Ruttonsha International ... vs Union Of India
1996 Latest Caselaw 587 Del

JUDGMENT

Anil Dev Singh, J.

(1) This is an application under section 30 of the Arbitration Act whereby the petitioner seeks setting aside of the award of the arbitrator dated September 21, 1984. The respondent Union of India entered into a contract on December 20, 1973 with the petitioner for supply of four numbers of mobile transformer rectifiers and their spares. Date for completion of the supplies was fixed as April 30, 1974. However, subsequently the delivery date was refixed as March 15, 1975. It needs to be mentioned that the petitioner requested for increase in price of the rectifiers in view of the refixation of the delivery date. On February 7, 1975, the petitioner informed the Union of India that one rectifier was ready and would be offered for inspection. Subsequently, by another letter dated February 20, 1975, the petitioner offered the said equipment for inspection of the respondent. On April 28, 1975, the delivery period was again extended by the Union of India to May 31, 1975. The request of the petitioner for increase in price was, however, rejected by the respondent.

(2) It is not disputed that one rectifier was delivered by the petitioner to the respondent. However, the remaining three rectifiers were not supplied by it with the result that the contract was terminated by the respondent on July 23, 1975. Thereafter, the pondent purchased the remaining three rectifiers at the risk and cost of the petitioner and incurred an extra expenditure of Rs.2,33,839.05. The respondent having in'red the extra expenditure claimed the same from the petitioner but the petitioner disputed its liability. On July 26, 1976, the Director General of Supplies and Disposal pointed an arbitrator to go into the dispute raised by the parties. He, however, resigned before completing the proceedings. It appears that from 1976 to January 1984 a few arbitrators, one after the other, had to be appointed as due to exigencies of service they could not continue with the arbitration and had to tender their resignations. Finally on January 27, 1984, Mrs. R.Lakshman was appointed as an arbitrator who made and published her award on September 21, 1984. As per the said award the arbitrator allowed the claim of the respondent and held that the petitioner had committed breach of contract. Consequently she awarded a sum of Rs.2,33,839.05 in favour of the respondent and against the petitioner. Feeling aggrieved by the award, the petitioner challenged the same by means of the instant application.

(3) At the outset learned counsel appearing for the petitioner submitted that the award was made by the arbitrator beyond the period stipulated by section 28 of the Arbitration Act. He also submitted that the petitioner did not sign the letter extending the time for making the award.

(4) I have considered the submission of the learned counsel. I find that there is a letter dated September 5, 1984 on record whereby both the parties had agreed to extend the time upto December 31, 1984, for making the award. When the letter was shown to the learned counsel for the petitioner he did not insist on the objection raised by him.

(5) The learned counsel then submitted that this Court does not have the jurisdiction to deal with the award. According to the learned counsel the contract was to be executed at Bombay and the payment was also to be made to the petitioner at Bombay and, therefore, the award should have been filed before the appropriate court at Bombay. Learned counsel for the petitioner, however, does not deny that the acceptance of the tender was issued from Delhi and the arbitration proceedings were also held at Delhi. As per clause 20(3) of the Conditions of Contract it is the courts of the place from where the acceptance of the tender has been issued which shall have the jurisdiction to decide the disputes arising out of or in respect of the contract. Having regard to clause 20(3) of the conditions of the contract, it cannot be said that this Court does not have the jurisdiction to deal with the award. In this view of the matter the submission of the petitioner cannot be accepted.

(6) Learned counsel for the petitioner also canvassed that no communication was sent by the respondent to the petitioner regarding the cancellation of the contract and the purchase of the remaining mobile transformer rectifiers at the risk and cost of the latter. It appears that the petitioner did not lake up such a stand at any antecedent stage of the proceedings. Neither before the Arbitrator nor in the objections under section 30 of the Arbitration Act such a pica has been spelt out. The learned counsel for the petitioner not having raised the said points either before the Arbitrator or in the objections cannot be allowed to raise the same at this stage. Accordingly, the submission of the learned counsel is rejected.

(7) Lastly, learned counsel for the petitioner submitted that the award of the arbitrator is even otherwise bad on merits. It may be noted that the arbitrator has not given any reasons for the award. It is not open to the court to speculate, when no reasons are given in the award, as to what impelled the arbitrator to arrive at his conclusion. Ordinarily, the award of the arbitrator is to be honoured unless there is an error apparent on the face of the award. The learned counsel for the petitioner has not been able to point out any illegality in the award apparent on the face of it. This submission of the learned counsel for the petitioner does not merit any consideration and the same is rejected.

(8) Having regard to the aforesaid discussion, the application of the petitioner is dismissed. The award is made a rule of the court and a decree in terms thereof is hereby passed. With this order the suit and all other I.As. would also stand disposed of.