DELHI DEVELOPMENT AUTHORITY (DDA) Vs. JAIN ROLLING MILLS

JUDGEMENT

(1.) This petition under Sec. 34 of the Arbitration Act, 1996 has been preferred with respect to the arbitral award dated 27th March, 2002. The counsels for the parties made their respective submissions on the basis that the arbitration proceedings were governed by the 1996 Act. However, at the time of preparing the judgment, it is found that the arbitration proceedings in the present case had commenced in the year 1985. Under the provisions of Sec. 85(2)(a) of the 1996 Act, the arbitral proceedings having commenced before the 1996 Act came into force, are to be governed by the Arbitration Act, 1940 as held by the Supreme Court in Milkfood Ltd. Vs. GMC Ice Cream (P) Ltd 2004(7) SCC 288 : 2004(1) Arb. LER 613(SC) . The 1996 Act could have applied only if there had been an agreement to the same effect between the parties. Neither is it stated in the petition under Sec. 34 of the Act nor was it urged nor do I have been able to find any agreement of the parties as to the application of the 1996 Act. The petition under Sec. 34 of the 1996 Act is as such found to be misconceived. The procedure under the 1940 Act with respect to the challenge to the arbitration award being entirely different, this petition preferred under the 1996 Act cannot be treated as one under the 1940 Act objecting to the arbitration award. However, the matter having remained pending for the last nearly 8 years and the counsels having been heard, it is deemed expedient to proceed with the matter as if under the 1996 Act. I may notice that the respondent also in reply to the petition under Sec. 34 of the Act has contended that the petition does not disclose any of the grounds for setting aside of the award under Sec. 34 of the Act and has not contended that the petition is misconceived.

(2.) The petitioner/DDA had invited tenders for supply of 10000 M.T. of steel bars. The order for supply of the said quantity was placed on the respondent on 18th Dec., 1982. The entire supply of 10000 M.T. was to be made within four months of 20th Dec., 1982. The supplies were not completed within the said time. The petitioner extended the time for completing supplies, initially upto 30th June, 1983 and subsequently upto 30th Sept., 1983. The respondent however continued to make supplies. The last supply was made on 9th May, 1984 and the respondent then informed the petitioner that it was unable to make further supply. The petitioner rescinded the contract vide its letter dated 23rd Oct., 1984 and thereafter made risk purchase of the balance quantities and vide letter dated 26th April, 1985 imposed liquidated damages in the sum of Rs. 23,17,820.00 on the respondent.

(3.) The petitioner, before the arbitrator, made a claim on the respondent for (i) Rs. 60,93,272.90p towards loss for non supply of balance 3512 M.T. of steel bars and (ii) for liquidated damages of Rs. 23,17,820.00 (supra), besides for interest. The respondent also made a counter claim for damages for breach of contract and for refund of security deposit and for illegal deductions from the bills for the supplies made. The arbitrator has dismissed all the claims of the petitioner as well as the counter claim of the respondent for damages. However, the counter claim of the respondent for refund of security deposit of Rs. 1,00,000.00 and for illegal deductions of Rs. 15,798.00 has been allowed. Interest at the rate of 12% from 12th Aug., 1987 to the date of the award and further interest at the rate of 12% from 1st July, 2002 to the date of payment has also been awarded on the counter claims allowed. The respondent is not informed to have taken any proceeding for making of the award rule of the court nor filed objections to the award.