M S T C LIMITED Vs. JAIN TRADERS

JUDGEMENT

(1.) The present petitions, filed under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) assail the award dated 8 th January, 2008 passed by the learned Sole Arbitrator Shri H.C. Gupta. O.M.P. No. 108/2008 has been filed by MSTC Ltd., whose services were engaged by U.P. Rajya Vidyut Utpadan Nigam Ltd. - the owner of the scrap, to sell the same. O.M.P. No. 363/2008 has been preferred by U.P. Rajya Vidyut Utpadan Nigam Ltd. Both these petitioners were party respondents in the arbitral proceedings. By the impugned award, the ld. Arbitrator has partially allowed the claim of the respondent to the tune of Rs.4,40,408/- and has granted pendente lite interest @ 12% per annum from 10 th March, 2006 till the date of the award and also future interest @ 12% per annum till the payment.

(2.) The petitioner MSTC Ltd. (hereinafter MSTC) had floated tender No. MSTC(D)/T-547/UPRVUNL/03-04 on behalf of U.P. Rajya Vidyut Utpadan Nigam Ltd. The lot of the scrap which was the subject matter of the tender was detailed in the tender as 125 MVA transformer HT/LT damaged coil set, 11/242 KV copper wound, Gross weight of each set of coil 13.5 tons (tentative) including insulation . The lot was to be sold on as is where is basis. The tender was to open on 19 th March, 2004 and inspection was allowed from 04.03.2004 to 18.03 2004. The tenderers were required to submit a certificate along with their bid, declaring that the materials have been inspected and they are satisfied with the materials condition.

(3.) The respondent, in response to the tender, submitted its bid and was declared the highest and successful bidder. In terms of the tender, respondent deposited the first installment and pursuant to that they collected the first coil from Aligarh on 19 th August, 2004. The respondent thereafter raised a dispute about the weight of the coil, by claiming that the weight of the coil was 9.46 tonnes, as opposed to 13.5 tonnes stated in the tender. The respondent requested the petitioner to reduce the price of the coil which had been delivered and also to ensure that remaining coils were of the tentative weight. As the petitioners did not agree with the respondent, the respondent invoked the arbitration clause on 02.03.2005. Since the appointing authority failed to appoint the Arbitrator, respondent moved this court under Section 11 of the Act and same was allowed on 10.03.2006 with the appointment of the Arbitrator.