NAWAB CONSULTANTS FOR IDEAS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner has filed this petition under Section 34 of the Arbitration and conciliation Act, 1996 ("the Act" for short) assailing an award dated 25th february 2009 whereby the claim of the petitioner was rejected by the learned arbitrator.

(2.) BRIEF facts relevant for the purpose of deciding this petition are that the petitioner's tender for revolving chairs for a sum of Rs. 73,86,277/- was accepted. The petitioner had deposited earnest money of Rs. 1,92,313/- along with tender. As per the terms and conditions of the tender, the petitioner was to give performance bank guarantee within 15 days of acceptance of his tender. The tender was accepted on 28th April 2006 and a letter was written to the petitioner to submit performance bank guarantee for a sum of Rs. 3,69,314/- as per the terms and conditions of the contract within 15 days from the date of issue of letter. Thus, the performance bank guarantee was to be given by 13th May 2006. The time for giving performance bank guarantee was extendable by seven days. The petitioner sought extension and it was extended up to 20th may 2006. However, the petitioner failed to give performance bank guarantee even by extended period. The respondent, therefore forfeited the earnest money vide letter dated 25 th May 2006. After forfeiture of the earnest, the petitioner raised a dispute and the same was referred to the arbitrator. The learned arbitrator after noting the facts as stated above and noting that the petitioner had failed to give performance bank guarantee within the stipulated period dismissed the claims of the petitioner including the claim for refund of earnest money.

(3.) IT is argued by learned counsel for the petitioner and it is so stated in the objections as well that learned arbitrator did not address the right issue. According to him, the issue in this case was whether the petitioner was to supply the Godrej chairs or other equivalent chairs. Counsel for the petitioner contended that the tender provided either Godrej make chairs or equivalent chair. The petitioner submitted a sample chair after his tender was approved. This sample was to be cleared by respondent. Unless the sample was not cleared by the respondent, the petitioner could not have given the performance bank guarantee. It is also submitted that though the petitioner had got the performance bank guarantee ready but the same was not submitted because the sample was not cleared and, therefore, the petitioner was not bound to give performance bank guarantee.