Subhas Road vs Bharat Sanchar Nigam Ltd
2012 Latest Caselaw 487 Bom

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               IN THE HIGH COURT OF JUDICATURE AT BOMBAY                                




                                                                           
                ORDINARY ORIGINAL CIVIL JURISDICTION




                                                   
                  ARBITRATION PETITION NO. 59 OF 2012

     Bharat Lakhotya,
     an adult, of Calcutta




                                                  
     Indian Inhabitant, 
     sole Proprietor of 
     M/s. Salasar Hanumanji Industries,
     by the hands of his Constituted




                                      
     Attorney, Mohini Mahendra Kabra
     having addres at 23-A, Netaji
                       
     Subhas Road, 8th Floor, Suite No.32,
     Kolkata (West Bengal)
     Pin Code-700 001.                                      .....Petitioner. 
                      
                                           
                 V/s.

     Bharat Sanchar Nigam Ltd.,
      


     a Public Limited Company duly
     registered under 
   



     the Companies Act, 1956 through 
     its Principal General Manager (Development),
     Maharashtra Telecom Circle,





     having its office at New Admn. Bldg.,
     Behind CTO Compound Juhu Road,
     Santacruz-(W), Mumbai-400 054.               ....Respondent.

     Mr. A.L.N. Khatri  for the Petitioner.





     Ms.   Martina   Sapkal   i/by   M/s.   Arun   Sapkal   &   Co.   for   the 
     Respondent.
                                       
                                    CORAM     :  ANOOP V. MOHTA, J.

         JUDGMENT RESERVED ON        :  5 DECEMBER 2012.
         JUDGMENT PRONOUNCED ON  : 14 DECEMBER 2012. 





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     JUDGMENT :-




                                                                               
                                                       

The Petitioner, under Section 34 of the Arbitration

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

challenged award dated 22 July 2010, thereby dismissed the

claim of the Petitioner.

The operative part of the award is as under:-

Award:-

I, Shri G.K. Lodha, DGM (NWP-IT), BSNL, Pune as Sole Arbitrator appointed in the dispute between M/s Salasar Hanumanji Industries, Kolkata and BSNL, Mumbai in

exercise of powers vested under Section 31 of Arbitration and Conciliation Act, 1996, pass the order today i.e. on

22.7.2010 at Pune that the LD charges which are claimed by BSNL, Mumbai, are correct and no refund should be made to the claimant, M/s Salasar Hanumanji

Industries, Kolkata. The claim of Sales Tax by the claimant M/s Salasar Hanumanji Industries, Kolkata is quashed."

3 The basic events as per the Petitioner are as under:-

In the year 2000, the Petitioner responded to the

Respondent's tender for supply of Galvanized Tapered Steel

Tubes (for short, "the goods"). The tender of the Petitioner for

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supply of goods was accepted by the Respondent for the total

consideration of Rs.56,30,100/-. The supply contract was

governed by purchase order which stated various terms of the

contract. General Instructions to the purchase order contained

various stipulations for supply of goods. The goods were to be

delivered by 15 December 2000. There was complete labour

strike in the Petitioner's factory premises which went on from

20 September 2000 till 15 November 2000. On 25 September

2000, the Petitioner by letter "Under Certificate of Posting"

informed the concerned officer of the Respondent about the

said strike.

4 On 11 January 2001, the Assistant Labour Commissioner,

Government of West Bengal issued certificate, certifying that the

Petitioner's factory was visited and was non functional due to

stoppage of work reverted by workers. On 19 February 2001,

the Petitioner requested for extension of time for supply of

goods and the Respondent extended time with payment of

liquidated damages clause without taking into consideration

strike at Petitioner's factory. In the month of March/April, 2001,

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the Petitioner supplied goods to the Respondent. The total

value of goods were Rs.56,30,100/- after adding the Sales Tax

of Rs.2,01,946/- totaling to Rs.58,32,046/-. The Respondent

made payment of Rs.49,00,276/- leaving balance of

Rs.9,32,770/- which was deducted as liquidated damages.

5 In the year 2002, the Petitioner made request for waiving

the liquidated damages and sent various letters for release of

the balance amount.

6 In the year 2005-2006, the Petitioner moved Delhi High

Court and Hon'ble Supreme Court by filing various legal

proceedings claiming balance amount. However, the said

proceedings came to be rejected on technical grounds, for want

of jurisdiction etc..

7 On 9 August 2008, the learned Arbitrator was appointed

by the Chief General Manager of the Respondent, after lengthy

correspondences. In the year 2009 the Arbitration proceedings

were conducted.

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     8      On   22   July   2010   the   Arbitrator   passed   an   award   and 




                                                      

rejected the Petitioner's claim. Therefore, the present Petition.

9 There was delay in delivery as per the purchase order as

the Petitioner unable to complete the delivery by 15 December

2000. Supply was commenced from 4 April 2001 and

completed by 22 May 2001. The Petitioner requested for

extension of time to supply the material on 17 November 2000

on the ground of labour problem. The extension was

accordingly granted upto 15 January 2001 with LD (Liquidated

Damages) charges. The extension was again sought and it was

granted on 19 January 2001 upto 25 February 2001 again with

LD charges. Third time extension was asked and it was granted

upto 31 March 2001 with LD charges. Further extension was

also sought and it was granted upto 15 May 2001 with LD

charges. As per the terms, payment of Rs.49,00,276/- was

made from time to time subject to receipt of the goods. The

request was made by the Petitioner to waive the LD charges and

also payment of Sales-Tax at the rate of 4%. The Petitioner

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therefore claimed that balance amount due and payable was

Rs.9,31,770/- and 18% interest on the said amount from 1 June

2001 to 15 February 2009 was Rs.12,93,045/- and thereby

claimed total amount of Rs. 22,21,814/-, by raising the dispute

in question, which the learned Arbitrator, in the present facts

and circumstances and considering the LD charges clause,

maintained the action of Respondent in view of undistputed

position on record read with the permissible clause as agreed by

and between the parties. The learned Arbitrator has considered

the fact that the delayed portion of the supply materially

hampered the installation and commissioning of other systems

and thereby the charge so levied on the total value of the

purchase order, in no way can be stated to be contrary to law

and/or the record.

10 Another aspect is that the Petitioner filed the Writ Petition

in Delhi High Court and thereby challenged the amount of

liquidated damages. The Single Judge of Delhi High Court

rejected the Writ Petition. The Division Bench by order dated

10 July 2007 also rejected the Appeal against the same. The

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Supreme Court on 28 January 2008 dismissed the SLP also.

Thereby, in view of Clause 24 of the agreement, the issue of

jurisdiction was upheld by further observing that Delhi High

Court has no jurisdiction to decide and dealt with the matter,

apart from the Arbitration clause. As noted, cause of action in

the matter arise some time in the year 2000-2001. Inspite of

Arbitration clause, the Writ Petition was filed and ultimately the

same was rejected and confirmed by the Supreme Court on 28

January 2008. Thereafter, the Arbitration proceedings were

initiated and the matter proceeded to the Arbitrator for

adjudicating the same. Though there is no specific reason

and/or objection raised with regard to the limitation, but

undisputed position on record itself shows that the Petitioner

having knowledge of Arbitration clause, still had invoked writ

jurisdiction and thereby challenged the deduction of amount

towards the LD charges. The contention was raised that in view

of Section 14 of the Limitation Act as the Writ Petition was

disposed of in the year 2008 and thereafter Arbitration

proceedings were initiated and conducted accordingly, the

Arbitrator therefore, did not decide and as other side also did

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not raise any objection and therefore, on that ground, there is

no reason to discuss further the issue of limitation. The aspect

of delay and limitation just cannot be overlooked. Section 3 of

the Limitation Act is mandatory. In the present case, the facts

are not in dispute about the late invocation of the arbitration

proceedings.

What remains is the issue of "Force Majeure" as provided

in clause 21 of the Agreement. In view of this clause, it is

necessary for the Petitioner to give intimation/notice of

happening of the events, in the present case the strike/labour

problem. There is no material on record to show that such

intimation was sent and served within 21 days from the date of

occurrence. Though averments are made, the learned

Arbitrator has observed that the strike was from 20 September

2000 to 15 November 2000, but as there was no

communication received the LD charges so deducted and/or

action so taken also cannot be interfered. The learned

Arbitrator therefore, right in coming to the following

conclusion:-

ssm 9 arbp59.12

"After considering the facts and materials put

forth for conciliation by both BSNL, Mumbai as well as

by the claimant, M/s Salasar Hanumanji Industries,

Kolkata, and applying the principle of natural justice, it

is concluded that the LD charges which were claimed by

BSNL, Mumbai, is correct. The rate of material in P.O.

Was composite and inclusive of all the taxes, so claim of

Sales Tax by claimant M/s Salasar Hanumanji

Industries, Kolkata does not arise."

12 Therefore, taking overall view of the matter, I see there is

no case made out by the Petitioner to interfere with the

reasoned award so passed.

13 Resultantly, the Petition is dismissed.

     14     There shall be no order as to costs.



                                              (ANOOP V. MOHTA, J.)