UNION OF INDIA Vs. APEEJAY PRIVATE LIMITED

JUDGEMENT

(1.) THIS appeal arises from the judgment and order of Sabyasachi Mukharji, J. dated May 9. 1977: (Reported in AIR 1977 NOC 263 (Cal) in an application for setting aside the award of the Arbitrator Sri S. K. Sen dated June 12, 1969.

(2.) THE matter arose out of a contract between the Union of India represented by the Iron & Steel Controller and the respondent (hereinafter called Apeejay) regarding supply of enamelled sheets, black plates etc. from the United States of America which was to be financed out of the Development Loan Fund placed at the disposal of the Government of India by the U. S. Government. One of the terms of the said contract was for security deposit to the extent of 5% of the contract value of the goods by Apeejay. Such security amount at the calculated rate amounted to a sum of Rs. 1,99,156. In terms of the said contract a guarantee bond was executed by Apeejay in favour of the Union of India in lieu of the said security amount through Punjab National Bank. In the absence of the Arbitrator's records which were not placed before us during the hearing of this appeal it is difficult to appreciate what was meant by the Arbitrator and by the learned Judge of the court below when they referred to the performance guarantee bond and what were the terms and conditions thereof. All that we have ascertained is that the guarantee bond could be enforced by forfeiture in case of breach of the said contract.

(3.) AFTER such extension Apeejay shipped certain quantity of goods but failed and neglected to ship 162 tonnes being the balance quantity of the said materials entailing forfeiture of the said security deposit on account of such breach.