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2009(6) Supreme 629
SUPREME COURT OF INDIA
R.M. Lodha, J.
Steel Authority of India Ltd. —Appellant
Versus
Gupta Brother Steel Tubes Ltd. —Respondent
Civil Appeal No. 5241 of 2002
Decided on 09-09-2009
Facts of the Case :
Steel Authority of India Ltd. (SAIL) has preferred present appeal by special leave aggrieved by judgment of High Court whereby Single Judge dismissed Revision Petition preferred by the present appellant against the judgment passed by District Judge, Chandigarh affirming the judgment and order passed by Court of Sub – Judge, 1st Class, Chandigarh dismissing objections preferred by the present appellant under Sections 30/33 of the Indian Arbitration Act, 1940 and the award given by the sole arbitrator was made rule of the Court.
Findings of the Court :
Careful consideration of clause 7.2 of contact showed that it did not prescribe compensation for every type of breach.Claim of damages by the respondent for the breaches of contract by SAIL WAs essentially distinct from the breaches contemplated by Clause 7.2.In this back-drop, if High Court observed that Clause 7.2 as not panacea of all ills, it could not be said that High Court fell into an error.Again, view of arbitrator that breach due to refusal on part of SAIL to supply materials in July –September, 1988 quarter did not fall within the ambit of relevant terms contained in compensation Clause (7.2), by no stretch of imagination could be said to be an absurd view.The view of arbitrator being possible view on construction of Clause 7.2, and having not been found absurd or perverse or unreasonable by any of three Courts, namely , Sub-Judge, District Judge and High Court, no case for interference was made out in exercise of jurisdiction under Article 136 of Constitution. Once the arbitrator had construed clause 7.2 in a particular manner, and such construction was not absurd and appeared to be plausible, it was not open to courts to interfere with award of arbitrator. Courts below concurrently held that arbitrator had gone into the issues of facts thoroughly, applied his mind to the pleadings, evidence before him and the terms of the contract and then passed duly considered award and no ground for setting aside the award within the four corners of Section 30 had been made out.Hence held that there was no justifiable reason to take a different view. Appeal having no merit was dismissed
Result : Appeal dismissed
JUDGEMENT
R.M. Lodha, J.
1. Steel Authority of India Ltd. (SAIL) has preferred this appeal by special leave aggrieved by the judgment of High Court of Punjab and Haryana passed on May 15, 2001 whereby the learned Single Judge dismissed Revision Petition preferred by the present appellant against the judgment dated September 1,1999 passed by District Judge, Chandigarh affirming the judgment and order dated May 9, 1994 passed by the Court of Sub-Judge, 1st Class, Chandigarh dismissing the objections preferred by the present appellant under Sections 30/33 of the Indian Arbitration Act, 1940 and the award dated September 7, 1993 given by the sole arbitrator was made rule of the Court.
2. Brief narration of facts is necessary before we embark upon the contentions aised on behalf of the appellant. On April 18, 1988, SAIL formulated a scheme entitled “Full Requirement Supply Scheme” (for short, `the Scheme’). The said scheme is said to have been designed for meeting the full requirements of HR Coils/Skolps to the customers. Those who wanted to avail the said material as per the scheme were required to register the requirements with SAIL. The scheme further stipulated that those who wanted material over and above what was likely to be available from indigenous sources and were willing to accept imported HR Coils were required to register the requirements separately. The scheme was in operation in respect of two quarters, namely, (i) July to September, 1988 and (ii) October to December, 1988.
3. The case of the respondent is that pursuant to the terms of said scheme, they submitted an application for 1500 metric tones of imported material for the first quarter(July to September, 1988). It is also their case that they furnished the financial cover in terms of the said scheme.
4. On September 15, 1988, SAIL informed their inability to arrange for the import against the indent for reasons beyond its control.
5. The respondent, thereafter, indented for supply of 1500 metric tonnes of imported material for the second quarter (October to December, 1988). The indent was accepted by SAIL. The respondent furnished securities in terms of bank guarantee in lieu of irrevocable letter of credit and took physical delivery of the goods on March 7, 1989 and made payment for the same on February 15, 1989.
6. It appears that dispute/differences arose between the parties and the respondent lodged its claim to the appointing authority on March 11, 1989. Initially, one Shri K. Janardhana was appointed as Arbitrator but he resigned later on and in his place Shri K.P. Bhaumik was appointed arbitrator.
7. It may be noticed here that an application was made by the respondent before the arbitrator on September 12, 1991 for quantification of claims under the heads ‘A’, ‘AA’ and ‘AAA’ and thereby they made a total claim of Rs. 1,75,41,359/- alongwith interest @ 21 per cent against SAIL before the arbitrator.
8. The claimant - respondent in support of its claim produced oral as well as documentary evidence. In opposition, SAIL also produced oral as well as documentary evidence before the arbitrator.
9. The arbitrator seems to have had fifty sittings and after hearing the parties and taking into consideration the documentary as well as oral evidence passed an award on September 7, 1993. The award runs into almost 290 foolscap pages.
10. The objections to the award were filed by SAIL before Sub-Judge, Ist Class, Chandigarh raising diverse grounds, inter alia; that the arbitrator was biased in favour of the claimant; that he committed a jurisdictional error in adjudication of claims for the period from July to September, 1988 and granting claim in this regard when there was no pre-existing dispute; that the arbitrator entertained claim in respect of future disputes i.e. disputes not existing at the time of reference; that he went into constitutional questions such as discrimination, etc. which he had no jurisdiction to decide; that he ignored the terms of contrac
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