UNION OF INDIA Vs. JAIN STEEL INDUSTRIES

JUDGEMENT

(1.) THIS first appeal is filed under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act') impugning the judgment of the court below dated 30.4.2013 by which the objections filed by the appellant/claimant under Section 34 of the Act against the Award dated 28.9.2010 have been dismissed. By the Award dated 28.9.2010, the claims of the appellant/purchaser/Railways were dismissed on account of the claim of enhanced quantities of + 30% was raised in violation of the circular of the appellant dated 13.4.2006.

(2.) THE facts of the case are that the appellant placed a purchase order dated 19.2.2003 upon the respondent for supply of 2420 MT of item no.1 ISBH and 1760 MT of item no.2 ISBH. These items are steel items which are manufactured by the respondents and are used by the Railways. The original quantity of item no.1 was increased from 2420 MT to 2840 MT and of item no.2 from 1760 MT to 2060 MT vide first amendment issued by the appellant dated 3.4.2003. By the amendment dated 3.4.2003 besides increasing the quantity the delivery period was also extended upto 30.11.2003. Respondent completed the supply of enhanced quantities within the extended delivery period. At this stage, the appellant once again as per the additional clause entitling increase of the quantity to be supplied + 30%, increased the quantity of item no.1 to 3692 MT and to 2288 MT for item no.2. This second amendment was brought about by the amendment letter M.A dated 6.11.2003 and delivery period was re -fixed upto 29.2.2004. Since the increased quantity ordered vide M.A dated 6.11.2003 exceeded the prescribed contractual limit of + 30% for item no.1, the respondent protested by means of its letter dated 20.11.2003. The appellant/purchaser/Railways thereafter reduced the quantity upto 30% limit vide M.A dated 6.5.2004. The respondents however did not agree to comply with the amended purchase order resulting into arising of disputes and consequently the initiation of arbitration proceedings resulting in the impugned Award dated 28.9.2010.

(3.) THE issue in the present case in the arbitration proceedings, as also in the objections under Section 34 (including the present appeal) is as to whether the amendments issued by the appellant dated 6.11.2003 and 6.5.2004 are or are not legally and contractually justified.