UNION OF INDIA Vs. ALFA LAVAL INDIA LTD

JUDGEMENT

(1.) This appeal under Section 39 of the Indian Arbitration Act, 1940 has been filed by the Union of India against the judgment of the learned Single Judge dated 16.11.1999. Vide impugned judgment, the learned Single Judge has dismissed the objections under Section 30 and 33 of the Arbitration Act filed by the appellant against the arbitral award.

(2.) The facts of the case are that on 26.11.1977, the appellant had awarded a contract to the respondent for supply of 2856 containers Milk aluminum at Rs.189/- per piece plus excise duty and sales tax. The supply was to be made as per specifications mentioned in the contract. It is stated that the respondent failed to supply the goods within the time stipulated in the contract. The supply was not made even though time for delivery was extended by the appellant. Because of non-supply of goods by the respondent, the appellant resorted to risk purchase of the goods in question which it had to purchase at Rs.250/- per piece of Milk container. This risk purchase was made after about 2? years of the cancellation of the contract cancelled on 29.08.1979. Besides cancellation of the contract, the appellant also forfeited the security of the respondent amounting to Rs.26,989/-. The appellant is alleged to had suffered damages to the tune of Rs.2,12,446.40 being the difference between the contract price and the price at which risk purchase was made. The appellant demanded this amount from the respondent and as the respondent failed to satisfy the demand, the appellant withheld the amount of Rs.2,12,446.40 from the payment that was due to the respondent under the earlier contract. In view of the same, disputes and differences arose between the parties which were referred for decision to Shri Ram Bahadur, Sole Arbitrator. In order to decide the disputes between the parties, the arbitrator had framed the following issues:- i)Whether contract has been illegally cancelled by the UOI? ii)Whether R/P is in order? iii)Whether Claimants (UOI) are entitled to any damage whatsoever? iv)Whether respondents are entitled to the claimed amount by way of counter claim?

(3.) After hearing the parties, the learned arbitrator returned his finding on issue No.1 in favour of the appellant holding that the contract in question was validly terminated by the U.O.I. Finding on this issue are not in dispute in this appeal. On issues No.2 and 3, arbitrator returned the finding that the risk purchase was made by the appellant after 2? years of cancellation of the contract and for that reason the appellant is not entitled for any damages on account of alleged risk purchase made by it. The learned arbitrator has further held that the appellant has failed to lead any evidence to substantiate its claim for damages allegedly suffered on account of risk purchase. The findings of the learned arbitrator on these two issues i.e. issues No.2 and 3 were assailed by the appellant by filing objections under Sections 30 and 33 of the old Arbitration Act. These objections did not find favour with the learned Single Judge and aggrieved by the same the appellant has filed this appeal.