AROSAN ENTERPRISES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) These two appeals by the grant of Special Leave and arising out of the judgment of the Delhi High Court focus two singularly singular questions pertaining to (i) the time being the essence of the contract and (ii) authority of the High Court in the matter of interference with an Arbitral Award under the Repealed Act of 1940 (The Arbitration Act, 1940).

(2.) For effectual disposal of these two questions, noticed above, reference to certain factual details in this judgment is inevitable and adverting thereto it appears that on October 4, 1989 Union of India floated an invitation to tender for purchase of sugar to meet the urgent requirement of anticipated scarcity in the Indian market during the Dussehra and Diwali festivals in November, 1989 which however, and without much of a factual narration, culminated in an Agreement dated 24th/25th October, 1989 with M/s. Arosan Enterprises, being the appellants herein for the supply of 58000 metric tonnes of sugar. The Contract as above inter alia contained the following terms:

(3.) The factual score further depicts that on 24th October, 1989, itself the appellant did furnish a performance bank guarantee for $ 29,28,000 and upon bank guarantee being furnished, the Government of India assigned the contract to the Food Corporation of India (FCI) under clause 20 of the Agreement. FCI also in its turn opened a Letter of Credit for the full value of the contract though, however, as the records depict that while on 26th October, 1989, the Letter of Credit was opened by FCI but its authentication was not effected within the delivery date i.e. 31st October, 1989.