MANMOHAN, J (ORAL)

I.A. 7606/1995 Present application has been filed by the Union of India seeking condonation of delay in filing objections to the Award. For the reasons stated in the application, delay in filing objections is condoned. Accordingly, application stands disposed of. I.A. 7605/1995

1. Present application has been filed by the Union of India under Section 30 of Arbitration Act, 1940 (hereinafter referred to as “Act, 1940”) challenging the impugned Award dated 31st May, 1994 to the extent it rejected Union of India’s counter-claim towards risk purchase loss.

2. It is pertinent to mention that by virtue of the said Award, learned Arbitrator had also directed refund of security deposit and payment of balance amount under the contract dated 18th March, 1988 executed between the parties. However, the decision to refund the security amount as well as to make balance payment have not been challenged in the present application.

3. Mr. Rajat Gaur, learned counsel for applicant-Union of India submitted that the Arbitrator had misconducted himself by exceeding his jurisdiction by not taking into account the term of the contract which permitted the UOI to issue a risk purchase order. He stated that the petitioner-contractor had been given a number of opportunities to supply the tent poles and it was only after the contractor had repeatedly failed to supply the same, that the applicant-Union of India had purchased the said poles from three different suppliers. He submitted that in the present instance, the contractor had been over- paid beyond the contractual terms and the Arbitrator had not considered the documents pertaining to the overpayment.

4. However, on a perusal of the Award I find that the learned Arbitrator has rejected applicant-Union of India’s counter-claim for risk purchase on the following grounds :

1) Risk purchase contract was placed on the basis of Limited Tender Enquiry whereas the cancelled contract was based on the Advertised Tender Enquiry – proof of page (2) annexure (1) clause (15) sub-clause (d) filed by Union of India and Annexure (19) page 45 clause (15) (d) at page 46 filed by Union of India. 2) In original contract F.O.R. is Delhi and NOIDA while in risk purchase contract F.O.R. is consignee’s end. 3) In original contract security deposit clause was at S.No. (9) while in risk purchase contract there was no security deposit clause. 4) In original contract there was option clause while there was no option clause in R.P. contract. 5) UOI have admitted that they did not issue the proper order for typographical or any other error. 6) Some of parties refused to give tender. 7) Respondent/UOI have not filed the comparative statement of the risk purchase contract. 8) Hence the risk purchase contract is defeated and illegal.”

5. I am of the view that the Arbitrator has given cogent reasons for disallowing the counter-claim of risk purchase. In fact, the Arbitrator after considering the contractual term of risk purchase and the documents on record has unequivocally found that not only the risk purchase offer was not similar to the initial tender but the principle of mitigation had not been followed by the Union of India.

6. I may mention that in similar cases this Court had refused to interfere with an Award passed by an Arbitrator in jurisdiction under Section 30 of Act, 1940. In this connection, I may refer to the following two judgments :-

I) St. Gites Company Vs. Union of India reported in 59 (1995) DLT 735 wherein it has been held as under :- “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