IN THE HIGH COURT OF JUDICATURE AT BOMBAY ANOOP V. MOHTA AND A.S. GADKARI, JJ. M/s. Sarathi Enterprises – Appellant Vs. Union of India, Through Executive Engineer, Mumbai Central – Respondent APPEAL NO. 123 OF 2016 IN ARBITRATION PETITION NO. 950 OF 2013 Decided On : 06-06-2016 Cases Referred : M/s. Chebrolu Enterprises Vs. Andhra Pradesh Backward Class Cooperative Finance Corporation Ltd. reported in 2015 (12) Scale 207 Advocates Appeared : For the Appellant : Ms. Shilpa Kapil For the Respondent : Dr. G.R. Sharma a/w Mr. D.P. Singh JUDGMENT : (PER- ANOOP V. MOHTA, J.):- Heard the learned counsel appearing for the Appellant finally, as the matter is fixed for the final hearing. 2 In nutshell, the case of the Appellant-Original Respondent, is that- On 22 July 2010, a tender was invited for “providing and fixing vitrified tiles flooring over existing flooring from Ground to sixth Floor at Aayakar Bhawan, Mumbai”. The work was awarded to the Appellant by letter dated 22 July 2010. The Appellant by letter dated 5 August 2010, recorded the verbal discussion with the Executive Engineer whereby, the Executive Engineer has directed to use only Johnson vitrified tiles and no other equivalent brand. The Appellant has further informed the Respondent that the Appellant intends to use some other equivalent brand as per condition of contract. By letter dated 16 August 2010, the Respondent again reiterated that only Johnson vitrified tiles and no other equivalent brand be used as the client has approved Johnson vitrified tiles only. 3 The Appellant was directed to execute the work with Johnson vitrified tiles only and no other equivalent brand. The Appellant by letter dated 28 September 2010, informed the Respondent that they have already shown their inability to execute the work with Johnson Vitrified tiles as M/s. H.R. Johnson (India) Limited is quoting exorbitant price for the product specified in the tender in comparison to other equivalent brand by taking advantage of the fact that he is the only preferred manufacture by the Respondent. By letter dated 9 October 2010, the Appellant informed the Respondent that they have lodged a complaint with Chief Engineer (Vigilance) CPWD. 4 The Appellant, time and again, had stated that they are always ready and willing to execute the work subject to approval of “equivalent brand”. The Respondent never agreed to it. By letter dated 9 October 2010, the Appellant informed the Respondent that they have lodged a complaint with Chief Engineer (Vigilance) CPWD. 4 The Appellant, time and again, had stated that they are always ready and willing to execute the work subject to approval of “equivalent brand”. The Respondent never agreed to it. On the aspect of violation of Sections 3 and 4 of the Competition Act, 2002 (for short, “the Competition Act”), the Executive Engineer by letter dated 7 December 2010, had stated that the agreement is entered into between the parties and the breach is on the part of the Appellant. 5 On 22 January 2011, the advertisement appeared in the newspaper for the work of “Providing and Fixing vitrified tiles flooring over existing flooring from Ground to Sixth floor at Aayakar Bhavan, Mumbai” which is the same work, which was awarded to Appellant. Interestingly, except issuance of “final notice”, the work awarded to the Appellant is neither terminated nor foreclosed. The fresh tender invited, was also not the risk and cost tender. The Appellant, by letter dated 29 January 2011, requested the Executive Engineer to foreclose the contract without liability upon the Appellant and refund the EMD and performance guarantee. On 8 February 2011, the Executive Engineer by its letter stated that contract has already been determined with forfeiture of EMD and Security Deposit by their letter dated 16 November 2010. 6 In view of an Arbitration under Clause 25, the Appellant by letter dated 9 March 2011, requested the Chief Engineer to appoint the Arbitrator. The Chief Engineer by letter dated 27 July 2011, appointed Shri Rajiv Kumar as the sole Arbitrator in respect of the claims of the Appellant and counter claim of the Respondent. On 6 March 2013, the Appellant and the Respondent filed their respective pleadings before the Arbitrator. The Respondent also raised the counter claim before the Arbitrator. The Arbitrator after hearing both the parties passed Award dated 6 March 2013. 7 Being aggrieved, the Respondent filed an Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration Act”) for setting aside the Award. 8 On 20 April 2015, the Arbitration Petition was allowed by the learned Single Judge and impugned Award dated 6 March 2013 in respect of claim No.1 and 2, was set aside. Hence the present Appeal. 8 On 20 April 2015, the Arbitration Petition was allowed by the learned Single Judge and impugned Award dated 6 March 2013 in respect of claim No.1 and 2, was set aside. Hence the present Appeal. 9 The Appellant has challenged impugned Judgment and order dated 20 April 2015, passed by the learned Single Judge under Section 34 of the Arbitration Act, thereby prayer clause (a) of the Petition to the extent of claim Nos. 1 and 2 of the Respondent has been allowed and thereby, the award of the learned Arbitrator in respect of claim Nos. 1 and 2 are set aside. The rest of the award has been upheld. 10 The learned counsel appearing for the Appellant has strongly relied upon the following contract clause (8) of Special Condition and thereby, submitted that the Respondent ought to have permitted the Appellant to provide equivalent brand as an alternative. “8. Unless otherwise specified, the brand/make of the material as specified in the item nomenclature shall be used in the work. In case of non availability of the brand specified in the contract the Contractor shall be allowed to use alternate equivalent brand of the material subject to submission of documentary evidence of non-availability of the specified brand. The necessary cost adjustments on account of above change shall be made for the material with wastage and contractor's profit.” 11 After hearing the learned counsel appearing for the Appellant, we have noted that there is no material and/or documents placed on record to show that the tiles of M/s. H.R. Johnson (India) Limited was not available at the relevant time, though it was specifically agreed by and between the parties to use the same for the concerned purposes. The Appellant was fully aware of the terms and conditions of the agreement, by which it was specifically insisted and also agreed by the Appellant to supply and use the agreed branded tiles. The reasons behind the selection of those brands, at this stage, cannot be gone into so also the Respondent's decision to use the said tiles. The Appellant was fully aware of the terms and conditions of the agreement, by which it was specifically insisted and also agreed by the Appellant to supply and use the agreed branded tiles. The reasons behind the selection of those brands, at this stage, cannot be gone into so also the Respondent's decision to use the said tiles. 12 The Appellate Court, at this stage, would not like to even test/accept the submission that the insistence of particular branded product by the Respondent-Union of India, in view of Section 3 of the Competition Act, read with Section 23 of the Indian Contract Act, 1872, inspite of Clause 8 of Special condition, was impermissible and contrary to contract conditions. The Appellant was fully aware of the Competition laws and the related circulars, still instead of raising the objections at initial stage, submitted the offer for the supply of branded tiles. The Appellant therefore, was under contractual obligation to provide/supply the said branded tiles. There was no case of non-availability of the said tiles. The Respondent's insistence for the branded tiles, which the Appellant was not ready to supply, therefore, was within the frame of the contract. The defence of law of Competition Act, therefore, is unsustainable in the present case. 13 This is also for the reason that the Appellant, in the commercial contract like this, knowing fully the effect of selection of the branded tiles by the Respondent, as the insistence of use of particular brand at the relevant time, in no way can be stated to be with ulterior motive to favour the brand. The Appellant having agreed upon therefore, bound by it. There was no choice, unless specific case made out of non-availability of those branded tiles. The insistence upon only for equivalent product, as sought to be done by the Appellant, was contrary to the contract condition. 14 The Departmental internal quality test and the reasons for selecting the brand, therefore, cannot be gone into at the instance of the Appellant, at this stage. The acceptance of other equivalent quality tiles after awarding the contract, in the present case, would have affected the basic terms and conditions of the contract. This would definitely give leverage to the contractor to use and utilize the other sub-standard products/tiles. 15 This Court (Coram:- Anoop V. Mohta and S.C. Gupte, JJ.) in Indian Oil Corporation Ltd. Vs. The acceptance of other equivalent quality tiles after awarding the contract, in the present case, would have affected the basic terms and conditions of the contract. This would definitely give leverage to the contractor to use and utilize the other sub-standard products/tiles. 15 This Court (Coram:- Anoop V. Mohta and S.C. Gupte, JJ.) in Indian Oil Corporation Ltd. Vs. Artson Engineering Ltd., Appeal (L) No. 31 of 2016, dated 14 March 2016 has already recorded the power and scope of Appellate Bench while deciding the Appeal. In paragraph No.17 it is observed that:- “17. The Apex Court in the case of M/s. Chebrolu Enterprises Vs. Andhra Pradesh Backward Class Cooperative Finance Corporation Ltd. reported in 2015(12) Scale 207 , recently reiterated and reinforced the principle that unless case of perversity and/or error on the face of the record and/or any issue of jurisdiction is raised which goes to the root of the matter and/or any Award and/or order is contrary to the agreed terms and conditions, no interference is called for by the learned Judge as well as the Appellate Court in the finding of facts. In para 20 of the Judgment, the Apex Court has observed thus: “20. ….This Court or even the Appellant Court would not look into the finding of facts unless they are perverse.” 16 Therefore, taking overall view of the matter and as there is no perversity. The learned Single Judge has passed the reasoned order referring to the clauses and conditions so referred above and interpreted the same correctly. Considering the total rival submissions, including the clauses and the provisions so read and referred, we see no reason to interfere with the order passed by the learned Single Judge. 17 Hence, the Appeal is dismissed. No costs.