Delhi High Court
M/S. Cbate International vs Union Of India And Ors. on 16 May, 2014
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No.447/2011
% 16th May, 2014
M/S. CBATE INTERNATIONAL ..... Appellant
Through: Mr. K.B. Thakur, Advocate.
Versus
UNION OF INDIA AND ORS. ..... Respondents
Through: Mr. Jagjit Singh, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This first appeal under Section 37 of the Arbitration &
Conciliation Act, 1996 (hereinafter referred to as 'the Act') is filed against
the impugned judgment of the court below dated 23.4.2011 which has
dismissed the objections filed by the appellant against the Award dated
9.10.2009.
2. Counsel for the appellant urges that Award which is passed
under the 1996 Act has to be a reasoned Award in view of Section 31(3) of
the 1996 Act. It is argued that the court below has wrongly ignored Section
31(3) in the facts of the present case inasmuch as the Award in question
dated 9.10.2009 is a non-speaking Award.
3. The disputes between the parties pertain to supply of stone
ballast by the appellant to the respondent under a contract and which contract
respondent terminated on account of breach by the appellant of failing to
supply the requisite quantity as also delay in supplying whatever quantity
was supplied.
4. The appellant had filed a claim petition before the arbitrator and
the respondent had filed a counter claim. The claim petition pertained to
release of payment as also various deposits which were made by the
appellant to the respondent and for recovery of deductions made by the
respondent from the payment made to the appellant. The counter claim
pertained to entitlement of the respondent to adjust all amounts claimed by
the appellant on account of risk purchase tender which was issued by the
respondent after terminating the contract on account of breaches by the
appellant.
5. The arbitration panel of three arbitrators have given the
following operative portion of the Award:-
"AFTER having heard and fully considered all arguments and evidence of the parties the
said disputes and differences and having gone through the materials, papers and
documents, and having considered all the matter submitted to us in connection with the
aforesaid disputes and differences we do direct and award as follows:-
SN Description of Amount of claims Amount of Reasons of amount
claims (Rs.) award awarded
1. Extra payment 2,08,019.00 NIL As per records available,
for material Contractor had given his
supplied at written consent to supply
Tanda Yard material in Tanda Yard
and also completion
period was extended
giving them opportunity
to complete the work.
2. EMD Amount 50,000.00 NIL This has been adjusted
against risk & cost dues
of Respondents as risk &
cost tender was done for
balance work and
completed successfully.
3. Amount of 2,50,000.00 NIL This has been adjusted
Fixed Deposits against risk & cost dues
as Security of Respondents as risk &
Deposit cost tender was done for
balance work and
completed successfully.
4. Security Deposit 2,00,732.00 NIL Security Deposit
deducted from amounting Rs.2,27,957/-
Running bill. has been deducted from
running bills and has
been adjusted against
risk & cost dues of
Respondents.
5. Amount due 2,73,295.00 NIL As per final bill prepared
against supply by the respondents the
of material cost of balance material
supplied by the claimant
is Rs.2,73,295/-.
However the same has
been adjusted against
risk & cost dues of
Respondents as risk &
cost tender was done for
the balance work and
completed successfully.
Total claim of 9,82,046.00 NIL
contractor
Railway's Claims
SN Description of Amount of claims Amount of Reasons of amount
claims (Rs.) award awarded
1. Railway's Claim 17,76,783.74 17,44,232.74 As per details made
on account of available during hearing
risk & cost and details of counter
tender claims submitted by the
respondents total amount
to be recovered by
Respondents from
Claimant due to Risk &
Cost tender comes as
Rs.25,45,484.74.
Respondents already
have Rs.8,01,252.00 i.e.
[50,000 (Earnest money)
+ 2,50,000 (Fixed
deposit as security
deposit) + 2,27,957/-
(security deducted from
bills) + 2,73,295/- (cost
of balance material
supplied by claimant)]
available against the
terminated contract of
claimant. Hence only
balance amount, of
Rs.17,44,232.74 are due
to the respondents.
Total claim of 17,76,783.74 17,44,232.74
IN CONCLUSION M/S CBATE International shall pay to U.O.I. represented
through Dy. Chief Engineer/Const/Jalandhar, Northern Railway (respondent) a sum of
Rs.17,44,232.74/- in full and final settlement of all claims/Counter Claims of both the
parties arising out of the disputes and counter disputes as referred by the General
Manager in his letter No.74-W/1/1/377/WA/JUC/ARB dated 21.04.08.
THAT this amount as mentioned above should be paid to RESPONDENT within 45 days
from the date of publication of the award failing which amount of award will carry simple
interest of 10% thereafter i.e from the 46th day of publishing of this award till the date of
payment."
6. Without question, the Award in this case is a non-speaking
Award because there is no discussion in the Award as to how the appellant is
held guilty of delay in performance of the contract and as to how respondent
is hence justified in issuing the risk purchase tender and thereafter adjusting
the amounts which were payable to the appellant. Of course, I am not saying
one way or the other on merits because either the case of the appellant can be
correct or the case of the respondent can be correct, however, reasons have
to be given under the 1996 Act and which are ex facie missing in the
impugned Award.
7. In view of the above, the appeal is allowed. Impugned
judgment as also the Award dated 9.10.2009 is set aside. In view of the
Division Bench judgment of this Court in the case of BSNL Vs. Canara
Bank & Anr. 169 (2010) DLT 253 (DB) the matter is remanded back for a
fresh decision by the arbitrators already appointed or if one or more of the
arbitrators are not available then, to any other arbitrator or arbitrators which
the respondent will appoint in accordance with law and the contract between
the parties. The arbitrators will take up the case from the stage of final
arguments and if the parties also want to lead any evidence, arbitrators will
allow the parties to lead additional evidence. The arbitrators will thereafter
decide the matter afresh in accordance with law without in any manner being
influenced by the fact that earlier an Award dated 9.10.2009 was passed.
Arbitration record be given back dasti to the counsel for the respondent who
undertakes to give the record to the requisite authority who keeps the
arbitration record or directly to the arbitrators themselves.
MAY 16, 2014 VALMIKI J. MEHTA, J.
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