APPU HOTELS LIMITED vs VOLTAS LIMITED COMPANY Incorporated under the Prov

2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ORDERS RESERVED ON : 16.10.2026
ORDERS PRONOUNCED ON : 11.11.2026
CORAM
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
Original Petition No.680 of 2019
and Application No.4013 of 2024
M/s. Appu Hotels Ltd.,
"PGP" House, No.57, Sterling Road
Nungambakkam, Chennai - 600 034
rep.by its Director ... Petitioner
Vs.
M/s. Voltas Limited a Company incorporated
under the Provisions of Companies Act, 1913
and having registered office at Voltas House
"A", Dr.Babasaheb Ambedkar Road, Chinchpokli,
Mumbai-400 033 and branch office at
No.621, Anna Salai, Chennai - 600 018,
rep.by its Authorised Representative ... Respondent

PRAYER: Original Petition filed under Section 32 (2) of the Arbitration and
Conciliation Act, 1996, praying to set aside the award dated 01.03.2019 and pass such
further or other orders.
For the petitioner : Mr.Om Prakash, Senior Counsel
for Mr.T.Ravichandran
For the respondent : Mr.Vinod Kumar
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
O R D E R
This Original Petition is filed under Section 34(2)(b)(i) and (ii) of
the Arbitration and Conciliation Act, 1996 (hereinafter referred to as
‘the Act’), challenging the award dated 01.03.2019 of the sole
Arbitrator in the arbitration dispute arising out of an agreement dated
11.05.2019 between M/s. Appu Hotels Limited, represented by its
Director (the petitioner herein, referred to as 'Appu Hotels'), and M/s.
Voltas Limited, represented by its Authorised Representative (the
respondent herein, referred to as 'Voltas Limited').
2. The brief facts leading to the filing of this Original Petition are
that Appu Hotels, through their consultant, invited bids from eligible
bidders for the Heating, Ventilation and Air-Conditioning Systems
(HVAC) and the installation of the Electrical System for their proposed
‘Le-Meridien Hotel’ at Coimbatore. The project includes the supply of
materials, installation, testing and commissioning of the entire HVAC
and electrical systems. Voltas Limited, being the successful bidder,
was issued a work order on 11.05.2009 for a total contract value of
Rs.11.80 Crores. The period of completion of the contract was eight
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
months. Clause 1 of the work order deals with the scope of work;
technical specifications are contained in Clause 2; prices are
mentioned in Clause 3; terms of payment in Clause 5; completion
period in Clause 6; dispute resolution through arbitration in Clause 8;
testing and guarantee in Clause 11; and further specifications are
annexed to the said work order.
3. Upon further consideration of the exhibits marked in the
arbitration proceedings, it is evident that as the work progressed,
there were amendments to the work orders on 21.05.2010,
23.05.2020, 20.08.2010, 19.10.2010, 21.10.2010 and 03.04.2011. As
the project neared completion, disputes arose between the parties,
resulting in claims and counterclaims concerning the completion or
abandonment of the work, the balance amount payable under the
final bill, the release of the retention amount to Voltas Limited, and
the compensation claim made by Appu Hotels on the ground that it
was compelled to engage third parties to complete the pending works.
Disputes also arose regarding the obtaining of the final clearance from
the Chief Electrical Inspector to Government (in short, ‘CEIG’). These
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
disputes were followed by the issuance of legal notices, replies and
rejoinder notices.
4. Under the said circumstances, Voltas Limited invoked
arbitration by a letter dated 18.09.2013. On an application filed by
them under Section 11 of the Act in O.P.No.78 of 2014, the Hon'ble Mr.
Justice A.S. Venkatachalamoorthy (Retd Judge, High Court of Madras)
was appointed as the sole arbitrator to enter into the reference and
decide the disputes between the parties. By a subsequent order dated
08.01.2016 in Application No.110 of 2016, the original Arbitrator was
substituted by another Arbitrator on account of the former’s illness. By
this order, the Hon'ble Mr. Justice G.M. Akbar Ali (Retd Judge, High
Court of Madras) was appointed to continue the proceedings. Both the
original appointment and the substitution made it clear that the
arbitration be conducted under the aegis of the Madras High Court
Arbitration Centre and that the parties be governed by the rules of the
Centre.
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
5. It can be seen that Voltas Limited filed a claim petition for
Rs.4,53,76,310/-, being the amount due under the invoice dated
20.07.2011, and another sum of Rs.5,02,74,645/-, being 24% interest
from 20.07.2011 till the date of filing of the claim, i.e., up to
29.02.2016, in all totaling to Rs.9,56,50,775/-, with further interest at
the rate of 24% per annum and for costs.
6. Voltas Limited made a further claim for payment of the
retention amount of 10 %, being Rs.1,34,84,844/-, along with interest
at the rate of 24 % per annum from 11.06.2012 till 29.02.2016, being
Rs.1,21,29,710/- in all, totalling Rs.2,56,14,554/-, with further interest
and costs.
7. Appu Hotels resisted the claim by filing a detailed counter
statement and, along with the same, a counter claim was made,
claiming a sum of Rs.77,11,487/-, being the excess payment made to
Voltas Limited, along with interest at the rate of 24 % per annum. A
sum of Rs.52,68,610/- was claimed towards liquidated damages,
together with further interest at 24 % per annum from 12.01.2010
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
until the date of payment. A further sum of Rs.34,50,00,000/- was
claimed for the loss, inconvenience, and hardship suffered by Voltas
Limited, together with interest at the rate of 24% per annum from
26.12.2012 until realization. The parties also filed rejoinder and sur-
rejoinder.
8. After the pleadings were completed, the Arbitrator framed the
following twelve issues,
“ 1. Whether the Claimant had committed breach of contract, delay
of work and abandoned the work site as claimed by the Respondent?
2. Whether the Claimant had completed the entire project as per the work
order issued by the Respondent on 11.06.2010 as claimed by the Claimant,
if not, when was the project completed?
3. Whether the Respondent had completed the work by engaging third
parties?
4. Whether the claim petition is not maintainable for want of cause of
action as the Claimant has not completed the work and could not have
raised the final bill?
5. Whether the Claimant is entitled for the amounts claimed in the invoice
dated 20.07.2011 towards total work done by the Claimant as claimed
including the commissioning charge at 5% and the testing and handing
over charges @10%?
6. Whether there is any retention amount in the hands of the Respondent
and if any, whether the Claimant is entitled for the same as claimed?
7. Whether the Respondent is entitled for any liquidated damages?
8. Whether the Respondent is entitled for any amount towards excess
payment as Claimed by them?
9. Whether the Respondent is entitled for any damages towards loss,
inconvenience and hardship?
10. Whether the Claim and counter claim are barred by limitation?
11. Whether the parties are entitled to interest on various claims as
claimed by them?
12. To what reliefs, the parties are entitled to?”
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
9. The parties adduced oral and documentary evidence. On
behalf of Voltas Limited, C.W.1 and C.W.2 were examined. Proof
affidavits were filed, and detailed cross-examination was conducted.
Exhibits C.1 to C.70 were marked. On behalf of Appu Hotels, R.W.1 was
examined. A proof affidavit was filed, and detailed cross-examination
was conducted. Exhibits R.1 to R.105 were marked on their behalf.
10. After considering the written and oral arguments on behalf of
either side, the learned Arbitrator passed the impugned award dated
01.03.2019. The Arbitrator first considered the arguments on
limitation, namely whether the claim and counter-claim were barred
by limitation. The Arbitrator held that, for the purpose of limitation,
the proceedings shall be deemed to commence on the date on which
the request for dispute to be referred to arbitration is received by
Appu Hotels, and found that, as per Ex.C.45, the relevant date could
be 18.09.2013. Thereafter, taking into account that the claim was
based on the final invoice dated 20.07.2011 and that the two-year
defect liability period commenced upon completion of the project, the
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
Arbitrator rejected Appu Hotels' contention that the work had been
completed on 11.06.2010 and that, consequently, the claim was
barred by the three-year limitation period.
11. The learned Arbitrator further observed that, according to
Appu Hotels’ case, Voltas Limited had abandoned the work only in
June 2011, compelling Appu Hotels to engage a third party to
complete the pending works. The Arbitrator further considered the
amended work orders, including the one dated 03.04.2011, and
concluded that the claim was made within a period of three years and,
as such, is not barred by limitation. The Arbitrator found that the
excess payment, liquidated damages, and the damages for the
inconvenience caused were all related to the events mentioned and
occurred between 2010 and 2012, and that no claim whatsoever was
earlier made, and it was raised for the first time only on 14.05.2016,
and, as such, held that the counter claim made by Appu Hotels was
barred by limitation.
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Original Petition No.680 of 2019
and Application No.4013 of 2024
12. Thereafter, the Arbitrator proceeded to consider issues Nos. 1
to 4. After considering the oral evidence and the correspondence on
record, the learned Arbitrator answered issues Nos. 1 and 4, i.e.,
whether the claimant had committed a breach of contract, delayed
the work, and abandoned the work site as claimed by the respondent,
and whether the claim petition is not maintainable for want of cause
of action, as the claimant has not completed the work and could not
have raised the final bill, in favour of the claimant, by holding that the
subsequent conduct of the parties would demonstrate the variations
of the work order and the period as the work progressed.
13. However, while answering Issue Nos. 2 and 3, namely,
whether the claimant had completed the entire project in terms of the
work order dated 11.06.2010, as claimed by it, and whether Appu
Hotels had completed the pending works by engaging third parties,
the learned Arbitrator found in favour of Appu Hotels, holding that it
had engaged third parties to complete the pending works and had
incurred expenditure in that regard. Thereafter, the learned Arbitrator
considered Issue Nos. 5 and 6 with reference to the claimant’s
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
entitlement to the amount claimed by way of the balance as per the
final invoice dated 20.07.2011 and the repayment of the retention
amount in the hands of Appu Hotels. After detailed discussion, the
Arbitrator discounted the claims of Voltas Limited as per its invoices
and bills, as also the case of Appu Hotels, and found that, as per the
terms of the contract, the value of the work done by Voltas Limited
had been assessed and that the total value of the work was
Rs.11,28,20,374/-, of which Appu Hotels had to engage third parties
for completion and incurred an expenditure of Rs.1,12,82,037/-, and
thus found that the value of the work done by Voltas Limited was
Rs.10,15,38,337/-. After considering the payments made against the
running bills, totaling Rs.7,59,87,285/-, the learned Arbitrator found
that a sum of Rs.2,55,51,052/- is payable.
14. The learned Arbitrator further found that a sum of
Rs.1,01,53,833/-, being the 10 % retention value, is again liable to be
paid to Voltas Limited. Thereafter, the learned Arbitrator considered
issue Nos.7 and 8 and held that neither party was entitled to any
damages or any refund of excess amount/damages against the other,
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
and answered issue Nos.7 to 9 in the negative. Thereafter, the
Arbitrator considered the quantum of interest, both up to the date of
filing of the claim and pendente lite/post award, and awarded interest
at the rate of 18% per annum from the date of award till the date of
payment. Aggrieved by the same, the present Original Petition is filed.
15. Mr.Om Prakash, the learned Senior Counsel appearing on
behalf of Appu Hotels, after taking this Court through the pleadings
and the oral and documentary evidence on record, would primarily
contend that the Arbitrator's award is self-contradictory, as he could
not have found in favour of Voltas Limited on issues Nos. 1 and 4
when issues Nos. 2 and 3 were found in favour of Appu Hotels. Once it
is clear that Voltas Limited did not complete the project within time, it
goes without saying that it breached the contract and was not entitled
to the balance amount raised in its final bill. Admittedly, Voltas Limited
raised the final bill on the pretext that it had completed the entire
work. The very fact that the CEIG gave its clearance only in the year
2017 shows that Voltas Limited never fulfilled its obligations under
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
Clause 11 of the work order, being testing and approvals, and thus the
learned Arbitrator committed patent illegality in passing the award.
16. The learned Senior Counsel, by further drawing attention to
the answers elicited from C.Ws. 1 and 2 during their cross-
examination, which indicate that the work had not been completed,
would submit that the learned Arbitrator overlooked the complete lack
of evidence adduced by Voltas Limited in support of its claim. He
would therefore contend that the award is contrary to the
fundamental policy of Indian law, as any award of a claim must be
supported by at least some evidence on record. He would further
contend that the award, being made on the basis of the valuer's
report and disregarding the claim made by Voltas Limited, would
render the award with reference to the retention amount patently
illegal.
17. The learned Senior Counsel would also draw the attention of
this Court to the correspondence exchanged between the parties to
demonstrate that Voltas Limited was in breach of the agreement at
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
every stage. He would further seek to demonstrate, on a factual
analysis of the oral and documentary evidence on record, that certain
findings of the learned Arbitrator were erroneous and unsustainable
and when the Arbitrator omits material evidence on record for
consideration while granting the award, it is a case for interference .
18. The learned Senior Counsel would submit that once the
Tribunal, in its award, relied only on the value of the work as assessed
by Appu Hotels, as a natural corollary, it ought to have awarded the
counter claim and dismissed the claim made by Voltas Limited. The
learned Senior Counsel would point out that Voltas Limited's stand on
abandonment of work and the permission issued by CEIG is self-
contradictory. The claimant witnesses were cross-examined in detail
with reference to the various permissions and approvals required for
the due completion of the project. The learned Senior Counsel would
submit that, on a perusal of Ex.C.43, it is clear that Appu Hotels had
made a claim of Rs.24,08,393/- towards excess payment and
Rs.56,41,019/- towards liquidated damages, and therefore the Tribunal
erred in holding that the counter claim is barred by limitation. In any
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
event, having found that the work was done till June 2011, the
Tribunal ought to have held that the counter claim to the extent of
Rs.24,08,393/- was within limitation.
19. Per contra, Mr.Vinod, the learned counsel appearing for Voltas
Limited, would submit that, on instructions, he is not supporting the
award with reference to the retention money and that they are not
pressing the claim with reference to the award made by the Arbitrator
on that amount. As to the balance sum payable, he would counter the
learned Senior Counsel's arguments by submitting that the surveyor,
whose assessment/value cannot be disputed by the parties, found the
final value of the work, which the Arbitrator ultimately adopted. With
regard to the grant of permissions by the CEIG, the Tribunal also
considered the permissions dated 11.06.2010 and 02.03.2011, the
issuance of which was not disputed by Appu Hotels.
20. Though Appu Hotels marked Exs.R.45 and R.46 purport to be
the surveyor's report, Voltas Limited, through cross-examination of
R.W.1, established that the survey reports were not filed by Appu
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
Hotels and that the survey value details are correctly reflected as per
Ex.C.43, a reply notice, which was considered by the Arbitral Tribunal.
The learned counsel would then point out the various exhibits, on
which the Arbitral Tribunal came to the conclusion as to the total
quantum of work, the total quantum of expenditure actually incurred
by Appu Hotels, and the balance amount payable.
21. The le arned counsel would then argue that the stand of the
Appu Hotels on abandonment of work is inconsistent and would point
out that the contract was not terminated and that Voltas Limited was
permitted to work till June 2011. In this regard, the learned counsel
would also point out that the final permission was granted by CEIG on
02.03.2011. The learned counsel would submit that there is no
infirmity in the findings of the learned Arbitrator relating to limitation
and the counter claim. With regard to the excess payment, since the
award was made based on the valuer's assessment, there is no
question of excess payment. With reference to the liquidated
damages, the Arbitrator considered that the amendment orders
themselves were issued after eight months, whereas the original
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
period was mentioned in the work order, and therefore there is no
infirmity in the conclusion of the Arbitral Tribunal.
22. The learned counsel would rely upon the Judgment of the
Hon'ble Supreme Court of India in Kailash Nath Associates Vs. Delhi
1
Development Authority and Another , more specifically paragraphs 24 and
25, and the Judgment in S.Brahmanand and Others Vs. K.R.Muthugopal and
2
Others
more specifically paragraph 34.
23. The learned counsel would submit that no grounds were
made out for interference under Section 34 of the Act and would rely
upon the Judgment of the Hon'ble Supreme Court of India in Associates
3
Builders Vs. Delhi Development Authority . The learned counsel would further
submit that the well-reasoned award cannot be interfered with, and
once the award is supported by the pleadings and evidence before the
Tribunal, it does not call for any interference. The learned counsel
would also rely upon the Judgment of the Hon'ble Supreme Court of
1 (2015) 4 SCC 136
2 (2005) 12 SCC 764
3 (2015) 3 SCC 49
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
4
India in Dyna Technologies Vs. Crompton Greaves Limited and OPG Power
Generation Private Limited Vs. Enexio Power Cooling Solutions India Private
5
Limtied in support of his contentions.
24. I have considered the rival submissions from both sides and
perused the material records of the case.
25. Firstly, with reference to the claim for refund of the retention
amount along with further interest and costs, and the award of the
learned Arbitrator for a sum of Rs.1,01,53,833/-, I am satisfied that the
award in respect thereof is severable, as it can be identified and
removed independently, and even in its absence, the remaining award
would remain coherent. The validity or otherwise of the remaining part
of the award is not inextricably intertwined with this. Therefore, in
view of the dictum of the Constitution Bench of the Hon'ble Supreme
6
Court of India in Gayatri Balasamy Vs. ISG Novasoft Technologies Limited , I am
of the view that the position conceded by the learned counsel for
4 (2019) 20 SCC 1
5 (2025) 2 SCC 417
6 (2025) 7 SCC 1
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
Voltas Limited, that they are not pressing the claim for retention of
money, can be recorded, and that portion of the award is set aside.
26. Thus, this takes us to the question of the award of
Rs.2,55,51,052/- in respect of the balance sum payable to Voltas
Limited for the works executed by them. On a concise and clear
appreciation of the evidence and cogent reasoning, the learned
Arbitrator found that there was no breach of agreement or
abandonment of work, which would dis-entitle Voltas Limited from
claiming the amount due as per the bill. At the same time, factually,
some portions of the project remained unfinished, and Appu Hotels
carried out the work by engaging third parties and incurring
expenditure. The Arbitrator took into account the parties’ conduct as
the contract progressed, variations in the original work order, and the
circumstances under which the entire work was not completed. Such a
finding cannot be perverse or mutually contradictory, patently illegal,
or a violation of any fundamental policy of Indian Law.
27. The findings in respect of issue Nos. 1 to 4 are cogent and
consistent with each other, leaving only the ground of re-appreciation
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Original Petition No.680 of 2019
and Application No.4013 of 2024
of evidence and substitution of another possible view. That exercise,
as if an appellate forum, cannot be undertaken in this petition under
Section 34 of the Act. With reference to the quantum, in view of the
findings made in issue Nos. 1 to 4, the Arbitral Tribunal considered the
assessor/surveyor's report, as periodic assessment/survey is
contemplated even under the terms of the agreement between the
parties, and the value mentioned therein cannot be disputed by either
side. The parties caused the assessment in the natural course of the
contract, and the evidence came on record. The aspects of the oral
and documentary evidence pointed out by the learned Senior Counsel
fall within the realm of re-appreciation of the entire evidence and it is
not as if the findings are arrived at by ignoring the terms of the
contract between the parties and the material evidence on record.
28. After considering the detailed documentary and oral evidence
on record, the Learned Arbitrator has concluded that the total value is
Rs.11,28,20,374/-, has taken into account the value of the work done
by Appu Hotels to the tune of Rs.1,12,82,037/-, and has arrived at the
total value and the balance amount payable after taking into account
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
the amount actually paid. This Court is unable to find any error
whatsoever, much less any ground for interference, under Section 34
(2) (b) (i) and (ii) of the Act.
29. With reference to the award of interest, while the learned
Arbitrator considered the claim for interest at the rate of 24% from the
date on which the amount became due till the date of making the
claim and rejected the same, the Arbitrator nevertheless awarded
post-award interest at the rate of 18% from the date of award till the
date of realization. Thus, on a reading of the award as a whole, the
background of the claims of both the parties, the award does not call
for any interference with reference to the balance sum payable or the
quantum of interest awarded in respect thereof.
30. In view thereof, this Original Petition is partly allowed on the
following terms:
(i) The impugned award dated 01.03.2019 in the matter of
arbitration dispute arising out of an agreement dated 11.05.2009
between Voltas Limited represented by its authorized representative
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Original Petition No.680 of 2019
and Application No.4013 of 2024
and Appu Hotels, in respect of the claim relating to payment of
retention amount being Rs.1,01,53,833/- which is included in the
operative portion of the award along with further interest shall stand
set aside;
(ii) The award made towards the amount due to the respondent –
Voltas Limited to the tune of Rs.2,55,51,052/- with further interest at
the rate of 18 % from the date of award till the date of realization is
not interfered with;
(iii) The parties shall bear their own costs;
(iv) Consequently, the pending Application(s) if any, shall stand
closed.
11.11.2026
Jer
Neutral citation : Yes/No
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2026:MHC:4510
Original Petition No.680 of 2019
and Application No.4013 of 2024
D.BHARATHA CHAKRAVARTHY, J.,
Jer
Pre-Delivery Order made in
Original Petition No.680 of 2019
and Application No.4013 of 2024
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and Application No.4013 of 2024
11.11.2026
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