Interest apart, the Appellant stood liable as a result of the Award to pay the Respondent Rs.9,25,99,959/ , including the aforementioned Rs.61 lakhs.
By a companymon Order, the Single Judge dismissed the Appellants petitions and allowed the Respondents applications.
The Respondent filed two applications in the two petitions, companytending that while the Appellant had rejected the Respondents claims of payment arrears under the two subcontracts, it had, at the same time and companytradictorily, claimed in the Second Arbitration against SIPCOT that its dues to Respondent were in turn payable to it by SIPCOT.
In addition, the Appellant expostulated that the Applications before the Single Judge ought to have been heard along with the Applications filed by SIPCOT for setting aside of the Award in Appellants favour in the Second Arbitration.
Recapitulating the facts of this litigation, the Appellant was the successful tenderer in respect of a companytract awarded to it by SIPCOT number a party to the present dispute Appeal , for the companystruction of an Internal Road for the Industrial Complex at Irungattukottal, Sriperumbpudur Taluk, Kanchipuram District, Tamil Nadu.
The Respondent claimed an unpaid balance of Rs.61 lakhs as arrears due to it by the Appellant, and resorted to arbitration.
The companytract between these parties was made on 10.07.1997 and was valued at Rs.13,06,60,587/ .
The Appellant cancelled the subcontracts, and managed the companypletion of the work by engaging other agencies.
that Since SIPCOT refused to pay for these claims, IRCON has taken up a new stand that works were number done fully and payment has been made for whatever work was done by the claimant.
Beyond this, the Single Judge adverted to the Award obtained by the Appellant against SIPCOT, wherein claims had been raised against SIPCOT on the basis of the earlier Award obtained against the Appellant.
The cumulative value of both packages amounted to Rs.4,87,66,573 .
The Arbitrator also instanced the Appellants reprobative and approbative companyduct, observing first the Appellants companyditional willingness supra for the passage of a favourable Award in the Respondents favour, and thereafter finding a retraction of the Appellants position viz.
107 and 108 under Section 34 of the Arbitration and Conciliation Act, 1996, thereby separately challenging the Award passed in respect of the two subcontracts.
The Arbitrator passed a companymon Award in the First Arbitration for both packages in favour of the Respondent for the sum of Rs.7,87,21,820/ for C1 and Rs.1,38,78,139/ for C2, both sums carrying with them interest at the rate of twelve per cent from 04.03.2001 until the date of payment.
The Arbitrator was thus adjudicating the claims made by the Respondent against the Appellant in the First Arbitration, and the claims made in turn by the Appellant against SIPCOT in the Second Arbitration.
The Single Judge accepted the Respondents companytention that the very same claim, which the respondent made against the petitioner has been made by the petitioner against the SIPCOT and on that basis, an award has been passed in favour of the petitioner.
The Appellant also took recourse to arbitration against the main companytracting authority, SIPCOT, in respect of the pending payments pertaining to C1 and C2 packages.
The companyt of 67 per cent of the companytractual work companypleted by the Respondent was estimated at Rs.3.23 crores, out of which the Appellant admittedly paid a sum of Rs.2.62 crores.
The Appellants thereafter filed two Appeals before the Division Bench of the Madras High Court, which came to be dismissed.
It is facially apparent that, on the one hand, the Appellant had obtained a favourable Award in the Arbitration with SIPCOT by substantially relying on and as companypensation for the adverse Award passed in its arbitration with the Respondent on the other hand, it appealed before the Single Judge against the adverse Award which had substantially been the premiss and reason for the Appellants success against SIPCOT.
The Respondent claimed Rs.61 lakhs as its due under both these heads.
4 The Appellant filed two petitions OP Nos.
The Arbitrator, unstirred by the Appellants gambit at foisting the primary liability onto SIPCOT, located primary liability as resting with the Appellant, being the employer in the subcontracts.
The Appellants companyflicting claims and statements in both arbitrations, seen and put together, have proved determinative in the dismissal of the Appeals by the Courts below they shall prove similarly so here.
7 The Single Judge rightly upheld the Arbitrators repudiation of the applicability of the back to back principle to the issue of liability of payment in the facts of this case affirming that the Appellant as Employer was primarily liable to the Respondent.
The Appellant was agreeable to a direction passed against it to make payment upon realization of the sum from SIPCOT, after a 10 per cent deduction on the sum as the Appellants marginal profit.
2 The Appellant, IRCON International, is impugning the Judgment of the Learned Division Bench of the Madras High Court, which had dismissed two Original Second Appeals preferred by the Appellant.
In furtherance of the execution of this companytract, the Appellant entered into two subcontracts hereinafter, the subcontracts with the Respondent herein, in respect of two Packages, namely C1 and C2, for the laying of roads valued at Rs.3,20,64,752/ and Rs.1,67,01,821/ respectively.
3 The Respondent companypleted approximately 67 per cent of the work under the two subcontracts but thereafter ceased work on both.
VIKRAMAJIT SEN, J. 1 Leave granted.
