BHARAT SANCHAR NIGAM LTD. Vs. BWL LTD.

JUDGEMENT

(1.) Valmiki J. Mehta, J. - The present appeal arises out of the impugned judgment dated 8.5.2006 of a learned Single Judge of this Court passed in OMP 88/2005 filed under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as the Act) by the appellant objecting to the Award dated 21.10.04 of the Arbitrator. By the Award the Arbitrator in a claim petition filed by the respondent was pleased to award the following amounts to the respondent/claimant :

(2.) The disputes between the parties arose out of a contract for the supply of optical fibre cables entered into between the appellant as the buyer and the respondent as the seller. The value of the contract was Rs. 5,66,61,562.00. The respondent gave a performance security in the form of a bank guarantee of Rs. 23,14,000.00. The contract was terminated by the appellant on account of the failure and breach of the respondent in failing to supply the contracted material by the due date. The original purchase order is dated 16.9.1999 and the supply was to be completed within seven months from this purchase order viz. by 15.4.2000. An extension was granted to the respondent at its request whereby the last date of supply was extended to 28.6.2000. The extension was however subject to liquidated damages (hereafter "LD") and that the respondent would be only entitled to 75% of the price on delivery instead of 95% as was originally contracted. The extension which was granted on 27.4.2000 for delivery by 28.6.2000 specifically stated that the extension granted is the last extension. One of the terms of the contract was that the respondent was responsible for obtaining a Type Approval from Tele-communications Engineering Centre (hereafter "TEC") with respect to the cables. This Type Approval under the contract was to be obtained by the respondent from TEC, the designated body under the contract, within three months of the original purchase order dated 16.9.1999 i.e. by 16.12.1999. The respondent in fact did not get the Type Approval by 16.12.1999 and in fact applied only on 15.12.1999, the last day by which Type Approval was to be obtained. The cables under the contract were to be supplied with certain accessories and which were to be procured by the respondent from the Department of Tele-communications (hereafter "DOT") approved small scale industries manufacturers. The first extension was applied for by the respondent on 28.3.2000 and which was granted for supply by 28.6.2000, as already stated above. On 7/8.7.2000 the respondent further requested the appellant to extend the delivery period upto Oct., 2000. This letter seeking extension is after expiry of the extended period, and, which had expired on 28.6.2000. Extension was sought on the ground that Type Approval had not come from the TEC. On 21.7.2000 TEC asked the respondents to deposit a sum of Rs. 65,000.00 as the testing fees and for issuing of the Type Approval and which fees were deposited by the respondent. The appellant on 24.7.2000 terminated the contract on account of the failure of the respondent to supply the cables by the extended date of 28.6.2000. The appellant also enchased the bank guarantee given as performance security for the sum of Rs. 23,14,000.00. It is relevant to note that the accessories portion to be supplied with the cables was deleted by the appellant vide its letter dated 27.4.2000 i.e. at the time of grant of the extension itself.

(3.) Disputes having arisen between the parties, the same were referred to an Arbitrator who was appointed by an order passed in a petition moved in this Court for appointment of an Arbitrator under the Act. After completion of the pleadings the following issues were framed by the Arbitrator :