UNION OF INDIA Vs. TECHMA ENGINEERING ENTERPRISE

JUDGEMENT

(1.) The instant petition under section 34 of The Arbitration and Conciliation Act, 1996 (the Act) is against an Award dated 9th April 2012, directing that instead of the liquidated damages (LD) imposed on the respondent, token liquidated damages at the rate of 10% of the LD may be imposed by the petitioner on the respondent. The respondent was the claimant in the arbitration proceedings. The impugned Award was delivered on 9th April 2012 at Kolkata by the learned sole Arbitrator, who was the Chief Rolling Stock Engineer (Freight), South Eastern Railway, Garden Reach.

(2.) The claim of the respondent before the learned Arbitrator was for waiver of the imposed liquidated damages of Rs.34, 99, 498/-, being the quantified amount of financial hardship faced by the particular unit of the petitioner, for the delayed supply of materials by the respondent under the contract executed between the parties. The "token liquidated damages" was awarded at the rate of 10% of the liquidated damages under 0 (c) of Part V, Chapter II of the Indian Railways Tender Conditions of Contract. The learned Arbitrator quantified the token liquidated damages at Rs.3, 49, 949/- to be imposed on the respondent by the petitioner for the delayed supplies of joggled fish plates.

(3.) The petitioner in these proceedings has only argued on the point of imposition of LD and that the LD has been imposed under Clause 0702 of Indian Railway Service (IRS) Conditions of Contract and that the contract was governed by the IRS Conditions. The respondent, on the other hand, relies on Chapter II Part V of the Rules for Entering into Supply Contract which provides for "Levy of Liquidated Damages" and submits that the contract was governed by these Rules.