ALFA LAVEL INDIA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This application has been filed on behalf of Union of India under Sections 30 and 33 of the Arbitration Act for setting aside the Award dated 25.9.1992 on the grounds that the Arbitrator has misconducted himself and the proceedings and that he has committed an error of law which is apparent on the face of the Award. Brief facts of the case are that M/s.'the Contractor') had been awarded a tender on 26.11.1997 for the supply of 2856 Milk Aluminium Containers on the specifications detailed in the Acceptance of Tender. The Contractor failed to supply these Containers even for the extended delivery period and hence the contract was cancelled by the Union of India. The security amount furnished by the Contractor was forfeited and in addition thereto a claim for Rs. 2,12,446.40 was preferred on account of loss suffered. This amount is the difference between the rate at which the order had been placed on the Contractor and the rate at which risk purchase had been effected. It appears that after the cancellation of the Contract, a Risk Purchase Order had been placed on M/s. Delhi Brass & Metal Works, but this was also subsequently cancelled. After 2 1/2 years a second Risk Purchase Order was placed on the same Company i.e. M/s. Delhi Brass & Metal Works. The Contractor was not invited to participate in the second Risk Purchase. The learned Arbitrator had framed the following four issues:

(2.) On issue No. 1 the Arbitrator returned the finding that the Contract had not been illegally cancelled by the Union of India and that the security deposit had been rightly forfeited by it in the absence of due. performance of the contract by the Contractor.

(3.) On Issue No. 2 the Arbitrator held that the Risk Purchase was vitiated and was not in order since no notice had been given to the original contractor in the second Risk Purchase and that this had. been 'delayed for 2 1/2 years after the contract was cancelled.