UNION OF INDIA Vs. TRIBHUWAN DAS LALJI PATEL

JUDGEMENT

(1.) This appeal is directed against the order of Shri N. C. Gupta, Sub Judge Ist Class, Delhi whereby the objections filed by M/s. Tribhuwan Das Lalji Patel to an award made by Shri Ram Labhaya were accepted and the award was not made a rule of the Court.

(2.) The facts leading up to the award were that a contract for the supply of Indian Teak Sleepers of specified sizes at a specified rate was entered into between the Union of India and M/s. Tribhuwan Das Lalji Patel of Bhavnagar. The contracted goods had to be supplied to the Union of India on monthly basis from June, 1952 onwards and the total quantity was to be supplied by 31st December 1952. The contract entered into by the Union of India was subject to its Supply Department's general conditions of contract contained in a printed booklet known as form W.S.B. 133. These general conditions, inter alia, contained an arbitration clause under which in case of a dispute between the parties and differences arising between them the same were to be referred to the arbitration of two arbitrators, one to be appointed by each of the contracting parties and in case of disagreement to an umpire for his adjudication. Disputes did arise between the parties as to the claim of damages of Union of India arising out of the alleged non-supply of the contracted goods buy the other party. The arbitrators did not agree among themselves and so the matter was referred to Shri Ram Labhaya, Umpire, who made his award on 21st November, 1960. By this award the Government's claim for damages were upheld to the extent of Rs.18,320/-. On the award being filed in Court the Contractor filed objections against it and contended that the award is liable to be set aside as it suffered from an error a parent on the face of it. The trial Court agreeing with the contention set aside the award and dismissed the application of Union of India for making the award a rule of the Court. Aggrieved, the Union of India has preferred this appeal.

(3.) Mr. Brijbans Kishore, the learned counsel for the appellant, has urged that on a reading of Clause 11 (3) of the conditions of contract it would be clear that irrespective of whether the Government suffered any loss or not on account of the contractor's failure to supply the contracted goods, the Government was entitled to damages. He further contended that the award was justified in terms of illustration (a) under Section 73 of the Contract Act. The learned counsel for respondent, on the other hand, contended that when admittedly the Government suffered no loss or damage, the umpire could not award damages as damages can only be awarded provided there is a loss.