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1983 Supreme(Del) 21

High Court Of Delhi
DODSAL PRIVATE LIMITED - Appellant
Versus
DELHI ELECTRICITY SUPPLY UNDERTAKING - Respondent
Decided On : 01/16/1983

Headnote:Arbitration Act, 1940 - Sections 30 and 33 — The plea of the invalidity of the contract can be taken at the stage of proceedings in the Court. Such a plea cannot be resisted by the plea of estoppal merely because the objecting party appeared at and participated in the proceedings before the arbitrator without voicing any such objection.

S. Raaganathan, J.

( 1 ) THIS three appeals raise the same common issue and can be disposed of altogether. As it is common ground that the facts involved are the same and the disposal of one of the appeals will also cover the other two, we proceed to deal with the facts and the contentions urged in F. A. O (OS) 50/79, the order in which will cover the other two appeal as well.

( 2 ) THE appellant M/s Dodsal Pvt. Ltd. submitted a tender on 23/9/1968 giving quotations for the erection and commissioning of a boiler with its auxiliaries for the 5th Unit at the Indraprastha Power Station Project at Delhi. This tender was made to the Executive Engineer, Electrical III, Delhi Electric Supply Undertaking (a department of the Municipal Corporation of Delhi) in response to an advertisement calling for tenders published by the above officer. According to the appellant the tenders submitted by it as well as other contractors were examined and the appellant s tender was accepted after negotiations held with the General Manager, Delhi Electric Supply Undertaking (DESU), the officers of the Central Water and Power Commission and other representatives of various other Governmental agencies. Following these negotiations the appellant was given a letter of indent signed by the Executive Engineer. Electrical III and the appellant was asked to commence work immediately. They are stated to have commenced work on 11th December, 1968.

( 3 ) A formal contract embodying the terms and conditions subject to which the work of costruction and erection was entrusted to the appellant was executed on 28/4/1969. This contract admittedly contained an arbitration clause under which all disputes arising between the parties the settlement of which was not specifically provided for in the contract were to be referred to two arbitrators, one to be nominated by the DESU and one by the con- tractor and in the event of disagreement between the arbitrators to an umpire appointed by the arbitrators.

( 4 ) IT appears that certain disputes did arise between the parties. The; appellant appointed Shri K. R. Chaudhary as its arbitrator and the respondent appointed Shri K. . L. Vijh as its arbitrator and the two arbitrators entered upon the reference. During the pendency of the arbitration, the work continued and further disputes arose which were referred to the aforesaid two arbitrators by way of two subsequent references It is in this manner that there were three references before the arbitrators in regard to the three claims which can be conveniently referred to as Claim No. 1, Claim No. 2 and Claim No. 3. The arbitrators, after hearing the parties on a number of occasions, made their awards. In respect of Claim No. 1 the award was made on 9/8/1975 by which the arbitrators directed the DESU to pay to the appellant company within a period of 30 days a sum of Rs. 1,10,000. 00 in full discharge and satisfaction of all their claims against the DESU in respect of this claim. The counter claim made on behalf of the DESU was rejected in toto. In regard to Claim No. 2 the award, also made on 9/8/1975, directed the DESU to pay to the appellant compay a sum of Rs. 3,33,000. 00 and rejected the counter claim on behalf of the DESU, Again Claim No. 3 was disposed of by the award dated 9/8/1975 by directing the DESU to pay to the appellant company a sum of Rs. 5,57,000. 00 and rejecting the counter claim of DESU in this regard. In other words, all the three references ended in awards of substantial sums in fovour of the appellant company to be paid by the DESU within a period of 30 days.

( 5 ) THE appellant company thereafter filed applications under Sections 14 and 17 of the Arbitration Act. It was stated that the applicant had requested the arbitrators to file the award in the court and prayed that adecree may be pronounced in accordance with the award. On the other hand the respondent DESU filed objections under Sections 30 and 33 of the Arbitration Act contending that the award was

























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