Bombay High Court
Act vs Companies Act on 18 December, 2009
Bench: S.J. Vazifdar
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 226 OF 2006
Indian Oil Corporation Limited, )
a Company incorporated under the )
provisions of the Indian Companies )
Act, 1956, having its Registered )
Office at Indian Oil Bhavan, G-9 )
Ali Yavar Jung Marg, Bandra (East) )
Mumbai - 400051. ) ... Petitioners
Versus
M/s. Mahaveer Cylinders Limited )
a Company incorporated under the )
Companies Act, 1956, having its )
Registered Office at B-13/5, )
Jhilmil Industrial Area, Shahadra, )
Delhi - 110095, and factory at B-32, )
Site-IV, Industrial Area, Sahibabad, )
Ghaziabad, U.P. ) ... Respondents
Mr. S.H. Doctor, senior counsel with Mr. Chirag Balsara & Tanmay
Gardi i/b M/s. Negandhi, Shah & Himayatullah for the Petitioners
Mr. D.V. Merchant, senior counsel i/b Amit Shroff & Co. for the
Respondents.
ALONGWTH
ARBITRATION PETITION NO. 225 OF 2006
Indian Oil Corporation Limited, )
a Company incorporated under the )
provisions of the Indian Companies )
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Act, 1956, having its Registered )
Office at Indian Oil Bhavan, G-9 )
Ali Yavar Jung Marg, Bandra (East) )
Mumbai - 400051. ) ... Petitioners
Versus
GDR Cylinders Private Limited )
a Company incorporated under the )
Companies Act, 1956, having its )
Registered Office at 30/5, Deve )
Apaartment, 1st Main Road, Adyar, )
Chennai. ) ... Respondents
Mr. S.H. Doctor, senior counsel, Mr. Chirag Balsara, Mr. Tanmay Gardi
i/b Negandhi, Shah & Himayatullah for the Petitioner.
Mr. V.K. Ramabhadran with Ms. Shikha Goenka and Mr. Nand Kumar
for the Respondents.
ARBITRATION PETITION NO. 227 OF 2006
Indian Oil Corporation Limited, )
a Company incorporated under the )
provisions of the Indian Companies )
Act, 1956, having its Registered )
Office at Indian Oil Bhavan, G-9 )
Ali Yavar Jung Marg, Bandra (East) )
Mumbai - 400051. ) ... Petitioners
Versus
JCL International Limited, )
a Company incorporated under the )
Companies Act, 1956, having its )
Registered Office at 206, )
South Ex-Plaza-I, 389, Masjid Moth, ) ... Respondents
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Shri S.H. Doctor, senior counsel with Mr. Chirag Balsara & Mr. Tanmay
Gardi i/b Negandhi, Shah & Himayatullah for the Petitioner.
Mr. Vatsal Shah i/b U.L. Shah for the Respondent.
AND
ARBITRATION PETITION NO. 228 OF 2006
Indian Oil Corporation Limited, )
a Company incorporated under the )
provisions of the Indian Companies )
Act, 1956, having its Registered )
Office at Indian Oil Bhavan, G-9 )
Mumbai - 400051.
Ali Yavar Jung Marg, Bandra (East) )
) ... Petitioners
Versus
Lite Containers Limited )
a Company incorporated under the )
Companies Act, 1956, having its )
Registered Office at Lite Contains )
Private Limited, B-7 Vidya )
Apartment, 2nd Main Road, Gandhi )
Nagar, Adyer, Chennai 600 020. ) ... Respondents
Mr. S.H. Doctor, senior counsel with Mr. Chirag Balsara and Mr.
Tanmay Gardi i/b Negandhi, Shah & Himayatullah for the Petitioner.
Mr. V.K. Ramabhadran with Ms. Shikha Goenka and Mr. Nand Kumar
for the Respondents.
CORAM: S.J. VAZIFDAR, J.
DATED : 18TH DECEMBER, 2009.
ORAL JUDGMENT :
1. These petitions are filed under section 34 of the Arbitration and
Conciliation Act, 1996, to set aside the awards made by the learned sole
Arbitrator.
2. The facts of these cases and, in particular, the nature and the terms
and conditions of the cylinder purchase agreement and the purchase
orders placed pursuant thereto by IOCL on the claimant are similar to
those in Arbitration Petition Nos.138 and 223 of 2006. Counsel have,
therefore, invited me to proceed on that basis.
3. However, in these cases, as in all other connected matters, the
claimants have not challenged the award, whereas in Arbitration Petition
No.138 of 2006, it is the claimant who had challenged the award. The
same award was also challenged by IOCL in Arbitration Petition No.223
of 2006.
4. I have rejected Mr. Doctor's contention regarding the price of the
cylinders having been fixed by the MPO & NG in Arbitration Petition
No.138 of 2006. There is no difference between the facts of this case
and the facts in Arbitration Petition No.138 and 223 of 2006 in this
regard. Mr. Doctor's submission in this regard is, therefore, rejected for
the reasons stated in my order and judgment dated 17th December, 2009
in Arbitration Petition Nos.138 and 223 of 2006.
5. Mr. Merchant and Mr. Ramabhadran, the learned counsel who
appeared in other connected matters invited my attention to the said
receipts on the basis whereof IOCL contended that the claimant had
accepted the payment in full and final satisfaction of its dues. Each of
the receipts acknowledged the amounts received, the particulars of the
cheques by which payment was made and recite that the same was "on
account of bill no. ........ dated ........". Mr. Doctor contended that
payment having specifically been made on account of the said bill made
it clear that it was in full payment in respect of the said bill. On the
other hand, the claimants contended that the receipt merely
acknowledged receipt of the amounts stated therein and did not evidence
the acceptance thereof in full and final satisfaction.
6. Mr. Doctor's submission that IOCL had made payment of Rs.
22,94,979.64 to the claimant in full and final satisfaction of the
claimant's claim resulting in an accord and satisfaction between the
parties in respect of the claims is on the same basis as his submission to
this effect in Arbitration Petition Nos.138 and 223 of 2006. Evidence to
this effect was led on behalf of IOCL in the affidavits in lieu of
examination-in-chief of one Surajit Roy. The witness deposed that
having accepted the said payment, the claimants issued a receipt in
respect thereof which expressly stated that the amounts had been
received by the claimant in full payment in respect of its bills. In the
petitions, this contention was specifically taken. In the affidavits in
reply, this submission was denied. It is contended that the receipt of
cheques paid by IOCL constituted merely an acknowledgement of
receipt of particular cheques and nothing more and cannot be treated as
full and final settlement of the accounts between the parties. Mr.
Rambadhran, the learned counsel appearing on behalf of the Petitioners
in Arbitration Petition Nos.225 and 228of 2006 submitted that the
receipts were issued after the impugned circulars dated 31st October,
2000 and 3rd November, 2000 and therefore the Petitioners could never
have accepted the payments mentioned therein in full and final
settlement of their claims.
7. In these cases too, I do not intend dealing with the question as to
whether there was accord and satisfaction in respect of the claimant's
claim. That was for the learned Arbitrator to decide. In these cases too,
the learned Arbitrator failed to consider the contention altogether. The
awards are silent in respect thereof. The alleged implied rejection of the
contention is thus without reasons. On this ground alone, the awards are
liable to be set aside.
8. As noted earlier, in the present cases the claimant has accepted the
award. The award is on similar lines as in the case of the award in
Arbitration Petitions Nos.138 of 2006 and 223 of 2006. Mr. D.V.
Merchant, the learned senior counsel appearing on behalf of the claimant
submitted that the difference between the case in Arbitration Petition
Nos.138 and 223 of 2006 and these cases is that in these cases there was
no prayer for the fixation of the price. The claimants in these cases
agreed that the price was provisional, that there was no decision by the
MOP & NG as required under the purchase orders and the cylinder
purchase agreements and that there was no question, therefore, of the
IOCL adjusting the amounts from the petitioner's bills. He submitted
that there was no power in IOCL of adjustment of the amounts under the
contracts. Therefore, according to him, the provisional price must be
considered to be the final price, subject to any adjustment later on
account of the MOP & NG fixing the price at a future date.
9. Even assuming that the statements of claim proceeded on this
basis there is no consideration in the awards of this aspect of the matter.
The learned Arbitrator has not come to a conclusion that in view of the
MOP & NG not having fixed the price, the contractual provisions
mandate the provisional price to be the final price between the parties.
That the claimant accepted the provisional price finally and the fact that
the period of contract had come to an end would make no difference.
Indeed, even this aspect has not been considered in the awards. The
learned Arbitrator thus had to consider the consequence of the absence
of the price fixation by the MOP&NG of the final price of the cylinders.
10. As in the case in Arbitration Petition Nos.138 and 223 of 2006, it
is not the claimant's case here that the arbitration was invoked only as an
interim measure viz. to restrain the withholding of the amounts by IOCL
pending finalisation of the price. The statement of claim proceeds on the
basis that a particular price is due and payable by IOCL to the claimant.
11. Mr. Merchant then submitted that the cylinder purchase
agreements themselves provided a mechanism to fix the price. Thus, in
the absence of the MOP & NG fixing the price, the price must be
determined in accordance with such mechanism/formula. Even
assuming that the submission is well founded, I do not find consideration
thereof in the awards. It would have been necessary in that event for the
Arbitrator to have applied this mechanism/formula, determined the price
accordingly and then adjusted the amounts paid pursuant to the
provisional price and the final price so determined. Mr. Merchant, in
fact, fairly agreed that the learned Arbitrator had not even accepted this
case.
12. In the circumstances, the award must be set aside on the ground
that there is no consideration of the method or mode of fixing the price
and there was, in fact, no price fixed. In other words, the award is silent
as to the basis on which it was made. The award is, therefore, liable to
be set aside.
13. The Petitions are, therefore, made absolute in terms of prayer
clauses (a). The impugned awards are, therefore, set aside. There shall
be no order as to costs in any of the Petitions.
