C.I. Laboratories vs Union Of India
1996 Latest Caselaw 94 Del

JUDGMENT

S.D. Pandit, J.

(1) This suit has been registered on account of filing of an Award by Shri I.C. Achutan, who was appointed as an Arbitrator by the respondent in order to pass an Award as regards the disputes which had arisen between the petitioner and respondent Union of India.

(2) Respondent had issued a tender bearing No. CD-1/222/051/26.11.82/ COAC/869 dated 23.2.1983 for supply of Sorbitrol Solution 70% conforming to Is Specification No. 3987-1977 (1st revision). Petitioner submitted its tender bearing No. CTL/F-54/3327 dated 24.1.1983. Offer given by the petitioner was accepted by the respondent on 3.2.1983 and, thus, a contract took place between the parties. It seems that thereafter there was levy of Customs Duty on the said commodity and, therefore, the petitioner was insisting to have a written contract mentioning therein specifically the liability of the respondent to pay the said customs duty. The petitioner was requested to withdraw that claim but they did not agree to the same and persisted with their claim. Ultimately, they were informed by the respondent to give the details of their claim and the petitioner has claimed in all Rs. 2,80,590.00 by supplying the details.

(3) But, after a few months they were informed that their claim was not acceptable to the respondent and, consequently, a dispute arose between the parties and as per the terms of contract between the parties the said dispute for the claim . of Rs. 2,80,590.00 was referred to the Arbitrator by a letter dated 1.11.1988.

(4) The Arbitrator asked the petitioner to file its claim and the respondent to file its counter claim and to produce the material in support of their rival contention and after giving opportunity to both the sides to produce evidence and after hearing the arguments of their Counsel, the Arbitrator has passed the Award on 21.12.1990 holding that the petitioner was entitled to get the amount of Rs. 2,80,590.00 . He rejected the claim of the petitioner for payment of interest @18%.

(5) After the filing of the Award notices were sent to both the petitioner as well as the respondent. Petitioner has not filed any objections under Sections 30 and 33 of the Indian Arbitration Act, 1940. However, respondent filed IA.10001 /91 under Sections 30 and 33 of the Indian Arbitration Act raising various objections to the Award passed by the Arbitrator.

(6) It is contended on behalf of the respondent that the Arbitrator had misconducted himself by not considering the material documents on record and by not applying the provisions of law correctly to the facts. Thus, it is contended that the Award suffers from the errors apparent on the face of the record and the same is liable to be set aside.

(7) The objections filed by the respondent are resisted by the petitioner by filing the reply. It is contended that the objections filed by the respondent were barred by the law of limitation and, therefore, they could not be considered. They further contended that the contentions raised by the objector are vague and there is no specific contention that a particular document was not considered by the Arbitrator. The Award passed by the Arbitrator is a reasoned award and there is no . commission of any misconduct by the Arbitrator. In these circumstances, objections filed by the respondent be rejected and the Award be made rule of the Court.

(8) In view of the rival pleadings my learned Predecessor had settled issues on 9.11.1993. Those issues and my findings thereon for the reasons hereinafter stated are as under: Sl.No. issue Finding 1. Whether the award is liable Does not to be set aside on the survive. ground mentioned in the If survives, 756 objection petition No. (IA.10001/91)? Whether the objection petition is barred by limitation? Yes. 3. Relief. As per final order.

(9) It is contended on behalf of the petitioner that the objection petition filed by the respondent is barred by the law of limitation and, therefore, the objections raised therein could not be considered by the Court. The material on record shows that after the Arbitrator had filed the Award in this Court by its order dated 22.4.1991 notices were issued to both the petitioner and the respondent. The record further shows that respondent was served with the said notice on 9.5.1991. The objection petition, IA.10001/91 is filed by the respondent on 179.1991. Thus, this objection petition is filed beyond the period of 30 days from the date of service of notice under Section 15 of the Arbitration Act, 1940. Alongwith this petition no application for condensation of delay was filed. Thus, it is obvious, that the objections raised by the respondent by filing IA.10001/91 is barred by the law of limitation. I, therefore, answer Issue No. 2 in the affirmative. Issue No. 1:

(10) In view of my finding that objections filed by the respondent are barred by the law of limitation, it is not necessary to consider the objections raised by the respondent. Therefore, Issue No. I does not survive. But even if I happen to consider the said objection petition, then from the material on record it is not possible to hold that the said objections deserve to be allowed. The Award passed by the Arbitrator is a speaking award and he has given the detailed reasons as to why he was allowing the claim of the petitioner. The respondent was the purchaser whereas the petitioner was the supplier of the said Sorbitrol solution, which the respondent wanted to buy. It has been pleaded by the respondent in IA.10001/91 in para No. 2, as under : "BESIDES other terms and conditions which related to the delivery schedule as also the price and specification to which the stores would conform, it was clearly stipulated that "any change in the customs duty/import duty on imported ingredients for special items will be on buyer's account".

If the above pleading of the respondent is taken into consideration then it would be quite clear that if the goods which were imported were to be brought then the buyer was to pay the customs duty or import duty on the said imported ingredient. No doubt it has been further mentioned in the same para by the respondent that the claims had informed defendant that the ingredients of the commodity sold by them were to be imported but it is very pertinent to note that it is not the claim of the respondent that the claim of the petitioner that he had imported the ingredients and that he had to pay the customs duty on the same is not at all specifically denied at any time by the respondent either before the Arbitrator or even in their objection petition. The Arbitrator has taken into consideration the provisions of Section 64A of the Sales of Goods Act. It is very pertinent to note that it is not the claim of the respondent that as per the terms of contract between the parties it was agreed that rate quoted by the petitioner and which was accepted by the respondent was inclusive of the payment of duties and that there would be no change in rate irrespective of the change in the duty. When it is not the claim of the respondent that as per the terms of contract between the parties the petitioner was to bear the customs duty for which the claim is made by the petitioner, the claim of the petitioner allowed by the Arbitrator could not be said to be allowed by the Arbitrator by misapplication of law.

(11) It was further tried to be urged before me that in the meeting between the officers of the respondent and the officers of the petitioner there was an agreement to withdraw the claim by one Mr. Khanna and that the Arbitrator has not taken into consideration the same. But the respondent had not produced any material before the Arbitrator to support or justify that contention. The Award of the Arbitrator does not show that that submission made was made before the Arbitrator and the Arbitrator has rejected the same in view of the material before him. It is settled law that this Court cannot sit as an Appellate Court over the Award passed by the Arbitrator. This Court cannot consider the sufficiency of the reasons given by the Arbitrator. This Court cannot also have reappreciation of the evidence produced before the Arbitrator. Therefore, that question of fact could not be gone into by me while considering the objections raised on behalf of the respondent.

(12) Therefore, in view of the above considerations even if it is assumed that the objections filed by the respondent could be considered, there is no substance in the objections raised on behalf of the respondent. Therefore, I hold that IA.10001 /91 deserves to be rejected.

(13) Thus, I order that the Award passed by the Arbitrator on 21.12.1990 is made Rule of the Court. The respondent do pay the amount of Rs. 2.80.590.00 awarded by the Arbitrator in the said Award with 12% interest thereon from the date of the Award till realisation. Both the parties to bear their respective costs. Decree be drawn accordingly.