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2012 Supreme(Bom) 2332
High Court of Judicature at Bombay
ANOOP V. MOHTA, J.
Bharat Lakhotya
Versus
Bharat Sanchar Nigam Ltd.
Arbitration Petition No. 59 of 2012
Decided on : 14-12-2012
For the Petitioner:A.L.N. Khatri, Advocate.
For the Respondent:Ms. Martina Sapkal i/by M/s. Arun Sapkal & Co., Advocates.
The court emphasized the importance of adhering to contractual clauses, such as LD charges and force majeure provisions, and the significance of timely invocation of arbitration proceedings.
Headnote:
Arbitration Act - Challenge to Arbitral Award - Section 34 - Sale of Goods - Arbitration and Conciliation Act, 1996, Section 31 - Limitation Act, Section 14 - Force Majeure Clause, Agreement Clause 21
Fact of the Case:
The Petitioner challenged an arbitral award dismissing their claim for balance payment and interest arising from a delay in the delivery of goods due to a labor strike. The Petitioner's claim was rejected by the Arbitrator, and the Petition was subsequently dismissed by the court.
Finding of the Court:
The court found that the LD charges claimed by the Respondent were correct, and the claim of Sales Tax by the Petitioner did not arise as the rate of material in the purchase order was composite and inclusive of all taxes. The court also noted that the Petitioner's delay in invoking arbitration proceedings and the failure to provide timely intimation of the labor strike were significant factors in upholding the arbitral award.
Issues: The issues involved the validity of LD charges, the jurisdiction of the court in light of the arbitration clause, the delay in invoking arbitration proceedings, and the compliance with the force majeure clause regarding the labor strike.
Ratio Decidendi: The court upheld the arbitral award based on the correctness of LD charges, the lack of jurisdiction for the court to decide the matter due to the arbitration clause, the delay in invoking arbitration proceedings, and the failure to comply with the force majeure clause.
Final Decision: The Petition was dismissed, and no costs were awarded.
The Petitioner, under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act), has challenged award dated 22 July 2010, thereby dismissed the claim of the Petitioner.
2. The operative part of the award is as under:-
Award:-
I, Shri G.K. Lodha, DGM (NWP-IT), BSNL, Pune as Sole Arbitrator appointed in the dispute between M/s Salasar Hanumanji Industries, Kolkata and BSNL, Mumbai in exercise of powers vested under Section 31 of Arbitration and Conciliation Act, 1996, pass the order today i.e. on 22.7.2010 at Pune that the LD charges which are claimed by BSNL, Mumbai, are correct and no refund should be made to the claimant, M/s Salasar Hanumanji Industries, Kolkata. The claim of Sales Tax by the claimant M/s Salasar Hanumanji Industries, Kolkata is quashed.”
3. The basic events as per the Petitioner are as under:-
In the year 2000, the Petitioner responded to the Respondent's tender for supply of Galvanized Tapered Steel Tubes (for short, “the goods”). The tender of the Petitioner for supply of goods was accepted by the Respondent for the total consideration of Rs.56,30,100/-. The supply contract was governed by purchase order which stated various terms of the contract. General Instructions to the purchase order contained various stipulations for supply of goods. The goods were to be delivered by 15 December 2000. There was complete labour strike in the Petitioner's factory premises which went on from 20 September 2000 till 15 November 2000. On 25 September 2000, the Petitioner by letter “Under Certificate of Posting” informed the concerned officer of the Respondent about the said strike.
4. On 11 January 2001, the Assistant Labour Commissioner, Government of West Bengal issued certificate, certifying that the Petitioner's factory was visited and was non functional due to stoppage of work reverted by workers. On 19 February 2001, the Petitioner requested for extension of time for supply of goods and the Respondent extended time with payment of liquidated damages clause without taking into consideration strike at Petitioner's factory. In the month of March/April, 2001, the Petitioner supplied goods to the Respondent. The total value of goods were Rs.56,30,100/-after adding the Sales Tax of Rs.2,01,946/-totaling to Rs.58,32,046/-. The Respondent made payment of Rs.49,00,276/-leaving balance of Rs.9,32,770/-which was deducted as liquidated damages.
5. In the year 2002, the Petitioner made request for waiving the liquidated damages and sent various letters for release of the balance amount.
6. In the year 2005-2006, the Petitioner moved Delhi High Court and Hon'ble Supreme Court by filing various legal proceedings claiming balance amount. However, the said proceedings came to be rejected on technical grounds, for want of jurisdiction etc..
7. On 9 August 2008, the learned Arbitrator was appointed by the Chief General Manager of the Respondent, after lengthy correspondences. In the year 2009 the Arbitration proceedings were conducted.
8. On 22 July 2010 the Arbitrator passed an award and rejected the Petitioner's claim. Therefore, the present Petition.
9. There was delay in delivery as per the purchase order as the Petitioner unable to complete the delivery by 15 December 2000. Supply was commenced from 4 April 2001 and completed by 22 May 2001. The Petitioner requested for extension of time to supply the material on 17 November 2000 on the ground of labour problem. The extension was accordingly granted upto 15 January 2001 with LD (Liquidated Damages) charges. The extension was again sought and it was granted on 19 January 2001 upto 25 February 2001 again with LD charges. Third time extension was asked and it was granted upto 31 March 2001 with LD charges. Further extension was also sought and it was granted upto 15 May 2001 with LD charges. As per the terms, payment of Rs.49,00,276/-was made from time to time subject to receipt of the goods. The request was made by the Petitioner to waive the
