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2023 Supreme(Del) 791
IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Sachdeva, Vikas Mahajan, JJ.
The India Government Mint – Appellant
Versus
Alfa Security And Allied Services – Respondent
FAO (COMM) 48 of 2023 & CM APPLS. 9032-34 of 2023
Decided On : 14-03-2023
Mr. Kamal Kant Jha and Mr. Avinash Singh, Advocates, for the Appellant.
None, for the Respondent.
The main legal point established in the judgment is the narrow scope of interference under Section 34 of the Arbitration and Conciliation Act and the limited judicial scrutiny in arbitration proceedings.
Headnote:
Arbitration and Conciliation Act - Objections under Section 34 - Summary of Acts and Sections: Arbitration and Conciliation Act, Section 34 - The court discussed the parameters of interference as laid down by the Supreme Court in several judgments, the requirement projected in the NIT, and the supervisory role of the court in arbitration proceedings. The court emphasized that the jurisdiction under Section 34 is not appellate in nature and the extent of judicial scrutiny and scope of interference is narrow. The court also highlighted that the supervisory role of the court in arbitration proceedings has been kept at a minimum level.
Fact of the Case:
The appellant challenged the dismissal of objections filed under Section 34 of the Arbitration and Conciliation Act, pertaining to the Award of the Arbitral Tribunal. The dispute arose from the supply of manpower under a contract and the invocation of a performance Bank Guarantee.
Finding of the Court:
The court found that the objections of the appellant did not fulfill the parameters of interference as laid down by the Supreme Court. It emphasized that the court's role is not to re-assess the entire evidence and that the extent of judicial scrutiny and scope of interference is narrow.
Issues: The issues revolved around the contradictory findings of fact by the Arbitral Tribunal, the supply of manpower under the contract, the invocation of the performance Bank Guarantee, and the parameters of interference under Section 34 of the Act.
Ratio Decidendi: The court's decision was based on the narrow scope of interference under Section 34, the limited judicial scrutiny in arbitration proceedings, and the supervisory role of the court in such proceedings.
Final Decision: The court dismissed the appeal, finding no infirmity in the impugned order rejecting the objections of the appellant under Section 34 of the Act.
JUDGMENT
Sanjeev Sachdeva, J. (Oral)
1. Appellant impugns order dated 20.10.2022, whereby the objections filed by the appellant under Section 34 of the Arbitration and Conciliation Act (hereinafter referred to as the Act) challenging the Award dated 05.11.2020 of the Arbitral Tribunal have been dismissed.
2. Learned counsel for appellant submits that the learned District Judge has erred in rejecting the objections by merely holding that the objections do not fall within the parameters of interference as explicitly laid down by the Supreme Court in several judgments referred to in the order.
3. He submits that the learned District Jude has erred in not appreciating that the Arbitral Tribunal has returned contradictory findings of fact. He submits that on the one hand the Tribunal has held that the respondent/claimant was at fault and on the other hand held that the respondent/claimant has not committed any breach of contract.
4. Learned counsel for appellant further submits that the respondent/claimant had filed a writ petition before the High Court of Judicature at Hyderabad impugning the invocation of the subject Bank Guarantee and the writ petition was dismissed. Thereafter, a writ appeal was filed and the Division Bench in Writ Appeal No.1198/2016 by judgment dated 10.11.2016 held that the clauses of the NIT would apply even for the extended period of contract even though no formal document was executed.
5. Appellant had invited bids on 15.02.2013 for hiring skilled and unskilled manpower for one year through outsourcing agency on as and when required basis. The bid of the respondent was successful and a Letter of Intent dated 24.05.2013 was issued, valid for a period of one year from 01.06.2013 till 31.05.2014.
6. The Letter of Intent specifically stated that 21 skilled labour and 69 unskilled labour would be required to be supplied by the respondent. The bifurcation of the skilled and unskilled workers into different fields, inter-alia, electrician, cook, plumber, carpenter, welder etc. was specifically mentioned in the Letter of Intent. The Letter of Intent, however, clarified that the maximum number of skilled labour would not exceed 21 and unskilled labour would not exceed 69.
7. It is not in dispute that the respondent duly complied with the terms and conditions of the Letter of Intent and supplied the workers for the entire period of one year, however, one of the contentions raised by the respondent was that though the tender was for supply of 90 workmen, order was placed only for supply of approximately 40 workmen throughout the period of one year.
8. The Letter of Intent further stipulated that the contract could be extended on the same terms and conditions for a further period of three months or till execution of a new contract, whichever was earlier.
9. In alleged exercise of power under the said clause, a letter of extension was given on 29.05.2014, extending the contract for a period of three months. The letter, however, specified that the maximum number of workers would be 40 workers i.e., 10 skilled and 30 unskilled.
10. Respondent supplied the workmen for one month in the extended period i.e. for June, 2014 and thereafter, did not supply any workman in July and August. Consequent to which, the appellant invoked the performance guarantee on 02.07.2014 and forfeited the amount. It was this invocation of Bank Guarantee, which was challenged in the writ petition before the High Court of Judicature at Hyderabad.
11. The Arbitral Tribunal after considering the claim of the respondent well as the evidence led by the parties held that the claimant had not committed any breach of the original contract, however, held that the claimant should have provided the manpower for the months of July and August, 2014. The Tribunal held that the same did not amount to a breach of contract for the reason that the original period of contract was duly performed.
12. The Arbitral Tribunal held that the appellant (responde
