Union Of India vs Sohan Singh Sethi & Colonel R. K. ...
1996 Latest Caselaw 152 Del

JUDGMENT

K. Ramamoorthy, J.

1. There is a contract for supply of vegetables by the later to the Union of India. Differences arose between the parties and the matter was referred to arbitration. Accordingly, Shri R. K. Saldhi was appointed as the sole arbitrator. On 28th day of April, 1989 the arbitrator passed an award directing Sohan Singh Sethi to pay the Union of India Rs. 8,70,187.25.

The Union of India has filed this suit under Sections 14 and 17 for making the award rule of court.

2. M/s. Sohan Singh Sethi has filed IA 9190 under Sections 30 and 33 of the Arbitration Act, 1940 to set aside the award.

3. Mr. Jagjit Singh, learned counsel for the contractor submitted that the arbitrator did not give any opportunity at all to the contractor to substantiate its case and the arbitrator had taken into account matter which were brought to the notice of the arbitrator by the Union of India after the arbitrator received orders for passing the award. He also submitted that the arbitrator has not given any reasons and the arbitrator misconducted himself in passing the award. Another objection taken by the learned counsel was that the arbitrator did not file the the award and the relevant records pertaining to the arbitrator into this court. The award is filed by the Union of India without any authority from the arbitrator and the procedure prescribed under the Act has not been followed :

4. The award of the arbitrator is in the following terms :

Issues before the Arbitrator

The following issues have come up before the arbitrator :

(a) Issues raised by Supply Depot, ASC Delhi Cantt.

M/s. Sohan Singh Sethi & Sons 1306/7, Gilwali Gate, Amritsar entered into a contract No. 57/87-88/STS dated 21st August, 1987 for the supply of vegetables fresh to Supply Depot ASC, Delhi Cantt. for the period 1st October, 1987 to 30th September, 1988. The contractor commenced supply w.e.f. 1 October, 1987 till 14th June, 1988 and thereafter did not meet Supply Depot demands. Exercising his powers under the contract, Commandant Supply Depot ASC, Delhi Cantt. resorted to risk and expense purchase of vegetables. Dues to continuous failure of the contract, the contract was finally rescinded w.e.f. 29th July, 1988. The risk and expense purchase from 15th June, 1988 to 30th September, 1988 resulted in the extra expenditure of an amount of Rs. 9,32,707.50 and the amount is due for recovery from the contractor.

(b) Issues raised by M/s. Sohan Singh Sethi & Sons.

The contractor has denied that there was any contractual failure on his part. He admits that there was some lapse on his part to meet the demands of Supply Depot ASC, Delhi Cantt. due to the following reasons, which were beyond his control :

(i) non-release of security deposit of Rs. 32,000/- of the expired contract for the year 1986-87;

(ii) with-holding of 10% of payment of bills for two months of current year from 15th April, 1988 to 15th June, 1988;

(iii) hardship created by Supply Depot ASC, Delhi Cantt. by not accepting/rejecting the vegetables brought by the respondent;

(iv) bom blasts/closure of vegetable market at Tilak Nagar on 20th June, 1988 causing difficulty in procuring the vegetables to meet the demands of Supply Depot ASC, Delhi Cantt;

(v) heavy rains/floods in North Zone causing traffic disruption and closure of markets making the respondent unable to procure vegetables.

AND WHEREAS, I, the sole Arbitrator appointed herein have read the pleadings and documents filed on record. I have duly considered the claims and documents of the respective parties and deliberated over the contentions of both the parties and come to the conclusion that :

(a) there was breach of contract by the contractor in supplying vegetables fresh to Supply Depot ASC, Delhi Cantt;

(b) action on the part of Supply Depot ASC, Delhi Cantt. to resort to risk and expense purchase of vegetables w.e.f. 15th June, 1988 was due to the continuous failure of contractual obligations and in exercise of the powers conferred upon vide Clause 7(ii) of the General conditions (IAFZ-2120) of the contract;

(c) the grounds put forward by the contractor do not hold ground for any lapse in carrying out the contractual obligations.

NOW, therefore, I hereby make and punish this my Final Award in writing of and concerning the matter so referred to me as follows :

(a) the Union of India has suffered inconvenience due to non-supply of vegetables fresh by Contractor at the particular point of time necessitating risk and expense purchase.

(b) the extra cost of risk and expense purchases, as detailed below, should be borne by the contractor :

    
 (i)   amount recoverable from the contractor due to risk
       and expense purchases made from 15th June, 1988
       to 30th September, 1988                                 Rs. 9,32,707 
 (ii)  amount already recovered by Supply Depot ASC,
       Delhi by Supply Depot ASC, Delhi Cantt. from
       contractor's bill at the time of making 90% of
       payment of bills                                        Rs. 1,201.05 
 (iii) balance recoverable from the contractor as on the
       date of award                                        Rs. 9,21,506.25 
 (iv)  amount of security deposit held by by CDA Western
       Command now stands forfeited due to contractual
       failure to be adjusted against the dues from the
       contractor                                             Rs. 38,900.00 
 (v)   amount of 10% bills with held by CDA and kept
       under suspense account now stands forfeited and to
       be adjusted against the dues from the contractor       Rs. 12,408.00 
 (vi)  balance recoverable from the contractor after
        adjustment of amounts referred to at (iv) & (v) above  Rs. 8,70,198.25  
 
 

The parties should bear their own cost of Arbitration proceedings. The Stamp Duty amounting to Rs. 75.00 payable in respect of this Award of this Award have been borne by the Union of India.

5. The arbitrator has not sent any records and this court is not able to examine the matter in the light of the contentions of the parties on the basis of the records. On this sole ground. I feel, the matter should be remitted back to the arbitrator without going into the other questions raised by the learned counsel for the contractor. Therefore, the award is set aside and I remit the matter back to the arbitrator. Whoever is in office holding the post of Col. shall arbitrate upon the disputes other than Shri R. K. Saldhi. The arbitrator shall pass the award within four months from today. There shall be no order as to cost. The office shall issue the order dasti to counsel for the parties.