Research › Browse › Judgment

Delhi High Court · body

1994 DIGILAW 502 (DEL)

APEX SALES AGENCY v. UNION OF INDIA

1994-08-01

USHA MEHRA

body1994
Ms. Usha Mehra, J. ( 1 ) M/s. Apex Sales Agency, a partnership concern entered into an agreement with respondent No. 1 /union of India through Secretary,ministry of Defence, Department of Defence Production and Supplies, New Delhifor supply of Blankets Barrack Type a Natural Grey as per the supply order. Thesaid supply order was subject to the condition that Contract Form Schedule b (Revised 1965 ). Clause 16 of the said contract provided for reference of disputesand differences arisen under the Contract to the sole arbitration of the Secretary,department of Defence Production and Supplies or any other person appointed byhim. ( 2 ) DISPUTES and differences arose between the parties. Consequently, Secretary, Ministry of Defence, Department of Defence Production and Supplies was approached, who appointed Commodore C. P. George VSM, respondent No. 2 as thesole Arbitrator vide his letter dated 5/04/1989. The respondent No. 2, the solearbitrator made and published his award on 21/06/1991. Pursuance to theapplication filed by the petitioner, the said award was ordered to be filed in thecourt. The arbitrator filed the award in Court, thereafter notice of the filing of theaward was issued to the parties. The petitioner herein wanted the award to bemade rule of the Court but the Union of India, respondent No. 1 has filed theobjections which are listed as IA. No. 2196/92. ( 3 ) THE main objection raised by the respondent No. 1/union of India is that thearbitrator without giving any reason, arbitrarily awarded Rs. 75,000. 00 as againstthe claim of the Union of India to the tune of Rs. 9,08,766. 00. The objector hadclaimed general damages against claim No. l. The contract was for supply of1,20,000 Blankets Barracks, which was to be supplied in different lots between Julyto September,1985. At the asking of the petitioner, these delivery dates were refixed from August to October,l 985. Again on the request of the petitioner, the timewas extended upto 3 1/12/1985 and then to 28/02/1986. Inspite ofthe time having been extended, the petitioner could supply only 19,026 Blanketsupto 28/02/1986 and failed to supply balance quantity. Thus, the breachhaving been committed by the petitioner herein, the objector automatically becameentitled to compensation as the contract was cancelled and the balance materialwas purchased at the risk and cost of the petitioner. The Arbitrator appredatedthat breach had been committed by the petitioner herein, inspite of that he allowedonly part claim and Arbitrarily disallowed the remaining. Thus, the breachhaving been committed by the petitioner herein, the objector automatically becameentitled to compensation as the contract was cancelled and the balance materialwas purchased at the risk and cost of the petitioner. The Arbitrator appredatedthat breach had been committed by the petitioner herein, inspite of that he allowedonly part claim and Arbitrarily disallowed the remaining. Counsel for thepetitioner on the other hand contended that Arbitrator was not required to givereasons. Clause 16 of the contract does not stipulates that the Arbitrator will givereasoned award. Hence, for not giving any reason no mis-conduct can beattributed nor pointed out. In fact no error can be found on the face of the award. This Court cannot substitute its decision in place of the Arbitrator. What weighedwith the Arbitrator while awarding Rs. 75,000. 00 cannot be re-appreciated andexamined by this Court. This Court is not sitting as a Court of appeal. Thearbitrator is the best Judge of facts and of law as that Forum is chosen by the partiesfor settlement of their disputes. In this case, the Arbitrator has mentioned that hetook into consideration the pleadings, the evidence oral as well as documentaryand then came to that conclusion. Hence, it cannot be said that he did not take intoaccount the facts and law pleaded before him or that he Arbitrarily given theaward. According to Counsel for the petitioner, numerous breaches at differentstages committed by Union of India were pointed out before the Arbitrator. Hetook into consideration the same while deciding this claim. The breaches were alsonarrated in the reply and rejoinder as well as in the documentary evidence filed bythe present petitioner before the Arbitrator. Arbitrator took intoconsideration, thebreaches alleged against the present petitioner and the lapses and defaults pointedout on the part of the Union of India, whatever he found justified he awarded. ( 4 ) THE objection that the Arbitrator ought to have given reason, to my mind,is without force and not sustainable. Clause 16 of the Agreement does notstipulate that the Arbitrator will give reasons. In the absence of such stipulation thearbitrator is under no obligation to give reasons. In the absence of any reasonshaving been given this Court cannot furnish the reasons for the Arbitrator. Moreover, this Court is not sitting as a Court of appeal nor the law permits to assignreasons when not given by the Arbitrator. In the absence of such stipulation thearbitrator is under no obligation to give reasons. In the absence of any reasonshaving been given this Court cannot furnish the reasons for the Arbitrator. Moreover, this Court is not sitting as a Court of appeal nor the law permits to assignreasons when not given by the Arbitrator. The parties lead evidence as pointed outby the Arbitrator and not disputed by the objector. The Arbitrator examined,assessed and appreciated the same. This Court while considering the objectioncannot go behind the award to find out whether the Arbitrator rightly appreciatedthe evidence or not. How much was the breach committed by the petitioner hereinand what were the defaults and breaches on the part of the objector cannot be goneinto by this Court. In fact, the Arbitrator is the Forum chosen by the parties fordeciding their case on facts as well as on law and this Court cannot substitute hisdecision by giving its own reasoning. The only argument advanced by Counsel forthe Union of India is that this Court must re-appreciate the evidence lead before thearbitrator, to my mind, this cannot be done nor it is permissible under law. On theface of the award, no error can be found, therefore, this objection is without meritsand hence rejected. ( 5 ) THE other objection taken by the Union of lndia/ objector is regarding theaward against counter claim awarded in favour of the present petitioner,respondent before the Arbitraror. The contention of the objector is that the awardis vague as the Arbitrator failed to quantify the amount due to be recovered againstthis claim. So far as the award of counter claim is concerned, the con. tention of thecounsel for the objector appears to be justified. The award of Rs. 14,954. 27 paise issubject to recovery of liquidated damages, if any. The award against this counterclaim appears to be vague. The Arbitrator was under legal obligation to indicateas to what are the liquidated damages recoverable by the objector. It is only afterdeducting the same, the award should have been given. He has left it open as towhat are those liquidated damages recoverable by objector hence award in thisregard is undetermined and not definite. Since, the award against counter claim isvague, indefinite, therefore, is liable to be remanded back to the Arbitrator forclarifying and quantifying the liquidated damages, if any. He has left it open as towhat are those liquidated damages recoverable by objector hence award in thisregard is undetermined and not definite. Since, the award against counter claim isvague, indefinite, therefore, is liable to be remanded back to the Arbitrator forclarifying and quantifying the liquidated damages, if any. What are the liquidateddamages which are to be deducted from the amount of Rs. 14,954. 27. According tothe objector, the liquidated damages came to Rs. 23,248. 00. This has to be taken intoaccount while awarding any amount against counter claim. If this amount hadbeen taken into account by the Arbitrator then award against counter claim wouldhave been NIL and the Union of India would have been entitled to recoverrs. 8,294. 00. But the Arbitrator left it open hence there is vagueness in the awardagainst counter claim No. 1. I accordingly remand the award to the extent of thiscounter claim to the Arbitrator for quantifying the liquidated damages, if any. ( 6 ) SINCE, the award against the claim No. 1 as well as against counter claimno. 1 are separable, therefore, award against claim No. 1 is made rule of the Courtbut so far as the award against counter claim is concerned, that is remanded backto the Arbitrator with the above observation to quantify the liquidated damages,if any.