CHANDA CABLES Vs. DAKSHIN HARYANA BIJLI VITRAN NIGAM

JUDGEMENT

(1.) The instant appeal has been filed seeking to challenge the order of the Addl. District Judge, Hisar dtd. 13/7/2016 dismissing the objection petition filed by the appellant under Sec. 34 of the Arbitration and Conciliation Act 1996 for setting aside the Arbitral award dtd. 18/2/2013.

(2.) The facts as alleged are that the respondent-Haryana State Electricity Board floated a tender enquiry No.-NIT 59 dtd. 29/8/2005, inviting tenders for supply of "LT PVC cable of various sizes". Pursuant to the said NIT, appellant deposited earnest money and submitted the tender with supporting documents. The bid was accepted and the appellant emerged as the lowest bidder on account of quoting the lowest prices for supply of goods i.e. 2Cx6, 2Cx10 sq. mtr LT PVC cable. As per Clause 10 of the notice of the NIT, the tender was to remain valid for 120 days from the date of opening and on account of the delay on part of the respondent in finalizing the contract, a letter dtd. 16/12/2005 was sent by respondent to the appellant seeking extension of the period of validity of the offer, which was agreed to by the appellant. The appellant herein agreed to extend the validity of its offer till 31/1/2006 as against the original validity period of 120 days, which was to lapse on 15/1/2006. The respondent issued a Letter of Intent dtd. 27/1/2006 and on receipt thereof, the appellant addressed a letter dtd. 3/2/2006 to the Chief Engineer-UHBVNL, expressing its inability to accept the Letter of Intent, which had been received after expiry of the validity of its offer and asked for refund of earnest money deposited by the appellant at the time of its offer. Despite the withdrawal of offer, a purchase order vide letter bearing reference No. DH-446/QH- 11/1793/XEN/MM-1 dtd. 26/4/2006 was issued and on receipt thereof, the appellant informed the respondent that the validity period of its offer had expired on 31/1/2006 and thus was unable to comply with the purchase order. Thereafter, the respondent while treating the Letter of Intent dtd. 27/1/2006 as a binding contract between the parties invoked "Risk Purchase Clause" and proceeded to invoke the arbitration clause as per the Notice Inviting Tenders. It instituted its claim before the arbitrator, seeking an award for a sum of Rs.7,51,820.00 along with interest @ 18% per annum from the date of purchase of cables from a third part till the date of payment.

(3.) The appellant submitted its detailed reply controverting all averments made in the claim by the respondent while submitting that no concluded contract had come into existence between the parties and as a consequence, the appellant firm was under no contractual obligation to supply the material as specified in the purchase order. It was submitted that the Letter of Intent did not constitute a valid contract between the parties.