Delhi High Court
Union Of India Thr The Central ... vs M/S Tal Manufacturing Solutions ... on 12 August, 2015
$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on : 12.08.2015
+ FAO(OS) 497/2013 and CM No. 17461/2013 (Stay)
UNION OF INDIA THR THE CENTRAL ORGANIZATION
..... Appellant
Through: Mr Bhagwan Swarup Shukla, CGSC
versus
M/S TAL MANUFACTURING SOLUTIONS LTD. ... Respondent
Through: Mr Akhil Sibal and Mr Shakunt and
Mr Aditya Garg, Advs.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. This appeal questions the decision of the learned Single Judge dated
04.02.2013, whereby the objections to the award--to the extent that it
wrongly denied a direction to repay the amounts encashed by the
appellant--were upheld.
2. The brief facts of the case are that the appellant-Union of India
entered into a contract with the respondent (hereinafter referred to as 'the
claimant') for supply of Minerallic Abrasive (Sand) Blasting Plant for
Stainless Steel Passenger Coach/Car Shells. The contract was amended by
mutual agreement on 17.04.2000. The Union of India invoked two bank
guarantees on 22.06.2007 and 10.07.2007 respectively for an aggregate
FAO(OS) No.497/2013 Page 1
amount of Rs.1,42,82,785.86. The claimant was aggrieved and raised the
dispute which was referred to the arbitration. The arbitrator held inter alia
that the invocation of the bank guarantees was unlawful. The operative
portion of the award, however, confined the relief only to a declaration with
regard to the wrongful invocation of the bank guarantees, but did not grant
any consequential relief. The operative portion of the award reads as
follow:-
"1. Based on the in the above discussion I feel that since, the
PTC has been issued to M/s TAL which takes care of the
require productivity given by the plant, the invocation of WBG
is not justified.
2. The counter claim submitted by the respondent to the
extent of spending money for rectification of the plant while
giving frequent trouble and was under break down during
warranty should be realized from the claimant which amounts
to Rs.2,58,594/-.
3. No interest should be applicable on any amount spent by
the respondent on the amount of WBG invoked."
3. The claimant felt aggrieved and approached this Court under Section
34 of the Arbitration and Conciliation Act. The learned Single Judge heard
counsel for the parties and also took note of the fact that despite the
claimant's efforts to have the award corrected by initiation of the
proceedings under Section 33, no relief was afforded. The learned Single
Judge also significantly noticed that the Union's objections in OMP
No.710/2011 against the award were rejected by judgment dated 21.09.2011.
That order had attained finality. In these circumstances, the learned Single
Judge directed the payment of Rs.1,42,82,785.86 being the aggregate of the
FAO(OS) No.497/2013 Page 2
amount of two warranty bank guarantees together with 9% interest per
annum. The Union contends that the learned Single Judge fell into error in
interfering with the award. It is submitted that the modification of the award
was not warranted given that the Section 33 application itself stood rejected.
Likewise, the award of interest has also been challenged.
4. This Court has considered the grounds urged in support of the appeal.
The learned Single Judge, in our opinion, pertinently modified the award by
exercising the power granted under Section 34 of the Act and directed a
consequential relief without which the entire redress mechanism had been
rendered academic. So far as the counter-claim is concerned, this Court
noticed that the Union's objections have been rejected and attained finality.
5. In view of these circumstances, we find no reason to interfere with the
impugned judgment.
The appeal along with the pending application is accordingly
dismissed.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
AUGUST 12, 2015
BG
FAO(OS) No.497/2013 Page 3
