EASTERN COALFIELDS LTD Vs. RUNGTA PROJECTS LTD

JUDGEMENT

(1.) The Award under challenge has been delivered by a learned Sole Arbitrator on 23rd February, 2008 allowing several of the claims made by the respondent herein in respect of a contract entered into between the petitioner and the respondent for transporting a substantial tonnage of coal from Chitra Colliery to Banjemahari Siding and loading the coal into wagons at the said siding.

(2.) The respondent contractor was the successful participant in a tender floated by the petitioner pursuant to which the respondent was to execute the work for a period of three years from 14th October 1989 to 14th October 199 Disputes arose between the parties soon after the respondent started the work and on 13th March 1990, five months after the commencement of the contract, the petitioner issued a letter of termination under Clause 23 of the tender conditions with immediate effect on the ground of "administrative reasons". Under Clause 23, the petitioner was inter-alia entitled to terminate the contract without any notice and with immediate effect for unsatisfactory performance or for breach of terms or for administrative reasons. The said clause also provided that the company's (the petitioner) decision in this matter would be final and binding on the contractor (respondent). In the termination notice, however, the only ground mentioned was "administrative reasons". In response to the termination letter, the respondent wrote two letters dated 6th April 1990 and 15th May 1990 requesting for refund of the earnest money of 1 lakh deposited by respondent with the petitioner. The respondent thereafter filed a suit in this Court on 11th June 1990 being Suit No. 460 of 1990 against the petitioner and Coal India Limited (proforma respondent herein) claiming a decree for a sum of Rs.16, 88, 72, 000 and for declaration that Clause 23 of the contract is null and void. After a considerable gap of several years, the respondent filed an application for referring the disputes to Arbitration in terms of the Arbitration Clause in the contract. In the Arbitration, which culminated in the impugned Award, the reliefs claimed by the respondent in the statement of claim was for an amount of Rs.20, 80, 97, 874/- to be paid by the petitioner to the respondent.

(3.) In the instant petition, the petitioner is aggrieved since the learned Arbitrator has come to various findings with regard to monetary entitlements of the respondent in view of the premature termination of the contract and has awarded a sum of Rs.2, 42, 24, 376/- inclusive of interest in favour of the respondent. The relevant issues framed in the arbitration and which have been urged in the instant proceedings, are set out below: