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Bhushan Power & Steel Ltd. v/s Union Of India


Company & Directors' Information:- BHUSHAN POWER & STEEL LIMITED [Active] CIN = U27100DL1999PLC108350

Company & Directors' Information:- B P INDIA LIMITED [Amalgamated] CIN = U51209MH1978PLC020456

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- STEEL UNION PVT LTD [Active] CIN = U51420WB1940PTC010133

Company & Directors' Information:- S. G. POWER AND STEEL PRIVATE LIMITED [Active] CIN = U14290DL2012PTC240718

Company & Directors' Information:- R. S. STEEL AND POWER PRIVATE LIMITED [Active] CIN = U70100CT2009PTC021362

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- UNION STEEL (INDIA) PRIVATE LIMITED [Strike Off] CIN = U27107MH1995PTC094592

    FAO(OS) 324 OF 2011 & CM 12285 OF 2011

    Decided On, 25 August 2011

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE VIKRAMAJIT SEN & THE HONOURABLE MR. JUSTICE SIDDHARTH MRIDUL

    For the Appellant: Rajesh Banati, Arpit Bhargava, Advocates. For the Respondent: Jagjit Singh, Advocate.



Judgment Text

ORDER

1. The case has a chequered and convoluted chronicle. The Union of India (UOI), Ministry of Railways had claimed a sum of Rs. 17,63,096/- by way of damages for the alleged delay/non-supply of Two Way Keys. The Appellant had supplied 6,42,400 Two Way Keys which were duly accepted by the Respondent. Thereafter, it despatched the remainder to the Respondent who rejected the consignment on the ground that the attempted supply was beyond the contractual period. It appears that risk purchase was thereafter undertaken by the Respondent thereby leading to claim of Rs. 17,63,096/-. Disputes having arisen, the matter was referred to arbitration. The issues before the Arbitrator were not restricted only to the claim of UOI of Rs. 17,63,096/-, but also to the counter-claim raised by the Appellant for the sum of Rs. 6,40,000/-. So far as the counter-claim is concerned a specific Issue has been framed by the Arbitrator to the effect '(e) Whether the respondents are entitled to loss of profit, as claimed by them'. Ultimately, in the first arbitration a sum of Rs. 5,60,000/- was awarded in favour of the Respondent.

2. Within the statutory period, the Appellant filed Objections under Sections 30 and 33 of the Arbitration Act, 1940 contending, inter alia, that the learned Arbitrator had failed altogether to adjudicate their counter-claim. After hearing Counsel for the parties, the learned Single Judge passed a brief Order on 8th December, 2004, the operative part of which reads as follows: 'In view of the matter, objections filed by the objector are accepted. Award is hereby set aside and remitted back to the learned Arbitrator for deciding afresh in accordance with law.'

3. Mr. Jagjit Singh, learned Advocate for the Respondent has argued, and not without some substance, that the Order dated 8th December, 2004 facially sets aside the Award in totality. Since the learned Arbitrator had been mandated by the Court to decide the matter 'afresh', the only inference that could possibly be drawn was that, it was open to the second Arbitrator to reconsider the entire claim of the UOI viz. Rs. 17,63,096/-. If a semantic and pedantic approach is taken, no doubt, the Appeal would be liable for dismissal. We, however, find it difficult to lose sight of the fact that objections against the first Award had not been filed by the Respondent. It was not the stance of the Respondent that the first Award was erroneous inasmuch as it awarded only Rs. 5,60,000/- out of the total claim of Rs. 17,63,096/-. Our attention has been drawn to the Reply to the Objections filed on behalf of the Respondent, which is completely to the contrary and ends with the following prayer: 'Prayer Clause of the objection is wrong and denied. The award of the learned Arbitrator dated 1st Sept. 1993 is fully valid and may be made the rule of the Court and the objections of the objectors be dismissed with costs.'

4. Only one conclusion can be arrived by us and that is that so far as the Respondent Railways was concerned it was fully and finally satisfied with the sum of Rs. 5,60,000/- awarded in their favour towards the non-supply of the entire quantity of Two Way Keys.

5. The learned Single Judge has been largely influenced by the fact that the Appellant had not considered it necessary to approach the learned Single Judge seeking a Review or clarification of the orders dated 8th December, 2004, thereby receiving an appropriate Court observation to the effect that the second Arbitrator had been restricted to the fresh adjudication of only the counter-claim. We, however, are of the opinion that a finality had attached itself to the adjudication of the Respondent’s claim at the figure of Rs. 5,60,000/-. The grievance that was articulated before the learned Single Judge was of the Appellant before us. Firstly, it pertained to the quantum awarded in favour of the UOI. Secondly, the Objections articulated the Appellant grievance with regard to the failure of the adjudication of the counter-claim.

6. It is in these circumstances, that we are of the opinion that it was no longer open to the second Arbitrator appointed in the remitted arbitration proceedings to once again consider the full claim of Rs. 17,63,096/-. As we have already observed, finality had attached so far as the UOI’s claim is concerned at Rs. 5,60,000/ -. The holistic reading of the Order dated 8th December, 2004 leads to the conclusion that what the learned Single judge intended was a ‘fresh’ adjudication but on the question of counter-claim alone.

7. Learned Counsel for the Appellant has relied on four judgments which have been mentioned in the Order dated 8th December, 2004. However, we find that in those cases the Court had specifically indicated the contours of the claims which required to be considered. It is not of any assistance to the Appellant keeping in perspective the operative part of the Order dated 8th December, 2004. Be that as it may, since the Respon

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dent Railways were fully satisfied with the sum of Rs. 5,60,000/ - their claim stood settled. In the event, the learned second Arbitrator has rejected the counter-claim. To this extent the Appellant does not assail that finding. 8. For these reasons the impugned Order is set aside. The effect is that no further payments would be required to be made by the Appellant since the sum of Rs. 5,60,000/- has already been received by the Respondent. The Appeal is allowed but there shall be no order as to costs. Pending application also stands disposed of.
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