UNION OF INDIAversusM/S. SUSAKA PVT. LTD. & ORS.

                          [2017] 12 S.C.R. 430



A                            UNION OF INDIA
                                         v.
                     MIS. SUSAKA PVT. LTD. & ORS.
                       (Civil Appeal No. 8530 of 2009)

B                           DECEMBER 08, 2017
       [ABHAY MANOHAR SAPRE AND NAVIN SINHA, JJ.]
           Arbitration and Conciliation Act, 1996 - ss.11(5), 31(a), (b)
    and 34 - Worh contract awarded by appellant to respondent No. I
    - Disputes arose between the parties - Arbitral Tribunal partly
c   allowed the claims of respondent No. I against the appellant -
    Application uls.34 filed by appellant before Single Judge of High
    Court was allowed in part wherein two modifications were made in
    the date of award of interest on respondent No. I~· claim for damages
    - Respondent No. I filed appeal before Division Bench against tile
    said orde1; which was allowed -Plea of appellant that interest could
D   not have been awarded on various claims to respondent No. I as
    Cl.13(3) of General Conditions of Contract (GCC) did not allow it
    to claim any interest on the sums payable under the contract except
    on Government securities, (f any deposited with t/1e appellallf - On
    appeal, held: Appellant did not raise the plea based on Cl.13(3)
E   against respondent No.I at any stage of the proceedings - No
    indulgence can be granted to the appellant to raise such plea for
    the first time in Supreme Court - It is a clear case of waiver or/and
    abandol)ment of a plea at the initial stage itself- Further, appellant's
    application u/s.34 was dismissed on all other claims except two
    claims - However, despite such substantial dismissal it did not file
F   any appeal to challenge the part dismis.ml of the application - Thus,
    the order of Single Judge insofar as it resulted in dismissal of
    appellant's application became final and attained finality - Grant
    of award of interest on tirbitmble claims by Arbitral Tribunal was
    not illegal or against any public policy or per se bad in law - Waive1:
G         Practice and Procedure - Pleadings - Raising a plea for the
  first time in Supreme Court - Held: If a plea is available wlzetlzer 011
  facts or law, it ht1s to be raised by the party at appropricite stage in
  accordance with law - If not mised or/and given up with consent,
   the party would be precluded from mising such plea at a later stage
H of the proceedings 011 the principle of waiver - Waiver.
                                   430
    UNION OF INDIA v. MIS. SUSAKA PVT. LTD. & ORS.                       431



      Doctrines/Principles - Principle of waiver - Discu.ssed.           A
      Arbitration - Arbitration award - Binding value of - Held:
Award of Arbitral Tribunal once passed is binding on the parties -
Parties having chosen their own Arbitrator and given him an
authority to decide the specific disputes arising between them must
respect his decision as far as possible and should not make any          B
attempt to find fault in each issue decided by him only because it is
decided against one party.
      Arbitration - Grant of interest by Arbitral Tribunal - Held: It
is permissible to award interest on arbitrable clainL~ by the Arbitral
Tribunal.                                                                C

     Maxims - "Cuilibet licet renuntiare juri pro se introducto" -
Discussed.
      Dismissing the appeal, the Court
                                                                         D
      HELD: 1.1 The appellant did not raise the plea based on
Clause 13(3) of the General Conditions of Contract (GCC) against
respondent No.1 at any stage of the proceedings either in their
reply filed before the Arbitral Tribunal or/and in submissions
except raising it, for the first time, before Supreme Court in this
appeal. It is found that in proceedings under Section 11 (5),            E
Arbitration and Conciliation Act, 1996, the appellant did not raise
this objection in their reply and instead gave their express consent
to refer the issue of award of interest payable on various claims
(1 to 17) to Arbitral Tribunal considering the said claim to be
arbitrable under the contract. [Paras 20, 21) [437-F-G]
                                                                         F
      1.2 If the appellant was so keen to place reliance on clause
13(3) of GCC to defeat the claim of respondent No.1 relating to
the award of interest on various claims, then it was necessary for
the appellant to have raised such plea specifically, in their reply,
before the Arbitral Tribunal. No such plea was raised even before
                                                                         G
the Arbitral Tribunal. Though it is found that the appellant raised
this ground, for the first time, in Section 34 proceedings before
the Single Judge but again this ground was not pressed at the
time of arguments, as is clear from the perusal of the Single
Judge's order. Not only that, the appellant again did not raise
                                                                         H
432            SUPREME COURT REPORTS                      [2017] 12 S.C.R.


A     this plea before the Division Bench. In the light of aforementioned
      factual scenario emerging from the record of' the case, no
      indulgence can be granted to the appellant to raise such pica for
      the first time here. It is a clear case of waiver or/and abandonment
      of' a pica at the initial stage itself. [Paras 24-26] [438-B-E]
B            2.1 Everyone has a right to waive and to agree to waive
      the advantage of a law made solely for the benefit and protection
      of' the individual in his private capacity, which may be dispensed
      with without infringing any public right or public policy. Cuilibet
      licet remmtiare juri pro se introducto. [Para 27] [438-F]
c             Maxwell on The Interpretation of Statutes 12'11 Edition
            - referred to.

            2.2 If' a plea is available-whether on facts or law, it has to
      be raised by the party at appropriate stage in accordance with
      law. If' not raised or/and given up with consent, the party would
D     be precluded from raising such plea at a later stage of the
      proceedings on the principle of waiver. If' permitted to raise, it
      causes prejudice to other party. This principle applies to this
      case. [Para 28] [438-G]

            Firm Kaluram Sitaram v. The Dominion of India
E
            AIR 1954 Bombay 50 - approved.

                             Case Law Reference

            AIR 1954 Bombay 50            approved           Para 35
F          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8530
      of2009.
            From the Judgment and Order dated 11.02.2005 of the High Court
      of Judicature at Bombay in Appeal No. (Ld.) No.666 of 2003.

G           Ms. Kiran Suri, Sr. Adv, Ms.Vimla Sinha, Raj Bahadur,
      Ms. Kiran Bhardwaj, Mrs. Anil Katiyar, B. Krishna Prasad, Advs for
      the Appellant.

           Vinay Navare, Ms. Gwen Kartika, Naresh Kumar, Advs for the
      Respondents.
H
     UNION OF INDIA v. MIS. SUSAKA PVT. LTD. & ORS.                            433



      The Judgment of the Court was delivered by                               A

       ABHAY MANOHAR SAPRE, J. I. This appeal is filed by the
Union of India against the final judgment and order dated 11.02.2005
passed by the High Court of Bombay in Appeal (Ld) No.666 of 2003 in
Arbitration Petition No.96 of 2003 whereby the Division Bench of the
High Court allowed the appeal filed by respondent No. I herein and set         B
aside the order dated 21.04.2003 passed by the Single Judge in Arbitration
Petition No.96 of2003.

      2. The issue involved in the appeal is short and, therefore, it is not
necessary to set out the entire factual scenario of the case except to the
extent necessary to appreciate the issue.                                      c
       3. In short, the question, which arises for consideration in this
appeal, is whether theArbitral Tribunal was justified in awarding interest
on various claims for different periods to the claimant (respondent No. I),
namely, (i) for a pre-reference period, i.e., 04.03.1996 to 05.05.1999@        D
15% p.a.; (ii) pendent lite, i.e., for the period from 06.05.1999 to
09.09.2002@ 12% p.a.; and (iii) post reference period, i.e., 09.09.2002
till payment@ 18% p.a., total (first and second) Rs.12,89,033/- on the
awarded sum.

      Brief facts:                                                             E

      4. A works contract (repairing work of 25 No. stators of TA0-
659 Traction Motors of Electric Locomotives type WC AMI of Electric
Loco Shed-Valsad) was awarded by the Union ofindia (Railways) - the
appellant herein to respondent No. I (claimant) on 19.12.1994.
                                                                               F
       5. In execution of the works contract, various disputes arose
between the parties. Since the General Conditions of Contract (in short,
"GCC") contained Clause 56( I) to decide the disputes arising out of the
contract through arbitration, respondent No. I (claimant) invoked the
arbitration clause and filed an application in the High Court of Bombay
under Section 11(5) of the Arbitration and Conciliation Act (hereinafter       G
referred to as "the Act") praying therein for appointment of the
Arbitnil Tribunal in terms of Clause 56(1) and to make a reference to
the Arbitral Tribunal for deciding the disputes which had arisen between
the parties.
                                                                               H
434              SUPREME COURT REPORTS                                  [2017] 12 S.C.R.


A            6. The High Court, by order dated 27.07.2001, with consent of
      both the parties allowed respondent No.1 's application and referred the
      various claims (I to 17) made by the respondent (claimant) against the
      appellant for their adjudication by theArbitral Tribunal, which consisted
      of three Arbitrators (Railway Officials). The order making the reference
      to the Arbitral Tribunal reads as under:
B
                     "There is no dispute that claims Nos. 1 to 13 which are
               mentioned in the letter dated 191h August, 1999, Exhibit
               "B" to the Application, are already referred for arbitration
               to Shri B.B. Verma, Presiding Joint Arbitrator & FA & CAO
               (I), Churchgate and two other Arbitrators, (i) Shri Arunendra
c              Kumar, Jt. Arbitrator & CRSE, Churchgate and (ii) Shri
               S.K. Kulshrestha, .Jt. Arbitrator & CE, N.F. Railway.
               2. By Consent, claim at Sr. No. 16 (Claim No. 2.1) and at
               Sr. No. 17 (Claim No. 2.2) are also referred for arbitration
               to the same Arbitrators who shall decide these claims along
D              with claim Nos. 1 to 15. They shall also be free to decide
               pre-reference interest, Pendente lite interest, further
               interest and costs considering the agreement. The
               Respondent shall be free to file counter-claim, if any.''
             7. Parties submitted to the jurisdiction of the Arbitral Tribunal,
 E    filed their statement of claim/reply etc. and adduced evidence. The
      Arbitral Tribunal, by their unanimous reasoned award dated 11.09 .2002,
      partly allowed the claims of respondent No. I against the appellant as
      under:
        ClabnN>.
                       -·--
                          -

                         Britf            ···------· -Oaim AnDwt. -   ·1 ·AJmunt
                         llscripti111            in Us.               I awdnkd     in
 F                                                                    I Us,


         I.I             lo;.~     sufL'l'ed     6,97,554             . 3,48,777
                         due to tn:ler-
                         llilization      IX
                         CC1Jipnrrt
                         ixm:ha;ed
 G                       "Pecially for this
                         coo tract.

         1.2             Material                 3,00,723              3,00,723
                         p.ircha;ed     not
                         llili2!.XI.

 H
             UNION OF INDIA v. MIS. SUSAKA PVT. LTD. & ORS.                        435
                     [ABHAY MANOHAR SAPRE, J.]

                                                                                   A
       1.3            Loss of Profit       4,65,409         2,32,7ffi
                                           (Revised to R~
                                           4,44,620)

     1.4, l.5    &    t.4- -Overl-eatls    4,65,409         3,41,S:ll
     2.1             ci1ring
                     cootractcd                                                    B
                     rcriul       lnler
                     tJilil!iXI- 1.5 -     3,89, 165
                     CNc1reads li'om
                     9.6.19'15       to
                     4.3.19'16-2.I -
                     CNerl-cads li'om      3,06, 748
                     5.3.19'16
                     :-0.06.19'16
                                     to                                            c
 : 1.7 &22           I. 7 - Arru11t        3.28.005         l,64,042
                     fir tie rcricd
                     1.7.94       to
                     29.6.19%
                                                                                   D

                     22 - Arm11t
                     f<r ttc rcriul
                     5.3.96       to
                     :ll.09.19'16          1,24, 174
                                                                                   E
       1.6           Pa)TI£11t unler       85,106           85,l<X>
                     r-rice variatirn
                     clause
 '
 !     1.8 &23       Paynrnt of pre                         12,89,ffi3
                     lite interest from
     2.4             13.1295          to                                           F
                     5.5.99
                                                                         . j
                                           Total            27,62,214          l
 I
 I__




      8. The appellant-Union of India, felt aggrieved of the Arbitral              G
Award, challenged its legality by filing an application under Section 34 of
the Act in Bombay High Court (Single Judge).
       9. The Single Judge, by order dated 21.04.2003, allowed the appeal
in part and made two modifications in the arbitral award with respect to
the date of award of interest on the claim of respondent No. I for damages         H
436             SUPREME COURT REPORTS                           [2017] 12 S.C.R.



A     and on the claim of one purchase item. The Single Judge made the
      interest payable from the date of award till realization. So far as the
      challenge to other claims including award of interest on such claims
      were concerned, the Single Judge rejected the appellant's all objections
      and upheld the award in totality for all purposes.

B            10. Respondent No.I (claimant), felt aggrieved against that part
      of the order of the Single Judge which interfered in part in the arbitral
      award, filed appeal before the Division Bench. So far as the appellant-
      Union of India was concerned, they did not file any appeal against that
      part of the order of the Single Judge which had rejected substantially
      their application filed under Section 34 of the Act. In this view of the
c     matter, the award to that extent became final.
             11. By impugned judgment, the Division Bench of the High Court
      allowed respondent No.1 's appeal and set aside the order of the Single
      Judge. It was held that no ground under Section 34 of the Act had been
      made out by the Union of India to modify the award to the extent of
D     awarding interest on the claim. In other words, in the opinion of Division
      Bench, the ground on which the limited interference was made by the
      Single Judge for setting aside a part of the Award in relation to award of
      interest from a particular date on two (2) claims to respondent No. I
      (claimant) was not a ground falling under Section 34 of the Act and,
 E    therefore, the order of Single Judge was not legally sustainable. It was
      accordingly set aside resulting in upholding of the entire award and
      dismissal of Section 34 application in its entirety. It is against this order,
      the Union oflndia (Railways) felt aggrieved and filed the present appeal
      by way of special leave in this Court.

 F         12. Heard Ms. Ki ran Suri, learned senior counsel for the appellant
      and Mr. Vinay Navare, learned counsel for respondent No. I.
             13. Ms. Kiran Suri, learned senior counsel, appearing for the
      appellant (Union oflndia) while challenging the legality and correctness
      of the Impugned judgment has argued only one point.
 G           14. According to learned counsel, the Arbitral Tribunal mis-
      conducted in awarding interest on various claims and, therefore, a ground
      to set aside the arbitral award under Section 34 of the Act is made out.
            15. Placing reliance on Clause 13(3) of GCC, learned counsel
      urged that since clause 13(3) provides that no interest will be payable
 H    upon the earnest money or the security deposit or amounts payable to
     UNION OF INDIA v. M/S. SUSAKA PVT. LTD. & ORS.                             437
             [ABHAY MANOHAR SAPRE, J.]

the contractor under the contract (except Government securities),               A
respondent No.1 (claimant) was not entitled to claim interest on any of
the heads.
       16. Iii other words, the submission was that the Arbitral Tribunal
mis-conducted in awarding interest to respondent No. I (claimant) on
their various claims when the clause 13(3) of GCC did not allow them to         B
claim any interest on the sums payable under the contract except on
Government securities, if deposited with the appellant.
       17. It was, therefore, her submission that the award to this extent
was not legally sustainable and, therefore, it was liable to be set aside
under Section 34 of the Act. Learned counsel elaborated this submission         c
by placing reliance on the provisions of the Act and some decided cases
cited at the Bar.
       18. In reply, learned counsel for respondent No. I (claimant)
supported the impugned judgment and contended that the aforementioned
point urged by the appellant was neither raised nor urged before the            D
Arbitral Tribunal nor the High Court, i.e., Single Judge and also Division
Bench and hence it cannot be permitted to be raised, for the first time, in
an appeal under Article 136 of the Constitution for want of any factual
foundation and finding by any Court on such plea.
       19. Having heard learned counsel for the parties and on perusal          E
of the record of the case, we are inclined to accept the argument of
learned counsel for respondent No.I as, in our view, it has a force and
hence deserves acceptance.
       20. It is not in dispute that the appellant did not .raise the plea
based on clause 13(3) of the GCC against respondent No. I at any stage
                                                                                F
of the proceedings either in their reply filed before the Arbitral Tribunal
or/and in submissions except raising it, for the first time, before this
Court in this appeal.
       21. On the other hand, we find that in Section 11 (5) proceedings,
the appellant did not raise this objection in their reply and instead gave      G
their express consent to refer the issue of award of interest payable on
various claims (I to 17) to Arbitral Tribunal considering the said claim to
be arbitrable under the contract.
      22. In our opinion, the appellant could have registered their objection
before the Single Judge at the time of making a reference to the Arbitral
                                                                                H
438             SUPREME COURT REPORTS                          [2017) 12 S.C.R.


A     Tribunal by pointing out Clause 13(3) of GCC or could have reserved
      their right to raise such objection before the Arbitral Tribunal. It was,
      however, not done.
             23. Not only that, we further find that the appellant, in their reply,
      filed before theArbitral Tribunal also did not raise this plea and allowed
B     the Arbitral Tribunal to adjudicate the said issue on merits.
             24. If the appellant was so keen to place reliance on clause 13(3)
      of GCC to defeat the Claim of respondent No.1 relating to the award of
      interest on various claims, then it was necessary for the appellant to
      have raised such plea specifically, in their reply, before the Arbitral
c     Tribunal. No such plea was raised even before the Arbitral Tribunal.
              25. Though we find that the appellant raised this ground, for the
      first time, in Section 34 proceedings [see-ground (cc)] before the Single
      Judge but again this ground was not pressed at the time of arguments. It
      is clear from the perusal of the Single Judge's order. Not only that, the
D     appellant again did not raise this plea before the Division Bench.
             26. In the light of aforementioned factual scenario emerging from
      the record of the case, we cannot grant any indulgence to the appellant
      (Union oflndia) to raise such plea for the first time here. In our view, it
      is a clear case of waiver or/and abandonment of a plea at the initial
 E    stage itself.
             27. Everyone has a right to waive and to agree to waive the
      advantage of a law made solely for the benefit and protection of the
      individual in his private capacity, which may be dispensed with without
      infringing any public right or public policy. Cuilibet licet renuntiare juri
 F    pro se introducto. (See Maxwell on The Interpretation of Statutes
      12'h Edition at page 328)
             28. If a plea is available-whether on facts or law, it has to be
      raised by the party at appropriate stage in accordance with law. If not
      raised or/and given up with consent, the party would be precluded from
      raising such plea at a later stage of the proceedings on the principle of
 G
      waiver. If permitted to raise, it causes prejudice to other party. In our
      opinion, this principle applies to this case.
               29. In our opinion, the appellant is otherwise not entitled to raise
      · the plea on yet another ground. It is not in dispute that the appellant's
        application filed under Section 34 of the Act was partly allowed by the
 H
      UNION OF INDIA v. MIS. SUSAKA PVT. LTD~ & ORS.                             439
              [ABHAY MANOHAR SAPRE, J.]

Single Judge only to the extent of two claims regarding award of interest.       A
In other words, the application suffered dismissal substantially on all
other claims except two claims mentioned above. However, despite
suffering substantial dismissal, the appellant did not file any appeal to
challenge the part dismissal of their application.
       30. In this view of the matter, in our view, the order of the Single      B
Judge insofar as it resulted in dismissal of the appellant's application
became final and attained finality. In order to keep the issue alive, the
appellant was under obligation to file regular appeal before the Division
Bench against that part of the Single Judge's order by which their
application under Section 34 of the Act in relation to all other claims had
been dismissed. It was only then in the event of dismissal of the appeal,
                                                                                 c
the issues raised therein could have been pursued in appeal to this Court
under Article 136 of the Constitution and that too only on the grounds
raised therein and decided against the appellant. It was, however, not
done by the appellant.
      31. In our opinion, therefore, this is yet another infinnity which         D
renders the appeal devoid of any merit.
       32. In our considered view, the grant of award of interest on
arbitrable claims by theArbitral Tribunal is not inherently illegal or against
any public policy or per se bad in law or beyond the powers of the
Arbitral Tribunal. In other words, it is permissible to award interest in        E
arbitrable claims by the Arbitral Tribunal.
      33. Indeed, Section 31(7) (a) and (b) of the Act empowers the
Arbitral Tribunal to award interest on the awarded sum and secondly, it
is always subject to the agreement between the parties.
                                                                                 F
       34. It is a well-settled principle in Arbitration Law that the award
of an Arbitral Tribunal once passed is binding on the parties. The reason
being that the parties having chosen their own Arbitrator and given him
an authority to decide the specific disputes arising between them must
respect his decision as far as possible and should not make any attempt
to find fault in each issue decided by him only because it is decided            G
against one party. It is only when the issue decided is found to be bad in
law in the light of any of the specified grounds set out in Section 34 of
the Act, the Court may consider it appropriate to interfere in the award
else not. The case at hand falls in former category.

                                                                                 H
440            SUPREME COURT REPORTS                         [2017] 12 S.C.R.


A            35. This case reminds us of the apt observations made by former
      Chief Justice M.C. Chagla in Firm Kaluram Sitaram vs. The Dominion
      of India, AIR 1954 Bombay 50. That was also a case between the
      Railways and private party (citizen) wherein the learned Chief Justice,
      in his distinctive style of writing, commented upon the manner in which
      the Railway contested the case against the private party (citizen) by
B
      raising some technical pleas and observed as under:
            "Now, we have often had occasion to say that when the State
            deals with a citizen it should not ordinarily rely on
            technicalities, and if the State is satisfied that the case of
            the citizen is a just one, even though legal defences may be
c           open to it, it must act, as has been said by eminent judges,
            as an honest person."
              36. The aforementioned observations has full application to the
      case at hand because here also, the appellant (railways) pursued their
      technical legal point up to this Court against respondent No. I (claimant)
D     without even raising it at any stage of proceedings much less to find out
      whether it could be made a ground under Section 34 of the Act to seek
      its setting aside. All was being done to defeat respondent No.l's just
      claim of interest which was rightly awarded by the Arbitral Tribunal and
      upheld by the Courts below on other grounds.
 E            37. Learned counsel for the appellant did not urge any other point
      to attack the impugned judgment including the reasoning given in support
      of the award of interest except to urge the aforesaid point to challenge
      its legality, which we have repelled by not permitting the appellant to
      raise it in this appeal.
 F          38. In view of foregoing discussion, we find no merit in the appeal,
      which thus fails and is accordingly dismissed.


      Divya Pandey                                               Appeal dismissed.