J K CEMENT WORKS Vs. DELHI JAL BOARD

JUDGEMENT

(1.) These are objections by M/s J.K. Cement Works under Sections 30 and 33 of the Arbitration Act, 1940 ('1940 Act') challenging an Award dated 7 th April 2004 of the sole Arbitrator in the disputes between the Petitioner and the Respondent Delhi Jal Board (' DJB' ) arising out of an Agreement dated 31 st October 1990 whereunder the Petitioner was to supply the Respondent 40000 metric tonnes (' MT') of cement at a total cost of Rs. 6.84 crores. By the impugned Award dated 7 th April 2004 the Respondent DJB was awarded a sum of Rs. 66,51,390 together with pendente lite and post-Award interest at 10% per annum and the costs of Rs. 2,95,500.

(2.) Pursuant to the Agreement, a Work Order was issued by the DJB on 10 th October 1990. The Petitioner was to supply 8000 MT of cement every month. Till 8 th March 1991 only 5235 MT of cement was supplied and thereafter the supply stopped. Despite several letters, when no cement was supplied, DJB served a show cause notice dated 12 th March 1991 and required the Petitioner to pay it a sum of Rs. 68,40,000. Thereafter a decision was taken on 11 th April 1991 to rescind the contract. According to the DJB, it purchased the balance cement from other suppliers at the risk and cost of the Petitioner under Clause (3) of the Agreement dated 31 st October 1990.

(3.) There were eight items of claim preferred by DJB before the learned Arbitrator. Claim No. 1 was for a sum of Rs. 68,40,000 as compensation for breach of contract. Claim No. 2 was for a sum of Rs. 1,97,48,368 being the additional expenditure incurred in purchasing short full cement from other firms. Claim No. 3 was for Rs. 29,56,637.51 being the aggregate sums paid to various firms on account of escalation payable under the Agreement. Claim No. 4 was for interest at 18% p.a. pm the amount recoverable as damages for withholding payments. Claim No. 5 was for interest at 18% p.a. on the amount claimed under Claim No. 1 from 11 th August 1991. Claim No. 6 was for interest on the sums claimed under Claims 2 and 3. Claim No. 7 was for Rs. 17,69,804.16 towards charges @ 12% and Claim No. 8 was for arbitration expenses.