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2014 Supreme(Del) 800
High Court of Delhi
VALMIKI J. MEHTA, J.
India Tourism Development Corporation Ltd.
Versus
Integrated Digital Solution (P) Ltd.
FAO No. 43 of 2013 & CM No. 1616 of 2013 (Stay)
Decided on: 11-03-2014
For the Appellant:Karunesh Tandon, Advocate.
For the Respondent:Atul Tandon, Amit Tewari, Advocates.
The respondent was bound by the price stated in the appellant's letter for the additional mannequins, and the court awarded security charges and interest based on the evidence and provisions of the Act.
Headnote:
Arbitration - Sound and Light Show Contract - Arbitration and Conciliation Act, 1996, Section 37 - 34 - Summary
Fact of the Case:
The respondent accepted a tender for a sound and light show contract. Disputes arose regarding the price of additional mannequins, security charges, and interest on the amount due. The arbitrator allowed all three claims of the respondent.
Finding of the Court:
The court allowed the appeal regarding the cost of additional mannequins, rejecting the other objections. It held that the respondent was bound by the price stated in the appellant's letter and awarded security charges and interest to the respondent.
Issues: Dispute over the price of additional mannequins, security charges, and interest payment.
Ratio Decidendi: The respondent was bound by the price stated in the appellant's letter for the additional mannequins. Security charges and interest were awarded based on the evidence and provisions of the Act.
Final Decision: The appeal was partly allowed regarding the cost of additional mannequins and dismissed for the other objections. Each party bears its own costs.
Valmiki J. Mehta, J. (Oral)
1. This first appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act) impugning the judgment of the court below dated 16.10.2012 by which the objections filed by the appellant/objector (respondent in the arbitration proceedings) under Section 34 of the Act have been dismissed. Impugned Award dated 27.1.2009 awards an amount of Rs.16,41,054/- alongwith interest against the appellant.
2. The facts of the case are that respondent herein accepted a tender with respect to a sound and light show at Chittorgarh, Rajasthan in the year 2003. As per the contract the respondent was to supply the material required for execution of the sound and light show. Originally the proposal was a comprehensive one for the supply of mannequins and other material for a sum of Rs. 1,60,40,240/-, but subsequently the quantity was reduced, including the quantity of the mannequins, and therefore, the second proposal was made by the respondent for a sum of Rs. 1,43,64,530/-. In this second proposal there was no motorized mannequins included, and therefore, seven motorized mannequins were included in a final contract with the total amount of contract agreed at Rs. 1,49,00,000/-. For this purpose a letter of intent dated 12.6.2003 was issued by the appellant in favour of the respondent and subsequently a formal agreement was executed on 20.6.2003 between the parties. After entering into of the contract six additional mannequins were ordered by the appellant making the mannequins to a total number of 13. This order was placed upon the respondent by the appellant by its letter dated 23.3.2005 and which reads as under:
“AC/SEL/CHITTOR/03
23.3.05
M/s. Integrated Digital Solutions Pvt. Ltd.
B-21/3, Okhla Industrial Area-Phase-2
New Delhi-110020.
Dear Sirs,
Sub: Motorized Mannequins for Day Show, Chitorgarh Fort.
This is with reference to the motorized mannequins for the Day Show at Chittorgarh Fort. We hereby confirm the number of mannequins has been increased from seven(7) to thirteen (13).
As discussed and explained in the meeting with Sr. Vice President, ITDC recently, the amount payable for thirtee mannequins reached at site will be Rs. 9,95,429/- only @ Rs. 76,571.43.
Thanking you,
Yours faithfully
For India Tourism Development Corpn. Ltd.,
Sd/-
(R. Sridharan) Sr. Manager (Culture)”
3. The respondent initially objected to the price as stated in the aforesaid letter dated 23.3.2005, by its reply-letter dated 24.3.2005 which reads as under :
“Our reference : IDS/SEL-CG/2103-01
March 24, 2005
Deputy General Manager-Ashok Creatives
India Tourism Development Corporation Limited
Scope Complex – Core 8
Lodi Road
New Delhi 110 003.
Kind attention : Ms. Madhu Dubey Dear Madam Re: Chittorgarh Mannequins Kindly recall our discussions of the last week where we expressed our displeasure in the delays on part of ITDC on the matter related with the issue of amendment for the additional mannequins, release of related with-held payments and the decision on the locations where these mannequins are required to be mounted.
During this meeting, we were assured that all the matter will be resolved within a week. On the contrary, we are shocked to receive a letter from your office, bearing # AC/SEL/CHITTOR/03 dated 23rd instant, which has no bearing either with previous discussions or with the provisions of the contract agreement and has no rationale too, as it suggests that we supply the additional 6 mannequins at a meager total amount of Rs. 45 thousand approximately.
As per the contract agreement:
.- the entire project is on a fixed upper-limit value (Rs. 149.00 lacs), except for the mannequins.
.- unit rate of the mannequins has been fixed (Rs. 1,35,700.00)
.- tentative requirement of the mannequins (seven nos.) included in the originally agreed upper-limit value of the contract and
.- where, for any additional requirement (six now) of the mannequins, an enhancement in the upper-limit value (by Rs. 8,14,200.0
