The court upheld the Arbitrator's decision to reject the claim of the Union of India for loss suffered in risk purchase, emphasizing the importance of the terms and conditions of the contract and the burden of proof in substantiating the claim of loss.

( 1 ) UNDER A/t No. TP. 7/rgc-812/rp/paoc/37dated 13th August 1985, certain disputes had arisen between the parties and they were, accordingly, referred for adjudication to Shri C. Achuthan, Additional Legal Advisor to the Government of India, Ministry of Law and Justice, Department of Legal Affairs, Shastri Bhawan, New Delhi. After giving opportunities to the parties to file their claim statements, documents, evidence and after hearing the parties and their Counsel, the Arbitrator made and published his award on 30th May, 1991. The Arbitrator sent the award to this Court and notice of the filing of the same was given to the parties. The Union of India has filed objections to the award.

( 2 ) IT has been contended in the objection petition that the Arbitrator having held that cancellation of the contract by Union of India was valid and the Union of India was within its rights to risk purchase AT and the same was also within time, he has grievously erred in holding that on a comparison of the terms and conditions of two risk purchase contracts with defaulted contract, he was of the opinion that there was variation between the two and as such the Union of India was not entitled to any amount of loss which might have been suffered by it in risk purchase. The submission, therefore, is that the Arbitrator has misconducted himself and the proceedings by rejecting the claim of the Government of India and by not allowing the loss alleged to have been suffered by the Union of India in making risk purchase.

( 3 ) I have heard learned Counsel for the parties.

( 4 ) THE only argument advanced by the Counsel for the Objector is that once the Arbitrator had come to a finding that the Government had rightly cancelled the contract of the petitioner and after also having come to a finding that the Government was within its right to issue risk purchase AT, the Arbitrator ought to have allowed the claim of the Union of India by awarding a sum of Rs. l,00,000. 00 which is the amount of loss alleged to have been suffered by the Government.

( 5 ) AFTER having gone through the record, I find that there are no merits in the contention of learned Counsel for the Objector. The Arbitrator on the basis of the material before him has come to a finding that on a comparison of the terms and conditions of the two risk purchase contracts with the defaulted contract, he found that they were at variance which could have an impact on the price quoted therein. He has also held that the terms and conditions of the risk purchase contract could not be more onerous nor liberal than those of the defaulted contract and as the terms were at variance, the Government was not entitled to any amount.

( 6 ) IN view of the above discussion, he held that the supplier could not be held liable to pay the loss/additional expenditure alleged to have been incurred by the Government as a result of risk purchase. The claim of the Government was, accordingly, rejected. It was also held by him that the Government had failed to substantiate their claim and it was also one of the reasons to reject the claim. However as, according to the Arbitrator, the Government must have suffered some loss due to the breach of contract by the supplier, the Government was held to be justified in adjusting the security deposit toward such loss. Claim of the supplier, therefore, for refund of the security was rejected.

( 7 ) THE submission made by the respondent s/objector s Counsel is that as the Arbitrator has held that the Government was entitled to risk purchase loss, he ought to have allowed the claim of the Government. I am afraid, I cannot agree with this contention of the Government s Counsel. On the basis of material before him, the Arbitrator though has held that the Government was entitled to risk purchase, however, at the same time he has held that there were variations between the contract with the petitioner herein and the contracts which have been by way of risk purchase, a