Research › Search › Judgment

Bombay High Court · body

2012 DIGILAW 2338 (BOM)

Bharat Lakhotya v. Bharat Sanchar Nigam Ltd.

2012-12-14

ANOOP V.MOHTA

body2012
Judgment : The Petitioner, under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act), has challenged award dated 22 July 2010, thereby dismissed the claim of the Petitioner. 2. The operative part of the award is as under:- Award:- I, Shri G.K. Lodha, DGM (NWP-IT), BSNL, Pune as Sole Arbitrator appointed in the dispute between M/s Salasar Hanumanji Industries, Kolkata and BSNL, Mumbai in exercise of powers vested under Section 31 of Arbitration and Conciliation Act, 1996, pass the order today i.e. on 22.7.2010 at Pune that the LD charges which are claimed by BSNL, Mumbai, are correct and no refund should be made to the claimant, M/s Salasar Hanumanji Industries, Kolkata. The claim of Sales Tax by the claimant M/s Salasar Hanumanji Industries, Kolkata is quashed.” 3. The basic events as per the Petitioner are as under:- In the year 2000, the Petitioner responded to the Respondent's tender for supply of Galvanized Tapered Steel Tubes (for short, “the goods”). The tender of the Petitioner for supply of goods was accepted by the Respondent for the total consideration of Rs.56,30,100/-. The supply contract was governed by purchase order which stated various terms of the contract. General Instructions to the purchase order contained various stipulations for supply of goods. The goods were to be delivered by 15 December 2000. There was complete labour strike in the Petitioner's factory premises which went on from 20 September 2000 till 15 November 2000. On 25 September 2000, the Petitioner by letter “Under Certificate of Posting” informed the concerned officer of the Respondent about the said strike. 4. On 11 January 2001, the Assistant Labour Commissioner, Government of West Bengal issued certificate, certifying that the Petitioner's factory was visited and was non functional due to stoppage of work reverted by workers. On 19 February 2001, the Petitioner requested for extension of time for supply of goods and the Respondent extended time with payment of liquidated damages clause without taking into consideration strike at Petitioner's factory. In the month of March/April, 2001, the Petitioner supplied goods to the Respondent. The total value of goods were Rs.56,30,100/-after adding the Sales Tax of Rs.2,01,946/-totaling to Rs.58,32,046/-. The Respondent made payment of Rs.49,00,276/-leaving balance of Rs.9,32,770/-which was deducted as liquidated damages. 5. In the month of March/April, 2001, the Petitioner supplied goods to the Respondent. The total value of goods were Rs.56,30,100/-after adding the Sales Tax of Rs.2,01,946/-totaling to Rs.58,32,046/-. The Respondent made payment of Rs.49,00,276/-leaving balance of Rs.9,32,770/-which was deducted as liquidated damages. 5. In the year 2002, the Petitioner made request for waiving the liquidated damages and sent various letters for release of the balance amount. 6. In the year 2005-2006, the Petitioner moved Delhi High Court and Hon'ble Supreme Court by filing various legal proceedings claiming balance amount. However, the said proceedings came to be rejected on technical grounds, for want of jurisdiction etc.. 7. On 9 August 2008, the learned Arbitrator was appointed by the Chief General Manager of the Respondent, after lengthy correspondences. In the year 2009 the Arbitration proceedings were conducted. 8. On 22 July 2010 the Arbitrator passed an award and rejected the Petitioner's claim. Therefore, the present Petition. 9. There was delay in delivery as per the purchase order as the Petitioner unable to complete the delivery by 15 December 2000. Supply was commenced from 4 April 2001 and completed by 22 May 2001. The Petitioner requested for extension of time to supply the material on 17 November 2000 on the ground of labour problem. The extension was accordingly granted upto 15 January 2001 with LD (Liquidated Damages) charges. The extension was again sought and it was granted on 19 January 2001 upto 25 February 2001 again with LD charges. Third time extension was asked and it was granted upto 31 March 2001 with LD charges. Further extension was also sought and it was granted upto 15 May 2001 with LD charges. As per the terms, payment of Rs.49,00,276/-was made from time to time subject to receipt of the goods. The request was made by the Petitioner to waive the LD charges and also payment of Sales-Tax at the rate of 4%. The Petitioner therefore claimed that balance amount due and payable was Rs.9,31,770/-and 18% interest on the said amount from 1 June 2001 to 15 February 2009 was Rs.12,93,045/-and thereby claimed total amount of Rs. 22,21,814/-, by raising the dispute in question, which the learned Arbitrator, in the present facts and circumstances and considering the LD charges clause, maintained the action of Respondent in view of undistputed position on record read with the permissible clause as agreed by and between the parties. 22,21,814/-, by raising the dispute in question, which the learned Arbitrator, in the present facts and circumstances and considering the LD charges clause, maintained the action of Respondent in view of undistputed position on record read with the permissible clause as agreed by and between the parties. The learned Arbitrator has considered the fact that the delayed portion of the supply materially hampered the installation and commissioning of other systems and thereby the charge so levied on the total value of the purchase order, in no way can be stated to be contrary to law and/or the record. 10. Another aspect is that the Petitioner filed the Writ Petition in Delhi High Court and thereby challenged the amount of liquidated damages. The Single Judge of Delhi High Court rejected the Writ Petition. The Division Bench by order dated 10 July 2007 also rejected the Appeal against the same. The Supreme Court on 28 January 2008 dismissed the SLP also. Thereby, in view of Clause 24 of the agreement, the issue of jurisdiction was upheld by further observing that Delhi High Court has no jurisdiction to decide and dealt with the matter, apart from the Arbitration clause. As noted, cause of action in the matter arise some time in the year 2000-2001. Inspite of Arbitration clause, the Writ Petition was filed and ultimately the same was rejected and confirmed by the Supreme Court on 28 January 2008. Thereafter, the Arbitration proceedings were initiated and the matter proceeded to the Arbitrator for adjudicating the same. Though there is no specific reason and/or objection raised with regard to the limitation, but undisputed position on record itself shows that the Petitioner having knowledge of Arbitration clause, still had invoked writ jurisdiction and thereby challenged the deduction of amount towards the LD charges. The contention was raised that in view of Section 14 of the Limitation Act as the Writ Petition was disposed of in the year 2008 and thereafter Arbitration proceedings were initiated and conducted accordingly, the Arbitrator therefore, did not decide and as other side also did not raise any objection and therefore, on that ground, there is no reason to discuss further the issue of limitation. The aspect of delay and limitation just cannot be overlooked. Section 3 of the Limitation Act is mandatory. In the present case, the facts are not in dispute about the late invocation of the arbitration proceedings. The aspect of delay and limitation just cannot be overlooked. Section 3 of the Limitation Act is mandatory. In the present case, the facts are not in dispute about the late invocation of the arbitration proceedings. 11. What remains is the issue of “Force Majeure” as provided in clause 21 of the Agreement. In view of this clause, it is necessary for the Petitioner to give intimation/notice of happening of the events, in the present case the strike/labour problem. There is no material on record to show that such intimation was sent and served within 21 days from the date of occurrence. Though averments are made, the learned Arbitrator has observed that the strike was from 20 September 2000 to 15 November 2000, but as there was no communication received the LD charges so deducted and/or action so taken also cannot be interfered. The learned Arbitrator therefore, right in coming to the following conclusion:- “After considering the facts and materials put forth for conciliation by both BSNL, Mumbai as well as by the claimant, M/s Salasar Hanumanji Industries, Kolkata, and applying the principle of natural justice, it is concluded that the LD charges which were claimed by BSNL, Mumbai, is correct. The rate of material in P.O. Was composite and inclusive of all the taxes, so claim of Sales Tax by claimant M/s Salasar Hanumanji Industries, Kolkata does not arise.” 12. Therefore, taking overall view of the matter, I see there is no case made out by the Petitioner to interfere with the reasoned award so passed. 13. Resultantly, the Petition is dismissed. 14 There shall be no order as to costs.