T.S. Sivagnanam ORDER
T.S. Sivagnanam, J.
1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") to set aside the award passed by the second respondent, the Sole Arbitrator dated 24.01.2009 in so far as the failure to consider the claim for compensation made by the petitioner on account of the default in refund of the Earnest Money Deposit (EMD) for the period 16.06.1999 and 13.10.2000.
2. The petitioner was awarded a transport contract by the Southern Railways vide contract dated 25.02.1999 for transportation of 3704 MTs of C.I. Scrap from various places of Southern Railway to the destination points. The petitioner had paid a sum of Rs. 20,000/- as EMD and a sum of Rs. 1,50,000/- as security deposit in the form of Bank Guarantee dated 27.03.1999. The allegation of the Railway Administration is that out of the estimated quantity of 3704 MTs of C.I. Scrap, the petitioner had transported only 1226.195 MTs and failed to execute the contract in respect of the balance quantity. The petitioner was advised to lift the available scrap immediately vide letter dated 20.03.1999 followed by reminders dated 07.12.1999 and 31.12.1999 respectively. The petitioner's case is that while awarding the contract, the respondent Railway administration should have taken into consideration the location, availability of material, etc and accordingly they should have fixed the period for completion. The allegation is that planning and estimation were not properly done by the Railway Administration resulting in the petitioner incurring heavy loss on waiting time and awaiting orders, etc. In the background of these facts, the petitioner submitted various claim petitions before the respondent Railway Administration which were not considered and ultimately the matter was referred for arbitration before the second respondent. Totally seven claims were made by the petitioner, of which, we are not concerned about Claim Nos. 1 to 5 and what is required to be seen is only Claims Nos. 6 and 7 which are as follows:
3. Claim No. 6 relates to refund of EMD furnished by the petitioner in respect of other contracts and not in relation to the subject contract and Claim No. 7 is relatable to Claim No. 6 as the petitioner's case is that these EMDs were unjustly withheld by the Railway Administration and therefore, they are liable for compensation. The Railway Administration in their reply to the claim statement with regard to Claim No. 6 stated that so far as the four EMDs are concerned, the same will be refunded to the Contractor if found eligible. However, in respect of other claim for compensation for withholding the EMDs, there was no specific averments made in the reply. The petitioner filed a rejoinder to the counter reiterating their stand and submitted that the Railway Administration has taken seven long years and they are entitled for due compensation for the delayed submission of the EMD amount. Before the learned Arbitrator, the petitioner did not press Claim No. 6(a) as they had received payment, Claim Nos. 6(b) and 6(c) were allowed and Claim No. 6(d) was rejected.
4. In this petition, the petitioner does not contest the rejection of Claim NO.6(d) by the Arbitrator but their contest is only restricted to the claim for compensation under Claim No. 7. The learned Arbitrator, while considering the Claim No. 7, has not discussed as to whether the petitioner is entitled for compensation or not, but has merely observed that the said claim relates to Claim No. 6 for which award has been given by the Arbitrator. This has been questioned in this petition.
5. Mr. S. Raghavan, learned counsel for the petitioner, after elaborately referring to the factual matrix contended that the Sole Arbitrator has not even dealt with Claim No. 7 where the petitioner had claimed compensation for the delayed refund of the EMD for over seven years and therefore the award requires interference.
6. Mr. V.G. Sures........