Full Text
FAO(OS) 71/2013 and FAO(OS) 74/2013
UOI ... Appellant
Through : Ms. Geetanjali Mohan with Ms. Mansi Goutam, Advocates.
Through
HON'BLE MS. JUSTICE INDERMEET KAUR o/o
05.02.2013 CMAPPL. No. 2088/2013 INFAO (OS) No. 74/2013
Allowed, subject to all just exceptions. ... Respondent
Delay of 14 days in re-filing the appeal)
14 days in re-filing) and CM APPL. No. 2090/2013 (for Condonation of
Delay of 9 days in filing)
The dispute pertains to a contract placed on the respondent by the appellant for High Tensile Strands (HTS) wires for use and manufacture of a quantity of 1,000 MT, the contract having been executed on 29.01.2001.
In pursuance to this contract, a release order for 700 MT ofHTS wires was
2013:DHC:7384-DB issued on 25.08.2000. It was at that stage of issuance of the release order that a new condition was sought to be introduced requiring that prior to the supply ofmaterial, necessary approval should be obtained from the Research
Design and Standard Organization (for short, 'RDSO'). The admitted position is that this clause was never proposed either at the stage of inviting the tender or at the stage of entering into the contract.
The respondent, however, faced with the aforesaid position, deposited the requisite fee of Rs.23,000/- with RDSO, but was unable to obtain the approval from RDSO resulting in termination of the contract on 14.08.2002.
This gave rise to disputes, which were referred to the sole arbitration of Shri
Satish Kumar, Executive Director (Corporate Co-ordination), Railway
Board, technical person, by the competent authority being the Member
Engineering, Railway Board on 18.07.2003. The Arbitrator made and published the Award dated 12.10.2006. Both the parties aggrieved by the said Award filed objections under Section 34 of the Arbitration and
Conciliation Act, 1996 (for short, 'the said Act') - the objections of the appellant being numbered as O.M.P. No. No. 69/2007, while the objections ofthe respondent being numbered as O.M.P. No. 83/2007.
In terms ofthe impugned Order dated 08.11.2012, the objections filed by the appellant have been dismissed, while those of the respondent have succeeded to the extent that the Award has been found to be without reasons qua the aspects objected to by the respondent and the respondent has been left to its remedy in view thereof. It is in view ofboth the OMPs being dealt with by the common order, two appeals have been filed by the appellant aggrieved respectively by the two aspects ofthe impugned order.
The first submission of learned counsel for the appellant, before us, is that the respondent .not only deposited the charges, but there were communications exchanged for the inspection by RDSO and, thus, the respondent cannot make a grievance qua the same. Learned counsel submits that the matter is not really ofRs.23,000/-, but ofprinciple.
A perusal of the impugned order shows that the refund ofRs.23,000/- was directed by the learned Arbitrator on the ground that the same did not form part of either the tender process or the contract, but was thrust on the respondent when the order was placed for part ofthe contract.
We see no patent irregularity in this view taken by the learned
Arbitrator and the appellant cannot be permitted to modify the terms of the contract post-contract to the prejudice of the respondent as it is this condition, which was not satisfied by the respondent and resulted in termination ofthe contract.
The second aspect urged by learned counsel for the appellant is that compensation has been given to the respondent for the loans availed of by the respondent even though the facility was set up by the respondent not exclusively for the appellant and much prior to the tender being floated. The loan was availed of from the Economic Development Council, Goa on
10.09.1995, while the contract was awarded by the appellant in the year
ORDER
2000. The learned Arbitrator and the learned Single Judge have, however, found that compensation had to be provided to the respondent for the same as the loan was taken up for setting up a factory for manufacture of HTS wires and the condition imposed of approval by RDSO prevented the FAO(OS) 71/2013 andFAO(OS) 74/2013 Page 3 of[5] respondent from proceeding with such manufacture of HTS wires and, thus, the appellant was responsible for the situation, which came to pass. However, the compensation has been restricted to a period of two years. It is, thus, not as if from the inception of loans availed of by the respondent, it is sought to be compensated from the appellant, but is restricted to a period of two years from the date of the award of contract till the date the contract was terminated, which is reasonable and fair and does not suffer from any patent irregularity calling for interference. The third and the last aspect urged arises from the learned Single Judge setting aside the rejection of claim No. 1 in part and claim Nos. 2, 3 and 4 as submitted to the learned Arbitrator by the respondent on the ground that it suffers from absence of reasons. In this behalf, learned counsel does not dispute that there are no reasons given qua rejection of claim Nos. 2, 3 and 4, though she, of course, states that those claims are not sustainable on merits. She, however, submits that so far as the rejection of part of claim No. 1 is concerned, some reasons can be found as given by the learned Arbitrator. The reasons to be recorded is the mandate of the said Act and is not a mere formality. Just citing respective stands of the two parties does not amount to recording of reasons and, thus, we find no error in the learned Single Judge setting aside that part of the Award on account of absence of reasons leaving it open to the respondent to avail of appropriate remedies as may be permissible under law. FAO(OS) 71/2013 andFAO(OS) 74/2013 Page 4 of[5] In view of the aforesaid, we find no merit in the appeals and the same are dismissed leaving the parties to bear their own costs. The applications also stand disposed of accordingly. ~...__ SANJAY KISHAN KAUL, J. L FEBRUARY 05, 2013 madan INDERMEET KAUR, J. FAO(OS) 71/2013 andFAO(OS) 74/2013 Page 5 of[5]