Arb.O.P.(Com.Div.) No.49 of 2021

& O.P.No.442 of 2021

In the High Court of Judicature at Madras

Reserved on

03.2.2026

Delivered on:

13.2.2026

Coram :

The Honourable Mr.Justice N.ANAND VENKATESH

Arbitration O.P.(Com.Div.) No.49 of f 2021

& O.P.No.442 of 2021

& A.No.2474 of 2021

M/s KRK Education Trust

Rep. by its Managing Trustee

Mr.K.R.Ilanghovan, New No.40/1,

Old No.23, A.B.M.Avenue

R.A.Puram, Chennai-28. ...Petitioner in

Arb.O.P.No.49 of 2021

& Respondent in

O.P.No.442 of 2021

Vs

M/s.Aintiram Developers (P)

Ltd., BG–3, Gokul Apartments,

New No.250, R.K.Mutt Road,

R.A.Puram, Chennai-28. ...Respondent in

Arb.O.P.No.49 of 2021

M/s.Aintiram Developers (P)

Ltd., No.19, Venkatraman

Street, R.A.Puram, Chennai-28. ...Petitioner in O.P.No.

442 of 2021

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PETITIONS under Section 34 of the Arbitration and Conciliation

Act, 1996 praying

(i) to set aside the award dated 06.2.2020 made by the

learned Arbitrators to the extent the claim has been granted in

favour of the respondent on the grounds mentioned above (Arb.O.P.

(Com.Div.) No. 49 of 2021); and

(ii) to set aside the award dated 06.2.2020 of the Arbitral

Tribunal (O.P.No.442 of 2021).

For Petitioner in

Arb.O.P.No.49 of 2021 &

Respondent in

O.P.No.442 of 2021 : Ms.Tanya Kapoor

For Respondent in

Arb.O.P.No.49 of 2021 &

Petitioner in

O.P.No.442 of 2021 : Mr.R.Karthikeyan

COMMON ORDER

Both the claimant and the respondent before the Arbitral

Tribunal have filed the above petitions under Section 34 of the

Arbitration and Conciliation Act, 1996 (for short, the Act) challenging

the award passed by the Arbitral Tribunal dated 06.2.2020.

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2. Heard both.

3. For the sake of convenience, the parties will be assigned

the same rank as was assigned before the Arbitral Tribunal.

4. The facts leading to filing of these petitions are as follows:

(i) The claimant is a public charitable trust to promote and

run educational institutions in all faculties. They approached the

respondent with a request to undertake construction works of a

college and the scope of work was for construction of a building and

interior contract. The respondent also introduced two other potential

contractors to complete the work.

(ii) A work order was issued to the respondent by the claimant

on 18.3.2010. Further, an agreement was entered into between the

parties on 22.3.2010.The respondent was awarded the contracts for

execution of the works such as Block A, Block B – second floor,

Workshop – ground, first and second Floors and Hostel – second and

third floors. The project was to be executed between March 2010

and December 2011 and the claimant had to supply all materials like

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steel, cement, etc. The respondent was paid a sum of Rs.842.42

lakhs, which was inclusive of the materials supplied amounting to

107.78% of the total contract value.

(iii) When the final bill namely bill No.8 was raised and

submitted by the respondent, the same was approved by the

Architect. However, vide letter dated 25.12.2012, the claimant

disputed the said approval given by the Architect and pointed out

the mistakes. Further, the Architect, vide letter dated 01.2.2013,

rectified the mistakes and revised the certified bill.

(iv) The dispute arose between the parties, which resulted in

making 8 claims by the claimant. The respondent raised the bills for

a sum of Rs.969.31 lakhs. The Architect certified the bills for

Rs.833.40 lakhs. The claimant paid a sum of Rs.842.42 lakhs.

Hence, the claimant took a stand that excess payment was made to

the respondent and that the respondent was liable to refund

Rs.60.85 lakhs, which was paid in excess by the claimant.

(v) Before the Arbitral Tribunal, the claimant prayed for an

award against the respondent for a sum of Rs.60.85 lakhs towards

the amount paid in excess along with interest at the rate of 8% per

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annum. In turn, the respondent filed a statement of defence and

made counter claims. According to the respondent, the contract was

limited to civil works to be carried out in terms of the drawings of

the Architect.

(vi) In the statement of defence, the respondent also took a

stand that there was no understanding of steel calculation of 5 Kgs

per sq.ft., between the parties, that, apart from that, the

respondent undertook additional works on the request made by the

claimant vide letters dated 08.8.2011 and 19.12.2011 and that the

construction of second floor of Blocks A and B was agreed at the

revised rate of Rs.750/- per sq.ft., while the construction of the

hostel and the workshop was agreed at the price quoted by the

claimant.

(vii) The respondent also took a stand that the constructed

buildings were handed over (a) during July 2010 – Block A - ground

and first floors; (b) during May 2011 – Blocks A & B – II Floor; and

(c) during July 2011 – workshop - ground and first floors. Totally,

13 bills were raised by the respondent for the main building and the

workshop, 3 bills for the hostel block and 2 bills for the work shop

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second floor. Further, 11 bills were certified by the Architect on

03.2.2012. However, the final bills for the hostel and the second

floor of the workshop raised on 14.8.2012 were not approved. After

having certified the bills, the Architect unanimously revised the bills

without notice to the respondent and thereby the amounts due and

payable to the respondent were drastically cut down. Therefore, the

respondent also raised 11 counter claims along with interest.

(viii) Considering the pleadings, the Arbitral Tribunal framed

the following issues:

“1. What were the terms of the contract

between the parties?

2. By whom was the breach committed?

3. Whether the deductions made by the

Architect in the certified final bill dated

01.2.2013 is correct?

4. Whether the respondent is liable to pay

a sum of Rs 60.85 lakhs to the claimant?

5. Whether the respondent is entitled to

counter claim as prayed for?

6. Whether the parties are entitled to

interest as claimed by them?

7. Whether the parties are entitled to

costs of the proceedings? and

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8. To what relief the parties are entitled

to?”

(ix) The claimant examined C.W.1 and marked Ex.C.1 to

Ex.C.43. The respondent examined R.W.1 and marked Ex.R1 to

Ex.R.28.

(x) The Arbitral Tribunal, on considering the facts and

circumstances of the cases and on appreciation of evidence, passed

an award on 06.2.2020 in the following terms:

“a. the claimant shall pay the respondent

a sum of Rs.34,69,347/- and in addition the

retention money shall be refunded to the

respondent as set out in paragraph 47 above;

b. the interest payable by the claimant on

the sum set out in (a) above shall be at the rate

of 12% p.a. on the sum of Rs.16,84,348/-

adjudged to be payable to the respondent by the

claimant in respect of the main building from

03.2.2012 till date of realisation and at 12% p.a.

on the sum of Rs.17,84,999/- adjudged to be

payable to the respondent by the claimant in

respect of the workshop and hostel from

14.8.2012 till date of realisation; and

c. the claimant shall reimburse the

respondent the sums paid by the respondent as

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fees to the Arbitrators and the venue charges for

the sittings of the Arbitral Tribunal.”

(xi) Aggrieved by the directions that were issued to the

claimant to pay to the respondent a sum of Rs.34,69,347/- and in

addition, to refund the retention money and to pay interest, the

claimant filed Arb.O.P.(Com.Div.) No.49 of 2021. Aggrieved by the

rejection of the counter claims, the respondent filed O.P.No.442 of

2021.

5. The learned counsel for the claimant submitted as follows:

(a) The Arbitral Tribunal went wrong in rejecting the claim for

steel price deduction (disputes A & H) and allowing counter claim

No.1, rejecting the claim towards defect in construction (dispute B)

and directing the claimant to refund a sum of Rs.5 lakhs each

(counter claim Nos.5 and 6), rejecting the claim pertaining to

wrongful bill raised for parapet wall works (dispute C) and allowing

counter claim No.2, rejecting the claim pertaining to deduction of

money from the final bill for using aluminium windows instead of

UPVC (dispute D), rejecting the claim for price reduction for areas

under corridor, staircase, etc., whose construction cost less (dispute

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F), allowing counter claim No.4 towards weathering course and

counter claim No.11 towards withheld payment for cupboard works

for boys hostel, that the findings of the Arbitral Tribunal were in

violation of the terms of the contract and that the award passed by

the Arbitral Tribunal to that extent is against Section 20(3) of the

Act and suffers from perversity and patent illegality warranting the

interference of this Court.

(b) The award is severable and the valid portion can be

severed from the invalid portion in line with the judgment of the

Hon’ble Apex Court in Gayatri Balasamy Vs. ISG Novasoft

Technologies Ltd. [reported in 2025 SCC OnLine SC 986].

6. Per contra, the learned counsel for the respondent

submitted as follows:

(a) The Arbitral Tribunal, after taking into consideration

Ex.R.6, Ex.R.7, Ex.C.42 and Ex.C.43, ought to have passed the

award for the balance payments to the tune of Rs.90,12,961/-.

Apart from that, the Arbitral Tribunal, having accepted the amounts

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for steel price deductions, ought to have directed the payment of

balance items also to the tune of Rs.15,19,907/-.

(b) The learned counsel for the respondent also questioned

the award of the Arbitral Tribunal in not awarding payment for the

hostel and the workshop with regard to steel consumption to the

tune of Rs.74,93,054/-. Thus, the claimant is liable to make all the

payments and the award passed by the Arbitral Tribunal rejecting

the counter claims to the tune of Rs.3,04,11,401/- is certainly

vitiated by perversity and patent illegality.

7. This Court has carefully considered the submissions of the

learned counsel on either side and perused the materials available

on record and more particularly the impugned award.

8. In order to have a bird’s eye view of the claims and the

counter claims made by the parties on either side and as to what

was awarded by the Arbitral Tribunal, they are tabulated as

hereunder:

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Dispute Claims/Disputes

relating to

Amount claimed Award

Disputes A &

H

Difference in Steel

Consumption

Rs.95,26,011/-

&

Rs.32,30,000/-

respectively

Rejected

Dispute BRectification Work Rs.2,23,750/- Rejected

Dispute CWrongful bill raised for

parapet wall works

Rs.9,41,300/- Rejected

Dispute DUPVC Windows (more

expensive) not provided

as per agreement

Rs.2,23,080/- Rejected

Dispute EM Book not furnished - -

Dispute FPrice reduction for areas

under corridor, staircase,

headroom, etc., whose

construction cost less

Rs.43,94,640/- Rejected

Dispute GShuttering materials hire

charges paid by the

claimant

Rs.2,35,448.45 Ps. Allowed

Total (A) Rs.187.74 lakhs

Total Value of bills of the

respondent (B)

Rs.969.31 lakhs

Amount to be paid to the

respondent [B – A] = [C]

Rs.781.57 lakhs

Amount paid to the

respondent (D)

Rs.842.42 lakhs

Amount claimed

(D - C)

Rs.60.85 lakhs

Counter Claims

relating to

CC No.1

(Disputes A

& H of the

Deduction of steel Rs.94,33,585/- Allowed

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claim)

CC No.2

(Dispute C of

the claim)

Parapet wall Rs.9,41,300/- Allowed

CC.No.3 Workshop Headroom

deduction

Rs.32,400/- Rejected

CC No.4Weathering course labour

deduction fund

Rs.1,00,000/- Allowed

CC No.5

(Dispute B of

the claim)

Deduction from boys

hostel bill

(i) for outer painting

(ii) finishing with grill

works at cloth drying

area

Rs.3,32,680/- Rs.5,00,000/-

to be

returned to

the

respondent

CC No.6

(Dispute B of

the claim)

Deduction for rectification

and screed concreting

Painting outer wall

deduction refund

Rs.8,67,200/- Rs.5,00,000/-

to be

returned to

the

respondent

(common

finding for

dispute B &

CC Nos.5 and

6

CC No.7 Difference in quantity of

brick work altered from

115 mm to 230 mm for

inner wall works

Rs.21,20,680/- Rejected

CC No.8 Difference in inner

painting work (plastic

emulsion done instead of

OBD)

Rs.4,40,196.42 Ps Rejected

CC No.9Excess price for materials

supplied

Rs.28,56,500/- Rejected

CC No.10 Losses for stoppage of

work

Rs.4,00,000/- Rejected

CC No.11 Withheld payment for

cupboard works for boys

hostel

Rs.5,00,540/- Allowed

Interest @ 18% p.a. Allowed

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9. The case of the claimant is as follows:

The certification of the final bill by the Architect by

communication dated 03.2.2012 (Ex.R.3) has not taken into account

various issues as set out in the claimant’s communication dated

25.12.2012. There were errors, which were corrected by the

Architect by refusing the certification done by communication dated

01.2.2013 (Ex.C.35). The claimant had made payments to the tune

of Rs.842.42 lakhs as against the total value of bills of Rs.969.31

lakhs claimed by the respondent. Most of the claims were primarily

the payments made pursuant to the original certification, which

were subsequently disallowed in the revised certification. Apart from

the differences in the steel reconciliation cost, the claimant also

raised other issues including the defects in construction and

rectification, inclusion of the parapet wall area in the final bill, use of

aliminium doors instead of UPBC, reduction in cost for the areas

under corridor, staircase and headroom portion, hire charges for

shuttering materials and reduction in the base price of the fixed cost

of Rs.750/- per sq.ft., for the second floor of all the buildings.

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10. Per contra, the case of the respondent is as follows:

The certification of the final bill under Ex.R.3 was done in

terms of the contract and there was no power to review the said

certification as was done under Ex.C.35. This is more so since the

claimant did not raise any objection to the final bill. What was paid

by the claimant was Rs.842.42 lakhs. Apart from that, the

respondent made counter claims with respect to certain payments

not raised earlier and those, which were disallowed consequent to

revision in the certification of the final bill.

11. Having understood the scope of the dispute between the

parties, this Court can directly go into each of the claims and the

counter claims and the findings rendered by the Arbitral Tribunal in

that regard and see if they require interference of this Court.

Disputes A & H and Counter Claim No.1:

12. This issue pertains to steel price deduction. Ex.C.2

agreement provided that the cost of construction of the ground floor

and the first floor of the main building (Blocks A & B) would be

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Rs.800/- per sq.ft. Thereafter, the construction of the second floor

of the building was also entrusted to the respondent at a rate

agreed namely Rs.750/- per sq.ft. Twelve items of work were set

out in the agreement itself. In so far as the hostel was concerned,

the rates were approved as were set out vide communication dated

08.8.2021 (Ex.C.4) and in so far as the workshop was concerned,

vide communication dated 19.12.2011 (Ex.C.6). The construction of

the ground and the first floors of the main building was completed

and handed over in September 2010 and the second floor was

handed over in May 2011. The hostel building was completed in

January 2012 and the second floor of the workshop was completed

in April 2012. The same were evident from the deposition of the

witnesses. It was the claimant, which had supplied steel, cement

and readymix concrete to the respondent.

13. The specific case of the claimant is that a meeting was

held between the parties, in which, it was agreed that the

computation of the steel price per sq.ft., used should be 3.5 Kgs

instead of 5 Kgs, which was taken in the designs and that the steel

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consumption was again agreed and reworked, which would be

evident from the minutes of the meetings held on 03.4.2010 and

04.4.2010 (Ex.C.10 and Ex.C.11). In view of the same, the stand

taken by the claimant was that the Architect, under Ex.R.3,

erroneously certified the bill without taking into account this rework

done for the steel consumption and the same was subsequently

corrected through rectification of certification under Ex.C.35 after

the objections were raised by the claimant.

14. The Arbitral Tribunal rendered a finding that even C.W.1

had no knowledge about the certification of the final bill under

Ex.C.35 and the fact that the claimant was requesting for details in

this regard under Ex.C.25 would show that the claimant did not

know the basis for rectification. The Arbitral Tribunal further

rendered a finding that there was no evidence before it regarding

the basis, on which, such rectification was effected.

15. At this juncture, this Court has to take into consideration a

vital fact where totally three contractors were employed for doing

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the entire work, which included the respondent and all the three had

attended the meetings held on 24.12.2010 and 25.10.2010. The

minutes of the meeting dated 24.12.2010 were available along with

Ex.C.32. On going through the minutes of the meeting, it is seen

that there was a discussion on steel price deduction and the second

floor rate. The evidence of R.W.1 and more particularly the answers

that were given during the cross examination would establish the

fact that there was a discussion regarding steel price deduction.

However, the respondent took a stand that they did not sign the

minutes of the meeting.

16. The Arbitral Tribunal completely disregarded the

discussions that took place between the parties on this issue as if

there was no meeting between the parties touching upon this issue.

However, the same Arbitral Tribunal, while dealing with a dispute

arising with the other contractor namely one Mr.D.Prem, Proprietor,

M/s.D.Square (Ref.: common order dated 04.12.2025 in O.P.Nos.48

of 2021 and 59 of 2022), took into consideration the understanding

between the parties in the meeting and rendered a finding that the

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steel consumption only touched upon the ground and the first floors

and not the second floor and hence, rejected the reduction in rate in

so far as the second floor was concerned. When the minutes of the

meeting were common for all the contractors, it cannot be relied

upon for one contractor and disregarded for the other.

17. It is also relevant to take note of the findings of the

Arbitral Tribunal at paragraph 24 of the award wherein the Arbitral

Tribunal relied upon the minutes of the meeting held on 27.4.2011

(Ex.C.33) to grant the relief of Rs.2,10,000/- towards screed

concrete. Hence, either the minutes of the meeting will have to be

relied upon in its entirety or they have to be completely disregarded.

Unfortunately, the Arbitral Tribunal relied upon the same on certain

occasions and completely disregarded while dealing with this issue.

18. The Arbitral Tribunal rendered a finding that the claimant

had not let in any evidence for reduction from the rate agreed upon

on account of steel usage. However, the finding goes against the

answers that were given by R.W.1 for question Nos.19, 50 and 71

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during the cross examination. The Arbitral Tribunal ultimately

rendered a finding that no case was made out by the claimant for

reduction of rate on account of steel consumption and consequently

rejected the claim made under disputes A & H while allowing counter

claim No.1. This finding of the Arbitral Tribunal goes against

the evidence available on record and hence, it requires the

interference of this Court.

Dispute B and Counter Claim Nos.5 & 6:

19. This issue deals with the defect in construction and

rectification.

20. It was the specific case of the claimant that Clause 47 of

the agreement provided for recovery of loss due to defective

materials and the cost of repairs, that apart from that, Ex.C.7 would

show the deficiencies in the work and that therefore, the recoveries

that were effected were valid.

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21. On the contrary, the respondent took a stand that no bills

were produced towards the cost of rectification to the extent of

Rs.6,57,200/-, that the amounts that were withheld in Ex.R.3 were

also objected, that apart from that, the screed concrete was an

extra work done by the respondent and that there could be no

deduction made for this work.

22. The issue regarding the defect in construction and

rectification to be made was discussed in a meeting and it was

recorded as the minutes of the meeting on 25.4.2011. For some

reason, the respondent admitted this document, but disputed its

contents. However, the respondent did not choose to deny this

document at the relevant point of time and this objection was taken

for the first time only before the Arbitral Tribunal.

23. The Arbitral Tribunal took into consideration Ex.R.3 and

gave a finding that withholding a sum of Rs.2,10,000/- towards

screed concrete was lawful and that with regard to the final painting

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and cleaning of spillage, a further deduction was made under Ex.R3

to the tune of Rs.7.50 lakhs.

24. Having rendered such a finding that withholding of

Rs.2,10,000/- under Ex.R.3 was lawful, the Arbitral Tribunal

observed that there was a further deduction made under Ex.C.35

towards screed concrete to the tune of Rs.2,10,000/-. This finding

was rendered without noticing the fact that there was no deduction

towards screed concrete under Ex.R.3. Therefore, this finding

rendered by the Arbitral Tribunal goes contrary to the records.

25. Thereafter, the Arbitral Tribunal went into the issue of

external painting work and took into consideration Ex.R.12 and

Ex.R.3 and made a guesswork that as against a sum of Rs.10 lakhs,

at the best, only a sum of Rs.5 lakhs could be withheld.

Consequently, the Arbitral Tribunal rendered a finding that the

respondent would be entitled to the refund of Rs.5 lakhs that was

withheld under Ex.R.3. The above finding rendered by the Arbitral

Tribunal does not have any basis and it is a clear case of guesswork,

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which would tantamount to a finding rendered on mere

presumption. Hence, the same is liable to be interfered by this

Court.

Dispute C and Counter Claim No.2:

26. This issue pertains to the construction of parapet wall,

which was taken to be an additional work by the respondent.

27. The Arbitral Tribunal, by relying upon Ex.C.2 agreement

dated 22.3.2010, took into consideration the 12 items of work that

were specifically mentioned and the construction of parapet wall and

weathering course did not form part of those 12 items. In view of

the same, the Arbitral Tribunal concluded that the parapet wall work

in the second floor was a separate item, which was liable to be

included in Ex.R.3, but it was completely omitted in Ex.C.35.

28. The case of the claimant was that the construction of

parapet wall and weathering course always formed part of the main

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work and it was never agreed that it would be construed as an extra

work.

29. In the considered view of this Court, the Arbitral Tribunal

took into consideration Ex.C.2 and Ex.R.3 and rendered a finding,

which is a possible view on appreciation of evidence and the terms

of agreement. Hence, this finding does not require the

interference of this Court.

Dispute D:

30. This dispute pertains to usage of aluminium windows

instead of UPVC material windows.

31. The case of the claimant was that the aluminium windows

were supplied by them for the ground and the first floors and that

necessary deductions have been made for the cost thereof.

32. On the contrary, the respondent took a stand that since, in

the ground and the first floors, aluminium windows were used, for

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the sake of uniformity, even in the second floor, the respondent

used the aluminium windows as per the instructions given by the

Architect. Therefore, the respondent objected to the deductions

made on this account.

33. The Arbitral Tribunal came to the conclusion that the

aluminium windows were supplied by the claimant only for the

ground and the first floors, that the respondent did not object to the

certification made by the Architect under Ex.R.3 when such

deduction was made and that in so far as the claimant was

concerned, they were making a claim for the difference in cost for

the ground and the first floors also instead of the second floor.

34. In the certified bill under Ex.R.3 and the rectified certified

bill under Ex.C.35, the second floor area of the main building was

not accounted for in so far as the aluminium windows were

concerned. The respondent was not objecting to the measurements

of the ground and the first floors and the respondent also admitted

that they had followed the same process for uniformity and that the

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aluminium windows were used in the second floor also. Under such

circumstances, the Arbitral Tribunal did not take into consideration

this admission made by the respondent and instead, proceeded to

reject the claim. This finding is perverse since it disregards the

evidence on record and is liable to be set aside.

Dispute F:

35. This issue pertains to the price deduction for the areas

under the corridor, staircase, headroom, etc.

36. The claimant took a stand that the cost of construction of

the areas under the corridor and the staircase was 30% lesser than

usual construction cost and that therefore, they were entitled to a

sum of Rs.43,94,640/- from the final bill.

37. On the contrary, the respondent took a stand that the

areas under the corridor and the staircase formed part of the

general construction area and hence, the cost must be the same as

that of the main building.

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38. The Arbitral Tribunal rendered a finding that in Ex.C.35, a

lower rate was applied erroneously without any basis contrary to

what was certified under Ex.R.3 and that therefore, such deduction

was unsustainable.

39. In the considered view of this Court, the above

finding rendered by the Arbitral Tribunal is supported by

reasons and is certainly a possible view and that there is no

scope for interfering with this finding in exercise of

jurisdiction under Section 34 of the Act.

Counter Claim No.11:

40. This issue pertains to the claim made towards carpentary

work done for the third floor of the hostel.

41. The Arbitral Tribunal rendered a finding that the bill was

raised on 22.5.2012 (Ex.R.9) and C.W.1 admitted receipt of the bill

and therefore, the claimant was bound to make payment for the

work done.

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42. The above finding was rendered by the Arbitral Tribunal

purely based on the answer given by C.W.1 regarding the receipt of

the bill and he had no knowledge about the non payment despite

TDS deduction. If the TDS deduction was made and if there

was no response on the side of the claimant, certainly, the

view taken by the Arbitral Tribunal is a possible/plausible

view.

Counter Claim Nos.7 to 10:

43. In so far the rejection of counter claim Nos.7 to 10

are concerned, the Arbitral Tribunal rightly rejected the same

since they were not proved and the finding rendered by the

Arbitral Tribunal does not suffer from perverse or patent

illegality.

Counter Claim No.3:

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44. In so far as counter claim No.3 is concerned, since the

claim made under dispute F has been upheld by this Court, the

respondent will be entitled to counter claim No.3.

Award of interest:

45. In so far as the payment of interest is concerned,

considering the fact that there was a commercial transaction

involved between the parties, the interest component fixed

by the Arbitral Tribunal at the rate of 12% per annum is

upheld for the respective claims and the counter claims

payable on either side.

46. One more important ground that was raised on the side of

the respondent was to the effect that as per Clause 50.1 of the

agreement, if any bill submitted was not certified by the Architect

within 30 days, the bill was deemed to have been accepted by the

claimant and that therefore, all those payments, which fell under

this category, would have to be necesarily awarded in favour of the

respondent.

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47. In the considered view of this Court, one vital fact

regarding the subsequent meetings, which were held with the

contractors and which were reduced into writing by means of

minutes of the meetings and which were also agreed on the side of

the respondent, were completely disregarded by the Arbitral

Tribunal. As stated supra, on certain occasions, reliance was placed

on the minutes of the meeting and on some occasions, they were

discarded. This procedure adopted by the Arbitral Tribunal led to a

fundamental error that has crept in in this case to examine as to

whether the subsequent understanding between the parties on

certain issues, after those meetings, constituted novation of the

earlier agreement dated 22.3.2010 (Ex.C.2) to that extent.

48. The bills that were certified under Ex.R.3 were

subsequently rectified under Ex.C.35 only because of such

understanding between the parties in the meetings that were held.

Therefore, without properly appreciating the significance of those

meetings and the understanding between parties, modifying/

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altering/amending the original agreement, constitutes patent

illegality.

49. Having rendered the above findings, this Court must see if

the entire award has to be set aside since there is no scope for

modification of the award or the valid portion of the award can be

severed from the invalid portion in line with the judgment of the

Hon’ble Supreme Court in Gayatri Balasamy Vs. ISG Novasoft

Technologies Ltd. [reported in 2025 SCC OnLine SC 986].

50. In the considered view of this Court, the claims/counter

claims that have been upheld and the claims/counter claims that

have been interfered are severable and hence, the valid portion of

the award can be severed from the invalid portion.

51. In the light of the above discussions, this Court

holds that the claimant is entitled to an award under disputes

A, H, B, D and G and the respondent is entitled to an award

under counter claim Nos.2, 3, 4 and 11.

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52. In the result, both the original petitions are allowed in

part. On 01.10.2021, this Court directed the claimant to deposit a

sum of Rs.34,69,347/- before this Court on or before 29.10.2021.

This amount was deposited with the Equitas Small Bank,

Purasawalkam Branch, Chennai in an interest bearing account in the

name of the Registrar General of this Court. This was recorded vide

order of this Court dated 01.11.2021 in A.No.3967 of 2021 and the

claimant was further directed to file the original fixed deposit receipt

with the Registrar General of this Court. It is not in dispute that the

said deposit is still alive. In the light of this common order, the

claimant is permitted to withdraw the amount now lying in the fixed

deposit along with accrued interest. Consequently, the connected

application is closed. Considering the facts and circumstances of the

case, there will be no order as to costs.

13.2.2026

RS

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N.ANAND VENKATESH,J

RS

Arbitration O.P.(Com.Div.) No.49

of 2021 & O.P.No.442 of 2021

& A.No.2474 of 2021

13.2.2026

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