UNION OF INDIA v. SOHAN SINGH SETHI AND COLONEL R. K. SALDHI
1996-02-01
B.K.RAMAMOORTHY
body1996
DigiLaw.ai
K. RAMAMOORTHY ( 1 ) THERE is a contract for supply of vegetables by the latter to the Union of India. Differences arose between the parties and the matter was referred to arbitration. Accordingly, Shri R. K. Saldhi was appointed as the sole arbitrator. On 28th day of April 1989 the arbitrator passed an award directing Sohan Singh Sethi to pay the Union of India Rs. 8,70,198. 25. The Union of India has filed this suit under section 14 and 17 for making the award rule of court. ( 2 ) M/s Sohan Singh Sethi has filed IA 9190 under section 30 and 33 of the Arbitration Act, 1940 to set aside the award. ( 3 ) MR. Jagjit Singh, learned counsel for the contractor submitted that the arbitrator did not give any opportunity at all to the contractor to substantiate its case and the arbitrator had taken into account matters which were brought to the notice of the arbitrator by the Union of India after the arbitrator received orders for passing the award. He also submitted that the arbitrator has not given any reasons and the arbitrator misconducted himself in passing the award. Another objection taken by the learned counsel w as that the arbitrator did not file the award and the relevant records pertaining to the arbitrator into this court. The award is filed by the Union of India without any authority from the arbitrator and the procedure prescribed under the Act has not been followed. ( 4 ) THE award of the arbitrator is in the following terms:- ISSUES BEFORE THE ARBITRATOR The following issues have come up before the arbitrator: (a) Issues raised by Supply Depot. ASC Delhi Cantt, M/s Sohan Singh Sethi and Sons. 1306/7. Gilwali Gate, Amritsar entered into a contract No. 57/87-88/sts dated 21 Aug 87 for the supply of vegetables fresh to Supply Depot ASC, Delhi Cantt for the period 01 Oct 87 to 30 Sep 88. The contractor commenced supply w. e. f 01 Oct 87 till 14 June 88 and thereafter did not meet Supply Depot s demands. Exercising his powers under the contract, Commandant Supply Depot ASC, Delhi Cantt resorted to risk and expense purchase of vegetables. Due to continuous failure of the contract, the contract was finally rescinded w. e. f. 29 July 88.
Exercising his powers under the contract, Commandant Supply Depot ASC, Delhi Cantt resorted to risk and expense purchase of vegetables. Due to continuous failure of the contract, the contract was finally rescinded w. e. f. 29 July 88. The risk and expense purchase front 15 June 88 to 30 Sep 88 resulted in the extra expenditure of an amount of Rs. 9,32,707. 50 and the amount is due for recovery from the contractor. (b) Issues raised by M/s Sohan Singh Sethi and Sons. The contractor has denied that there was any contractual failure on his part. He admits that there w as some lapse on his part to meet the demands of Supply Depot ASC, Delhi Cantt due to the following reasons, which were beyond his control: (i) non-release of security deposit of Rs. 32,000. 00 of the expired contract for the year 1986-87, (ii) with-holding of 10% of payment of bills for two months of current year from 15 Apr 88 to 15 June 88, (iii) hardship created by Supply Depot ASC, Delhi Cantt by not accepting/ rejecting the vegetables brought by the respondent, (iv) bomb blasts/closure of vegetable market at Tilak Nagar on 20 June 88 causing difficulty in procuring the vegetables to meet the demands of Supply Depot ASC, Delhi Cantt, (v) heavy rains/floods in North Zone causing traffic disruption and closure of markets making the respondent unable to procure vegetables. AND WHEREAS, I, the Sole Arbitrator appointed herein have read the pleadings and documents filed on record. I have duly considered the claims and documents of the respective parties and deliberated over the contentions of both the parties and has come 10 the conclusion that: (a) there was breach of contract by the contractor i8n supplying vegetables fresh to Supply Depot ASC, Delhi Cantt, (b) action on the part of Supply Depot ASC, Delhi Cantt to resort to risk and expense purchase of vegetables w. e f 15 June 88 was due to the continuous failure of contractual obligations and in exercise of the powers conferred upon vide clause 7 (ii) of the General conditions (1afz-2120) of the contract, (c) the grounds put forward by the contractor dio not hold ground for any lapse in carrying out the contractual obligations.
NOW, therefore, I hereby make and punish this my Final Award in writing of and concerning the matter so referred to me as follows: (a) the Union of India has suffered inconvenience due to non-supply of vegetables fresh by Contractor at the particular point of time necessitating risk and expense purchases, (b) the extra cost of risk and expense purchases, as detailed below, should be borne by the contractor: (i) amount recoverable from the contractor due to risk and Rs. 9,32,707, expense purchases made from 15 June 88 to 30 Sep 88 (ii)amount already recovered by Supply Depot ASC, Delhi Rs. 1,201. 25 by Supply Depot ASC. Delhi Cantt from Contractor s bill at the time of making 90% of payment of bills (iii) balance recoverable from the contractor as Rs. 9. 21,506. 25 on the date of award (iv) amount of security deposit held by CDA Western Rs. 38,900. 00 Command now stands forfeited due to contractual failure to be adjusted against the dues from the contractor (v) amount of 10% bills with held by CDA and kept Rs. 12,408. 00 under suspense account now stands forfeited and to be adjusted against the dues from the contractor (vi) balance recoverable from the contractor after Rs. 8,70,198. 25 adjustment of amounts referred to at (iv) and (v) above. The parties should bear their own cost of Arbitration proceedings. The Stamp Duty amounting to Rs. 75. 00 payable in respect of this Award have been borne by the Union of India. ( 5 ) THE arbitrator has not sent any records and this Court is not able to examine the matter in the light of the contentions of the parties on the basis of the records. On this sole ground, I feel, the matter should be remitted back to the arbitrator without going into the other questions raised by the learned counsel for the contractor. Therefore, the award is set aside and I remit the matter back to he arbitrator. Whoever is in office holding the post of Col. shall arbitrate upon the disputes other than Shri R. K. Saldhi. The arbitrator shall pass the award within four months from today. There shall be no order as to cost. The office shall issue the order dasti to counsel for the parties.