LAXMI PAT SURANA Vs. VOLTAS LTD

JUDGEMENT

(1.) This is an application for setting aside of an Award dated 28th March 2017 passed by a learned sole arbitrator. The petitioner who seeks to have the Award set aside was the respondent in the arbitration proceedings. By the said Award, the learned arbitrator held that the claimant before him (who is the respondent before me) is entitled to an Award of Rs. 22,31,530.60 and entitled to claim interest at the rate of 6% per annum from 19th November 2008 until realisation of its dues. By the said Award, the counter claim filed by the respondent was dismissed.

(2.) The facts leading to the arbitral Award impugned in the present proceedings are as follows. Under a contract dated 7th April, 2007, the petitioner placed a work order for design, engineering testing etc. at the manufacturer's works and commissioning as well as performance test of water cooled type central air conditioning system for Puja Complex at Kharagpur. The respondent, Voltas Ltd, accepted the work order by its letter dated 20 April, 2007 confirming the value of the project at Rs.1,24,23,086/- subject to tax duties/levies imposed by the State/Central government. According to the petitioner Mr. Surana, the entire work was to be completed within 30thJune, 2007 and the fact of completion was acknowledged by the petitioner including satisfactory completion thereof which would appear from a handing over certificate dated 21st August, 2008. The respondent Voltas complained before the arbitrator that after having supplied goods and services, the petitioner failed to make payment of bills amounting to Rs. 22,31,532.60/-. The respondent's case before the Arbitrator was that despite repeated demands, the petitioner did not pay. The respondent claimed interest at 24% per annum for delay in making payment and the total dues claimed by the respondent before the Learned Arbitrator was Rs.44,58,907/-. The respondent contended that the petitioner had failed and neglected to pay the respondent's legitimate dues for the work completed without any bona fide reason. The petitioner filed a counter statement (and counter claim) before the Arbitrator claiming an Award for a sum of Rs. 4,32,81,469.20/- under various heads including for liquidated damages. The impugned Award records that in the 22nd sitting, the petitioner withdrew five of the initial seven claims after which the counter claim became restricted to Rs.6,21,154.30/- on account of liquidated damages for belated execution of the work and Rs. 65,000/- for cost of electricity supplied to the respondent for 65 weeks. The petitioner further complained that the respondent had not done the performance test despite several reminders sent on 5th September 2008, 6 January 2009, 16 June 2009, 28th of June 2010 and 11th of August 2010.

(3.) According to the petitioner (respondent before the Learned Arbitrator), the bills were not processed and not paid due to breach on the part of the respondent (claimant in the arbitration proceedings) in not performing the performance tests which compelled the petitioner to withhold 10% of the contract price amounting to Rs.12,42,308/-. The petitioner stated that the commissioning of the plant was delayed by 13 months resulting in the petitioner suffering losses as commercial operations in the shopping mall could not be started without the Air Conditioning Plant being in place.