High Court Of Delhi
FOOD CORPORATION OF INDIA - Appellant
Versus
SUBHASH CHANDER LAXMI NARAIN - Respondent
Decided On : 03/31/2006
( 1 ) THE petitioner, Food Corporation of India, (FCI) has filed its objections against the award passed on 23/6/1997 by the sole arbitrator in arbitration case RNM-1/95 (FCI) titled Food Corporation of India v M/s Subhash chander Laxmi Naraian. The objections have been preferred under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the said Act ).
( 2 ) BEFORE I set out the objections raised by the petitioner/claimant, it would be necessary to point out as to what was the nature of the transaction between the petitioner and the respondent No. 1. It appears that a Notice inviting Tender had been published by the petitioner in respect of lifting of arhar (gram) whole by independent parties for the purposes of milling and converting the same into arhar dal. There is no dispute that in response to the said Notice Inviting Tender, the respondent had submitted its tender and the same had been accepted by the petitioner by virtue of a telegram (Exhibit P2) issued to the respondent No. 1 by the petitioner. At this stage, it is pertinent to note that the acceptance was a conditional acceptance in the sense that it was subject to production of power of attorney, partnership deed, financial soundings from banker and income tax clearance certificate . These particulars were furnished by the respondent No. 1, as indicated in the award itself, on 21/8/1978. It so happened that despite the contract entered into between the petitioner and the respondent No. 1, the latter did not lift any arhar (gram) whole from the petitioner s godowns. Ultimately, the petitioner cancelled the contract by a letter dated 25/9/1978. Upon the cancellation and termination of the contract, the respondent No. 1 filed a suit bearing No. 1020a/1978 in this court and also filed an application for interim relief therein i. e. , IA 3464/1978. On the said interim application which was under Section 41 of the said Act read with Order 39 Rules 1 and 2 and Section 151 CPC, this court passed an order restraining the petitioner from inviting fresh tenders in respect of the contracted quantity for the milling of whole gram as detailed in the said tender submitted by the respondent No. 1 and accepted by the petitioner till further orders. This order was passed on 6. 10. 1978. Subsequently, by another order dated 1/12/1978, this court disposed of the said IA 3464/1978 by vacating the restraint which had been imposed on the petitioner from inviting fresh tenders. It was directed by the said order dated 1/12/1978 that the petitioner was free to invite fresh tenders and give the contract to any other contractor but that the same would not be at the risk and cost of the respondent No. 1. It was further directed that as and when the petitioner is able to prove that the respondent No. 1 had committed the breach which resulted in the termination of the contract, the petitioner may be held entitled to any relief against the respondent No. 1 and the same would be the subject matter of arbitration.
( 3 ) SUBSEQUENTLY the matter was referred to arbitration and the same was concluded by the then Arbitrator Mr Shiv Prakash. That award was also the subject matter of challenge by both the parties and this court by another order dated 27/10/1994 set aside the award made by Mr Shiv Prakash and directed the parties to fresh arbitration. This arbitration was conducted by Mr R. N. Mishra and it culminated in the impugned award dated 23/6/1997.
( 4 ) THE objections raised by the petitioner/claimant against the impugned award are two in number. The first objection raised by the petitioner/claimant is that the arbitrator has awarded storing charges to the claimant only for a period of 34 days i. e. , from 21. 8. 1978 to 25. 9. 1978 whereas the petitioner had claimed storage charges for 182 days w. e. f. 9. 8. 1978 to 7. 2. 1979. The learned counsel appearing for the respondent No. 1 contended that the arbitrator has rightly granted only 34 days st
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