ESSEN SYNTHETICS (P) LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS order will dispose of objections filed by the respondent Union of India under Sections 30 and 33 of the Arbitration Act, 1940 (in short the Act) challenging the award dated 14.2.1990 made and published by the sole arbitrator Mr. R.K. Gupta, defendant no. 2. The relevant facts are that the plaintiff submitted an application under Section 14/17 of the Act for a direction to defendant no. 2 to file the award dated 14.2.1990 and with the prayer that the award be made rule of the court and a decree be passed in terms of the award allowing 18% interest p.a. from the date of the award till the date of its realisation of the awarded amount.

(2.) AFTER the award dated 14.2.1990 was filed and taken on record, the requisite notice were issued to the parties. Only the defendant Union of India submitted objections against it purported to be in accordance with under Section 30 and 33 of the Act.

(3.) CONTESTING these objections the plaintiff in the counter affidavit raised preliminary objections that the objections are not maintainable, they are baseless, unambiguous and not specific. They were even not raised at the time of the reference or during the proceeding; the objections are malicious and no specific charge or misconduct has been level led against the arbitrator; the dispute cannot be referred under Section 33 of the Act as the award is given on merit. On merit it was contended that the objector has not made any specific charge of misconduct with positive evidence against the arbitrator, so the objections are not covered by Section 30 of the Act and is not sustainable in law; the award is passed on merit on the basis of the materials and the evidence on record and that it is a reasoned and speaking award; the arbitrator has given reasons for awarding the liquidated damages and further that the claim of the objector for Rs. 81,553.75 was not calculated on any sound principles of accounting and as per the terms and conditions of the agreement whereas the arbitrator awarded the amount of Rs. 50,000/ - as liquidated damages on sound principles and also that the said amount was to be given to the objector for default in supply of 1262 bottles; the objector want to withhold the legitimate dues of the plaintiff to the tune of Rs. 5,85,341.41 which was 5% of the total amount of the value of the goods supplied and that this amount in terms of the agreement was to be paid immediately after the completion of the supply of the material under contract and that the supply had already been completed long back and, therefore, the arbitrator has correctly directed the release of that amount; the rate of interest of 12% is at reasonable rate and is payable by the party as per the terms and conditions of the agreement; payment of excise duty is the liability of the purchaser i.e. the objector and the amount received from the objector had already been deposited with the Excise Department to the tune of Rs. 10,06,219.72; and further that the material supplied was not liable to the levy of excise duty, so refund thereof was claimed and on rejection of that claim the challenge was taken to the higher authorities and the appeal is pending before the Supreme Court. The petitioner was agitating this matter for the benefit of the objector and in case the excise duty is decided to be refunded, the plaintiff would not claim it and it would be the objector who would be benefited from it; the deposit of excise duty has nothing to do with 5% of the balance amount payable by the defendant to the plaintiff, which the plaintiff is entitled to receive, and the arbitrator has rightly awarded it to the plaintiff. It was prayed that the objections have no merits and should be dismissed.