Union Of India (Uoi) vs India Matals
2004 Latest Caselaw 1030 Del

JUDGMENT

R.C. Jain, J.

1. These are the objections filed by the petitioner under Sections 30 and 33 of the Arbitration Act, 1940, against the Award of the Sole Arbitrator dated 25.2.1993. Vide a purchase order No. 211-S/634/TSO/India Metals dated 31.7.1987, the respondent undertook to supply 6.5 lacs numbers of sleeper screws for HM fastening to RDSO drawing No. T 3001/Alt. Nil and confirming to I.R.S Specification No. IRST-16 to the petitioner. The requisite supplies were not made for various reasons and it is alleged that the petitioner-Union of India terminated the Contract and has made Risk Purchase of Screws and on that account suffered loss of Rs. 11,71,025/- which the respondent was liable to reimburse to the petitioner in accordance with the terms and conditions of the contract and the Risk Purchase Order. Respondent denied its liability and therefore, the dispute arose between the parties which were referred to the Sole Arbitration of Shri V. K. Kaul, Additional Divisional Railway Manager II Northern Railway, New Delhi, who entered into the reference and made and published his Award dated 25.2.1993 thereby rejecting the claim of the petitioner to the above amount and directed the petitioner-Union of India to refund of amounts withheld on account of their alleged claim arising of the Risk Purchase of the material.

2. Award and arbitral proceedings having being filed in the Court by the Arbitrator, parties were noticed. Pursuant to the same the Union of India has filed an application/objections under Section 30 of the Arbitration Act, 1940 (hereinafter referred to as the "Act") challenging the Award of the Sole Arbitrator and praying for its setting aside inter alia on the grounds that the Arbitrator has wrongly held that there was alteration in the drawing in respect of which material was supplied by the respondent and the alteration in all was very minute and the respondent has agreed to supply the material as per new drawings as was clear from certain correspondence exchanged between the parties; the Arbitrator has wrongly unfastened the liability on the claimant objector by misconstruing and misreading the letter dated 24.8.1990; the Arbitrator has wrongly rejected the claim of the objector on the ground that Risk Purchase was not proper and the same was not in accordance with the terms and conditions of the Contract and, therefore, the Award is bad in law and on facts and cannot be sustained.

3. The respondent has opposed the application/objection and has filed a reply raising preliminary objections in regard to the maintainability of the present petition on the ground that there is no error apparent on the face of the Award on the basis of which the Award can be set aside by this Court. It is denied that there are any grounds much less sufficient grounds for setting aside the Award of the Sole Arbitrator. Various grounds taken up by the petitioner for setting aside the Award are also denied. In the rejoinder, the petitioner has reiterated its stand as taken up in the petition.

4. I have heard Mr. Ajay Sahai learned Counsel for the plaintiff and Mr. Rajesh Banati learned Counsel representing the respondent and have given my thoughtful consideration to their respective submissions.

5. In this case the parties have not led any evidence and have referred to and relied on the award, arbitral proceedings and the relevant documents which form the subject matter of the Purchase Order and the ensuing correspondence exchanged between the parties.

6. The main contention put forward on behalf of the petitioner-objector is in regard to the correctness of the finding reached by the Arbitrator in disallowing the claim of the petitioner on account of Risk Purchase of the material. Learned Counsel for the objector has referred to the conditions of the Purchase Order and the general conditions of the contract etc. in order to show that the petitioner had allegedly resorted to the Risk Purchase of the material after terminating the contract of the respondent strictly in accordance with law. All these contentions were pressed by the petitioner even before the learned Arbitrator. The learned Arbitrator has morefully considered the effect of those terms and conditions in the contract as also various aspects preceding the risk purchase of the material resorted to by the petitioner. The Arbitrator has given cogent reasons for arriving at the said finding.

7. The Arbitrator is the sole Judge of the matter referred to him and his decision has to be respected by the parties unless it shows that there is an error apparent on the face of the Award or the Arbitrator has misconducted himself or the proceedings. Admittedly the petitioner has not made out any of these grounds to assail the Award of the Arbitrator. The entire objections of the petitioner are on the merits of the Award which this Court cannot scrutinise in the manner as an Appellate Court would do because this Court is not sitting as a Court of Appeal while dealing with these objections. Even if for the sake of argument it is assumed that a different view was possible on the face of the facts, circumstances and the material brought on record, still it will not be open to this Court to set aside the Award of the Arbitrator on that ground.

8. Having considered the matter in its entirety, this Court finds no merit whatsoever in the present objections of the Union of India. The objections are as such dismissed and the Award of the Arbitrator dated 25.2.1993, is hereby made a Rule of the Court. Let a decree sheet be drawn accordingly.

The petition stands disposed of accordingly.