ANOOP V. MOHTA AND A.S. GADKARI, JJ.

M/s. Sarathi Enterprises – Appellant

Vs.

Union of India, Through Executive Engineer, Mumbai Central – Respondent

APPEAL NO. 123 OF 2016

IN

ARBITRATION PETITION NO. 950 OF 2013

Decided On : 06-06-2016

Cases Referred :

M/s. Chebrolu Enterprises Vs. Andhra Pradesh Backward Class Cooperative Finance Corporation Ltd. reported in 2015 (12) Scale 207

Advocates Appeared :

For the Appellant : Ms. Shilpa Kapil

For the Respondent : Dr. G.R. Sharma a/w Mr. D.P. Singh

JUDGMENT :

(PER- ANOOP V. MOHTA, J.):-

Heard the learned counsel appearing for the Appellant finally, as the matter is fixed for the final hearing.

2 In nutshell, the case of the Appellant-Original Respondent, is that- On 22 July 2010, a tender was invited for “providing and fixing vitrified tiles flooring over existing flooring from Ground to sixth Floor at Aayakar Bhawan, Mumbai”. The work was awarded to the Appellant by letter dated 22 July 2010. The Appellant by letter dated 5 August 2010, recorded the verbal discussion with the Executive Engineer whereby, the Executive Engineer has directed to use only Johnson vitrified tiles and no other equivalent brand. The Appellant has further informed the Respondent that the Appellant intends to use some other equivalent brand as per condition of contract. By letter dated 16 August 2010, the Respondent again reiterated that only Johnson vitrified tiles and no other equivalent brand be used as the client has approved Johnson vitrified tiles only.

3 The Appellant was directed to execute the work with Johnson vitrified tiles only and no other equivalent brand. The Appellant by letter dated 28 September 2010, informed the Respondent that they have already shown their inability to execute the work with Johnson Vitrified tiles as M/s. H.R. Johnson (India) Limited is quoting exorbitant price for the product specified in the tender in comparison to other equivalent brand by taking advantage of the fact that he is the only preferred manufacture by the Respondent. By letter dated 9 October 2010, the Appellant informed the Respondent that they have lodged a complaint with Chief Engineer (Vigilance) CPWD.

4 The Appellant, time and again, had stated that they are always ready and willing to execute the work subject to approval of “equivalent brand”. The Respondent never agreed to it. On the aspect of violation of Sections 3 and 4 of the Competition Act, 2002 (for short, “the Competition Act”), the Executive Engineer by letter dated 7 December 2010, had stated that the agreement is entered into between the parties and the breach is on the part of the Appellant.

5 On 22 January 2011, the advertisement appeared in the newspaper for the work of “Providing and Fixing vitrified tiles flooring over existing flooring from Ground to Sixth floor at Aayakar Bhavan, Mumbai” which is the same work, which was awarded to Appellant. Interestingly, except issuance of “final notice”, the work awarded to the Appellant is neither terminated nor foreclosed. The fresh tender invited, was also not the risk and cost tender. The Appellant, by letter dated 29 January 2011, requested the Executive Engineer to foreclose the contract without liability upon the Appellant and refund the EMD and performance guarantee. On 8 February 2011, the Executive Engineer by its letter stated that contract has already been determined with forfeiture of EMD and Security Deposit by their letter dated 16 November 2010.

6 In view of an Arbitration under Clause 25, the Appellant by letter dated 9 March 2011, requested the Chief Engineer to appoint the Arbitrator. The Chief Engineer by letter dated 27 July 2011, appointed Shri Rajiv Kumar as the sole Arbitrator in respect of the claims of the Appellant and counter claim of the Respondent. On 6 March 2013, the Appellant and the Respondent filed their respective pleadings before the Arbitrator. The Respondent also raised the counter claim before the Arbitrator. The Arbitrator after he