KAMRUP INDUSTRIAL GASES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) An agreement dated 21.04.1965 was executed between the appellant-Kamrup Industrial Gases Ltd., and the respondent-Diesel Locomotive Works, Varanasi, for setting up a plant for manufacture of Oxygen gas and Acetylene gas, at the site of the Diesel Locomotive Works, at Varanasi. It is not a matter of dispute, that the aforesaid contract required the Diesel Locomotive Works, to lift a minimum of 18,000 cubic meters of Oxygen gas, and 2,500 cubic meters of Acetylene gas, per month. The obligation being, that even if the minimum quantity of the gases was not lifted, payment for the minimum postulated quantity, would have to be made, by Diesel Locomotive Works. The contractual agreement also envisaged, that in case Diesel Locomotive Works could not lift the aforesaid minimum postulated quantity, Kamrup Industrial Gases Ltd., would assist it for the disposal of the balance, which could not be lifted. However, if the appellant remained unsuccessful in the sale of the deficit amount of gas, Kamrup Industrial Gases Ltd., would have the liberty to empty their cylinders on buyer's account, namely, the appellant- Kamrup Industrial Gases Ltd., would blow off the unutilized balance, and recover the proceeds thereof, from Diesel Locomotive Works.

(2.) The appellant before this Court, raised an arbitral dispute, claiming payment/consideration, on account of non-lifting of the minimum quantum of gases, by Diesel Locomotive Works. By an order dated 13.08.1976, the Calcutta High Court appointed an arbitrator, in the matter. Various orders were passed by the Calcutta High Court thereafter, appointing different arbitrators. Eventually Shri D.P. Mukherji, was appointed (by the High Court, vide its order dated 209.1988) as the sole arbitrator, to adjudicate upon the dispute raised by the appellant-Kamrup Industrial Gases Ltd. The arbitral proceedings continued from 1982 to 2004. The arbitral award was finally rendered on 18.04.2004. The operative part of the arbitral award is extracted hereunder :

(3.) The Diesel Locomotive Works being dissatisfied with the award, approached the Calcutta High Court (hereinafter referred to as the High Court), under Sections 30 and 33 of the Arbitration Act, 1940. By an order, dated 19.04.2005, a learned Single Judge of the High Court, upheld the award, dated 18.04.2004.