that a candid admission had been made by the
appellant company as to the outstanding liability of Rs. 7,69 Crores. The
present appeal calls in question the correctness of the said order.
2. Appearing for the appellant, Mr. Jaitley made a solitary submission
before us. He contended that while the arbitrator was correct in holding that
the appellant had admitted its liability to the extent of Rs. 7 .69 Crores, the
arbitrator should have, while making an interim award, also kept in view
the fact that the appellant had made a counter claim of Rs. 25 Crores before
him. He submitted that the interim award may have been justified if the
appellant had nqt made any counter claim, but once the counter claim was
made, the arbitrator could not have, relying upon the admissions of the
appellant, made any interim award or directed payment of the amount, no
matter the pleadings and the correspondence on the subject clearly admitted
the liability of the appellant to the tune of Rs. 7.69 Crores.
3. On behalf of the respondent, it was on the other hand argued by Mr.
Sharma that the arbitrator's power to make an interim arbitral award not
being in dispute, the only question which fell for consideration was whether·
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the award suffered from any patent illegality or perversity. He drew our
attention to Section 2(c) of the Arbitration and Conciliation Act, 1996 to
argue that an arbitral award includes an interim award.. He placed reliance
upon Section 31(6) of the Act to contend that the tribunal may, at any time
during the arbitral proceedings, make an interim arbitral award. He
submitted that the arbitrator had, in the instant case, correctly appraised
the material on record including the pleadings of the parties and the
correspondence which contained a clear acknowledgement of the liability of
the appellant to the tune of Rs. 7 .69 Crores after giving adjustment of the
payments made and even the set off claimed by it. The fact that the
respondent had made a counter claim could not therefore, argued the
learned counsel, make any difference insofar as the power of the arbitrator
to make an interim award was concerned. Relying upon the decision of a
Division Bench of this Court in Cofex Exports Limited v. Canara Bank
AIR 1997 Delhi 355: 1997 (43) DRJ 754 (DB), Mr. Sharma argued that
a defendant could not be compelled to plead a set offor make a counter claim.
Either one of those could be maintained in an independent action and that
even if a set off was claimed or a counter claim made, the Court could, in
appropriate cases, direct the same to be tried separately. The pendency of a
counter claim 'before the arbitrator was therefore wholly immaterial for
determining whether or not the interim award was legally valid. It was
further argued by Mr. Sharma that the counter claim in the instant case
was ex-facie frivolous and vexatious in nature and had been raised belatedly
only in the arbitral proceedings, long after the making of the admissions in
the correspondence exchanged between the parties.
4. We have given our careful consideration to the submissions made at
the bar. Section 31(6) of the Arbitration and Conciliation Act, 1996 clearly
empowers the arbitral tribunal to make an interim arbitral award on any
matter with respect to which it may make a final arbitral award. It reads:
"31. Form and contents ofarbitral award.-
. (1) xxxxx
(2)xxxxx
(3) xxxxx
(4) xxxxx
(5) xxxxx
(6) The arbitral tribunal may, at any time during the arbitral proceed-
ings, make an interim arbitral award on any matter with respect to
which it may make a firial arbitral award."
5. In the light of the above, it is not open to the appellant to argue that
the interim award made by the arbitrator was incompetent. In fairness to
Mr. Jaitley, we must record that he did not question the jurisdiction of the
arbitrator to make an interim award as was, it appears, sought to be done
befole the learned Single Judge at some stage.
8
482 DELHI REPORTED JUDGMENTS 2008 (101) DRJ ....
6. What then remains. to be examined is whether the pendency of a

counter claim made by the appellant before the arbitrator was sufficient to
dis-entitle the respondent Prasar Bharti from claiming even the admitted
amount due from the appellant by way of an interim award in its favour.
According to Mr. Jaitley, since the claim made by the respondent and the
counter claim of the appellant were eventually to result in a net amount
which one or the other party would be required to pay, the payment of any
amount which the appellant may have admitted to be due and payable out
of the claim made by the respondent would not meet the ends of justice nor
was any such payment otherwise necessary. We do not however think so.
The legal position as regards the nature of a set off and counter claim was
examined in Canara Bank's case (supra) and summarised thus:
"34. The following things are in common in set off and counter claim:
( 1) None should exceed the pecuniary limits of the jurisdiction of the
Court;
(2) Both are pleaded in the written statement, if the law governing the
Court permits such plea being raised by the defendant in the written
statement;
(3) The plaintiff is expected to file a written statement in answer to a
claim for set off or to a counter claim;
(4) Even if permitted to be raised, the Court may in appropriate cases
direct for set off or counter claim being tried separately;
(5) A defendant cannot be compelled to plead a set off nor a counter
claim; he may as well maintain an independent action for enforcing the
claim forming subject matter f set off OF counter claim.
(6) Both are liable to payment of court fee under Sch. 1 Art. 1 of
Court-fees Act, 1870.
(7) Dismissal of suit or its withdrawal would not debar a 'set off or
counter claim being tried, may be followed by a decree against the
plaintiff."
7. In the light of the above, there is no gainsaying that the making of a
counter claim is tantamounting to instituti,m of an independent suit for
adjudication of the claim of the defendant. Not only court fee is payable on
the counter claim but the counter claim remains unaffected by the
withdrawal of the original suit evidently on the principle that the counter
claim is a suit in itself. So also the court has always the power to direct a
-set off or counter claim being tried separately from the original suit. Such
being th!) legal nature and character of a counter claim, its pendency does
not denude the·arbitrator of the power to make an interim award in the
.original suit/claim if such an interim award is otherwise justified. What is
sign:ificarrt is that the legality of an interim award may be tested by reference
·· to the· material on whi:ch it ·is based rather thari the areas of dispute that
niay still call for adjudication between the parties. If-an interim award on
the- basis·
. of materjal
. . available
. . . . on. record is not justified, the. Court may set
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aside the same under Section 34 of the Act. No interference with an interim
award would, however, be permissible only because the defendant has made
a counter claim or because some areas of dispute independent of the area
covered by the interim award remains to be resolved.
8. The issue can be viewed from yet another angle. The making of the
interim award ensures to the party in whose favour the same is made the
'payment of an amount which is an admitted position payable to it. There is
no reason why the payment of what is admittedly due should await the·
determination of other disputes which may take years before they are finally
resolved. If at the conclusion of the arbitral proceedings, the.defendant; were
to succeed in his claim, either wholly or partially, and if after adjustnmnt of
the amounts found payable to the plaintiff, any amount is eventually held
payable to one or the other party, the arbitrator can undoubtedly make such
an adjustment and direct payment of the amom,t to one or the other party,
as the case may be. The final award would in any such case also take into
consideration the payments, if any, made under the interim award. Suffice
it to say that the making of the interim award in no way prevents th.e
arbitrator from making adjustments of the amount in the final award and•..
doing complete justice between the parties. By that logic even ifwe assume
that the Prasar Bharti was to fail in substantiating its further claims which
are disputed and the appellant were to succeed wholly in the counter claim
that it has made, all that it would result in is an award in favour of the
appellant. There is, therefore, no inherent illegality or perversity in the
making of the interim award by the arbitrator so as to call for interference
by this Court under Section 34 of the Act.
9. As regards the question whether the amount of Rs. 7.69 Crores was
admittedly payable to the respondent, Mr. J aitley did not make any attempt
to assail that finding and in our opinion rightly so. The arbitrator has, on
the basis of the pleadings of the parties and the correspondences exchanged
between them, clearly arrived at a finding that a sum of Rs. 7.69 Cr'ores is
outstanding against the appellant on its known admis$ions. The arbitrator
has in that regard observed: • , •. ·
"Having regard to the fact that the amount has been admi_tted by the
Respondent as payat,le to the Claim.ant against the amounts payable
against the l:Jills for telecast qf episodes of varic_ms serials, I consider it
appropriate to make an interim award ln favour of the Claimant direct-
ing the RespondeI).t to make a payment of a sum of Rs. 7.69 Crores to
the Claimant towards discharge of its admitted liability. This interim
award will be taken into consideration at the time of making the final
·award after determination of the amount payable by the Respondent to
the Claimant under the Statement of Claim, including the· claim regard-
ing interest as well as the amount found payable to the Respondent
under the counter claim. Ai:cordingly I make this Interim Award and
diject the Re~poriderit to pay to the Claimant a sum of Rs. 7.69 crores
10
484 DELHI REPORTED JUDGMENTS 2008 (101) DRJ ....

(Rupees seven crores sixty nine lakhs only) against the claim made by
the Claimant, which is the subject-matter of these arbitral proceedings."
10. In the light of the above findings which have been affirmed even by
the learned Single Judge, there is no room for taking a contrary view by us.
In the result, this appeal fails and is hereby dismissed but in the
circumstances without any order as to costs.
2008 (101) DRJ 484(DB)

HIGH COURT' OF DELHI
WP(C) 43/2006, CMs 1819/2007.& 16275/2007
Social Jurist, a Civil Rights Group ............ Petitioner
Versus
,-.
GNCT & qrs ............. Respondents
T.S. Thakur, J.
Veena Birbal, J.
Decided on 08.02.2008
Delhi School Edu<;ation Act, 1973
Section 28 - Delhi School Education Rules, 1973 ;_ Rule 43 -
Pul,lic interest litigation - Unauthorized'and unrecognised school
run without permission of the _Government and without the
recognition of appropriate authority - No notice of intention to
open the school in terms of Section 34 ever given by such institutions
nor such ip.stitutions subjected to any inspection or evaluation to
determine whether they fulfil the bare minimum requirements for
running an institution in terms of Rules 50 and 51 - Total
breakdown of the machinery which the Act had envisaged for
regulating and· organizing planned development of school
education in Delhi - Directions given.
[Para 34/
Case Referred :
T:M.A. Pai Foundation v. State of Karnataka Al R 2003 SC 355
PRESENT: Mr. Anuj-Aggarwal, Adv. with Mr. Ashok Aggarwal, Adv. for the
· Appellant.
Mr. J.R. Midha, Standing Counsel with Ms. Zubeda Begum, Addl.
. Standing Counsel with Addl. Director of Edn. (ACT).
Mr. Ajay Verma, Adv. for the DDA
Mr. Sanjeev Sabharwa, Adv. for the MCD.
Mr. R.M. Sinha, Adv._ with Ms. Namita Sinha, Adv. for the
Applicant in CM 1819/07.
Ms. Maninder Acharya, Adv. for the Adarsh Public School.
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120 SUPREME COURT CASES (2000)7 sec

(2000) 7 Supreme Court Cases 120
(BEFORES. RAJENDRABABU ANDSHIVARAJV. PATIL, JJ.)
a
UTTAM SINGH DUGGAL & CO. LTD. Petitioner;
Versus
UNITED BANK OF INDIA AND OTHERS Respondents.
SLP (C) No. 12511 of 19991, decided on August 8, 2000
A. Civil Procedure Code, 1908 -Or. 12 R. 6 - Judgment on admission b
- Held, decree can be passed under Or. 12 R. 6 on the basis of admission
made in minutes of' a meeting and resolution passed thereon - When a
statement of' admission is brought before the court, as long as the party
making the statement is given sufficient opportunity to explain such
admission, judgment on admission can be decreed if the explanation is not
accepted by the court - Resolution passed after meeting of Board of
Directors of petitioner Company clearly setting out that the Company o
accepted "its liability as per details stated" and mentioning a figure
(Rs 1015.80 lakhs) - Petitioner communicating resolution to Respondent 1
Bank as enclosure to a letter - Petitioner Company filing affidavit-in•
opposition stating that except what were matters on record and except for
what appeared in the resolution, all allegations to the contrary were
disputed and denied - Held, an inference as to admission can be drawn on
the basis of the pleadings in the application under R. 6 and the answering d
affidavit - High Court rightly affirmed the decree passed by the trial court
(Single Judge of High Court) - Or. 8 R. 5(1) proviso, held on facts,
inapplicable - Deeds and Documents - Minutes of meeting and resolution
- Interpretation of - Admission of' liabilities
B. Interpretation of' Statutes - External aids - Statement of Objects
and Reasons - Held, on basis of, that the meaning of Or. 12 R. 6 CPC e
should not be unduly narrowed down, because the object of R. 6 is to enable
a party to obtain a speedy judgment
C. Evidence Act, 1872 - Ss. 18 to 23 - Admissions - Held, are of
many kinds and may be actual, as when they are contained in pleadings or
in answer to interrogatories, or implied as when inferences are made from
the pleadings which have not been traversed f
D. Civil Procedure Code, 1908 - Or. 12 R. 6 - Held on facts, it was
not necessary to examine what kinds of' admissions were covered by the
expression "otherwise" in Or. 12 R. 6
The present case arose out of transactions connected with the construction
of dormitories and other buildings for a university in Iraq. The project was
financed by Respondents 1 to 3, all banks, functioning as a consortium. Upon
disputes arising, the petitioner sub-contractor in respect of the project, filed suits g
against the respondent Banks contending that the debits raised were illegal.
Respondent 1 Bank also filed a suit for recovery of a large sum of money and
some other reliefs; Respondent I also filed an application under Order 12 Rule 6
for judgment upon admission in respect of a part of its claim. The application
was allowed and a decree passed for a sum of Rs 1015.50 lakhs.
h
t From the Judgment and Order dated 1-9-1998 of the Calcutta High Court in APD No. 101 of
1994
12
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lJTfAM SINGH DUGGAL & CO. LTD. v. UNITED BANK OF INDIA 121
For the purposes of the application Respondent 1 had relied on (i)
petitioner's balance-sheet for the year ending 31-3-1989 with references to
a certain schedules; (ii) minutes of the meeting of the petitioner's Board of
Directors held on 30-5-1990; and (iii) letter dated 4-6-1990 communicating the
resolution and minutes of the meeting held on 30-5-1990.
The resolution passed after the meeting on 30-5-1990 inter alia expressly
stated "that the Company accepts its liability as per details stated hereinbelow:".
The final figure in the "Amounts due" column, following these words was
"Rs 1036.80" lakhs. An explanatory note following this figure mentioned that
b Rs 21 lakhs was to be deducted from the figure as a result of fluctuations in the
exchange rate; the actual amount admiued as a liability was thus Rs 1015.80
lakhs.
A copy of the resolution was sent to Respondent I as an enclosure to letter
dated 4-6-1990, in which details of the Bank's claims which were disputed and
denied by the petitioner were clearly set out.
c The petitioners had filed an affidavit-in-opposition in connection with the
application under Order 12 Rule 6, raising various issues, but nowhere had they
actually explained the admission made by them in the resolution. The petitioners
had also stated with reference to the resolution dated 30-5-1990 and the letter
dated 4-6-1990 that they were matters of record and all allegations to the
contrary were denied. The application for judgment on admission was therefore
d allowed; the petitioners' appeal was dismissed.
Before the Supreme Court the petitioners contended inter alia that
(i) admissions under Order 12 Rule 6 should only be those made in the
pleadings; (ii) the effect of the admissions can only be considered at the trial of
the main suit; (iii) that admissions would in any case have to be read along with
Order 8 Rule 5(1) CPC and the court may call upon the party relying on such
admission to prove its case independently; (iv) while the other connected suits
e were pending, relief should not have been granted; and (v) the expression
"admissions" made in the course of pleadings or otherwise should be read
together with and the word "otherwise" interpreted ejusdem generis.
Dismissing the SLP with costs, the Supreme Court
Held:
In the Objects and Reasons set out while amending Rule 6 of Order 12 CPC
f it is stated that "where a claim is admitted, the court has jurisdiction to enter a
judgment for the plaintiff and to pass a decree on admitted claim. The object of
the Rule is to enable the party to obtain a speedy judgment at least to the extent
of the relief lo which according to the admission of the defendant, the plaintiff is
entitled". (Para 12)
The Supreme Court should not unduly narrow down the meaning of this
g Rule as the object is to enable a party to obtain speedy judgment. Where the
other party has made a plain admission entitling tl1e former to succeed, it should
apply and also wherever there is a clear admission of facts in the face of which it
is impossible for the party making such admission to succeed. (Para 12)
The contention that the resolutions or minutes of the meeting of the Board
of Directors, resolur.ion passed thereon and the letter sending the said resolution
to the respondent Bank cannot amount to a pleading or come within the scope of
h the Rule as such statements are not made in the course of the pleadings or
otherwise, is not tenable. When a statement is made to a party and such
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statement is brought before the court showing admission of liability by an
application filed under Order 12 Rule 6 and the other side has sufficient
opportunity to explain the said admission and if such explanation is not accepted a
by the court, the trial court is not helpless in refusing to pass a decree. The trial
Judge states that the statement made in the proceedings of the Board of
Directors' meeting and the letter sent as well as the pleadings when read
together, lead lo an unambiguous and clear admission and only the extent to
which the admission is made is in dispute. And the court had a duty to decide the
same and grant a decree. This approach is unexceptionable. (Para 13)
What is stated in the affidavit-in--0pposition in application under Order 12 b
Rule 6 CPC is save, what are matters on record and save what would appear
from the resolution dated 30-5-1990, all allegations to the contrary are disputed
and denied. This avermenl would clearly mean that the petitioner does not deny
a word of what was recorded therein and what is denied is the allegation to the
contrnry. The denial is evasive and the learned Judge is perfectly justified in
holding that there is an unequivocal admission of the contents of the documents c
and what is denied is extent. of the admission. (Para 14)
Even without referring to the expression "otherwise" in Ruic 6 of Order 12
CPC, the Court can drnw an inference in the present case on the basis of the
pleadings raised in the case in the shape of the applications under that Rule and
the answering affidavit which clearly reiterates the admission. (Pam 15)
Nagubai Ammal v. B. Shama Rao, AIR 1956 SC 593 : 1956 SCR 451; State Ba11k of India d
v. Midland Industries, AIR 1988 Del 153; Union of India v. Feroze & Co., AIR 1962
J&K 66, distinguished on.facts
Ba/raj Taneja v. Su11il Madan, (1999) 8 SCC 396; Pandam Tea Co. Ud., Re, AIR 1974 Cal
170, distinguished
Razia Begum v. Sahebzadi Anwar Begum, AIR 1958 SC 886 : 1959 SCR 1111, referred to
Shikharchand v. Bari Bai, AIR 1974 MP 75, approved by implication
Admissions generally arise when a statement is made by a party in any of e
the modes provided under Sections 18 lo 23 of the Evidence Act, 1872.
Admissions are of many kinds; they may be considered as being on the record as
actual if they are either in the pleadings or in answer to interrogatories or
implied from the pleadings by non-traversal. Secondly, as between parties by
agreement or notice. Since it has been considered that admission for passing the
judgment is based on pleadings itself it is unnecessary to examine as to what f
kinds of admissions are covered by Order 12 Rule 6 CPC. (Pam 17)
The present petition deserves to be dismissed with advocates' fees
quantified at Rs 10,000. (Para 18)
A-M/17_122911/C
Advocates who appeared in this case ;
Dushyant A. Dave and Ashok H. Desai, Senior Advocates (Prashant Kumar, Ms Niti g
Dikshit, S.K. Mehta, Dhurv Mehta, Ms Shobha, K.N. Balgopal, C.N. Sreekumar,
A.P. Mukundan and Mahendra Singh, Advocates, with them) for the appearing
parties,
Chronological list of cases cited on page(s)
I. (1999) 8 sec 396, Ba/raj Taneja v. Sun/I Madan !28c-d
2. AIR 1988 Del 153, State Bank of India v. Midland Industries 128g h
3. AIR 1974 Cal 170, Pandam Tea Co. Ltd., Re 128f
14
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UTTAMSINGHDUGGAL &CO. LTD. v. UNI1EDBANKOFINDIA 123

(Rajendra Babu, ].)
4. AIR 1974 MP 75, Shikharchand v. Bari Bai 128/-g
a 5. AIR 1962 J&K 66, Union of India v. Feroz,e & Co. 128g
6. AIR 1958 SC 886: 1959 SCR 1111, Razia Begum v. SahebzadiAnwar
Begum 128d-e
7. AIR 1956 SC 593: 1956SCR451,NagubaiA,mnalv. B. ShamnRao 12&b-c
The Judgment of the Court was delivered by
RAJENDRA BABU, J,- This petition is filed against the judgment passed
b by the High Court of Calcutta affirming a decree passed by the learned
Single Judge of the High Court for a sum of Rs 1015 .50 lakhs on application
of the respondent for judgment upon admission as provided under Order 12
Rule 6 of the Code of Civil Procedure. The facts leading to the suit are as
follows:
Transotient Engineering Company Ltd. sub-contracted construction of
c sUJdents' dormitories/dining hall for University of Baghdad, Iraq.
Respondents 1 to 3 functioned as consortium to finance the said project.
Certain disputes having arisen, the petitioner filed suits against the
respondent Banks that the debits raised are illegal etc. Indian Overseas Bank
(!OB) filed a suit for recovery of certain sums of money and an application
made therein under Chapter XIIJ-A of the Otiginal Side Rules and the High
d Court of Calcutta rejected the same and Respondents I and 3 Banks and
ECGC were also impleaded by an an1endmenL in the said suit. Respondent 1
filed a suit for recovery of certain sum of money with certain other reliefs
and in that suit, application for judgment upon admission was allowed.
Appeal thereon being unsuccessful, this petition is filed.
2. The application filed by the Isl respondent Bank for judgment on
e admission covers only a part of the suit claim. The !st respondent Bank
relied upon (i) balance-sheet of the petitioner for the year ending 31-3-1989
with reference to Schedules 'C', 'D' and 'E'; (ii) minutes of the meeting of
the Board of Directors held on 30-5-1990 which noticed the discussion at the
meeting and issues that could be deemed to have been settled as a result
thereof; and (iii) letter dated 4-6-1990 communicating the resolution and
f minutes of the meeting of the Board of Directors held on 30-5-1990.
3, In the said minutes in the meeting held on 30-5-1990 it was mentioned
as follows:
"IT WAS RESOLVED THAT in consideration of United Bank of India,
Connaught Circus Branch, New Delhi, having agreed to the continuation
g of the previously sanctioned aggregate credit limits amounting to
Rs 17.45 crores and in consideration of the Bank having agreed to
continue the operation of the vatious borrowing accounts with
outstanding dues, as stated hereinbelow in detail, the Company agrees to
duly execute a fresh set of documents as required by the Bank
thereagainst.
h
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That Mr Harcharan Singh Duggal, the Managing Director of the
Company be and is hereby authorised to execute the said documents and
the official seal of the Company be affixed thereon. a
It is also resolved that the Company disputes the amount of
Rs 3,08,01,000 debited to its cash-credit account on 1-8-1989 which
along with interest stands at Rs 3,60,62,579 as on 31-3-1990.
Thal lhe Company accepts ils liability as per details slated
hereinbelow:
~-------~------~-------
Natures Present Amount due
b
sanctioned
(Rs in lakhs) (Rs in lakhs)
Cash limit/OD 65.00 101.16
Inland guarantee 401.31 23.18
C
Baghdad guarantee 1082.60 793.73
Jordan guarantee 209.30 101.85
Tenn loan 5.00 Nil
Loan account Nil 16.88
1745.07 1036.80
That, also due to fluctuations in exchange rate there has been d
difference in amount due under Jordan guarantee amounting to about
Rs 21 lakhs which is not reflected in details shown above."
4. A copy of the aforesaid resolution was sent to the plaintiff with the
following note as indicated in lhe letter dated 4-6-1990;
"(a) We do not confirm the debit entry of Rs 3,60,62,579 e
representing your share of the invoked guarantee with interest up to
31-3-1990 which has been effected by you unauthorisedly against the
illegal payment made by Indian Overseas Bank. We are enclosing a copy
of the reply given to the legal notice received by us from them. The reply
is self-explanatory. You will agree that before effecting the said payment
consisting of such a large amount, a reference ought to have been made f
to us.
(b) The loan account of Janpath Branch amounting to Rs 4,03,820 is
not accepted and is totally denied. We have repaid your Janpath Branch
the convertible loan for Baghdad along with interest in full. The debit in
your ledger is on account of lhe Janpath Branch not giving effect to the
reduced interest rate as directed by Reserve Bank of India. At their g
request a copy of RBI circular was given to them and had also been sent
to you.
(c) Thal fresh documents are executed against the consideration of
permitting us to operate the sanctioned limits thereagainst as they stand.
The debit entry of Rs 3,60,62,579 and entries for interest thereon will
have no bearing on the actual amount due as confirmed by us in our h
Board resolution.
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UTTAM SINGH DUGGAL & CO, L'ID, v, UNITED BANK OF INDIA 125
(Rajendra Babu, J.)
(a) Almost two years ago an unofficial freeze was imposed on our
a inland guarantee limits for reasons never communicated to us. Thus, you
had denied fresh guarantees for bid bonds etc. to tender for new works
and the Company's huge fleet of construction equipments and trained
personnel perforce thereby remained idle since the last one-and-a-half
years."
5. The petitioners filed an affidavit-in-opposition to contend that:
b (1) that Defendant l's suit is barred by limitation;
(2) that the resolution dated 30-5-1990 was passed subject to a
condition that the inland guarantee limit would be resumed and that as
the condition was not fulfilled, the resolution was not binding;
(3) that Defendant l's suit was liable to be stayed under Section 10
CPC because the matter in issue in the suit was also directly and
C substalllially in issue in the previous suits filed by others; and
(4) that the suit of Defendant 1 is bad for misjoinder of parties.
6. The defendants further contended that, insofar as the resolution dated
30-5-1990 and a letter dated 4-6-1990 are concerned, they are to the effect
that they are matters of record and save what are matters of record and save
what would appear from the letter (sic resolution) dated 30-5-1990 all
d allegations to the contrary are disputed and denied. It is categotically denied
lhat lhere is any admission of liability hy lhe first respondent: 10 the petitioner
to the extent of Rs 10,15,80,090 as on 30-3-1990 or that since the said
alleged admission of the liability the claim of the petitioner has increased and
it is now more than Rs 24 crores, as wrongly alleged, if at all.
7. At the time of hearing it appears that it was contended:
e J. That the amount claimed by the plaintiff from the defendants was
part of the consortium agreement under which Indian Overseas Bank,
United Bank of India and EXIM Bank agreed to advance money to
Defendant 1 in the proportion of 50:25:25. It was stated that Indian
Overseas Bank has filed a suit against the defendants for recovery of all
the amounts advanced by the consortium lo Defendant I and that suit
f was still pending, lberefore, they were estopped from filing that suit and
making an independent claim against Defendant 1.
2, That in the suit filed by Indian Overseas Bank an application had
been moved by Indian Overseas Bank for final judgment under Chapter
XIII-A on the basis of the same documents which were sought to be
relied upon by the plaintiff. The trial Judge had rejected the satne.
g 3. Thal payments had been made subsequent I.O the admission and
loan was recalled only in 1993 just prior to the filing of the suit.
4, That several claims have been included in the suit in respect of
which another suit has been filed in the Madras High Court and,
therefore, the atnount could not be recovered.
5. The claim of the plaintiff had been covered by a counter-guarantee
h
issued by the Export Credit Guarantee Corporation and the extent of
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payment made by it to the plaintiff and the suit was for the reason not
maintainable at the instance of Defendant I.
6. That the defendants in the suit had filed a separate suit in which a
they had claimed for certain reliefs which would nullify the claim made
by the plaintiff in the suit.
8. The learned trial Judge found that there is an unequivocal admission of
the contents of the documents and what is denied is the extent of admission
and the increase of the liability admitted.
9, The learned trial Judge took the view that the prerequisites of Order 12 b
Rule 6 CPC had been satisfied in this ease and that on a plain reading of the
resolution of the Board dated 30-5- I 990 there could be no doubt that the
petitioner had made a clear, unambiguous and unconditional
acknowledgement of its liability to the Bank. The language of the resolution
would show that the extent of the admission in the resolution is for
Rs 10, 15,80,000, if not for Rs 10,36.80 lakhs. The figure of Rs 1015.80 lakhs c
is firm admission being the figure arrived at after deducting Rs 21 lakhs
claimed by lhe defendants by reason of fluctuation of the exchange rate and
that was the an10unt claimed by lhe petitioner in the suit. This admission
made in the course of the Board of Directors' resolution had not been
explained by the petitioner in the affidavit-in-opposition but on the other
hand had reiterated the same. The arguments raised before the trial court d
were considered to be contrary to the pleadings raised in the case. Therefore,
the application was allowed.
10. On appeal, the Division Bench noticed these very facts and also
noted that discrepancy, if any, between the appellant's particulars and the
particulars in respect of which a judgment was sought on admission was not
made the su~ject-matter of challenge either in lhe affidavit-in-opposition e
before the trial Judge or in the argument~ thereof and characterised the same
as a point of accounting discrepancy which could not be raised at lhe stage of
appeal and dismissed the same.
11. Learned counsel for the appellant contended that Order 12 Rule 6
comes under the heading "Admissions" and a judgment on admission could
he given only afLer due opporlunity to the olher side Lo explain the admission, f
if any, is given; that such admission should have been made only in the
course of the pleadings or else the other side will not have an opportunity to
explain such admission, that even though the provision reads that the court
may at any stage of the suit make such order as it thinks fit, the effect of
admission, if any, can be considered only at the time of trial; that the
admission even in pleadings will have to be read along with Order 8 g
Rule 5(1) CPC and the court need not necessarily proceed to pass an order or
a judgment on lhe basis of such admission bul call upon lhe party relying
upon such admission to prove its case independently; that during pendency
of other suits and the nature of contentions raised in the case, it would not be
permissible at all to grant the relief before trial as has been done in the
present case; that the expression "admissions" made in the course of the h
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UTTAM SINGH DUGGAL & CO. LTI). v. UNITED BANK OF INDIA 127
(Rajendra Babu, J.)
pleadings or otherwise will have to be read together and the expression
a "otheiwise" will have to be interpreted ejusdem generis.
12. As to the object of Order 12 Rule 6, we need not say anything more
than what the legislature itself has said when the said provision came to be
amended. In the Objects and Reasons set out while amending the said Rule, it
is stated that "where a claim is admitted, the court has jurisdiction to enter a
judgment for the plaintiff and to pass a decree on admitted claim. The object
b of the Rule is to enable the party to obtain a speedy judgment at least to the
extent of the relief to which according to the admission of the defendant, the
plaintiff is entitled". We should not unduly narrow down the meaning of this
Rule as the object is to enable a party to obtain speedy judgment. Where the
other party has made a plain admission entitling the former to succeed, it
should apply and also wherever there is a clear admission of facts in the face
0 of which it is impossible for the party making such admission to succeed.
13. The next contention canvassed is that the resolutions or minutes of
the meeting of the Board of Directors, resolution passed thereon and the
letter sending the said resolution to the respondent Bank cannot amount to a
pleading or come within the scope of the Rule as such statements are not
made in the course of the pleadings or otherwise. When a statement is made
d to a party and such statement is brought before the court showing admission
of liability by an application filed under Order 12 Rule 6 and the other side
has sufficient opportunity to explain the said admission and if such
explanation is not accepted by the court, we do not think the trial court is
helpless in refusing to pass a decree. We have adverted to the basis of the
claim and the manner in which tl1e trial comt has dealt with the same. When
e the trial Judge states that the statement made in the proceedings of the Board
of Directors' meeting and the letter sent as well as the pleadings when read
together, leads to unambiguous and clear admission with only the extent to
which the admission is made in dispute, and the court had a duty to decide
the same and grant a decree, we think this approach is unexceptionable.
14. Before the trial Judge, there was no pleading much less an
f explanation as to the circumstances in which the said admission was made,
so as to take it out of the category of admissions which created a liability. On
the other hand, what is stated in the course of the pleadings, in answer to the
application filed under Order 12 Rule 6 CPC, the stand is clearly to the
contrary. Statements had been made in the course of the minutes of the Board
of Directors' meeting held on 30-5-1990 which we have already adverted to
g in detail. In the pleadings raised before the Court, there is a clear statement
made by the respondent as to the undisputed part of the claim made by them.
In regard to this aspect of communicating the resolution dated 30-5-1990 in
the letter dated 4-6-1990 what is stated in the affidavit-in-opposition in
application under Order 12 Rule 6 CPC is save what are matters on record
and save what would appear from the letter (sic resolution) dated 30-5-1990
h all allegations to t11e contrary are disputed and denied. This averment would
clearly mean that the petitioner does not deny a word of what was recorded
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therein and what is denied is the allegation to the contrary. The denial is
evasive and the learned Judge is perfectly justified in holding that there is an
unequivocal admission of the contents of the documents and what is denied a
is extent of the admission but the increase in the liability is admitted.
15. Even without referring to the expression "otherwise" in Rule 6 of
Order 12 CPC, we can draw an inference in the present case on the basis of
the pleadings raised in the case in the shape of the applications under that
Rule and the answering affidavit which clearly reiterates the admission. If
that is so, interpretation of the expression "otherwise" becomes unnecessary. b
16. The learned counsel for the appellant relied on a decision of this
Court in Nagubai Ammal v. B. Sha,na Rao 1 as to when an admission
becomes relevant. Nagubai Ammal1, which is locus classicus on the subject,
stares that merely because a written admission is made in a different context,
such admission may not become relevant if the party making it has a
reasonable explanation for that. But that is not the position in the present case c
at all. Learned counsel for the appellant further adverted to the decision in
Ba/raj Taneja v. Sunil Madan 2 in which the Court was concerned with a case
of the effect of not filing a written statement and whether a decree could be
passed only on that basis. That was a suit for specific performance and it was
held that it could not be granred without even writing a detailed judgment
and adverted to various provisions of the Code of Civil Procedure and d
reference was made to Order 12 Rule 6 by way of analogy and referred to the
dictum in Razia Begum v. Sahe/Jzadi Anwar Begum3 to state that Order 12
Rule 6 should be read along with proviso to Rule 5 of Order 8 CPC. In that
case, what was noticed was that in cases governed by Section 42 and Section
43 of the Specific Relief Act, 1877 the court is not bound to grant declaration
prayed for on the mere admission of the claim by the defendant if the court e
has reason to insist upon a clear proof apart from admission. The result of a
declaratory decree confers status not only on the parties but for generations
to come and so it cannot be granted on a rule of admissions and, therefore,
insisted upon adducing evidence independent of the admission. That is not
the position in the present case at all. We fail lo see how this decision can be
of any use to the petitioner. The decision in Pandam Tea Co. Ltd., Re4 f
pertains to the manner in which the balance-sheet should be read and has no
bearing on the case. The decision in Shikharchand v. Bari Bai5 is to the
effect that the Rule is wide enough to afford relief not only in cases of
admissions in pleadings but also in the case of admission dehors pleadings.
State Bank of India v. Midland lndustries6 and Union of India v. Feroze &
g
1 AIR 1956 SC 593 : 1956 SCR 451

2 (1999) s sec 396
3 AIR 1958 SC 886 : 1959 SCR 111
4 AIR 1974 Cal 170
h
5 AIR 1974 MP 75
6 AIR 1988 Del 153
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R. BALAKRISHNA PILLAI v, STATE OF KERALA 129

7
Co. cannot have any relevance because the facts arising in these cases and
the present case are entirely different.
a 17. Learned counsel for the petitioner contended that admissions referred
to in Order 12 Rule 6 CPC should be of the same nature as other admissions
referred to in other rule preceding this Rule. Admissions generally arise
when a statement is made by a party in any of the modes provided under
Sections 18 to 23 of the Evidence Act, 1872. Admissions are of many kinds;
they may be considered as being on the record as actual if they are either in
b the pleadings or in answer to interrogatories or implied from the pleadings by
non-traversal. Secondly, as between parties by agreement or notice. Since we
have considered that admission for passing the judgment is based on
pleadings iL~clf it is unnecessary to examine as to what kinds of admissions
are covered hy Order 12 Rule 6 CPC.
18. We are not impressed with the contention of the learned counsel for
c the appellant that there is no admission for the purpose of Order 12 Rule 6 at
all, nor that the admission if any is conditional because we cannot spell out
any conditions stated therein nor the dismissal of application filed by Indian
Overseas Bank in the suit have any relevance. Therefore, we are of the view
that this case deserves to be dismissed with advocates' fees quantified at
Rs 10,000,
d
(2000) 7 Supreme Court Cases 129

(BEFOREM,B. SHAH AND S.N. Pl!UKAN, JJ.)
R. BALAKRISHNAPILLAI Petitioner;
e Versus
STATE OF KERALA Respondent.
Transfer Petition (Crl.) No. 115 of 2000!, decided on August 30, 2000
A. Criminal Procedure Code, 1973 - S. 406 - Transfer of appeals -
Delay in raising grievance by the person seeking transfer - Effect -
Former Minister in State Government prosecuted and convicted under
f
Ss. 5(l)(d) & (2) of Prevention of Corruption Act - During pendency of
appeal before High Court, he approaching Supreme Court for transfer of
the appeal to another High Court contending inter alia, that he
apprehended denial of a fair trial due to adverse publicity by the State
Government and by the press in the State which might consciously or
subconsciously iutlnence the Judges - Objection raised four long years
g after the f1Jing of the appeal and no objection taken when the appeal was
heard by a Single Judge who later referred the matter to a larger Bench -
In view of such delay the petitioner's contention rejected - Moreover, in
view of complete separation of judiciary from executive, held, Judges are
not influenced by propaganda or adverse publicity - Constitution of India,
Arts. 139-A, 50 and 217 - Prevention of Corruption Act, 1947, Ss, S(l)(d)
h
7 AIR 1962 J&K 66
t Under &clion 406 of ll1e Ca.le or Criminal Procedure
21
sec·
@ijdllM#
sec Online Web Edition, Copyright © 2019
i'b~l""fll>i.y,,Jn,s;;;:idf sec Online Web Edition: http://www.scconline.com
O.M.P. 60/2015
Nimbus Communc::ations ltd. v. Prasar Bharti
2015 sec Online Del 8583
(BEFORE V. KAMESWAR RAO, J.)
Nimbus Communcations Ltd ...... Petitioner

Mr. Jayant Bhushan, Sr. Adv. with Mr. Amol Chitala, Mr. N. Dube, Mr. Ankur s. Kulkarni, Mr.
Anand Srivastava, Mr. Shubham Jaiswal, Advs.
v.
Prasar Bharti & Anr ...... Respondents
Mr. Rajeev Sharma, Adv. with Ms. Radha Laksmi R., Adv. for Rl/Prasar Bharti
O.M.P. 60/2015
Decided on April 6, 2015
V. KAMESWAR RAO, J.
1. The challenge In this petition under Section 34 of the Arbitration and Conciliation Act, 1996
(Act, in short) is to the interim award dated September 16, 2014 passed by the Arbitral
Tribunal (Tribunal, in short), by majority (Hon'ble Mr. Justice S.P. Bharucha, Presiding
Arbitrator and Hon'ble Mr. Justice B.P. Jeevan Reddy) whereby the Tribunal has awarded in
favour of the respondent No. 1 an amount of Rs. 22,77,67,422/-. By a dissenting order, dated
September 18, 2014, Hon'ble Mr. Justice V.N. Khare has held that the application for interim
award be taken up for hearing after evidence is led by the parties on a reasoning that the
expression used 'adjustment of liabilities cannot be construed as an admission of claim by the
petitioner.
The facts:
2. On November 11, 2005, the Govt. of India had notified guidelines known as Downlinking
Guidelines, which Inter alla, provided in para 5.2 thereof, for compulsory sharing of signals of
sporting events of national importance by the rights holders with Prasar Bharti. The said
guidelines also provided that insofar as cricketing events are concerned, all cricket matches
featuring the Indian Team and the Seml·Flnals and Finals of International events would
constitute sporting events of national Importance. The downlinking guidelines provided, the
revenues generated by the sharing of signals by the rights holders with Prasar Bharti would be
shared In the ratio of 75:25 between the rights holders and Prasar Bharti. The guidelines also
provided as to who, out of the rights holders and Prasar Bharti would undertake the marketing
of commercial times associated with telecast. It is noted that the rights holders had to provide
the live signals of sporting events of national importance to Prasar Bharti without
advertisements and Prasar Bharti had to retransmit the live signals on its terrestrial and DTH
networks (Doordarshan National and DD Direct). During the transmission of the matches on
Doordarshan National, opportunities for ailing the advertisements would arise. Therefore, it
was also necessary to provide as to who would book advertisements. The guidelines provided
that the party that offered to maximise, the revenue would be appointed as the Revenue
Management Company. The appointment was formalized through a bidding process,
whereunder, both parties would give sealed bids in respect of their estimation of the revenues
that could be generated by way of advertisements to be carried on Doordarshan during the
telecast of the matches. The party which would give the higher estimation would get the right
to book the advertisements and the revenues so collected would be shared in the ratio of
75: 25 as between the rights holders and Prasar Bharti.
3. On December 5, 2005, the uplinking guidelines were notified. I note from record, the
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uplinking guidelines also contained a provision similar to the one contained in downlinking
guidelines insofar as the sharing of signals of sporting events of national importance were
concerned.
4. The first Cricket Series played after the aforesaid guidelines was India-England series in
February 2006 for which, the petitioner was the rights holder. By way of bidding process, the
petitioner was appointed as the RMC for the telecast to be made by the respondent No. 1,
Prasar Bharti. To secure the rights of both the parties, it was agreed that all money would be
deposited in an Escrow Account and the RMC would furnish a bank guarantee to the other
party-Prasar Bharti for an amount equal to 25% of the net projected revenue. Petitioner as
RMC furnished a bank guarantee to the respondent No. 1 for an amount equal to 25% of the
net projected revenue.
5. In February 2007, the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti)
Ordinance, 2007 was promulgated which was subsequently replaced by the Sports
Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007. In terms of Section 1
(3), the Act was deemed to have come into force on November 11, 2005, the day on which the
downlinking guidelines were notified. The Act provided the mandatory sharing of live signals of
events of national importance by the content rights owners or holders/Television or Radio
Service Providers with Prasar Bharti to enable It to retransmit such signals on Its terrestrial and
DTH networks. The Act, inter alia, provided that the revenues earned from such sharing of live
signals would be shared In the ratio of 75:25 between the rights holders and Prasar Bharti. The
rules made under the Act of 2007, inter alia, provides for a sealed bid procedure to be adopted
and the party bidding higher shall get the marketing rights. The party getting marketing rights
shall give a bank guarantee to the other party for an amount equal to the other party's share of
guaranteed revenue, which shall be valid for a period of six months from the first day of the
month succeeding the month, in which the sporting event comes to an end. The rules also
contemplate, the party having marketing rights shall be entitled to obtain all release orders
and payments in its name and all payments shall be received by it only by way of account
payee cheques which shall be deposited In a designated Escrow Account from which the party
shall be at liberty to make withdrawals after discharging the tax liability. The rules also
contemplate the party having the marketing rights shall submit to the other party, complete
accounts of revenue earnings duly audited by Chartered Accountant along with all the release
orders and shall pay the entire guaranteed amount as well as any other amount to which the
other party is entitled as per the revenue sharing formula under the Act and Sub-Rule 3 of
Rule 4 within 75 days from the first day of the month succeeding the month In which the
sporting events comes to an end.
6. It may be stated here that between the years 2007 and 2009, the following seven cricketing
events took place:
S. No. Event Shared Bv

1 India Bangladesh Serles Nimbus Sport International Pte Ltd.
2007
2 India Australia Cricket Nimbus Communications Ltd.
Series. 2007
3 India Australia T-20 Nimbus Communications Ltd.
match played on
20.10.2007
4 India Pakistan Cricket Nimbus Communications Ltd.
Series. 2007
5 India, Bangladesh & Nimbus Sport International Pte Ltd.
Pakistan Serles. 2008
6 India England Serles, Nimbus Communications Ltd.
2008
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7 India Sri. Lanka Series, Nimbus Sport International Pte Ltd.

2009
In the aforesaid cricketing events, the signals were shared by the petitioner and the
respondent No. 2 with the Prasar Bharti i.e. the respondent No. 1.
7. It is noted that a formal agreement was entered between the petitioner· and Prasar Bharti
(respondent No. 1) with respect to India Pakistan Series 2007, SI. No. 4 above, which provided
resolution of disputes by arbitration. As disputes arose between the Prasar Bharti and the
petitioner and the respondent No. 2 herein, clause 13 of the agreement in respect of India
Pakistan Serles 2007, was Invoked on June 1, 2009 for adjudication of the disputes. It was
mutually agreed between the parties that all disputes arising from the dealings between the
parties concerning the aforesaid seven events be adjudicated by the Tribunal constituted
pursuant to the invocation letter dated June 1, 2009. Accordingly, as desired by the Tribunal
(as submitted by learned counsel for the respondent No. 1), on the first date of hearing, calling
upon the parties to enter Into an arbitration agreement for referring the disputes to the
Tribunal, the parties on August 31, 2011, signed an arbitration agreement, whereby it was
consented that all disputes arising out of the cricketing events mentioned at SI. Nos. 1 to 7
above between the petitioner and respondent No. 1 and Nimbus Sports International Pte Ltd.-
respondent No. 2 be adjudicated upon In accordance with clause 13 in the agreement dated
November 3, 2007 by the Tribunal. Suffice to state, the agreement also record that, "all
contentions of the parties are left open".
The Disputes:
8. The respondent No. 1/Prasar Bharti's, the claimant before the Tribunal, claim In brief was
that the petitioner and respondent No. 2 have failed to pay their share of revenues for the
respective series marketed by them. It was the case of the respondent No. 1/Prasar Bharti that
it was at least entitled to the following amounts from the petitioner and the respondent No. 2 :-
s. Event Due from Due from Interest Total

No. Nimbus Nimbus
Sports Communications
International Ltd.
Pte. Ltd. Rs.
1 India 14,16,633 12,11,221 26,27,854
Bangladesh
Cricket
Series 2007
2 India 8,82,50,000 6,48,63, 750 15,31,13,750
Australia
Cricket
Serles,
2007
3 India 77,50,000 56,96,250 1,34,46,250
Australia
Twenty-20
Cricket
match 2007
4 India, 2,52,50,000 1,55,28,750 4,07, 78,750
Bangladesh,
Pakistan
2008
5 India 5,48,25,000 2, 87,83 .125 8,36,08,125
England
2008
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6 India Sri. 1,75,50,000 86,99,625 2,62,49,625

Lanka 2008
9. The prayers made in the claim petition by the respondent No. 1 are reproduced as under:
I. direct respondent no. 1 to render audited accounts In respect of revenue earnings from the
following series:
a. India - Australia Cricket Series, played from 29u, September to 27th October, 2007;
b. India - Australia Twenty-20 Cricket Match played on 20'" October, 2007.
c. India - England cricket series; played from 14 th November, 2008 to 2"" December, 2008.
ii. direct respondent No. 1 to pay Rs. 15,31,13,750/- (Rs. Fifteen Crore Thirty One Lakh
Thirteen Thousand Seven Hundred & Fifty) for the India-Australia Cricket Series, 2007 to the
claimant which is Inclusive of the principal sum of Rs. 8,82,50,000/- (Rs. Eight Crore Eighty
Two Lakh Fifty Thousand) and Interest thereon " 18% per annum for the period 15.1.2008 to
23.1.2012 amounting to Rs. 6,48,63,750/- (Rs. Six Crore Forty Eight Lakh Sixty Three
Thousand Seven Hundred & Fifty) alongwith pendente lite and future interest @ 18% per
annum till the date of payment or direct respondent No. 1 to pay 25% of the actual net
revenue for the India Australia series, 2007 if the actual net revenue was in excess of Rs.
36.30 crore alongwith interest thereon @ 18% per annum w.e.f 15.1.2008 upto the date of
payment, direct respondent No. 1 to pay Rs. 1,34,46,250/- (Rs. One Crore Thirty Four Lakh
Forty Six Thousand Two Hundred & Fifty) to the claimant for the India-Australia T-20 match,
2007 which Is inclusive of the principal sum of Rs. 77,50,000/- (Rs. Seventy Seven Lakh Fifty
Thousand) and interest thereon @ 18% per annum for the period 15.1.2008 to 23.1.2012
amounting to Rs. 56,96,250/- (Rs. Fifty Six Lakh Ninety Six Thousand Two Hundred & Fifty)
alongwith pendente lite and future interest @ 18% per annum till the date of payment
or
direct respondent No. 1 to pay 25% of the actual net revenue for the India Australia T-20
match, 2007 if the actual net revenue was in excess of Rs. 3.10 crore alongwith interest
thereon@ 18% per annum w.e.f 15.1.2008 upto the date of payment.
iv. direct respondent No. 1 to pay Rs. 8,36,08,125/- (Rs. Eight Crore Thirty Six Lakh Eight
Thousand One Hundred & Twenty Five) for the India-England Cricket Series, 2008 to the
claimant which Is inclusive of the principal sum of Rs. 5,48,25,000/- (Rs. Five Crore Forty Eight
Lakh Twenty Five Thousand) and interest thereon @ 18% per annum for the period 16.3.2009
to 23.1.2012 amounting to Rs. 2,87,83,125/- (Rs Two Crore Eighty Seven Lakh Eighty Three
Thousand One Hundred & Twenty. Five) alongwith pendente lite and future interest@ 18% per
annum till t'he date of payment:
or
direct respondent No. 1 to pay 25% of the actual net revenue for the India England series,
2008 if the actual net revenue was in excess of Rs. 22.05 crore, alongwith interest thereon @
18% per annum w.e.f 16.3.2009 upto the date of payment
vi. direct respondent no. 2 to render audited accounts in respect of revenue earnings from the
following series:
a. India - Bangladesh - Pakistan Triangular Cricket series played in June, 2008
b. India-Sri. Lanka Cricket Series, 2009 played in January-February, 2009.
vii. direct respondent No. 2 to pay Rs. 26,27,854/- (Rs. Twenty Six Lakli Twenty Seven
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Thousand Eight Hundred & Fiffy Four) to the claimant for the India Bangladesh series, 2007
which is inclusive of the principal amount of Rs. 14,16,633/- (Rs. Fourteen Lakh Sixteen
Thousand Six Hundred & Thirty Three) and interest thereon @ 18% per annum for the period
14.8.2007 to 23.1.2012 amounting to Rs. 12,11,221/- (Rs. Twelve Lakh Eleven Thousand Two
Hundred & Twenty One) alongwlth pendente lite and future interest @ 18% per annum till the
date of payment;
vii. direct respondent No. 2 to pay Rs. 4,07, 78, 750/- (Four Crore Seven Lakh Seventy Eight
Thousand Seven Hundred & Fifty) for the India-Bangladesh-Pakistan Cricket Serles, 2008 to
the claimant which Is Inclusive of the prlnclpal sum of Rs. 2,52,50,000/- (Rs. Two Crore Fifty
Two Lakh Fifty Thousand) and interest thereon (g 18% per annum for Ihe period 13.9.2008 to
23.1.2012 amounting to Rs. 1,55,28,750/- (Rs. One Crore Fifty Five Lakh Twenty Eight
Thousand Seven Hundred & Fifty) alongwith pendente lite and future interest 18% per annum
till the date of payment
Or
direct respondent No. 2 to pay 25% of the actual net revenue for the India-Bangladesh-
Pakistan Cricket Series, 2008 If the actual net revenue was In excess of princlpal sum of Rs.
10.10 crore alongwlth Interest thereon @18% per annum w.e.f 13.9.2008 upto the date of
payment.
vi/I. direct respondent No. 2 to pay Rs. 2,62,49,625/- (Two Crore Sixty Two Lakh Forty Nine
Thousand Six Hundred & Twenty Five) for the India-Sri. Lanka series, 2009 to the claimant
which Is Inclusive of the principal sum of Rs. 1,75,50,000/- (Rs, One Crore Seventy Five Lakh
Fiffy Thousand) and Interest thereon @ 18% per annum for the period 14.5.2009 to 23.1.2012
amounting to Rs. 86,99,625/- (Rs. Eighty Six Lakh Ninety Nine Thousand Six Hundred &
Twenty Five) alongwith pendente lite and future Interest @ 18% per annum till the date of
payment
Or
direct respondent No. 2 to pay 25% of the actual net revenue collections for the India-Sri.
Lanka series, 2009 if the actual net revenue was in excess of the principal sum of Rs. 7,02
crore atongwith Interest thereon @ 18% per annum w.e.f 14.5.2009 upto the date of payment.
Ix. Costs of the proceedings be awarded to the claimant;
x. such other order be passed as deemed fit in the circumstances of the case".
10. The petitioner/respondent No. 2's case in the reply to the claim petition was that the sums
claimed by the respondent No. 1 have already been adjusted against the amounts due to the
petitioner. It was the case of the petitioner that the respondent No. 1 had booked
advertisements, time totalling to 16,549 extra seconds but it accounted only for 30,000
seconds and had paid to the petitioner only Rs. 60,93,75,000 towards 75% of the value of the
30,000 seconds. The value of the additional time consumed by the respondent No. 1 of 16,549
seconds and 75% thereof being 19,86,82,487/- is required to be paid by the respondent No. 1.
In fact, the reliefs prayed for In the counter claim by the petitioner were as under:
(a) Be It declared that the adjustments made: by the Respondent No. 1 vlde Its letter, as
recorded In its Advocate's letter dated 24.10.2008 and as recorded in Its Advocate's letter
dated 16-05-2009 addressed to the Claimant-Exhibit-AN to the Statement of Claim appearing
on page 325 is valid and binding upon the claimant and the claimant be directed to record
such adjustments in Its books of accounts.
(b) For an award that adjustment of a sum of Rs. 4,12,62,500/- orlgi11al/y owned by the
respondent No. 2 to the claimant Is validly adjusted against the amount of Rs. 7,66,06,626/-
owed by the claimant to respondent No. 1.
26

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(c) For an award that the Claimant is liable to pay to the Respondent No. 1 a sum Rs.
21,19,81,626/- as per particulars Is annexed herewith.
(d) For an award that the adjustment of a sum of Rs. 13,53,75,000/- claimed by the claimant
from the respondent No. 1 against the sum of Rs. 21,19,81,626/- owed by the claimant to the
respondent No. 1 is valid and binding upon the claimant.
(e) For an award directing the claimant to pay to the respondent No. 1 a sum of Rs.
3,53,44,126/- as per particulars Is annexed herewith;
(f) For costs;
(g) For such other and further reliefs as the nature and circumstances of the case may require.
11. The basis for the aforesaid counterclaim of the petitioner as stated by the petitioner in Its
notice dated May 16, 2009, got issued through its lawyers, was that an amount of Rs.
1,32,99, 139/- was due to the petitioner by the respondent No. 1 in respect of India-England
2006 Cricket Series. In relation to India-Pakistan November-December 2007 Series, the
petitioner had demanded a sum of Rs. 19,86,82,847 /- which amount as on the date of notice
was said to be Rs. 21, 19,81,626/-. In respect of India-Australia October 2007 Series and India
-England November-December 2008 Series, a sum of Rs. 13,53, 75,000/- was claimed by the
respondent No. 1/Prasar Bharti and on adjustment of the claim of the respondent No. 1/Prasar
Bharti against the petitioner's claim of Rs. 21,19,81,626, an amount of Rs. 7,66,06,626/- was
due on that date. That apart, it was the case of the petitioner that it was nominated by the
Nimbus Sports International Singapore to be a Revenue Management Company In respect of
India-Bangladesh May 2007 Series, India-Pakistan-Bangladesh June 2008 Cricket Series, and
India-Sri. Lanka January-February 2009 Series. After adjusting a sum of Rs. 15,37,500/-; the
net amount claimed by the respondent No. 1/Prasar Bharti was Rs. 4,12,62,500/- from Nimbus
Sports International Singapore and the petitioner has procured from Nimbus Sports
International Singapore-respondent No. 2 their mandate to adjust the amount of Rs.
4,12,62,500/- owed by it to the respondent No. 1/Prasar Bharti, against the amount of Rs.
7,66,06,626/- owed by Prasar Bharti to the petitioner and after adjustment, the net amount
payable by Prasar Bharti/respondent No. 1 to the petitioner was Rs. 3,53,44,126/-.
Proceedings before the Tribunal:
12. It is noted that the Tribunal vide its order dated October 5, 2012 had directed disclosure of
Revenue Generation Statements. The petitioner furnished Revenue Generation Statements on
July 11, 2013. Based on these statements, the respondent No. 1 filed an application under
Section 17 of the Act before the Tribunal on July 15, 2013, inter alia, contending that as per
the petitioner's own showing, the petitioner and the respondent No. 2's actual revenues were
much less than estimated revenue for all but one series. Even though, the respondent No.
1/Prasar Bharti disputed the correctness but still it was its case that one were to go by the
same, the petitioner and the respondent No. 2 are liable to pay the following admitted amount:
Series Bid of the Entitlement Net Revenue 250/o of the Net Amount due
(A) Respondents of the Earned as Revenue Earned to the
(B) claimant As Per the (E) claimant as
per Bid Respondents per the
(25%) of (B) (D) figures
(C) provided by
the
Respondents
(F)
India 38,40,00,000 9,60,00,000 30,17,22,477 7 ,54,30,619 .00 9,60,00,000
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Australia
2007
India 10,10,00,000 2,52,50,000 9,12,51,122 2,28, 12780. 50 2,52,50,000
Bangla
Pak
2008
India 2,20,50,000, 5,48,25,000 13,21,76,437 3,30,44,109.25 5,48,25,000
England
2008
India 7,02,00,000 1,75,50,000 20,67,69,688 5,16,92,422.00 5,16,92,422
Sri.
Lanka
2009
Total 57,72-50-000 19.36.25,000 73,19.19,724 18,29,79-930.80 22-77.67.422
It accordingly made the following prayers: -

(a) direct the respondents to deposit an amount of Rs. 22,77,67,422/- alongwith appropriate
Interest and/or furnish a Bank Guarantee for the said, amount so as to secure the amount in
dispute;
(b) secure the amount of Rs. 22,77,67,422/- alongwith appropriate interest in such other
mariner is this Hon'ble Tribunal may deem fit; and
( c) pass such other order as deemed fit in the circumstances of the case.
13. Suffice to state, the petitioner and the respondent No. 2 had opposed the application and
sought the dismissal of the same.
14. It may be noted here that the respondent No. 1/Prasar Bharti had also filed an application
on September 13, 2013 for making an interim award in the sum of Rs. 22,77,67,422/-. In
reply, the petitioner had denied that It had made any admission as alleged by the respondent
No. 1/Prasar Bharti. Both the applications were initially heard on November 11, 2013 when Mr.
Rajeev Sharma, learned counsel for the respondent No. 1 had concluded his submissions. On
the request of the learned Senior Counsel for the petitioner and the respondent No. 2, the
matter was adjourned to February 3, 2014. On that date, the petitioner filed two applications;
one for adjourning the matter and the other for allowing inspection and discovery of a number
of documents. The Tribunal adjourned the matter to March 8, 2014 by directing the respondent
No. 1 to give inspection of the documents required by the petitioner. On that day, it was
reported by the learned counsel for the petitioner and the respondent No. 2 herein that the
inspection was incomplete In certain particulars. The matter was accordingly adjourned to May
2, 2014 on which date, the counsel for the petitioner and the respondent No. 2 came forward
with fresh objections stating that inspection was not fully granted, that the copies of the
documents required, were not given. The Tribunal thought it flt not to postpone the hearing of
the respondent No. l's application awaiting the result of the inspection and discoveries sought
by the petitioner and respondent No. 2. The reasoning given by the Tribunal was admittedly
Inspection and discovery of the several documents asked for by the petitioner and respondent
No. 2 were either to substantiate their claim/counterclaim or with a view to enable them to
increase the amount claimed by them by way of counterclaim and because those claims were
yet to be established at the trial. It may be pointed out here that the Tribunal had heard the
arguments of the learned Senior Counsel for the petitioner and the respondent No. 2 on the
respondent No. i's application. The application under Section 17 dated July 15, 2003 was
decided on May 06, 2014 by the Tribunal (as per majority) whereby it directed the petitioner
and the respondent No. 2 to furnish a bank guarantee in a sum of Rs. 20 Crores in favour of
the respondent No. 1 within three weeks' from that date. The bank guarantee was to be
obtained from a nationalized bank in India and was to be unconditional, payable on demand by
28

the respondent No. 1 without demur or objection. The said bank guarantee was to be kept alive
by the petitioner and the respondent No. 2 pending arbitral proceedings. At the same time, the
respondent No. 1 was to invoke the bank guarantee, subject only to the orders of the Tribunal.
It may be noted here that the other application for interim award filed on September 13, 2013
was kept pending awaiting the compliance of the order dated May 6, 2014.
15. Hon'ble Mr. Justice V.N. Khare had given a dissenting order whereby he was of the view
that the respondent No. 1 herein, the claimant before the Tribunal owed certain amounts to the
petitioner and the respondent No. 2 for which they have flied a counter claim. According to
him, the counter claim by the petitioner and the respondent No. 2 was in the nature of set off,
the amount due to them, being an accounting adjustment which only could be done after
looking into the evidence led by the parties.
16. Justice V.N. Khare was of the view that the petitioner and the respondent No. 2 in order to
substantiate their case has prayed for production and inspection of the documents by the
respondent No. 1, which has been allowed by the Tribunal and since the production and
inspection of the documents was not complete, the consideration of the applications on merit
be deferred and be taken after the evidence Is led by the parties. The order dated May 6, 2014
was challenged by the petitioner herein in Arb. Appeal No. 15/2014 before this Court. The
initial hearing In Arb. Appeal No. 15/2014 was held on July 4, 2014 when notice was issued for
July 7, 2014. On July 7, 2014, time was sought by the learned counsel for the respondent No.
1/Prasar Bharti which request was acceded to and the matter was posted for August 26, 2014.
On August 26, 2014, further time was sought by the learned counsel for the respondent No. 1.
On the said date, it was clarified by the Court that there is no stay in the case and the Tribunal
may continue with the proceedings. Accordingly, the Tribunal heard the application dated
September 13, 2013 on September 12, 2014 and vide the order dated September 16, 2014
(as per majority) was of the view that it was a fit case where an interim award should be
made. However, with a view to provide a final chance to the petitioner and the respondent No.
2 to show their bona fides, it was directed that they may deposit with the respondent No. 1 an
amount of Rs. 22 Crores on or before November 1, 2014 through a bank demand draft from a
nationalized bank in India. The learned Tribunal also observed that in case the petitioner and
the respondent No. 2 failed to make such deposit, an Interim award would follow awarding a
sum of Rs. 22,77,67,422/- in favour of the respondent No. 1. Justice V.N. Khare In his
disserting order was of the view that the petitioner and the respondent No. 2 in their reply
have used the expression "adjustment of liabilities". The said expression cannot be construed
as admission of claim by them. In law, the admission must be an equivocal and without
reservation. The expression 'adjustment' does not amount to admission and in his view the
consideration of the application need to be deferred. I may state here that the learned Senior
Counsel for the petitioner and the respondent No. 2 had argued before the Tribunal on
September 12, 2014, only one aspect that when there Is a counter claim, no decree should
follow In favour of the respondent No. 1 even if the respondent No. 1 's claim is admitted by the
petitioner and the respondent No. 2. In that regard, he had cited three judgments.
17. The order dated September 16, 2014 was also challenged by the petitioner before this
Court vide Arb. Appeal No. 30/2014. The learned Single Judge directed the Arb. Appeal No.
30/2014 be listed along with Arb. Appeal No. 15/2014
18. That on December 11, 2014, Tribunal, has by referring to its earlier order dated September
16, 2014 and noting the failure of the petitioner and the respondent No. 2 to deposit the sum
of Rs. 22 Crores gave a declaration that the interim award has come Into effect and issues to
be determined are the Interest on the amount awarded by the interim award and the counter
claim of the petitioner and respondent No. 2. It is pursuant thereto, the present petition has
been filed challenging the Interim award dated September 16, 2014.
The submissions;
19. Mr. Jayant Bhushan, learned Senior Counsel appearing for the petitioner would submit that
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the petitioner had never acknowledged its liability towards the respondent No. 1 nor admitted
the claim of the respondent No. 1 and the conclusion of the Tribunal is not tenable. He would
refer to the legal notice dated May 16, 2009 to contend that the claim of the respondent No. 1
against six matches need to be adjusted against the money owed by the respondent No. 1 to
the petitioner against India-Pakistan Series 2007 for which the respondent No. 1 was the RMC
and also the money owed by the respondent No. 2 to the respondent No. 1/Prasar Bharti and
on such adjustments, the respondent No. 1 rather owes the petitioner an amount of Rs.
3,53,44,126/-. The notice only stated that llablllty was discharged by way of an adjustment.
He would also state that a reading of averments in paragraphs 36, 37, 61, 69, 78 of the claim
petition and paragraphs 27, 28, 47, 48, 54 and 61 of the defence statement would show that
the petitioner had specifically denied the claims. He would also state that the claim of the
respondent No. 1 in its application for interim award was also denied by the petitioner in its
reply. He would rely upon the following judgments in support of his contention that there was
no unequivocal and/or absolute and/or unconditional admission by the petitioner to the claims
made by the respondent No. 1:
(i) Valliamma Champaka Pillai v. Sivathanu Pillai, (1979) 4 sec 429

(ii) Himani Alloys Ltd. v. Tata Steel Ltd., (2011) 15 sec 273
(iii) Western Coalfields Ltd. v. Swati Industries, AIR 2003 Born 369
20. Learned Senior Counsel also contends that the impugned order could not have been passed
without considering the counter claim of the petitioner. According to him, It was the case of the
petitioner that the respondent No. 1 was the RMC for India-Pakistan Series 2007 and had
booked advertisements for 16,549 extra seconds over and above the contractual time of 30000
seconds and the petitioner is entitled to the revenue for those extra seconds. According to him,
on the face of the counter claim, the interim award overlooking the counter claim in a
piecemeal by accepting the version of the respondent No. 1, is not tenable. He would rely upon
the judgment of the Supreme Court In the case of K. V. George v. Secretary to the Govt., Water
and Power Department, Trlvandrum (1989) 4 SC 595.
21. It was also his contention that the interim award is bad as the same was passed without
considering the issue of limitation specifically raised by the petitioner. According to him, the
issue of limitation was a substantive issue having a bearing on the maintainability of the
claims and could not have been overlooked. He would also state that the interim award passed
on the ground of non-compliance of the interim order is also bad in law. In that regard, he
would reiterate that Interim award is in the nature of a final award, to the extent of the claims
made by the respondent No. 1 and such award ought to have been passed after adjudicating
the claims of the parties in accordance with the law on the basis of the material available on
record. He would also state that the interim award passed on a speculation that the petitioner
does not have sufficient assets, is bad in law. He states that on May 2, 2014 while hearing the
application for Interim order, the Tribunal, for the first time, had asked the counsel for the
petitioner about the assets of the petitioner company. The counsel for the petitioner company
sought time to seek Instructions. However, without providing an opportunity to furnish details
of assets of petitioner, the Tribunal passed the interim order. Subsequently, on the same
ground, interim award came to be passed. In the last, it was his submission that the award is
against the principles of natural justice inasmuch as the petitioner had filed an application for
inspection of discovery of documents, to be furnished by the respondent No. 1. However, the
inspection of the documents was not complete which was noted by the Tribunal in its order
dated March 8, 2014. By the said order, the Tribunal directed the parties to file applications for
the discovery of documents and posted the matter for hearing the said applications on May 02,
2014. Surprisingly, on May 2, 2014, the Tribunal observed that it was not necessary to
adjudicate the applications for discovery of documents at that stage, and proceeded with the
hearing and passed the interim order and ultimately, for non-compliance of the interim order,
interim award came to be passed in favour of the respondent No. 1.
30

22. It was his submission that the Interim award need to be set aside to enable the Tribunal to
decide the respective claims and counter claim of the parties together.
23. On the other hand, Mr. Rajeev Sharma, learned counsel for the respondent No. 1 would
justify the interim award dated September 16, 2014 (as per the majority), which according to
him, was passed because of unequivocal admissions in the pleadings. In this regard, he has
drawn my attention to averments made in paragraphs 24, 28, 36, 49, 60, 61, 63, 71 of the
claim petition and paragraphs 23, 27, 38, 48, 50 and 56 of the reply to the claim petition to
highlight the admissions of the petitioner and the respondent No. 2, which relates to the
amounts payable for the India-Australia ODI Series 2007, India-Australia T-20 Matches 2007,
India-England Series 2008, India-Bangladesh-Pakistan Triangular Series June 2008 and India-
Sri. Lanka Cricket Series 2009. He would also refer to the letter dated April 2, 2008 and its
Annexure-I with regard to the India-Australia Series 2007 to show that as per the petitioner
itself, respondent No. 1/Prasar Bharti's share of 25% of Net Projected Revenue was Rs.
9,00,84,643/- which along with notice dated May 16, 2009 Is an acknowledgement of the
subsisting liability. He would state that the mandate to adjust the amounts due from the
petitioner to the respondent No. 1/Prasar Bharti was unequivocal admission of its liability. He
would deny the counter claim of the petitioner with regard to the extra seconds having not
paid by the respondent No. 1/Prasar Bharti as fictional. According to him, 75% of the revenue
realized from the sale of commercial time had already been paid to the petitioner and the
amount of Rs. 60,93,75000/- is not limited to 75% of the 30,000 seconds. He would state, till
such time, the counter claim of the petitioner is adjudicated, it is still a claim. In any case, it is
his case that the counter claim of the petitioner has not been admitted unlike the claims of the
respondent No. 1 by the petitioner and the respondent No. 2.
24. On limitation, It Is his submission that no such objection was raised at the time of hearing.
According to him, the same is clear from the fact, even the dissenting order of Justice V.N.
Khare dated September 18, 2014 does not refer to the point of limitation. According to him,
the only point urged before the Tribunal was, even if the claims have been admitted by the
petitioner, no decree should follow, since there is a counter claim. He would state that even in
the petition before this Court, It is not averred that the issue of limitation was pressed at the
time of hearing and the same was ignored. The only reference to the limitation In the petition
Is In the ground, In paragraph 3.20, which also does not state, the Issue was pressed at the
time of hearing.
25. Even on merits, It is his submission that the dealings between the parties took place
between the years 2007-09, the arbitration was Invoked by the respondent No. 1 in June,
2009; statement of claim filed In January 2012, which Is within limitation period. According to
him, even If the limitation is accounted from the date of adjustment was conveyed i.e. May 16,
2009, the claim is within limitation. He would state that explanation to Section 18 of the
Limitation Act provides that an acknowledgement can be coupled with a refusal to pay or claim
for set off.
26. It is his case that the pendency of the counter claim was no bar to the passing of an
Interim award to the extent the claim was admitted. According to him, a counter claim is
nothing but a cross suit. A Court, in its discretion, can order it to be tried separately. So, can
the Tribunal. According to him, the claim was admitted and counter claim was disputed. He
would state, any view contrary, would reduce the provisions of Order 12 Rule 6 CPC a dead
letter Inasmuch all one has to do to avoid a decree on admission, Is only prefer a counter claim.
He would state that the judgment of the Supreme Court In K. V. George (supra) Is not an
authority for proposition that an Interim award cannot be made on the basis of an admission on
account of a pendency of a counter claim. It is his submission that the petitioner, all
throughout, had avoided to discharge its liability towards the respondent No. 1 on one pretext
or the other. The initial order to give a bank guarantee was not complied with by the petitioner.
Even the Impugned order dated September 16, 2014, directs the petitioner to deposit the
amount of Rs. 22 Crores on or before November 1, 2014 which was also not complied with. He
would also state that between the period 2007-2009, the petitioner neither opened an Escrow
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Account; nor gave bank guarantee for 25% nor paid any amount for the Series/events where
the petitioner and the respondent No. 2 were the RMC, despite the Act and the Rules
stipulated so. He has relied upon the following judgments in support of his case and would
seek the dismissal of the petition:-
(i) State of Maharashtra v. Ramdas Shrlnlvas Nayak, (1982) 2 sec 463

(ii) Union of India v. Karam Chand Thappar and Bros. (Coal Safes) Ltd., (2004) 3 sec 504
(Iii) Numero Uno International Ltd. v. Prasar Bharti, FAO (OS) 507/2007
(iv) Nagindas Ramdas v. Dafpatram Ichharam (1974) 1 sec 242
(v) Mcdermott International v. Burn Standard Co. Ltd., (2006) 11 sec 181
(vi) Shfkharchand v. Bari Bal, AIR 1974 MP 75
(vii) iron & Hardware (India) Co. v. Firm Sham/al & Bros, AIR 1954 BOMBAY 423
(viii) Jabed Sheikh v. Taher Malik, 45 CWN 519
(ix) Gammon India Ltd. v. Sankaranarayanan Construction, OMP No. 628/2008 (Madras High
Court)
27. Mr. Jay ant Bhushan, learned Senior Counsel for the petitioner, in his rejoinder to the
submissions made by Mr. Rajeev Sharma would state that the interim award can only be
passed when there Is no counter claim by the other party. In other words, according to him, if
there are claims by one party and no counter claim by the other to the extent the claims are
admitted by the other party, the Interim award can be passed. According to him, the judgment
of the Supreme Court in K. V. George (supra) is exactly on this proposition where the claim was
adjudicated overlooking the counter claims and the Supreme Court has held that the High
Court could not have done it. He would state that even if there were admissions, interim award
could not be passed in view of the counter claim. He would lay stress on the fact that the
claims made by the respondent No. 1 were beyond the period of three years. He would refer to
Section 18 of the Limitation Act to contend, there was no acknowledgement of debt/liability.
He states, that, even assuming there was an acknowledgment of liability, still, the claims need
to be within limitation w.e.f. April 2, 2008. He reiterated his submission on extra air time to
contend that the petitioner was entitled to revenue for 16549 extra seconds which amounts to
Rs. 19,86,82,487/-.
28. On the other hand, Mr. Rajeev Sharma would reiterate that even the letter to set off dated
May 16, 2009 is an acknowledgement and the time would get extended in terms of Explanation
to Section 18 of the Limitation Act. He would refer to the order dated September 16, 2014 to
highlight, the limited submission made by the learned Senior Counsel for the petitioner.
29. Both the parties have filed their respective written submissions.
30. Having heard the learned counsel for the parties and considered the written submissions
made by them, the first and foremost point need to be decided is whether, there was an
unequivocal admission on the part of the petitioner and the respondent No. 2 of their liability
towards respondent No. 1. In this regard, it is relevant to refer to the averments made in the
claim petition and the corresponding reply of the petitioner and the respondent No. 2 before
the Arbitral Tribunal. I reproduce the relevant paragraphs to appreciate the respective stand of
the parties:
Series Averments in the claim Reply to claim

India Australia 24. That in September- Reply to para 24 (Not replied).
Cricket Series, 2007 October, 2007 an India- Reply to para 21:
32

(Refer to letter dated Australia series, was 22. With reference to paragraph 27, this
02.04.2008) scheduled to be played respondent repeats and reiterates the
in. India. The said series reply to paragraph 26 and the contents o
comprised of seven ODI's the record of discussions are evident from
and one T-20 match. the documents except that It was not
Nimbus Communications binding upon the respondent No. 2.
Ltd. was the rights ho/de Reply to para 28:
in respect of the said 23. The contents of paragraphs 28 and 29
series. Meetings took do not call for any comments from this
place on September 17, Respondent.
18, 19 & 20, 200 Replv to para 16 ·
between the officials o 27. With reference to paragraph 36, it Is
the claimant and denied that the 1'' Respondent's plea that
respondent no. 1 fo its auditors had refused to conduct the
finalising arrangements audit till the signed agreement was shown
for the sharing of the to them was a specious plea. As a matte
signals of the matches by of fact and, practice and orde
respondent No. 1 with the requirement, the auditors always require a
claimant and marketing signed agreement before they can conduct
of commercial time an audit. In the Instant case Prasa
associated with such Bharat/ failed and neglected to sign the
telecasts. agreement and as such the auditors did
XXX not proceed with their task of conducting
28. Thereafter by way of a the audit.
bidding process held on There are no payments due from the
20.9.2007, Responden Respondents towards the Claimant and all
No. 1 was appointed as payments have already been, made by the
the Revenue Managemen Respondents. No claim can now subsist
Company for the OD from the Claimants against the
matches since it had Respondent.
offered a net projected Replv to paragraph 37:
revenue of Rs. 35.30 28. With reference to paragraph 37, It is
crore as against the offe denied that a sum of Rs. 9,00,74,643/-
of Rs. 35 crore made by was due or payable from the Responden
the claimant for the No. 1 to the Claimant, The letters o
ODI's. The bids submitted demand notwithstanding it is submitted
by the parties for the that the Claimant's share would have
ODI's are annexed as become due after the audit process was
ANNEXURE-G. A separate completed and this could not be carried
meeting for appointing out since there was no signed agreement:
the RMC for the T.20 In the circumstances there Is no question
match was held on of making any payment of the amount
19.10.2007. Responden demanded.
No. 1 was appointed as
the RMC since it had
offered Rs. 3.1 O crore fo
the T-20 match as
against the offer of Rs.
2.8 crore by the claimant.
The bids submitted by
the parties for the T-20
match are annexed as
ANNEXURE-H.
xxxx
36. In response to the
letter dated 31.3.2008,
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respondent No. 1 sent a

letter dated 2.4.2008
along with which it
forwarded an unaudited
revenue generation
statement on the
specious plea that "ou
auditors have refused to
conduct an audit, till we
share with them the
signed agreemen
between PB/Nimbus fo
this event". As per the
said statement also an
amount of Rs.
8,23,24,643/- was
payable to the clalman
for the ODI series and an
amount of Rs. 77,50,000
- was payable for the T-
20 match. Thus the total
amount payable as pe
respondent No. 1 itsel
was Rs. 9,00,74,643/-. A
copy of the letter dated
2.4.2008 sent by
respondent No. 1 Is
annexed as ANNEXURE-R.
37. Thereafter by a lette
dated 26.6.2008 the
claimant called upon
respondent No. 1 to a
least pay the amount,
which as per Its own
unaudited statement was
due to the claimant. A
26.6.2008 is annexexd as
ANNEXURE-S. Thereafte
a reminder dated
18.7.2008 was sent to
respondent No. 1,
whereby It was called
upon to pay Rs.
9,00,74,643/- and to
provide an audited
statement of account, A
18.7.2008 is annexed as
ANNEXURE-T.
Subsequently by a Jette
dated 16.10.2008
respondent No. 1 was
again called upon to pay
Rs. 9,00,74,643/-, i.e.
the amount, which
34

admittedly was due from

it to the claimant as pe
its own unaudited
revenue generation
statement. A copy of the
letter dated 16.10.2008 is
annexed as ANNEXURE-U.
However, no response
was given by responden
No. 1 to the claimant's
said letter.
India Bangladesh 49. That an lndia- Reply to paragraphs 49 to 52 and 51-52
Pakistan, 2008 Bangladesh-Pakistan 38. The contents of paragraphs 49 to 52
Cricket Series cricket series was are substantially correct and contents o
scheduled to be played in paragraph 51 and 52 are matters of record
Bangladesh, in June, and do not call for any comments from
2008. The said series this respondent.
comprised of four GDI's, Reply to paragraph 60
of which three ODI's (two With reference to paragraph 60, the
ODI's featuring India and claimant would Have become entitled to
the final) were sporting Its share of revenue only upon signing o
events of national the agreement acceptable to both the
importance. Responden parties. In the circumstances the claim Is
No. 2, Nimbus Sports vague and lacks material particulars. The
International Pte Ltd. was claimant has also made an attempt to
the rights holder in specify its claim dispute, having
respect of the said series. knowledge of the advertisers' telecast on
By a bidding process held its own channel. It is estopped from
on 21.5.2008, it was making any claim on this basis.
decided that responden Reply to para 61
No. 1 would market the 48. With reference to paragraph 61, the
air time associated with contents thereof are denied as speculative
the event, since it had
offered net projected
revenue of Rs. 10.10
crore as against the offe
of Rs. 4,0 crore made by
the claimant. Accordingly
Respondent No. 2 was
appointed as the Revenue
Management Company.
The bid documents fo
the India-Bangladesh-
Pakistan cricket series are
annexed as ANNEXURE-X.
associated with the event,
since it, had offered ne
projected revenue of Rs.
81.25 crore as against the
offer of Rs. 75. 60 crore
net made by responden
No. 1. A formal
agreement dated
3.11.2007 was executed
between the parties.
XXX
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60. That in the absence o

the furnishing of a
revenue generation
statement by the
respondent No. 2, it is no
possible for the claiman
to give an exact estimate
of the amount due to It.
The claimant was entitled
to 25% of the actual
revenue or 25"/o of the
net projected revenue,
whichever was higher.
61. However, what can be
stated with certainty is
that If the revenue earned
was less than the net-
10.10 crore of which Rs.
2,52,50,000/- constituted
the guaranteed revenue
share of the claimant, the
claimant was at leas
entitled to that amount o
25% of the actual
revenue, if actual revenue
exceeded Rs. 10.10 crore,
The requisite amount was
payable to the claiman
on or before 13.9.2008
but has not been paid till
date. The claimant is also
entitled to interest @
18% per annum on the
amount due to it w.e.f.
13th Se tember 2008.
India England 63. That an India-England Reply to paras 63 to 65
Series, 2008 cricket series was 50. With reference to paragraphs 63 to 65,
scheduled to be played in the same are matters of record and do not
November-December, call for any specific response except tha
2008. Respondent No. 1, the respondent No. 1 is not bound to sign
Nimbus Communications any agreement as proposed since the
Ltd. was the rights ho/de terms proposed were not acceptable to it.
in respect of the said
series. The said series
comprised of seven ODI's.
By the bidding process
held on 27.10.2008, i
was decided tha
respondent No. 1 would
market the air time
associated with the event,
since it had offered ne
22.05 crore as against the
offer of Rs. 6.80 crore
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made by Prasar Bharati.

Accordingly Responden
No. 1 was appointed as
the Revenue Managemen
Company. The bid
documents are annexed
as ANNEXURE-AD.
India Sri. Lanka 71. That an India-Sri. Reply to paras 71 and 72
Series, 2009 Lanka cricket series was 56. With reference to paragraph 71 and
scheduled to be played in 72, the contents are matters of record and
Sri. Lanka in January- are not in dispute.
February, 2009.
Respondent No. 2,
Nimbus Sports
International Pte Ltd,,
was the rights holder In
respect of the said series.
The said series comprised
of five ODI's & one T-20,
out of which an
arrangement under the
Act was made for the fow
ODI's & the T-20 match
(one OD! not being
telecast on account of the
demise of Mr. R.
Venkataraman, forrne,
President of India). By
the bidding process held
on 27.1.2009, it was
decided that responden
No. 2 would market the
air time associated with
the event, since it had
offered net projected
revenue of Rs. 7.02 crore
as against the offer of Rs.
4.0 crore made by the
claimant. Accordingly
Respondent No. 2 was
appointed as the Revenue
Management Company.
The bid documents are
annexed as ANNEXURE-
AH.
31. It may be noted here, vide letter dated April 2, 2008 the petitioner in its communication to
the respondent No. 1 has shown the sharable revenue computation for the India Australia
Series 2007 in terms of Annexure I. The Annexure I depicts an amount of Rs. 8,23,24,643/-,
the share of the respondent No. 1/Prasar Bharti I.e. 25% of the Net Projected Revenue for the
seven ODis played In that series and Rs. 77,50,000/- for the T-20 matches. In fact,
respondent No. 1/Prasar Bharti, vide its letter dated June 26, 2008 had called upon the
petitioner to deposit the said amount.
32. Also for India Pakistan Bangladesh Triangular Series, 2008, the petitioner had bid for
appointment as a Revenue Management Company on the projected net revenue of Rs. 10.10
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Crores against which, the respondent No. 1/Prasar Bharti's share is of at least 25% i.e. Rs.
2,52,50,000/-.
33. That apart, I note, in the legal notice dated May 16, 2009, the petitioner had acknowledged
the respondent No. l's claim of Rs. 13,53,75,000/- and also the amount of Rs. 4,12,62,500/-
owed by Nimbus Sports International Singapore to the respondent No. 1/Prasar Bharti. Even
though, in the said letter, the petitioner mentioned about adjustment of the amount payable
against the amount payable to the petitioner on account of India Pakistan Cricket Series, 2007,
the respondent No. 1 has denied such a claim. In this regard, I may point out the response of
the respondent No. 1/Prasar Bharti in its letter dated June 24, 2009 addressed to the lawyers
of the petitioner, wherein, it has taken the following stand:
"Your letter also wrongly mentions that a sum of Rs. 13,53,75,000/- is due from your client to
Prasar Bharti for the India Australia, 2007 Serles comprising 7 ODis, India Australia, 2007 T-20
match and the India England, 2008 Series. The correct amount is Rs. 15,08,25,000/-. The said
amount has not been paid despite numerous reminders.
In addition, Nimbus Sports International, Singapore owes to my client a sum of Rs.

4,42,16,633 for the India In Bangladesh Series, 2007 India Bangladesh Pakistan Series, 2008
and the India in Sri. Lanka Series, 2009. The said sums are covered by separate agreements
between Prasar Bharati and Nimbus Sports International, Singapore and have not been paid
despite numerous reminders.
With a view to avoid paying the legitimate dues of Prasar Bharat/, which are held in trust by it,
your client has raised false disputes regarding the India Pakistan and India England Series and
come up with false and untenable claims. Whatever be the claims, your client has no right to
withhold amounts collected for and on behalf of Prasar Bharti and due to it, nor has it the right
to adjust the amounts collected for an on behalf of Prasar Bharati by Nimbus Sports
International, Singapore and payable by Nimbus Sports International Singapore to Prasar
Bharati. The alleged mandate by Nimbus Sports International, Singapore in favour of your
client is illegal, of no avail and indicative of the criminal conspiracy between your client and
Nimbus Sports International Singapore to misappropriate amounts held in trust for and on
behalf of Prasar Bharati.
In the circumstances, we hereby call upon your client to pay to Prasar Bharti the aforesaid sum
of Rs. 15,08,25,000/- alongwith interest thereon @ 18% per annum in terms of my client's
letters dated May 26, 2009 (bearing Nos. 2/41/2007-PX, 2/41/2007-PX & 2/20/2008-PX)
within fifteen days of the receipt of this notice, failing which we shall be constrained to initiate
appropriate criminal and clv/1 proceedings against your client and all persons In charge of and
In control of its affairs".
34. That apart, from the pleadings of the parties before the Tribunal, it is noted, the petitioner
has not denied the offer of net projected revenues, for the India England Serles 2008, and
India Sri. Lanka Series, 2009, which would entail Prasar Bharti/respondent No. 1 a revenue of
at least 25% of the projected revenues.
35. In the application filed under Section 17 of the Act, the respondent No. 1/Prasar Bharti,
has stated that the amounts due to it is as per the figures provided for by the petitioner and
the respondent No. 2. In reply to para 11 of the application, on a stand of the respondent No. 1
for a claim of Rs. 22,77,67,422/-, the petitioner has stated as under:
"11. The respondent No. 1 is, therefore, entitled to receive the said sum of Rs. 19,86,82,487/-
wlth interest thereon at such rate as this Tribunal may grant from the date on which the
claimant paid to the respondent No. 1 the sum of Rs. 60,93,75,000/-. It is further submitted
that the claimant has filed audited revenue statement on or about 22.07.2013 In this
proceeding in an attempt to show that the shareable revenue generated on the telecast of the
India Pakistan 2007 Cricket Series was Rs. 83,10,74,358/-. The said certification is far from
38

accurate and it has suppressed additional time sold by the claimant such special properties
and standard commercial elements such as Aston Bands, Action Reply Bugs, Third Umpire
Lights, On Air Graphics, Two Super (All pull through) per Over, End of Match packages etc.
contemplated in Clause 10 of the agreement for revenue management dated 3.11.2007
between the claimant and respondent No. 1. It is denied that the respondents were liable to
pay a sum of Rs. 19,36,25,000/- or any part thereof or that It raised false claim of Rs. 21
Crores as alleged or at all. It is vehemently denied that the respondent is making any
fraudulent claim In relation to the Ind! Pakistan Serles as alleged or at all".
36. There is no whisper in reply to para 11 that the amount of Rs. 22,77,67,422/- was not
payable to the respondent No. 1/Prasar Bharti against the four series/events. I note, the
petitioner had raised the issue of India Pakistan Series 2007 in reply to this para, the same
shall be subject to the determination by the Tribunal.
37. Suffice to state, from a reading of the letters/legal notice, the pleadings referred to above,
the petitioner claims to have adjusted the amounts payable by it against the revenue it has to
get for the India Pakistan Serles 2007. The petitioner and respondent No. 2 admit their liability
to that extent by giving credit to the respondent No. 1. In other words, the admission is
implicit in the very stand of the petitioner. On admissions, an interim award can be passed as
admissions are best proof of facts admitted. It has been held in Nagindas Ramdas's case
(supra) as under:
Admissions if true and clear, are by far the best proof of the facts admitted. Admissions In
pleadings or judicial admissions, admissible under Section 58 of the Evidence Act, made by the
parties or their agents at or before the hearing of the case, stand on a higher footing than
evidentlary admissions. The former class of admissions are fully binding on the party that
makes them and constitute a waiver of proof. They by themselves can be made the foundation
of the rights of the parties. On the other hand, evidentiary admissions which are receivable at
the trial as evidence, are by themselves, not conclusive. They can be shown to be wrong''.
38. The question which is required to be answered is whether the amount of Rs. 22,77,67,422/
- can be a subject matter of an interim award when a counter claim has been filed by the
petitioner. The issue is no more res-lntegra having been decided by a Division Bench of this
Court in the case of Numero Uno International Ltd. (supra) wherein the Division Bench on an
identical issue on more or less identical facts was of the following view:-
"6. What then remains to be examined is whether the pendency of a counter claim made by
the appellant before the arbitrator was sufficient to dis-entitle the respondent Prasar Bharti
from claiming evell the admitted amount due from the appellant by way of an Interim award In
Its favour. According to Mr. Jalt/ey, since the claim made by the respondent and the counter
claim of the appellant were evelltually to result ill a net amount which one or the ot/Jer party
would be required to pay, the payment of any amount which the appellant may have admitted
to be due and payable out of the claim made by the respondent would not meet the ends of
justice nor was any such payment otherwise necessary. We do not however thillk so. Tile legal
position as regards the nature of a set off and counter claim was examined in Canara Bank's
case (supra) and summarised thus:
"34. The following things are in common In set off and counter claim:
(1) None should exceed the pecuniary limits of the jurisdiction of the Court;
(2) Both are pleaded in the written statemellt, if the law governing the Court permits such plea
being raised by the defelldant ill the written statement;
(3) The plaintiff Is expected to file a written statement In allswer to a claim for set off or to a
counter claim;
(4) Even if permitted to be raised, the Court may in appropriate cases direct for set off or
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counter claim being tried separately;
(5) A defendant cannot be compelled to plead a set off nor a counter claim; he may as well
maintain an Independent action for enforcing the claim forming subject matter of set off or
counter claim;
(6) Both are liable to payment of court fee under Sch. 1 Art. 1 of Court-fees Act, 1870;
(7) Dismissal of suit or its withdrawal would not debar a set off or counter claim being tried,
may be followed by a decree against the plaintiff."
7. In the light of the above, there Is no gainsaying that the making of a counter claim is
tantamountlng to institution of an Independent suit for the adjudication of the claim of the
defendant. Not only court fee is payable on the counter claim but the counter claim remains
unaffected by the claim is a suit in Itself. So also the court has always the power to direct a set
off or counter claim being tried separately from the original suit. Such being the legal nature
and character of a counter claim, its pendency does not denude the arbitrator of the power to
make an interim award in the original suit/claim if such an interim award is otherwise justified.
What is significant is that the legality of an interim award may be tested by reference to the
material on which it is based rather than the areas of dispute that may still call for adjudication
between the parties. If an interim award on the basis of material available on record is not
justified, the Court may set aside the same under Section 34 of the Act. No interference with
an interim award would, however, be permissible only because the defendant has made a
counter claim or because some areas of dispute independent of the area covered by the Interim
award remains to be resolved."
39. It may be noted here that the judgment of Division Bench of this Court in Numero Uno
International Ltd. (supra), has been followed by a Single Judge of the High Court of Madras in
Gammon India Ltd. (supra).
40. Insofar as the judgment of the Supreme Court in K. V. George (supra), on which reliance
has been placed by Mr. Jayant Bhushan, Is concerned, I note the said judgment is
distinguishable on facts. In K. V. George (supra), the Supreme Court was considering a case
where the appellant before the Supreme Court, a contractor entered into an contract with
respondent on April 22, 1978 in connection with a construction of an embankment across
Musaliyar Podom between chainage 2573.5 M to 2827 M of E.B. Main canal of Kallada Irrigation
Project. Under the contract-agreement, the work was to the completed by March 30, 1980 i.e.
two years from the date of selection notice which was dated March 30, 1978. The appellant
having failed to complete the work as per the terms of the contract, the respondent by a notice
dated April 26, 1980 cancelled the contract at his risk and cost. Consequent there-to the
appellant filed a claim being Arbitration Case No. 132/1980 before the named Arbitrator
claiming enhancement of rates in respect of the earth work involved in the contract. He also
claimed interest on delayed payment and costs. The second respondent i.e. respondent, No. 2-
Superintendent Engineer (KIP Circle), filed a defence statement denying its liability for
enhancement of rates. It was their case that the extra and excess items were covered by the
supplemental agreement. The department has also alleged, the delay was attributable to the
contractor. A counter claim was made by the Superintending Engineer (K.I.P. Circle), for Rs.
28,84,000/-. The Arbitrator by his order dated January 22, 1981 made an award in regard to
claim No. 1 directing the respondents to pay 35% increase in the agreed rate for the item of
Earth work excavation and filling for forming the compacted embankment with earth from
barrow area. Claim No. 1 was thus allowed. Claim Nos. 2 and 3 regarding interest were
disallowed. As regards counter-claim Nos. 1 and 2, it was ordered that those issues will be
considered separately and no award was made. The appellant thereafter fifed O.P. (Arb.) No.
81 of 1981 in the court of Sub-Judge, Trivandrum under section 14 of the Arbitration Act for
making the award a rule of the court. On objections being raised by the respondents, the Court
of the Sub-Judge after hearing the parties by order dated August 18, 1981 remitted the
reference to the Arbitrator for fresh consideration on the ground that the Arbitrator did not
40
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consider the counter claims made by the respondents. The appellant thereafter filed an
application in the court of Sub-Judge praying that the order dated August 18, 1981 may be
reviewed. In the, meantime, the appellant filed another Arbitration Case No. 276/1980 before
the same Arbitrator in respect of the wrongful termination of the contract and also raised 13
items of claims therein. The Arbitrator after going through the objections of the respondents
made an award on October 29, 1981 whereby he ordered that the rearrangement of the work
should not be at the 1·isk and cost of the appellant. As regards claim No. 2, he ordered 30%
Increase in rates (as per original and supplemental agreement) for all Items of work carried out
by the appellant except on items covered by Award No. 132 of 1980 dated January 22, 1981.
Claim Nos. 3 and 5 were rejected. As regards claim No. 4 an increase of 20% in the agreed
rates for these items was allowed. Claim No. 11 regarding interest was disallowed. It was also
stated In the award, inter alia, that the claimant shall be entitled to the refund of the security
amount as well as refund of the retention amounts, the claimant shall be entitled to his final
bill in terms of the Award, the counter claim for recovery of costs of rearrangement of work and
also the counter claims filed by the respondent dated April 8, 1981 were declined. The
appellant filed O.P. (Arb) No. 296 of 1981 for making the second award a rule of the court. A
statement of defence was flied by the respondents. The respondents raised a plea of res
judicata. The Sub-Judge, vide order dated March 18, 1982 made the award the Rule of the
Court, dismissing the plea of res-judicata raised by the respondents. The respondents filed two
appeals before the High Court at Ernakulam, which held that the Arbitrator could not review its
order on the facts of the present case, so allowed one appeal. Insofar as the other appeal is
concerned, the same was allowed holding that the principles of constructive res judicata would
apply to the arbitration case. The question which fell for consideration before the Supreme
Court was whether the Sub Judge could have remanded the case back to the Arbitrator Insofar
as the first case is concerned. The Supreme Court was of the view that the Arbitrator, without
considering the counter claims and keeping the same for subsequent consideration made an
award. It held that the award made by the Arbitrator is not sustainable in law. It upheld the
order of the High Court whereby the High Court held that the Arbitrator misconducted himself
and had set aside the proceedings by directing the Arbitrator to dispose of the reference in
accordance with the law, considering the claim of the contractor and the counter claim of the
respondents.
41. It is clear from the above, in K. V. George (supra), the claim of the petitioner allowed by
the Arbitrator was for enhancement of rates which claim was denied by the department. Some
counterclaims were made by the department. The claim allowed, was not on an admission by
the department. Unlike In K. V. George (supra), where there was no admission of liability, In the
case in hand there were admissions of liability by the petitioner herein and on admissions, the
interim award is justified.
42. It Is a settled position of law that a judgment is only an authority for what it actually
decides in particular facts.
43. Insofar as the reliance placed by Mr. Bhushan on the case of Himani Alloys Ltd. (supra) is
concerned, the Supreme Court was dealing with a case wherein a suit was filed by the
respondent TISCO against the appellant for recovery of sum of Rs. 2,02,72,505/40 in regard to
supply of steel. The respondent filed an application praying for a decree upon admission for Rs.
74,57,074/50 alleging that the appellant has admitted the liability for such sum. The said
application was resisted by the appellant contending that there was no such admission and
was only a tentative agreement to have the accounts verified and not a final settlement or
admission of liability. The Supreme Court in para No. 9 was of the view that a judgment can be
given on an admission but the admission should be categorical. The Supreme Court was also of
the view that Order 12 Rule 6 being an enabling provision the power of the Court is
discretionary. The Supreme Court further observed that on examination of facts and
circumstances the Court has to exercise its judicial discretion keeping in mind that a judgment
on admission is a judgment without trial which permanently denies any remedy to the
defendant by way of an appeal on merits. The Supreme Court in the facts has held that the
41
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Minutes of Meeting on which reliance was placed by the TISCO could not be termed as an
admission for the purpose of Order 12 Rule 6 CPC. The facts in the said case are different from
the facts in the case in hand. Hence, the said judgment is distinguishable. In this case the
pleadings and the communications/correspondence are clear and have been dealt with above
and on the basis of which this Court has held that the petitioner and the respondent No. 2
have accepted their liability towards the respondent No. 1.
44. Insofar as the judgment of Bombay High Court in the case of Western Coalfields Ltd.
(supra) Is concerned, the said case has been decided keeping In view the fact situation. The
Court on a reading of the pleadings has come to a finding that the admissions made by the
defendant are not absolute but were conditional and it has been specifically stated that in
terms of another contract the said amount Is already appropriated. Unlike in Western Coal
Fields Ltd's case (supra), in the case in hand the llabillty towards the respondent No. 1 Is not
disputed even though plea of set off was taken, which was disputed by the respondent No. 1,
as such a plea need to be decided and till such time It ls decided it would, remain a claim and
not a debt, for the respondent No. 1 to be pecunlarily liable. Even though Mr. Rajeev Sharma
has made submissions on the merit of the counter claim of the petitioner, I refrain from saying
anything as the same needs to be decided by the Tribunal. That would not stop the entitlement
of the respondent No. 1 to get money on the basis of admissions with regard to 4
series/events. As held by the Division Bench of this Court In Numero Uno International Ltd. 's
case (supra), if a liability is admitted the amount can be awarded by the Arbitrator, which has
been done in the present case.
45. Insofar as the submission of Mr. Jayant Bhushan, learned Senior Counsel for the petitioner,
on limitation is concerned, on a reading of the impugned award it is seen and noted that no
such plea was urged before the Tribunal. The only submission advanced by the learned Senior
Counsel for the petitioner before the Tribunal was that the interim award/decree cannot be
granted in view of the counterclaim. In the absence of any submission on limitation, there was
no occasion for the Tribunal to consider and decide the issue of limitation. There is no
jurisdictional error.
46. The submission of Mr. Jayant Bhushan that the legal notice dated May 16, 2009 cannot be
construed as an acknowledgement of existing liability as the liability was discharged by way of
an adjustment by relying on the judgment of the Supreme Court in Val!iama Champaka Pilfai's
case (supra) is concerned, the same also need to be rejected in view of my conclusion above
that till such time, the claim of the petitioner with regard to India Pakistan Series 2007 is
decided, It would remain a claim and would not fructify as a "liability" to be adjusted.
47. In Val!iama Champaka Pil/ai's case (supra), the Supreme Court was dealing with a case
where the release deed executed by the original mortgagee referred to a past liability. The
deed also recorded that the payment has been made. It was in that context, the Supreme
Court held that It does not amount to a subsisting liability.
48. Insofar as the submission of Mr. Jayant Bhushan that the limitation had started running on
April 02, 2008 and the reference having been made to the Arbltral Tribunal on August 31,
2011 the claims were barred by time, is concerned, this submission of Mr. Jayant Bhushan also
need to be rejected for the reason that vlde letter dated April 02, 2008 the petitioner had
acknowledged the liability of the petitioner and the respondent No. 2 towards the respondent
No. 1/Prasar Bharti with regard to India Australia Series 2007 only. Vide notice dated May 16,
2009 the acknowledgment of liability was with regard to most of the matches played between
the years 2007-2009 and included the India Australia Series, 2007 as well. I agree with the
submission of Mr. Rajeev Sharma, learned counsel for the respondent No. 1 who had placed
reliance on Explanation to Section 18 of the Limitation Act which stipulates that for the
purpose of the said Section, acknowledgment may be sufficient if it is coupled with a claim to
set off. The letter dated May 16, 2009 is an acknowledgement of liability with a stand of
adjustment and the invocation of arbitration clause was vide letter dated June 1, 2009, the
agreement executed between the parties to refer to the disputes to the Arbitral Tribunal was
42
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on August 31, 2011 and the claims having been filed in January 2012, the claims would be
within time.
49. Insofar as the submission of Mr. Jayant Bhushan that the interim award was passed only
because the petitioner had not complied with the Interim order Is concerned, I do not see
anything illegal. The Tribunal has granted the Interim award after noting the non compliance of
first interim order dated May 6, 2014 to furnish a bank guarantee; failure to deposit an amount
of Rs. 22 Crores on or before November 1, 2014, and also failure to state clearly whether they
possess any assets within India. In fact I note, despite order dated October 31, 2014 in Arb.
Appeal No. 30/2014, the petitioner neither in that appeal nor even in this petition has filed
details of its unencumbered assets located in this country. In the given circumstances, as it is
a settled law, a decree on admission under Order 12 Rule 6 C.P.C. is a discretionary relief and
the Tribunal having exercised the discretion by way of an interim award, the same cannot be
interfered with.
50. Insofar as, the submissions of Mr. Jayant Bhushan that the Tribunal without allowing the
petitioner to complete the Inspection of the documents and adjudicating the application for
discovery of documents had proceeded with the hearing and passed an interim order/interim
award in favour of the respondent No. 1 is concerned, the inspection of the documents sought
for by the petitioner and respondent No. 2 were with regard to India Pakistan Series 2007 and
the said documents have no concern with the application for interim award filed by the
respondent No. 1 with regard to other four series/events. The Tribunal was justified to hold
that the inspection and discovery of the documents asked for by the petitioner and the
respondent No. 2 was either to substantiate their claim/counter claim or with a view to enable
them to Increase the amount claimed by them by way of counter claim and the said documents
are yet to be established at trial. Meaningfully read, the application for inspection and
discovery of documents had no effect/bearing on the application for Interim award. No
prejudice was caused to the petitioner. There was no violation of principle of natural justice as
alleged by Mr. Bhushan. This objection also need to be rejected. No submission has been made
on the competency of the Tribunal to pass an interim award.
51. In view of above discussion and keeping In view the position of law that passing of an
interim award based on admissions is matter of discretion and this Court while exercising
power under Section 34 of the Act, would not like to interfere with the impugned interim award
dated September 16, 2014. The petition Is accordingly dismissed with no order as to costs.
Ol~clalmiilr: While every effort !g madl'! to l.lvold any mistake or omission, tt11s casenote/ headnote/ Judgment/ act/ rule/ regulation/ circular/ ntit!ritatlon Is being
clrculatt>d on the c:on(litlon ,ind und,irntandlng that the, publlshur would not bti llablt! h1 ,,ny nu,nm:,r by rtMSoJI of a11y ml,..take or omission or fm any net/on taknn
or omltted to be tilken or <IUvlce nmderea or ;:iccepted on the bllSl6 ol' this c;rnenotc/ headnote/ judgment/ act/ rule/ regulation/ clrcul;1r/ notlflcatlon. AU
disputes wll! bl-l subject cxcloslvely to Jurio,Jlcthrn of courts, trlbunl.11\. urid forums at lucknow only. Th<.• m1thunt!dty of this text must be verified ffoin th<!
orlglrrnl source.
© EBC Publlshlng Pvt.Ltd., Lucknow.

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Part4 Gammon India Ltd. v. Sankaranarayana Construction 325

(Bangalore) Pvt. Ltd. (V, Ramasubramanian, J.)
(!) there shall be no order as to costs; ceedings, is the mother of Section 9 of the
(g) Consequently, connected present Act though Section 27(1) of the
38. In view of our decision in S.A. Nos. 1003 1940 Act may be its father. Para 16
and 1004 of 2008, CRP Nos. 1766 and 1974 Power conferred by Section 31(6) cannot
of 2008 are disposed of. No costs. Conse- be restricted, to exclude from its purview,
quently, all the connected miscellaneous peti- the power to pass an interim award on ad-
tions are closed. mission - To say that one cannot read a
VCJNCS power akin to Order XII, Rule 6, CPC, into
Section 31(6), would militate against the
j 2010-t-LW. 3251 very object of the Act, Para 23
Petitioner has clearly and categorically ad-
IN THE HIGH COURT OF JUDICA- mitted their liability before the Arbitrator
TURE AT MADRAS and hence the Arbitrator was right in pass-
ing an interim award on the strength of
11-12-2009/Transfer O.P.No.628 of 2008 such admission. Para 30
and O.A. No.1078 of 2008 and
A.Nos.5264 and 5748 of 2008 A statement made by the respondent/de-
fendant/opposite party in a proceeding,
V. Ramasubramanian, J. which by itself is sufficient, without any-
thing more, for a Court/Tribunal to render
Gammon India Ltd., Gammon House, Veer a decision or pass an order/decree/award,
Savarkar Marg, P.O.Box No.9129, Prab- without any further enquiry, on the whole
hadevi, Mumbai-400 025. .. Petitioner or any part of the claim/claims, could be
called, in simple terms, as an admission.
vs. Para 33
Sankaranarayana Construction (Bangalore) This Original Petition challenges an interim award
passed by the Arbitrator, directing the petitioner to
Pvt. Ltd., No.9, Rajaram Mohan Rm; Road, deposit a sum of Rs.56,63,990/- to the credit of
Bangalore-560 025 Represented by its Gen- O.P.No.538 of 2003 on the file of this Court and
eral Manager. .. Respondent pennitting the respondent to withdraw the same on
furnishing Bank Guarantee. Para 12
Petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996 against the Interim Mr.R.Senthil Kumar, learned counsel for the peti-
Award passed by the Arbitrator in I.A.No.2 of tioner, assailed the interim award, primarily on 3
2006 in Arbitration Case No.I of 2006 dated grounds viz.:-
16.12.2006, (i) that though an Arbitral Tribunal is empowered
to pass an interim award under Section 31 (6) of
Arbitration and Conciliation Act (1996), the Act, such a power would not include a power
Section 31(6)/'Interim award', ,C,f&. Or- to pass an interim award on admission, as in the
der 12, R.6/Admission, what is. case of Order XII, Rule 6, CPC;
Held: Article 9 of the Model Law enabling (ii) that in any case, a decree/award on admission
the parties to seek interim measures from cannot be passed unless the admission was clear,
a Court, before or during the arbitral pro- unambiguous and unequivocal and that what was
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326 Gammon India Ltd. v. Sankaranarayana Construction 2010-1-L.W.

(Bangalore) Pvt. Ltd. (V. Ramasubramanian, J,)
stated by the petitioner in the Statement of De- to (5) of Section 31 of the present Act. After doing
fence was not an admission at all; and so, the Parliament thought fit to incorporate three
(iii) that what was claimed by the petitioner in the more provisions in Section 31, in the form of sub
Statement of Defence was only an adjustment, sections (6), (7) and (8). Sub section (6) empowers
which was different from even a set off and that the Arbitral Tribunal to make an interim award.
therefore, no interim award that would have the ef- Para 16
fect of upsetting such adjustment could be passed. Thus, Section 31 (6), is a deviation from the Model
Para 13 Law. in the sense that there is no reference to any
interim award in the Model Law. Interestingly,
But the above contention of the learned counsel for
Section 31 (6) is also a deviation from Section
the petitioner is actually fallacious. Under the Ar-
27(1) of the 1940 Act. Under Section 27(1) of the
bitration Act, 1940, the word "Award" was de-
1940 Act, the power of the Arbitrators to pass an
fined under Section 2(b) only to "mean an
interim award, is made subject to the absence of "a
Arbitration Award". However, Section 27(1) of
different intention appearing in the Arbitration
the old (1940) Act, empowered the Arbitrators, if
Agreement". But under Section 31(6) of 1996 Act,
they think fit, to make an interim award, unless a
the power to pass an interim award is not made
different intention appeared in the Arbitration
subject to any provision or lack of it in the Arbitra-
Agreement. Sub section (2) of Section 27 made it
tion Agreement. Therefore, the intention of the
clear that all references in the Act, to an award,
Parliament in conferring a power under Section
would include references to an interim award.
31(6) of the new Act, both in deviation of the
Thus, the omission to include an interim award,
Model Law and also in deviation of Section 27(1)
within the definition of the word "Award" under
of the old Act, is quite clear. Para 16
Section 2(b), was more than compensated under
Section 27(2) of the 1940 Act. Para 15 Therefore, the power conferred by Secticn 31 (6)
cannot be artificially restricted, to exclude from its
It is common knowledge that the old Act was thor-
purview, the power to pass an interim award on ad~
oughly overhauled and the Arbitration and Con-
mission. The very object of the Act is to provide an
ciliation Act, I 996, was passed, keeping in view,
alternative dispute resolution mechanism, for the
the UNCITRAL Model Law on International
purpose of speedy resolution of disputes. There-
Commercial Arbitration, 1985. The provisions of
fore, to say that one cannot read a power akin to
the Model Law, have been adopted verbatim in
Order XII, Rule 6, CPC, into Section 3I (6), would
some places, adopted with variations in some
militate against the very object of the Act.
places and not adopted in a few areas, in the new
Para 23
Act. Toe Model Law did not contain a definition of
the word "Award", though it contained definitions The Arbitrator has actually applied his mind to the
of the words "Arbitration", "Arbitral Tribunal", question whether there was an admission on tl1e
"Court" etc. Article 9 of the Model Law enabling part of the petitioner. He has also applied his mind
the parties to seek interim measures from a Court, on the question whether such admission is clear,
before or during the arbitral proceedings, is the u~equivocal and positive and whether there are
mother of Section 9 of the present Act though Sec- other circumstances •ntitling the respondent to an
tion 27(1) of the 1940 Act may be its father. Simi- interim award on such admission. Para 26
larly, Article 17 empowering the Arbitral Tribunal The petitioner has not only admitted their liability
itself to order interim measures of protection, is the to the respondent to the extent of Rs.56,63,990/-,
fore runner for Section 17 of the present Act. Arti- but also gone to the extent of adjusting the same
cle 31 of UJe Model Law contains 4 clauses, all of towards the amount claimed by them against the
which are adopted and made into sub sections (I) respondent. Unless the petitioner was c1ear and
40 The Law Weekly, 16.1.2010

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(Bangalore) Pvt. Ltd. (V. Ramasubramanian, J.)
categorical about their own liability to the extent McDemw/1 International Inc. vs. Bum Standard
of Rs.56,63,990/-, they could not have given credit Co. Ltd {(2007) 3 Comp. U 213 (SC)};
to the respondent, to the extent of the said amount, Satwant Singh Sodhi vs. State of Punjab {2000-1-
so that the claim made by the petitioner against the L.W. 21 = 1999 (3) sec 487};
respondent is reduced to that extent. An adjust-
ment or appropriation would never take place, un- Numero Uno International Ltd vs. Prasar Bhani
1es s the party making such adjustment or {150 (2008) DLT 688}
appropriation, concedes its liability to that extent Razia Begum vs. Sahebzadi Anwar Begum [AIR
in clear cut terms. The petitioner might have suc- 1958 SC 886);
ceeded in creating a doubt in my mind, if the peti- Ba/raj Taneja vs. Sunil Madan { 1999 (8) SCC
tioner had actually made a claim for the entire 396};
amount ofRs.131,80,266/-. But by adjusting the
Uttam Singh Duggal & Co. Ltd vs. United Bank
amount of Rs.56,63,990/- towards the said amount
Of India {2001-1-L.W. 250 =(2000) 7 SCC 120};
and by asking for a decree only in respect of the
balance amount, the petitioner has steered clear of C/wranjit Lal Mehra vs. Kamal Saroj Mahajan
any such doubt. Therefore, I hold that the peti- {2006-1-L.W. 2s3 = (2005) 11 sec 279};
tioner has clearly and categorically admitted their Co/ex Exports Ltd vs. Canara Bank {AIR 1997
liability to the extent of Rs.56,63,990/- before the Delhi 355);
Arbitrator and hence the Arbitrator was right in Union of India vs. Karam Chand Thapar and
passing an interim award on the strength of such Bros. (Coal Sales) Ltd {2004 (3) sec 504 J;
admission. Para 30
Union of India vs. Raman Iron Foundry {AIR
What after all, could be called an admission ? A 1974 SC 1265);
statement made by the respondent/defendant/op-
posite party in a proceeding, which by itself is suf- State Bank of India vs. Ranjan Chemicals Ltd
ficient, without anything more, for a { 134 Comp. Cases 24); and
Court/Tribunal to render a decision or pass an or- Punjab Urban Planning and Development
der/decree/award, without any further enquiry, on Authority vs. Shiv Saraswati Iron and Steel Re-
the whole or any part of the claim/claims, could be rolling Mills ( 1998 (4) SCC 539);-Referred to.
called, in simple terms, as an admission. A person Tr.O.P. dismissed.
who claims to have adjusted an amount due from
him to another against his own claim, actually O.A 1078 dismissed.
makes it clear that the Court need not spend any
A,5748 allowed.
time on adjudicating his liability lo that extent, as
he had already given credit to the other and ad- For Petitioner : Mr.R.Scnthil Kumar
justed the same towards what is due to him. If this For Respondent : Mr.T.A.Srinivasan
is not admission, I do not know what else could be. ORDER
Therefore, the second contention is also rejected.
The main transfer original petition
Para33
O.P.No.628 of 2008 is filed under Section 34
In view of the above, the main original petition
of the Arbitration and Conciliation Act, 1996,
Tr.O.P.No.628 of 2008 is dismissed. Since the pe-
challenging an interim award passed by the
titioner has already deposited the interim award
Arbitrator, in I.A.No.2 of 2006 in Arbitration
amount in the execution proceedings. As a conse-
Case No. I of 2006. Pending the main original
quence O.A.No.1078 of2008 is dismissed and
A.No.5264 of 2008 is closed in view of the order petition, the petitioner seeks an interim order
passed in the main O.P. Para 39 of injunction in O.A.No. !078 of 2008 to re-

46
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(Bangalore) Pvt, Ltd. (V. Ramasubramanian, ).}
strain the respondent from executing the Court, Tirunelveli. But, on an application in
award. The respondent in the main O.P. has I.A.No.53 of 2007, taken out by the respon-
come up with two applications in A.Nos.5264 dent herein, the District Court, Tirunelveli,
and 5748 of 2008, praying respectively (i) to passed an order, ret1U11ing the O.P., for pres-
reject the main O.P., as not maintainable and entation to the proper Court viz., this Court.
(ii) to permit them to withdraw the amount al- Challenging the said order of the District
ready deposited by the main original peti- Court, the petitioner filed a Revision Petition
tioner in the execution proceedings. in CRP(PD)(MD) No.414 of 2008 on the file
2. Heard Mr.R.Senthil Kumar, learned coun- of the Madurai Bench of this Court. But the
sel for the petitioner and Mr.T.A.Srinivasan, said Civil Revision Petition was dismissed on
learned counsel for the respondent in the main 11.9.2008, permitting the petitioner to take
original petition. Since the main O.P., is being the return of the papers from the District
disposed of by this order, I refer to the parties, Court, Tirunelveli and to re-present it before
only as per their status in the main original pe- the Original Side of this Court, within 2
tition. weeks. Accordingly, the petitioner took return
of the papers from the District Court and re-
3. The petitioner herein was awarded a con-
presented the same in this Court.
tract for the construction of a Masonry Dam
across the Tamiraparani river basin in 6. But in the meantime, the respondent initi-
Mekarai Village, Shenkottah Taluk, ated execution on the file of the High Court of
Tirunelveli District, by the Public Works De- Bombay in E.P.No.85 of 2008 and the peti-
partment of the Government of Tamil Nadu. tioner was left with no alternative but to de-
A part of the said work namely, the construc- posit the entire interim award amount with the
tion of Masonry Spillway and Masonry non- Sheriff of Mumbai. Fearing that tht: respon-
overflow Dam from Block No.! I to Block dent may withdraw the amount, the petitioner
No. 18, was assigned by the applicant to the has filed, along with the main O.P., an appli-
respondent, by way of sub contract, under a cation in O.A.No. l 078 of 2008 for an interim
work order dated 2.11.2000. order of injunction restraining the respondent
from proceeding further with the execution.
4. Disputes arose between the parties, com-
pelling the respondent herein to file an appli- 7. The main O.P., was admitted by this Court
cation under Section 11 of the Arbitration and on 7.10.2008 and notice was ordered in the in-
Conciliation Act, 1996. By an order dated junction application. After service of notice
16.4.2005 passed in O.P.No.538 of 2003, on them, the responl:lent has come up with two
Mr.Justice N.V.Balasubramanian (Retired) applications in A.Nos.5264 and 5748 of 2008,
was appointed as the Arbitrator. He entered praying respectively for rejection of the main
reference and passed an interim award dated O.P., and for permission to withdraw the
16.12.2006, directing the petitioner herein to amount now lying in deposit in the execution
deposit a sum of Rs.56,63,990/- to the credit prxeedings.
of O.P.No.538 of 2003 within 6 weeks and 8. On 23.10.2009, when the O.P., came up for
permitting the respondent to withdraw the hearing, there was no representation for the
same after furnishing Bank Guarantee. respondent. Therefore, the petition was ad-
5. Challenging the said interim award, the pe- journed to 24.10.2009. Even on 24.10.2009,
titioner filed a petition in O.P.No.51 of 2007, there was no representation for the respon-
under Section 34 on the file of the District dent. At that time, two things were pointed

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(Bangalore) Pvt. Ltd. (V. Ramasubramanian,J.)
out by the learned counsel for the petitioner and the O.P., was liable to be reopened for
viz., (i) that the petitioner had already depos- hearing. However, there was no written appli-
ited an amount of Rs.56,64,080/- in cation by the respondent for reopening and re-
E.P.No.85 of 2008, filed by the respondent, in calling. Therefore, I posed a specific question
the office of the Sheriff of Mumbai and (ii) to Mr.R.Senthil Kumar, learned counsel for
that the Arbitrator had already completed the the petitioner, if he has any objections to the
hearing 3 months ago and awru:d was re- matter being heard on merits. He submitted
served. that he has no objections and that he was pre-
9. Taking into account the above two submis- pared to argue the O.P., on merits and that the
sions made by the learned counsel for the pe- O.P., could be disposed of on merits, despite
titioner and also in view of the absence of the the fact that there was no formal application
counsel for the respondent, I disposed of the by the learned counsel for the respondent to
original petition by an order dated set aside the ex parte order dated 24.10.2009.
24.10.2009, directing that the amount depos- Therefore, the O.P., is disposed of on merits.
ited in the office of the Sheriff of Mumbai, 12. As stated earlier, this Original Petition
could be retained till the award is passed by challenges an interim award passed by the Ar-
the Arbitrator and also making it clear that af- bitrator, directing the petitioner to deposit a
ter the award was passed, the successful party sum of Rs.56,63,990/- to the credit of
could withdraw the amount. O.P.No.538 of 2003 on the file of this Court
10. However, after I passed orders, the and permitting the respondent to withdraw the
learned counsel for the respondent made a same on furnishing Bank Guarantee. The cir-
mention stating that he was not well and could cumstances under which the said interim or-
not attend Court. He also pointed out that ar- der was passed by the Arbitrator are as
guments had not concluded before the Arbi- follows:-
trator, as was represented by the learned (a) In the claim petition filed by the respon-
counsel for the petitioner, at the time of dis- dent before the Arbitrator, they had claimed
posal of the O.P., on 24.10.2009. Therefore, I the following amounts:-
directed the O.P., to be posted "for being men- V. STATEMENT OF CLAIMS:
tioned" on 28.10.2009. Rs. in Lakhs.
11. On 28.10.2009, the learned counsel ap- 1. Payment pending corresponding
pearing on both sides made contradictory to the received by Gammon India Ltd.,
claims on the question whether the hearing in from PWD as detailed in our various
the arbitration had concluded or not. There- letters and statement enclosed 68.84
fore, I directed both counsel to file memos. 2. Compensation towards reduction
After the counsel filed memos, it became of value work 60.00
clear that though the parties had filed written 3. Interest payable for delay in payments 5.81
submissions before the Arbitrator, a request 4. Compensation towards loss overheads
for oral hearing was made and the proceed- and profit and due towards utilisation of
ings stood adjourned at that stage. Therefore, resources consequent to non-available of
it was obvious that the premise on which I Tower Crane, Rebar, GI Seal etc. 58.00
passed orders on 24.10.2009 in the O.P., was 5. Repayment of B.G. amount which
not factually correct. Hence, the order passed was got from the Bank illegally/unde
servedly 33.00
on 24.10.2009 became liable to be recalled

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330 Gammon India Ltd, v. Sankaranarayana Construction 2010-J.L.W.

(Bangalore) Pvt. Ltd. (V. Ramasubramanian,) .)
6. Interest from 7.4.2003@ 21% upto (d) The Arbitrator took into account the rival
31.7.2005 16.06 pleadings and arrived at a conclusion that
7. Claim for cost of Arbitration there was an admission on the part of the pe-
proceedings (Actuals) titioner to the extent ofRs.56,63,989.50. The
Total 241.71 Arbitrator also verified the details of the
(b) In 1esponse to the statement of claim filed amount set out in the Final Status Bill found
by the respondent, the petitioner herein filed a in Annexure V to the Defence Statement.
"Statement of Defence and Counter Claim". Therefore, taking into account Clause 31 of
In paragraph 15.1 of the Statement of De- the contract which provided for payment of
fence, the petitioner herein had dealt with the running bills within 7 days and also taking
claim under Item No. I, in the following into account Exx.C-51 and C-59, the Arbitra-
words:- tor passed the interim award, as aforesaid.
" 15.1 Withholding of bills and adjusting the It is in the backgrour.d of the above facts that
same for the amount due to the Respondent the challenge to the interim award is to be
are in order. The Claimant has stated that an considered.
amount of Rs.68.84 lak:hs is outstanding and
13. Mr.R.Senthil Kumar, learned counsel for
payment due. But as per the quantity arrived
the petitioner, assailed the interim award, pri-
by initial level and final level taken jointly
marily on 3 grounds viz.:-
with the Claimant, the amount of bill due to
Claimant works out to Rs.56,63,990/- An- (i) that though an Arbitral Tribunal is em-
nexure V with working sheet is attached. powered to pass an interim award under Sec-
tion 31 (6) of the Act, such a power would not
The Respondent submits that as a matter of
include a power to pass an interim award on
fact an amount of Rs.131,80,266/- is due to
the Respondent from the Claimant vide de- admission, as in the case of Order XII, Rule 6,
CPC;
tails furnished in the counter claim. The
amount of Rs.56,63,990/- payable to Claim- (ii) that in any case, a decree/award on admis-
ant has been adjusted towards the amount due sion cannot be passed unless the admission
to Respondent." was clear, unambiguous and unequivocal and
that what was stated by the petitioner in the
(c) In view of the above stand taken by the
Statement of Defence was not an admission at
petitioner in their statement of defence, the re-
all;and
spondent filed an application before the Arbi-
trator in I.A. No.2 of 2006, seeking an interim (iii) that what was claimed by the petitioner
direction to the petitioner to pay the sum of in the Statement of Defence was only an ad-
Rs.68.84 lakhs for the work done. The peti- justment, which was different from even a set
tioner filed a counter affidavit to the said in- off and that therefore, no interim award that
terim application, contending that such an would have the effect of upset.ting such ad-
application was not maintainable under any justment could be passed.
provision much less Section 18 and that the 14. Elaborating on the first submission, the
very issue framed for arbitration under Sec- learned counsel for the petitioner contended
tion 11 (4) before this Court, was as to whether that since an interim award, under the scheme
the petitioner was liable to pay Rs.72,03,513/- of the Act, conclusively detennines the rights
, representing the amount due on bills, with- of parties in so far as the matters covered
held amounts etc. thereby are concerned, the power conferred
by Section 31(6) cannot be taken to include a
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power similar to the one conferred on a Civil been adopted verbatim in some places,
Court under Order XII, Rule 6, CFC. After adopted with variations in some places and
drawing my attention to the definition of the not adopted in a few areas, in the new Act.
word "Award" under Section 2(c) and the dis- The Model Law did not contain a definition of
tinction drawn by the Apex Court in McDer- the word "Award", though it contained defini-
mott International Inc. vs. Burn Standard Co. tions of the words "Arbitration", "Arbitral
Ltd.((2007) 3 Comp. LJ 213 (SC)}. between Tribunal", "Court" etc. Article 9 of the Model
a partial award and an interim award, the Law enabling the parties to seek interim
learned counsel submitted that an interim measures from a Court, before or during the
award is actually final, in respect of matters arbitral proceedings, is the mother of Section
covered thereby. This is why, a petition under 9 of the present Act though Section 27(1) of
Section 34 is maintainable as against an in- the 1940 Act may be its father. Similarly, Ar-
terim award passed under Section 31(6), ticle 17 empowering the Arbitral Tribunal it-
though no such petition is maintainable self to order interim measures of protection, is
against an interim measure ordered under the fore runner for Section 17 of the present
Section 17. Therefore, in essence, it is the Act. Article 31 of the Model Law contains 4
contention of the learned counsel for the peti- clauses, all of which are adopted and made
tioner that a power to pass an interim award into sub sections ( 1) to (5) of Section 31 of the
on admission, cannot be read into Section present Act. After doing so, the Parliament
31 (6), by importing the provisions of Orcjer thought fit to incorporate three more provi-
XII, Rule 6, CFC. sions in Section 31, in the form of sub sections
15. But the above contention of the learned (6), (7) and (8). Sub section (6) empowers the
counsel for the petitioner is actually falla- Arbitral Tribunal to make an interim award
cious. Under the Arbitration Act, 1940, the and it reads as follows:-
word "Award" was defined under Section "The Arbitral Tribunal may, at any time dur-
2(b) only to "mean an Arbitration Award". ing the arbitral proceedings, make an interim
However, Section 27 ( 1) of the old (1940) Act, arbitral award on any matter with respect to
empowered the Arbitrators, if they think fit. to which it may make a final arbitral award"
make an interim award, unless a different in- Thus, Section 31(6), is a deviation from the
tention appeared in the Arbitration Agree- Model Law, in the sense that there is no refer-
ment. Sub section (2) of Section 27 made it ence to any interim award in the Model Law.
clear that all references in the Act, to an Interestingly, Section 31 (6) is also a deviation
award, would include references to an interim from Section 27(1) of the 1940 Act. Under
award. Thus, the omission to include an in- Section 27(1) of the 1940 Act, the power of
terim award, within the definition of the word the Arbitrators to pass an interim award, is
"Award" under Section 2(b), was more than made subject to the absence of "a different in-
compensated under Section 27(2) of the 1940 tention appearing in the Arbitration Agree-
Act. ment". But under Section 31(6) of 1996 Act,
16. It is common knowledge that the old Act the power to pass an interim award is not
was thoroughly overhauled and the Arbitra- made subject to any provision or lack of it in
tion and Conciliation Act, 1996, was passed, the Arbitration Agreement. Therefore, the in-
keeping in view, the UNCITRAL Model Law tention of the Parliament in conferring a
on International Commercial Arbitration, power under Section 31 ( 6) of the new Act,
1985. The provisions of the Model Law, have both in deviation of the Model Law and aiso

50
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in deviation of Section 27(1) of the old Act, is on account of the costs of the arbitration. Sub
quite clear. section (3) of Section 39 makes such provi-
17. After making a comparison between Sec- sional award subject to the fmal adjudication
tion 14 ofthe(English) Arbitration Act, 1950 by the Tribunal.
and -~ection 47 of the (English) Arbitration I 9. Thus, it is seen that though the English
Act, 1996, "Russell on Arbitration" says in Act of 1950 spoke about interim award, the
paragraph 6-008 (21st Edition-1997) as fol- English Act of 1996 enlarged the scope and
lows:- power of Arbitral Tribunals, subject to con-
"6-008 Power to make more than one award. tract between the parties, to pass provisional
An award may dispose of only some of the is- a wards under Section 39 and also to pass
sues in the arbitration, leaving others to be de- more than one award at different times on dif-
termined in a subsequent award or awards. In ferent aspects of the matter, including a part
some jurisdictions and certain sets of arbitra- of the claim or cross-claim under Section 47.
tion rules these awards are referred to as "par- But under the (Indian) Arbitration and Con-
tial awards". Section 14 of the Arbitration Act
1950 used the term "interim award" and gave ciliation Act, 1996, a quantum leap was taken
an express power to grant interim awards in the in the form of Section 3 I (6) by deviating from
absence of agreement to lhe contrary. This has the Model Law and also making the power
now been replaced by Section 47 of the Arbi- more pronounced than what it was under Sec-
tration Act 1996 which provides that the Tribu- tion 27(1) of the 1940 Act.
nal may make more than one award at different 20. A question as to what happens when an
times on different aspects of lhe matters to be interim award is passed and on an item cov-
determined. Again this is subject to agreement
otherwise by the parties. The section specifi- ered by the interim award, a different final
cally avoids using the term "interim award" on award is passed later, fell for consideration in
the basis that it was thought to be confusing Satwant Singh Sodhi vs. State of Punjab
and time will tell whether the expression will {1999 (3) sec 487 = 2000-1-L.w. 21 J. 1n
fall into disuse. The section also makes clear that case, the Arbitrator passed an interim
that the Tribunal may, in particular, make an award, allowing a sum of Rs.7.45 lakhs to-
award relating - wards item No. I of the claim. Subsequently, a
(a) to an issue affecting the whole claim, or final award was passed, granting a sum of
(b) to a part only of the claims or cross-claims Rs.3.75 lakhs for all the claims, including the
submitted to it for decision". claim under item No.!. The Trial Court made
18. Section 39(1) of the (English) Arbitration both the awards as rule of Court, but held that
Act, 1996 also makes a special provision, ena- in so far as item No. I is concerned, the final
bling the parties to confer upon the Arbitral award merged into the first award. When the
Tribunal, by Agreement, the power to make High Court reversed the said decision and the
provisional a wards. The power so granted matter landed up in the Supreme Court, it was
could include the power to grant any relief (on held as follows:-
a provisional basis), which could be granted "The question whether an interim award is fi-
in a final award. Section 39(2) of the English nal to the extent it goes or has effect till the fi.
Act, makes it clear that the provisional award nal award is delivered will depend upon the
that could be passed would include an order form of the award. If the interim award is in-
tended to have effect only so long as the final
for payment of money or for disposition of award is not delivered it will have the force of
property or an order to make interim payment the interim award and it wi!J cease to have ef-

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Part4 Gamm.on India Ltd. v. Sankaranarayana Construction 333

(Bangalore) Pvt. Ltd. (V. Ramasubramanian, ).)
feet after the final award is made. If, on the XII, Rule 6, CPC, into Section 31(6), would
other hand. the interim award is intended to fi- militate against the very object of the Act.
nally determine the rights of the parties it will 24. As a matter of fact, the same argument
have the force of a complete award and will
have effect even after the final award is deliv- was raised before a single Judge of the Delhi
ereci." High Court in Numero Uno International Ltd
vs. Prasar Bharti that the provisions of Order
21. In his book "ARBITRATION AND XII, Rule 6, CPC, were not applicable to arbi-
CONCILIATION" (First Edition-2001, Page tral proceedings. But the single Judge repelled
225), Mr.V.A.Mohta, the learned author the contention. When the matter was taken to
quotes JOHN PARRIS on "ARBITRATION- the Division Bench, in Numero Uno Interna-
PRINCIPLES AND PRACTICE" as fol- tional Ltd vs. Prasar Bharti {150 (2008) DLT
lows:- 688}, that contention was given up. However,
"It is always open to the Arbitrator to make an the question as to whether the pendency of a
interim award and frequently it is in the interest counter claim was sufficient to disentitle the
of the parties that he should do so."
claimant from an interim award on admission,
22. In their book "The Law and Practice of was raised. The Division Bench of ~he Delhi
Arbitration and Conciliation" (Second Edi- High Court answered the question in the
tion-2006, Page 145), O.P.Malhotra and lndu negative and held as follows:-
Malhotra, the learned authors, say the follow- 11No interference with an interim award would.
ing on interim awards passed on admission:- however, be permissible only because the de-
"The Arbitral Tribunal is called upon to give a fendant has made a counter claim or because
partial award particularly where certain items some areas of dispute independent of the area
of claim is admitted by the opposite party. covered by the interim award remains to be re-
Such claim may be in the nature of interim re• solved."
lief or partial satisfaction of the claim. In some Therefore, the first contention of the learned
jurisdiction and certain sets of arbitration rules,
these awards are referred to 'partial awards'. counsel for the petitioner is rejected.
There is a sort of distinction between the 'in- 25. The second contention of the learned
terim award' and the 'partial award' in that an counsel for the petitioner is that an admission,
interim award is the determination of prelimi- entitling a plaintiff to a decree/award, should
nary issues, such as jurisdiction of the Arbitral be positive, unequivocal and clear. I have ab-
Tribunal or liability of the party while partial solutely no quarrel with the said position of
award has an immediate monetary impact. law, which is well settled for a fairly long pe-
However, in practice, by and large, the terms
'interim' and 'partial' are used interchange-
riod of time. As pointed out by the Apex
ably." Court in Razia Begum vs. Sahebzadi Anwar
Begum ( AIR I 958 SC 886}, quoted with ap-
23. Therefore, the power conferred by Sec- proval in Ba/raj Taneja vs. Sunil Madan
tion 31(6) cannot be artificially restricted, to {1999 (8) sec 396}, the provisions of Order
exclude from its purview, the power to pass XII, Rule 6, CPC, have to be construed along
an interim award on admission. The very ob- with the proviso to Order VIII, Rule 5, CPC.
ject of the Act is to provide an alternative dis- Therefore, it is trite to point out that a Comt
pute resolution mechanism, for the purpose of
cannot act blindly upon the ~dmission of a
speedy resolution of disputes. Therefore, to
fact.
say that one cannot read a power akin to Order

52
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26. But unfortunately for the petitioner, the 29. Again in the "Prayer" portion, towards the
Arbitrator in the case on hand, has not acted end of Counter Claim No. I in Part-Ill of their
blindly on a statement made by the petitioner Statement of Defence, the petitioner prayed
in their Statement of Defence and Counter before the Arbitrator as follows:-
Claim. The Arbitrator has actually applied his "(A) The claims made by the Claimant are not
mind to the question whether there was an ad- maintainable and deserves to be rejected ex-
mission on the part of the petitioner. He has cept partial bill amount of Rs.56,63,990/-,
also applied his mind on the question whether which is adjusted towards the amount due to
such admission is clear, unequivocal and Respondent besides encashment of Bank
positive and whether there are other circum- Guarantee. 11
stances entitling the respondent to an interim 30. I do not think that there can be any admis-
award on such admission. sion, which is more clear, more positive and
27. As seen from the Statement of Claim filed more unequivocal, than what is stated by the
by the respondent before the Arbitrator, petitioner in paragraph 15. I and in the various
which I have extracted earlier, the first item of portions of their Statement of Defence and
claim in paragraph V.l is for Rs.68.84 lakhs, Counter Claim filed before the Arbitrator,
alleged to be a payment pending correspond; which are extracted in the previous para-
ing to the payments received by the petitioner graphs. As a matter of fact, in my opinion,
from the Public Works Department. In para- what is stated by the petitioner is actually
graph 15.1 of their Statement of Defence and more than a mere admission. The petitioner
Counter Claim filed by the petitioner before has not only admilted their liability to the re-
the Arbitrator, they claimed that "as per the spondent to the extent of Rs.56,63,990/-, but
quantity arrived by initial level and final level also gone to the extent of adjusting the same
taken jointly with the claimant, the amount of towards the amount claimed by them against
bill due to the claimant works out to the respondent. Unless the petitioner was
Rs.56,63,990/-". After stating so, the peti- clear and categorical about their own liability
tioner claimed in the second portion of para- to the extent of Rs.56,63,990/-, they could not
graph 15.1 of their Statement of Defence that have given credit to the respondent, to the ex-
an amount of Rs.131,80,266/- was due from tent of the said amount, so that the claim made
the respondent herein and that the amount of by the petitioner against the respondent is re-
Rs.56,63,990/- had been adjusted towards the duced to that extent. An adj ustrnent or appro-
said amount. priation would never take place, unless the
28. Again in Part-II! of their Statement of De- party making such adjustment or appropria-
fence, which contained their Counter Claim, tion, concedes its liability to that extent in
the petitioner stated as follows:- clear cut terms. The petitioner might have
succeeded in creating a doubt in my mind, if
"The Respondent submits that the total the petitioner had actually made a claim for
amount to be recovered from the Claimant un- the entire amount of Rs.131,80,266/-. But by
der above six items works out to
Rs.131,80,266/-. The total amount available adjusting the amount of Rs.56,63,990/- to-
with the Respondent by amount payable to wards the said amount and by asking for a de-
Claimant towards balance works out to cree only in respect of the balance amount, the
Rs.56,63,990/-. Hence an amount of petitioner has steered clear of any such doubt.
Rs.75,16,276/- is due to Respondent with An- Therefore, I hold that the petitioner has
nexure-XII. 11 clearly and categorically admitted their liabil-

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Part4 Gammon India Ltd. v. Sankaranarayana (' onstruction 335

(Bangalore) Pvt. Ltd. (V. Ramasubramanian, ).)
ity to the extent of Rs.56,63,990/- before the proceeding, which by itself is sufficient, with-
Arbitrator and hence the Arbitrator was right out anything more, for a Court/Tribunal to
in passing an interim award on the strength of render a decision or pass an order/de-
such admission. cree/award, without any further enquiry, on
31. Emphasising the object underlying Order the whole or any part of the claim/claims,
XII, Rule 6, CPC, the Supreme Court held in could be called, in simple terms, as an admis-
paragraph-I 2 of its decision in Uttam Singh sion. A person who claims to have adjusted an
Duggal & Co. Ltd vs. United Bank Of India amount due from him to another against his
{(2000) 7 SCC 120 = 2001-1-L.W.250} as own claim, actually makes it clear that the
follows:- Court need not spend any time on adjudicat-
"12. As to the object of Order 12, Rule 6, we ing his liability to that extent, as he had al-
need not say anything more than what the leg- ready given credit to the other and adjusted
islature itself has said when the said provision the same towards what is due to him. If this is
came to be amended. In the Objects and Rea- not admission, I do not know what else could
sons set out while amending the said Rule, it is be. Therefore, the second contention is also
stated that "where a claim is admitted, the rejected.
Court has jurisdiction to enter a judgment for 34. The third contention of the learned coun-
the plaintiff and to pass a decree on admitted
claim. The object of the Rule is to enable the sel for the petitioner is that an adjustment
party to obtain a speedy judgment at least to the stands on a different footing than a set off or
extent of the relief to which according to the counter claim. In this connection, the learned
admission of the defendant, the plaintiff is en- counsel relied upon the opinion of the Divi-
titled". We should not unduly narrow down the sion Bench of the Delhi High Court in Cofex
meaning of this Rule as the object is to enable Exports Ltd vs. Canara Bank ( AIR 1997
a party to obtain a speedy judgment. Where the Delhi 355}. In paragraphs-8 to 10 of the said
other party has made a plain admission enti- decision, the Delhi High Court held as fol-
tling the former to succeed, it should apply and lows:-
also wherever there is a clear admission of
facts in the face of which it is impossible for "8. A defendant has a right to defend himself
the party making such admission to succeed." by raising all possible pleas permitted by the
law. No Court-fee is leviable on a written state-
32. The above observations made in Uttam ment. The nature of the several pleas which can
Singh case, were also quoted with approval in be taken by a defendant faced with a suit for re-
Charanjit Lal Mehra vs. Kamal Saroj Maha- covery of a debt, in so far as relevant for the
jan ((2005) 11 SCC279=2006-l-L.W.283}, purpose of the present order may broadly be
where it was further held as follows:- classified as payment, adjustment, set off and
"In fact, Order 12, Rule 6, CPC, is enacted for counter~claim.
the purpose of and in order to expedite the tri- 9. A payment is the satisfaction or extinguish-
als if there is any admission on behalf of the de- ment of a debt prior to the filing of the written
fendants or an admission can be inferred from statement.
the facts and circumstances of the case without 10. An adjustment contemplates existence of
any dispute; then, in such a case in order to ex- mutual demands between the same parties in
pedite and dispose of the matter such admis- the same capacity. The broad distinction be-
sion can be acted upon." tween a payment and an aJjustment is that in
33. What after all, could be called an admis- an act of payment one party deals with the
sion? A statement made by the respon- other, which in an adjustment it is an act of the
dent/defendant/ opposite party in a party himself prior to the filing of the written

sec Online Web Edition, Copyright © 2019 54

statement though the benefit of both is claimed acter in respect of the two claims sought to be
by raising a plea in the written statement." set off or adjusted. Apart from the rule enacted
35. The distinction between an adjustment, in Rule 6 abovesaid, there exists a right to set-
set off and counter claim, is by now well set- off, called equitable, independently of the pro-
tled. In Union ofIndia vs. Karam Chond Tha- visions of the Code. Such mutual debts and
credits or cross-demands, to be available for
par ond Bros. ( Coal Sales) Ltd {2004 (3) SCC extinction by way of equitable set-off, must
504), the distinction between an adjustment have arisen out of the same transaction or
and set off and the distinction between a legal ought to be so connected in the.ir nature and cir~
set off and an equitable set off, were brought cumstances as to make it inequitable for the
out by the Apex Court in paragraphs-14, 15 Court to allow the claim before it and leave the
and 18, as follows:- defendant high and dry for the present unless
" 14. On general principles supported by ration- he files a cross-suit of his own. When a plea in
ality and reasonability, it appears to be a sound the nature of equitable set-off is raised it is not
proposition that a person who is obliged tc pay done as of right and the discretion lies with the
a sum of money to another person and also has Court to entertain and allow such plea or not to
in his hands an amount of money which that do so. 11
other person is entitled to claim from him, then 36. Incidentally, the author of the judgment
instead of physically entering into two transac- of the Division Bench of the Delhi High Court
tions by exchanging money twice that person in Cofex Exports Ltd vs. Canara Bank, is also
may utilize the money available in his hands to the author of the decision of the Apex Court in
satisfy the claim due and legally recoverable Union ofIndia vs. Karam C/wnd Thapar. The
from such other person to him. However, this
equitable principle is not one of universal ap- law laid down in Cofex Exports Ltd vs. Ca-
plication and has its own limitations. nara Bank has also been followed in the re-
cent decision of the Delhi High Court in
15. "Set-off' is defined in Black's Law Dic-
tionary (7th E<ln., 1999) inter alia as a debtor's Numero Uno International Ltd vs. Prasar
right to reduce the amount of a debt by any sum Bharti, which I have referred to in para-22
the creditor owes the debtor; the counterbal- above. Therefore, it is clear that the law is
ancing sum owed by the creditor. The diction- well settled on the distinction between an ad-
ary quotes Thomas W. Waterman from a justment and a set off/counter claim.
Treatise on the Law of Set-Off, Recoupment, 37. But what is the effect of such a distinc-
and Counter Claim as stating: tion, on the interim award passed by the Arbi-
"Set-off signifies the subtraction or taking trator, which is the subject matter of the
away of one demand from another opposite or present petition ? Nothing, in my considered
cross-demand, so as to distinguish the smaller view. As seen from the pleadings, the relevant
demand and reduce the greater by the amount
of the less: or, if the opposite demands are portions of which have been extracted above,
equal, to extinguish both. It was also, formerly, the petitioner claimed to have adjusted a sum
sometimes called stoppage, because the of Rs.56,63,990/- against his own claim of
amount to be set off was stopped or deducted Rs.1,3 I ,80,266/-. Consequently, the peti-
from the cross-demand." tioner has lodged a counter claim to the extent
"18. What the rule deals with is legal set-off. of Rs.75,16,276/- before the Arbitrator. In
The claim sought to be set off must be for an other words, the counter claim of the peti-
ascertained sum of money and legally recover- tioner has come down to the extent of the
able by the claimant. What is more significant amount admittedly payable by the petitioner
is that both the panies must fill the same char- to the respondent, which according to the pe-

r!JJ(f](C® Page 13 Wednesday, October 16, 2019
!ONLINE," TruePrint™ source: The Law Weekly
True Print"
Part4 Arunagiri v. Dr.Jayalakshmi & another 337

(R.Banumathi, ).)
titioner, had been adjusted out of Court. missed and A.No.5264 of 2008 is closed in
Therefore, the distinction between an adjust- view of the order passed in the main O.P.
ment and a set off/counter claim, has no bear- VCJ/VCS
ing upon the interim award passed by the
Arbitrator, on the admitted position. Conse-
quently, the third contention of the petitioner i2010-1-L.W. 3371
is also liable to be rejected.
38. Thus, all the three contentions raised by IN THE HIGH COURT OF JUDICA-
the learned counsel for the petitioner are TURE AT MADRAS
bound to fail. Apart from this, it is also seen
from the interim award passed by the Arbitra- 14.12.2009 /Second Appeal No.1264 of
tor that the award is a considered one. The Ar- 2009
bitrator has not solely proceeded on the basis
of the admission made by the petitioner. He R.Banumathi, J.
has taken into account (i) clause 31 of the con- Arunagiri .. Appellant
tract, (ii) the documents produced by the re-
spondent as Exx.C-51 and C-59 which
contained the details of pending payments vs.
and the details of the amount due (iii) the na- 1. Dr.Jayalakshmi
ture of the counter claim made by the peti- 2. J.Kumaravel .. Respondents
tioner and (iv) the various decisions of the
Supreme Court in Union of India vs. Raman Second Appeal filed under Section 100 C.P.C
Iron Foundry I AIR 1974 SC 1265}, State against the judgement and decree dated
Bank of India vs. Ranjan Chemicals Ltd {134 25.02.2009 made in A.S.No.66 of 2008 on the file
Comp. Cases 24) and Punjab Urban Plan- of Sub Court, Pollachi, against the judgement and
ning and Development Authority vs. Shiv decree dated 21.04.2008 made in O.S.No.402 of
Saraswati Iron and Steel Rerolling Mills 2007 on the file of District Munsif, Pollachi.
{1998 (4) SCC 539). Therefore, the interim Transfer of Property Act (1882), Section
award cannot even be termed as one passed 106/Ejection suit, Notice, Termination of
blindly on the strength of an admission made Tenancy, 15 days, Transfer of Property
by the petitioner. It is neither perverse nor ar- (Amendment) Act (2002), Section 13,
bitrary nor violative of any law. Hence, the
C.P.C., Order 17, Rule 3.
same does not call for any interference.
39. In view of the above, the main original Held: Ex,A3 notice was issued on
petition Tr.O.P.No.628 of 2008 is dismissed. 29.08.1997 terminating the lease with ef-
Since the petitioner has already deposited the fect from 24.09.1997 - It was contended
interim award amount in the execution pro- that Ex.A3 notice was issued terminating
ceedings, the application of the respondent in the tenancy within a month and therefore
A.No.5748 of 2008 is allowed and they are Ex.A3 would not be a valid notice and that
permitted to furnish Bank Guarantee in the there was no vali<( termination of tenancy
very same execution proceedings and with- - Defence plea of defective notice is not
draw the amount deposited therein by the pe- available to the defendant in view of Sec-
titioner. There will be no order as to costs. As tion 106 of Transfer of Property Amend-
a consequence O.A.No.1078 of 2008 is dis-
2010-1-L.W. 22 SI
56
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736 Current Tamil Nadu Cases 2011 (6) CTC
contrary, either to the express statutory provisions or to the object of those

provisions. The Instructions issued by the Election Commission are also
saved by Rule 144, which reads as follows:
"144. Savings.- All orders, direction, etc., issued by the Government, State
Election Commission or District Election Officer, for the preparation of electoral
rolls and for the conduct of elections under these Rules, shall unless repugnant to
these Rules, be deemed to have been issued or made under these Rules."
22. Therefore, the Instructions and Guidelines issued by the Election
Commission, which interpret Section 43(7) to confer a right upon the
President of a Village Panchayat to vote in the election to the post of Vice
President, have sanctity in terms of Rules 143 & 144. The understanding of
the Election Commission is also not repugnant to the scheme of the Act or
the Rules. Therefore, W.P. No.12905 of 2011 is dismissed. The other Writ
Petition W.P. No. 13322 of 201 I is disposed of, directing the Respondents to
permit the President of the Pagaivendri Village Panchayat to vote in the
election to the post of Vice President to be held on 30.11.2011. But the
prayer of the Petitioner in W.P. No.13322 of 2011 for allowing him to cast
his vote in the election held on 29.10.2011 itself, cannot be sustained. There
will be no order as to costs. Consequently connected Miscellaneous Petitions
are closed.
2011 (6) CTC 736

IN THE HIGH COURT OF MADRAS
R. Bannmathi & R. Mala, JJ.
O.S.A. No.112 of2010
30.11.2011
Gammon India Ltd., C-27, Navyug Mansion, Naushir Bharucha Marg,
Mumbai-400 007 ..... Appellant
Vs.
Sankaranarayana Construction (Bangalore) Pvt. Ltd., No. 9, Rajaram Mohan
Roy Road, Bangalore-560 025 ..... Respondent
Arbitration and Conciliation Act. 1996 (26 of 1996), Section 19 Code
of Civil Procedure, 1908 (5 of 1908), Order 12. Rule 6 - Parties to
Arbitration Agreement had not agreed to for procedural law other than
Code of Civil Procedure - Arbitral Tribunal can, in its discretion,
adopt principles of CPC - Passing of interim award on basis of
admissions is in accordance with law.
106 Current Tamil Nadu Cases/14.12.2011

58
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Part 7 Gammon India Ltd. v. Sankaranarayana Construction (Bangalore) Pvt. Ltd. 737
(DB) (R. Mala, J.)
Facts : "G" appointed "S" as sub-contractor. The work could not be completed
as each alleged that the other was responsible for breach. Matter was refened to
arbitration. "G" in its counter claim stated that "G" had adjusted amounts due by
"G" to "S" against G's claim. Interim award was passed on basis of such
admission. Learned Single Judge upheld award and Division Bench confirmed same.
The learned Counsel would take us to 1he decision stating 1hat Order 12, Rule 6,
C.P.C. is not a procedure to be adopted in the Arbitral Tribunal. At this juncture, it is
appropriate to consider that both the parties are agreed on 1he procedure to be
followed by the Arbitral Tribunal in conducting its proceedings. Accordingly, 1he
Tribunal may conduct the Arbitral proceedings 'in the manner it considers
appropriate'. This power, however, is subject to the provisions of Pt. I. Such
provisions, apai1 from Section 18 would be 1hose provisions of Pt. I, which set forth
special features of the discretionary powers or which limits the discretion in order to
ensure fairness. In the event that parties have not agreed on the procedure to be
followed in the conduct of proceedings, 1he Arbitral Tribunal is, subject to Pt. I, free
to conduct the proceedings in a manner which it considers appropriate. Instead of
following the straitjacket procedure of procedural laws, the Tribunal can design the
procedure to fit the exigencies of the subject matter of the arbitration. In practice, the
procedure is to be designed to fit the exact exigencies of the subject matter of
arbitration rather than follow the strict rule of the Code of Civil Procedure, 1908 or
the Indian Evidence Act, 1872. For instance, it is not compulsory for the Tribunal to
fmmally frame issues or record a decision on each and every one of the issues. as
required by the Code of Civil Procedure, 1908. The Arbitrators generally apply the
Rule of res-judicata. The power to proceed ex parte, in default of a party, is vested
in the Tribunal by the Act itself. It is not derived from the procedural law. As
already stated. the parties by agreement and the Arbitral Tribunal in its discretion
can always adopt the principles of the Code of Civil Procedure, 1908. The parties
are free to determine the rules on how their chosen method of dispute settlement will
be implemented. This allows them to design the procedural 1ules according to their
specific needs and wishes. They may choose those features familiar to them and
even opt for a procedure, which is anchored in a particular legal system. For
instance, they may agree to adopt the principles of the procedure prescribed in the
Code of Civil Procedure, 1908 (Orders 6 to 20-A). However, if they refer to a given
law on Civil Procedure, including evidence, such law would be applicable by vi11ue
of their choice, and not by virtue of being the national law. [Para I 3J
Considering the same, there is no evidence to show 1hat the parties agreed to fix
the procedural law other than Civil Procedure Code. So the Arbitral Tribunal in his
discretion can always adopt the principle of Civil Procedure Code. In such
circumstances, the learned Arbitrator after considering 1he statement of defence and
taken into account of the admission made by the Appellant/Petitioner herein, passed
an interim award. [Para 14]
Evidence Act, 1872 Cl of 1872), Section 17 - Admission - Where
Respondent in Counter claim admits money owed by him to claimant
and adjusts same in his claim, there is clear admission.
Learned Single Judge in para-33 of his judgment discussed the above aspect and
held that counter claim made by the Appellant/Petitioner in Claim-15.1 and his
prayer would clearly prove 1hat his admission is clear, unambiguous and
unequivocal. A person who claims to have adjusted an an1om1t due from him to
2011 (6) Current Tamil Nadu Cases • 47 107

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another against his own claim, actually makes it clear that the Court need not spend
any time on adjudicating his liability to that extent, as he had already given credit to
the other and adjusted the same towards what is due to him. On the basis of the
admission, fill interim award has been passed. Hence, we are of the considered view
that the learned Single Judge has rightly held that the admission is clear and
unambiguous and it does not suffer any incgulaiity. [Para 21]
Editors Note: Judgment of learned Single Judge has been reported in 2010 (2)
MWN (Civil) 528.
CASES REFERRED
Dr. S. K. Dora;.,amy v. N. Elangovan, 2001 (3) CTC 539 .................................................... R, 20
Ethiopian Airlines v. Ganesh Narain Saboo, 2011 (8) SCC 539 ......................................... 7, 16
Himani Alloys Ltd. v. Tata Steel Ud., 2011 (7) Scale 566 ................................................... 7, 20
M.M. Aqun Technologies Limited v. BDT Limited, A. Nos.3094, 3095 & 3935 & 4026 of
2005 in C.S. No.652 of 2005 ......................................................................................... 7, 20
Numero Uno International Ltd. v. Prasar Bharti, FAO (OS) 507/2007 Delhi.. .................. 7, 15
Union of India v. Karam Chand Thapar and Bros. (Coal Sales) Ud., 2004 (3) SCC 504 ........... 7, 22
R. Senthil Kumar, Advocate for Appellant.
T.A. Srinivasan for Sree and Associates, Advocates for Respondent,
O.S.A. DISMISSED - NO COSTS - M.Ps. CLOSED
Prayer: Ori1,inal Side Appea(fi/ed under Order 36, RHle 1 ~f Orit,inal Side Rules read with Sec/ion 3 7(1 )(13) qf
the Arbitmtion and Concilialion Ac!, 1996 and Clause 15 qf the Letters Patent, against the judgment and
decretal order dated 11.12.2009 in Tr.O.P. No.628 ef2008.
!JUDGMENT!
R. Mala, J.
1. Challenge in this Appeal is the Judgment and decretal order passed in
Tr.O.P. No.628 of 2008, dated 11.10.2009, in and by which, the learned
Single Judge permitted the Respondent herein to furnish Bank Guarantee in
the very same Execution proceedings, and withdraw the amount deposited
therein by the Petitioner, who is the Appellant herein.
2. Appellant/Petitioner was awarded a contract for the construction of a
Masonry Dam across the Tamiraparani river basin in Mekarai Village,
Shenkottah Taluk, Tirunelveli District. Block Nos. 11 to 18 were assigned
by the Appellant/Petitioner to the Respondent, by way of sub-contract, under
a Work Order dated 2.11.2000. Since dispute arose between the parties,
compelling the Respondent herein to file an Application under Section 11 of
the Arbitration and Conciliation Act, 1996. By an order dated 16.4.2005
passed in O.P. No.538 of 2003, Hon'ble Mr. Justice N.V. Balasnbramanian
(Retired) was appointed as Arbitrator and he entered reference and passed an
interim award dated 16.12.2006, directing the Appellant/Petitioner herein to
deposit a sum of ~56,63,990/- to the credit of O.P. No.538 of 2003 within six
weeks and permitting the Respondent to withdraw the same after furnishing
Bank Guarantee.

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Part 7 Gammon India Ltd. v. Sankaranarayana ConstrucUon (Bangalore) Pvt. Ltd. 739
(OB) (R. Mala, J.)
3. Challenging the said interim award, Appellant/Petitioner filed a
Petition in O.P. No.51 of 2007, under Section 34 before the District Court,
Tirunelveli, but it was returned with a direction to present before the
appropriate forum, against which, the Appellant/Petitioner filed Revision
Petition in CRP(PD)(MD) No.414 of 2008 and the same was dismissed.
Hence, he represented the same before the Original Side of this Court and it
was taken on file.
4. It is pertinent to note that after passing of an interim award, the
Respondent herein has initiated Execution proceeding before 1he Mumbai
High Court in E.P. No.85 of 2008, where the interim award amount has been
deposited before the Sheriff of Mumbai High Court. Admittedly, Appellant/
Petitioner herein filed an Application for rejection of main O.P. in A. No.
5264 of 2008, which was dismissed, against which, no O.S.A. has been filed.
5. Appellant/Petitioner filed Tr. O.P. N o.628 of 2008 challenging the
interim award passed by the Arbitrator and stated that Arbitral Tribunal has
not empowered to pass an interim award on admission, as in the case of
Order 12, Rule 6, C.P.C. His second submission is that in any case, a
decree/award on admission cannot be passed unless the admission was clear,
unambiguous and unequivocal and the statement of defence was not an
admission at all. His third limb of argument is statement of defence was only
an adjustment, which was different from even a set off and that therefore, no
interim award that would have the effect of upsetting such adjustment could
be passed.
6. The learned Single Judge after considering the argument of both sides
and several decisions relied upon by both sides, negatived the argument
advanced by the learned Counsel for Appellant/Petitioner stating that the
Arbitrator has every right to pass an interim award on admission. He has
further held that the Appellant/Petitioner lodged a Counter claim to the
extent of '75, 16,276/- before the Arbitrator and the balance amount,
Appellant/ Petitioner claimed to have adjusted is a sum of '<56,63,990/-
against his own claim ofH,31,80,266/-. Hence, the learned Single Judge has
allowed the Application in A. No.5748/2008 pern1itting the Respondent
herein to withdraw the amount of ,56,63,990/-, against which, the present
Original Side Appeal has been preferred.
7. Mr. R. Senthil Kumar, learned Counsel appearing for the Appellant/
Petitioner would reiterate the arguments that he advanced before the learned
Single Judge and again raised the same three points. He would take us to
Section 19 of the Arbilralion and Conciliation Acl (hereinafter referred lo as
"Act") and submitted that as per Section 19 of the Act, Arbitral Tribunal is
not bound by the Code of Civil Procedure and Indian Evidence Act. So the
Arbitrator has erroneously passed an interim award on admission by
invoking Order 12, Rule 6 of C.P.C. It is further submitted that the
admission is not clear, unambiguous and unequivocal. He further submitted
Current Tamil Nadu Cases/14.12.2011 109

61
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that there is a difference between an adjustment and a set offi'Counter claim

and the learned Single Judge has not considered this aspect and hence, he
prayed for setting aside the Judgment and decretal order dated 11. I 0.2009
passed in Tr.O.P. No.628 of 2008. To substantiate his argument, he would
rely upon the following decisions: (i) Numero Uno International Ltd. v.
Prasar Bharti, FAO (OS) 507/2007 Delhi; (ii) M.M. Aqun Technologies
Limited v. BDT Limited, A. Nos.3094, 3095 & 3935 & 4026 of 2005 in C.S.
No.652 of 2005; (iii) Union of India v. Karam Chand Thapar and Bros.
(Coal Sales) Ltd. and others, 2004 (3) SCC 504; (iv) Himani Alloys Ltd. v.
Tata Steel Ltd., 2011 (7) Scale 566; and (v) Ethiopian Airlines v. Ganesh
Narain Saboo, 2011 (8) SCC 539.
8. Resisting the same, Mr. T.A. Srinivasan, learned Counsel appearing for
the Respondent would submit that as per Section 31(6) of the Act, an
Arbitral Tribunal has every right to pass an interim award. Learned Counsel
would take us to the claim statement made by the Appellant/Petitioner and
submits that in Condition-31, it was stated that "payments of running bills
shall be made within 7 days of receipt of payment from S.E., P.W.D.,
Tirunelveli." Furthermore, in page-80 of the Statement of defence and
counter claim made by the Appellant, it was mentioned that bill amount as
per Annexure is ,56,63,990/-. As per Condition-31, it was stated that
payment of bill amount shall be paid within 7 days of receipt of payment
from S.E., P.W.D. Tirunclveli. So the learned Arbitrator has rightly passed
an interim award directing the Appellant/Petitioner to deposit a sum of
,56,63,990/- and that has been confirmed by the learned Single Judge that
the admission made in the Counter-claim statement is clear and the learned
Single Judge came to the correct conclusion that the Respondent is entitled
to withdraw the amount deposited in the execution proceedings in E.P.
No.85 of 2008 pending before the Sheriff of Mumbai High Court. To
substantiate his argument, he relied upon the decision reported in Dr. S.K.
Doraisamy v. N. Elangovan and three others, 2001 (3) CTC 539, and
hence, prayed for dismissal of the Appeal.
9. Considered the rival submissions made on both sides and perused the
materials available on record.
10. It is an admitted fact that the Respondent was a Sub-Contractor under
the Appellant/Petitioner herein. Volnme of work as per work order was
about ,13,18,81,960/- and the period of completion was fixed at 14 months
from 4.11.2000. Since the Appellant/Petitioner was not able to hand over the
site and keep pace with the claimant from the beginning, there was a delay in
handing over the site as well as necessary accessories/facilities, which has
been agreed by the Respondent herein, the work as contemplated in the work
order could not be completed within the time specified therein, extension of
time to complete the work sought for, problem arose between both of them.
Hence, the Respondent approached the Court under Section 11 of the Act.
After Arbitrator was appointed by this Court, the Arbitrator passed an
110 CurrentTam,I Nadu Cases/14.12.2011

62
Part 7 Gammon India Ltd. v. Sankaranarayana Construction (Bangalore) Pvt. Ltd. 741
(DB) (R. Mala, J.)
interim award as per Section 31(6) of the Act. Section 31(6) of the Act is
extracted hereunder:
"31 (6) The Arbitral Tribunal may, at any time during the Arbitral proceedings,
make an interim arbitral award on many matter with respect to which it may
make a final arbitral award."
As per Section 31(6) of the Act, an Arbitral Tribunal/Arbitrator has
empowered to pass an interim award.
11. The definition of arbitral award in Section 2(c) includes an 'interim
award'.
"2(c) 'arbitral award' includes an inte1im award".
Section 31 (6) authorises an Arbitral Tribunal to 'make an interim arbitral
award on any matter with respect to which it may make a final arbitral
award' at any time during the Arbitral proceedings. Such award deals only
with some of the matters referred, so that the remaining matters will be dealt
with later. As regards interim measures of protection, these are only
enforceable if the Arbitral Tribunal makes an interim award with respect to
such interim measures, and since this is time consuming, parties are
generally referred to the Court with an expression of opinion by the Arbitral
Tribunal on the need for such interim measures. An arbitral award on agreed
terms has the same status and effect as any other arbitral award on the
substance of the dispute.
12. Now this Court has to decide whether the Arbitral Tribunal is
empowered to pass an interim award on admission, as in the case of Order
12, Rule 6, C.P.C ? At this juncture, it is appropriate to consider Section 19
of the Arbitration and Conciliation Act, which is extracted hereunder:
"19. Determination of rules o_fprocedure-· (I) The Arbitral Tribunal shall not be
bound by the Code of Civil Proceudre, 1908 (5 of 1908) or the Indian Evidence
Act, 1872 (I of 1872).
(2) Subject to this Paii, the paitics are free to agree on the procedure to be
followed by the Arbit:ral Tribunal in conducting its proceedings.
(3) Failing any agreement referred to in sub-section (2), the Arbitral T1ibunal
may, subject to this Paii, condnct the proceedings in the manner it considers
appropriate.
(4) The power of the Arbitral Tribunal under sub-section (3) includes the power
to determine the admissibility, relevance, materiality and weight of any
evidence."
13. The learned Counsel would take us to the decision stating that Order
12, Rule 6, C.P.C. is not a procedure to be adopted in the Arbitral Tribunal.
At this juncture, it is appropriate to consider that both the parties are (sic)
agreed on the procedure to be followed by the Arbitral Tribunal in
conducting its proceedings. Accordingly, the Tribunal may conduct the

63
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arbitral proceedings 'in the manner it considers appropriate'. This power,

however, is subject to the provisions of Pt I. Such provisions, apart from
Section 18 would be those provisions of Pt I, which set forth special features
of the discretionary powers or which limits the discretion in order to ensure
fairness. In the event that parties have not agreed on the procedure to be
followed in the conduct of proceedings, the Arbitral Tribunal is, subject to Pt
I, free to conduct the proceedings in a manner which it considers
appropriate. Instead of following the straitjacket procedure of procedural
laws, the Tribunal can design the procedure to fit the exigencies of the
subject matter of the arbitration. In practice, the procedure is to be designed
to fit the exact exigencies of the subject matter of arbitration rather than
follow the strict rule of the Code of Civil Procedure, 1908 or the Indian
Evidence Act, 1872. For instance, it is not compulsory for the Tribunal to
formally frame issues or record a decision on each and every one of the
issues, as required by the Code of Civil Procedure, 1908. The Arbitrators
generally apply the rule of res-judicata. The power to proceed ex parte, in
default of a party, is vested in the Tribunal by the Act itself. It is not derived
from the procedural law. As already stated, the parties by agreement and the
Arbitral Tribunal in its discretion can always adopt the principles of the
Code of Civil Procedure, 1908. The parties are free to determine the rules on
how their chosen method of dispute settlement will be implemented. This
allows them to design the procedural rules according to their specific needs
and wishes. They may choose those features familiar to them and even opt
for a procedure, which is anchored in a particular legal system. For instance,
they may agree to adopt the principles of the procedure prescribed in the
Code of Civil Procedure, 1908 (Orders 6 to 20-A). However, if they refer to
a given law on Civil Procedure, including evidence, such law would be
applicable by virtue of their choice, and not by virtue of being the national
law.
14. Considering the same, there is no evidence to show that the parties
agreed to fix the procedural law other than Civil Procedure Code. So the
Arbitral Tribunal in his discretion can always adopt the principle of Civil
Procedure Code. In such circumstances, the learned Arbitrator after
considering the statement of defence and taken into account of the admission
made by the Appellant/Petitioner herein, passed an interim award.
15. Learned Counsel for the Appellant/Petitioner would rely upon the
following portion in Numero Uno l11ternatio11al Ltd. v. Prasar Bharti, FAO
(OS) 507/2007 Delhi, in para-5, it is stated as follows:
"5. .. In fairness to Mr. Jaitley, we must record that he did not question the
jurisdiction of the arbitrator to make an interim award as was, it appears, sought
to be done before the learned Single Judge at some stage."
He submitted that at the time of argument, learned Counsel has not
questioned the jurisdiction of the Arbitrator to make an interim award. But
here, the learned Counsel for the Appellant would question that the passing

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Part 7 Gammon India Ltd. v. Sankaranarayana Conslruction (Bangalore) Pvt. Ltd. 7 43

(DB) (R. Mala, J.)
of an interim award on the basis of the admission and hence, findings of the
learned Single Judge is unsustainable. Learned Single Judge has also
extracted the following portion of the above decision in his judgment, which
is stated as follows:
"No inteiference with an interim award would, however, be pennissible only
because the defendant has made a Counter claim or because some areas of
dispute independent of the area covered by the interim award remains to be
resolved."
Now we have to consider that whether the interim award has been passed on
admission and whether the statement given by the Appellant/Petitioner in the
claim statement is clear, unambiguous and unequivocal admission ? The
Tribunal has right to pass an interim award on admission made by the
Appellant/Petitioner by invoking Order 7, Rule 6 of C.P.C., because as
already stated that it is a discretion of the Arbitrator to follow the procedural
law, if both the parties are not agreed. Hence, we are of the opinion that the
learned Single Judge has rightly held that the Arbitral Tribunal has a right to
pass an award on the basis of the admission by invoking Order 7, Rule 6 of
C.P.C. So it does not warrant any interference.
16, The learned Counsel for the Appellant/Petitioner would rely upon
Ethiopian Airlines v, Ganesh Narain Saboo, 201 I (8) SCC 539, in para-66,
it is held as follows:
"66. Likewise, CPC itself does not claim to make Section 86 applicable to
proceedings before the Consumer Fora. Instead, CPC includes a saving clause,
providing that "in the absence of any specific provision to the contrary, nothing
in [CPC] shall be deemed to limit or otherwise affect any special ... law ... or any
special fom1 of procedure prescribed, by or under any other law ... " In addition,
Section 86 only applies to a "Suit in any Court". This term should be understood
differently than the tcnn "Comt" discussed above because CPC refers
exclusively to the Civil Courts. In paiticular, CPC specifically refers to the
District Courts, the High Courts, and the Supreme Court and makes little if any
reference to other, quasi ~judicial fora like the consumer rcdrcssal bodies at issue
here. This interpretation has been approved by the Supreme Court, in Bhagwat
Singh."
In the above citation, it was defined that what is the Court '/ 'Court' means
Civil Court (i.e.) District Court, High Court and Supreme Court. So he
mainly focussing upon the said decision to contend that the Arbitral Tribunal
will not come under the definition of 'Court'. As decided earlier that there is
no quarrel over the proposition, but the above citation is not relevant for this
Appeal, which is difforent from the facts of tl1is case.
17. Now this Court has to decide that whether averment in the claim
statement filed by the appellant is clear, unambiguous and unequivocal
admission ? At this juncture, it is appropriate to consider the claim statement
made by the Appellant/Petitioner. In page-48 of the Claim statement, Claim-
15. I is extracted hereunder:

65
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"15. I Withholding of bills and adjusting the same for the amount due to the
Respondent are in order. The Claimant has stated that an amount of ~68.84 lakhs
is outstanding and payment due. But as per the quantity arrived by initial level
and final level taken jointly with the Claimant, the amount of bill due to
Claimant works ont to ~56,63,990/-. Annexure V with working sheet is
attached."
"The Respondent submits that as a matter of fact an amount of n,31,80.266/- is
due to the Respondent from the Claimant vide details furnished in the Counter
claim. The amount of ~56,63,990/- payable to Claimant has been adjusted
towards the amount due to Respondent."
18. It is true, as per page-80 of the claim statement, it was specifically
mentioned that Bill amount as per Annexure-V is t56,63,990/- and that has
been admitted. But in Claim-15.1, Appellant/Petitioner stated that the
amount of t56,63,990/- payable to Claimant has been adjusted towards the
amount due to Respondent. So the Appellant/Petitioner admits that he owns
<1'56,63,990/-, which is clear and unambiguous admission. On that basis only,
an interim award has been passed by the Arbitrator. The learned Single
Judge has considered this aspect in para-26 of his judgment and discussed as
follows:
"as per the quantity aITived by initial level and final level taken jointly with the
claimant, the amount of bill due to the claimant works out to ,56,63,990/-."
In the prayer portion, towards the end of Counter Claim No. l in part-III of
their Statement of defence, Appellant/Petitioner prayed before the Arbitrator
as follows:
"(A) The claims made by the Claimant are not maintainable and deserves to be
rejected except partial bill amount of <1'56,63,990/-, which is adjusted towards the
amount due to Respondent besides encashment of Bank Guarantee."
19. The learned Single Judge considering the statement of defence and
prayer portion, came to the correct conclusion that admission is more clear,
more positive and more unequivocal. Appellant/Petitioner has not only
admitted their liability to the Respondent to the extent of t56,63,990/-, but
also gone to the extent of adjusting the same towards the amount claimed by
them against the Respondent. So the admission is clear, categorical about the
own liability of the Appellant/Petitioner to the extent of t56,63,990/-. So the
learned Single Judge has rightly held that an Arbitrator was right in passing
interim award on the strength of the admission made in the claim statement
of the Appellant/Petitioner.
20. At this juncture, learned Counsel for the Appellant/Petitioner would
rely upon the following decisions of this Court and Apex Court.
(i) Unreported judgment in M.M. Aqun Technologies Limited v. BDT
Limited, A. Nos.3094, 3095 & 3935 & 4026 of 2005 in C.S. No.652 of
2005, in para-I 1, it is held as follows:
114 CurrentTamil Nadu Cases/14.12.2011

66

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BEFORE THE HON’BLE ARBITRAL TRIBUNAL

(1) HON’BLE MR. JUSTICE V.B. GUPTA …PRESIDING

(2) MR. K.K. JALAN ...MEMBER

(3) MR. R.K. SRIVASTAVA ...MEMBER

IN THE ARBITRATION BETWEEN:

M/s BSC-C&C JV. Chief Engineer, PWD -Highway (NH)

COMPLIATION LAW COMPILATION

S.No Title Citation Paras Pg No.

2. Numero Uno International Ltd. 2008 (101) DRJ 8 5-10

4. Nimbus Communications Ltd. Vs. 2015 SCC OnLine 37, 21-42

5. Gammon India Ltd. 2010 (1) L.W. 325 23,30 43-56

6. Gammon India Ltd. 2011 SCC OnLine 17-24 57-65

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Delhi High Court

Numero Uno International Ltd.

The judgment of the court was delivered by

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the same are yet to be adjudicated by the learned arbitrator.

© EBC Publishing Pvt.Ltd., Lucknow.

Numero Uno International Ltd. v. Prasar Bharti 479

2008 (101) DRJ 479(DB)

Prasar Bharti ............ Respondent

480 f!ELHI REPORTED JUDGMENTS 2008 (101) DRJ ....

is admittedly due should await the determination of other disputes

Numero Uno International Ltd. v. Prasar Bharti 481

482 DELHI REPORTED JUDGMENTS 2008 (101) DRJ ....

6. What then remains. to be examined is whether the pendency of a

Numero Uno International Ltd. v. Prasar Bharti 483

484 DELHI REPORTED JUDGMENTS 2008 (101) DRJ ....

2008 (101) DRJ 484(DB)

120 SUPREME COURT CASES (2000)7 sec

122 SUPREME COURT CASES (2000)7 sec

UTTAMSINGHDUGGAL &CO. LTD. v. UNI1EDBANKOFINDIA 123

124 SUPREME COURT CASES (2000)7 sec

126 SUPREME COURT CASES (2000)7 sec

128 SUPREME COURT CASES (2000)7 sec

1 AIR 1956 SC 593 : 1956 SCR 451

R. BALAKRISHNA PILLAI v, STATE OF KERALA 129

(2000) 7 Supreme Court Cases 129

Nimbus Communc::ations ltd. v. Prasar Bharti

2015 sec Online Del 8583

(BEFORE V. KAMESWAR RAO, J.)

Nimbus Communcations Ltd ...... Petitioner

S. No. Event Shared Bv

7 India Sri. Lanka Series, Nimbus Sport International Pte Ltd.

s. Event Due from Due from Interest Total

6 India Sri. 1,75,50,000 86,99,625 2,62,49,625

b. India - Australia Twenty-20 Cricket Match played on 20'" October, 2007.

a. India - Bangladesh - Pakistan Triangular Cricket series played in June, 2008

b. India-Sri. Lanka Cricket Series, 2009 played in January-February, 2009.

Ix. Costs of the proceedings be awarded to the claimant;

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Proceedings before the Tribunal:

It accordingly made the following prayers: -

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(i) Valliamma Champaka Pillai v. Sivathanu Pillai, (1979) 4 sec 429

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(i) State of Maharashtra v. Ramdas Shrlnlvas Nayak, (1982) 2 sec 463

(vi) Shfkharchand v. Bari Bal, AIR 1974 MP 75

(viii) Jabed Sheikh v. Taher Malik, 45 CWN 519

Series Averments in the claim Reply to claim

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