UNION OF INDIA Vs. INDIA MATALS

JUDGEMENT

(1.) These are the objections filed by the petitioner under Sections 30 and 33 of the Arbitration Act, 1940, against the Award of the Sole Arbitrator dated 25.2.1993. Vide a purchase order No. 211-S/634/TSO/India Metals dated 31.7.1987, the respondent undertook to supply 6.5 lacs numbers of sleeper screws for HM fastening to RDSO drawing No. T 3001/Alt. Nil and confirming to I.R.S Specification No. IRST-16 to the petitioner. The requisite supplies were not made for various reasons and it is alleged that the petitioner-Union of India terminated the Contract and has made Risk Purchase of Screws and on that account suffered loss of Rs. 11,71,025/- which the respondent was liable to reimburse to the petitioner in accordance with the terms and conditions of the contract and the Risk Purchase Order. Respondent denied its liability and therefore, the dispute arose between the parties which were referred to the Sole Arbitration of Shri V. K. Kaul, Additional Divisional Railway Manager II Northern Railway, New Delhi, who entered into the reference and made and published his Award dated 25.2.1993 thereby rejecting the claim of the petitioner to the above amount and directed the petitioner-Union of India to refund of amounts withheld on account of their alleged claim arising of the Risk Purchase of the material.

(2.) Award and arbitral proceedings having being filed in the Court by the Arbitrator, parties were noticed. Pursuant to the same the Union of India has filed an application/objections under Section 30 of the Arbitration Act, 1940 (hereinafter referred to as the "Act") challenging the Award of the Sole Arbitrator and praying for its setting aside inter alia on the grounds that the Arbitrator has wrongly held that there was alteration in the drawing in respect of which material was supplied by the respondent and the alteration in all was very minute and the respondent has agreed to supply the material as per new drawings as was clear from certain correspondence exchanged between the parties; the Arbitrator has wrongly unfastened the liability on the claimant/ objector by misconstruing and misreading the letter dated 24.8.1990; the Arbitrator has wrongly rejected the claim of the objector on the ground that Risk Purchase was not proper and the same was not in accordance with the terms and conditions of the Contract and, therefore, the Award is bad in law and on facts and cannot be sustained.

(3.) The respondent has opposed the application/objection and has filed a reply raising preliminary objections in regard to the maintainability of the present petition on the ground that there is no error apparent on the face of the Award on the basis of which the Award can be set aside by this Court. It is denied that there are any grounds much less sufficient grounds for setting aside the Award of the Sole Arbitrator. Various grounds taken up by the petitioner for setting aside the Award are also denied. In the rejoinder, the petitioner has reiterated its stand as taken up in the petition.