SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Article Pause Article
judgment-img

2001 Supreme(Jhk) 459

Jharkhand High Court
Gurusharan Sharma, J.
Steel Authority Of India Ltd. - Appellant
Versus
Steel Products Ltd. - Respondent
MA 168 Of 2000(R)
Decided On : 17 July, 2001

Headnote:Arbitration Act, 1940 – Section 39 (vi) – award – an award passed within the parameters of the contract, after consideration of all evidence, pleadings and papers must be up held – appeal dismissed. (Para 3 & 4)

ORDER

Gurusharan Sharma, J.

1. Heard the parties and perused lower Court records. M/s. Steel Authority of India Limited (in short SAIL) has filed this appeal under Section 39(vi) of the Arbitration Act, 1940, against judgment and decree dated 12.6.2000, passed by 1st Subordinate Judge, Bokaro at Chas, in Title (Arbitration) Suit No. 10 of 1990, whereby and where under award dated 30.1.1990 given by the sole arbitrator, Dr. N.R. Sircar has been made Rule of Court. Four Blast Furnaces with heart, area of 2000 cubic meters each were in operation at Bokaro Steel Plant for production of hot metal. While producing hot metal, hot molten slag is an inescapable arising, which has to be disposed of in a planned way. For this purpose an area known as Blast Furnace slag dump has been earmarked. Blast Furnace slag contains some quantity of iron scrap, which can be recovered, removed and sold/purchased. The hot molten slag is transported through laddies, Some time in March, 1982, SAIL invited tenders for "recovery, removal and purchase of iron scrap, steel skull scrap and used/rejected refractory materials on as is where is basis on payment, from Blast Furnace slag dump of Bokaro Steel Plant on lumpsum basis." Offer made by M/s. Steel Products Limited was accepted by letter of acceptance dated 9.4.1982 and sale order was placed on the said Company on 2.6.1982. M/s. Steel Products Limited started raising disputes right from inception of the contract with regard to dumping of materials in the earmarked area as per the sketch map attached to the tender documents. The contract was for dumping of fresh arisings of iron scrap used/rejected, refractory materials, according to pattern of dumping, which was invogue. The earmarked area wherefrom the Contractor was to recover the materials was confined to the area under track (sidings) Nos. 1, 1A, 2, 2A, 3, 4, 5 and 6 as shown in the sketch map i.e. from axis B + 87002 to B+87009. The disputes and differences between the parties, which were referred to the sole arbitrator were related to interpretation of the contract and the rights and liabilities of the parties thereunder. The contractor alleged that the contract was for lifting all arisings from entire slag dump and SAIL was required to dump all scrap arisings etc. over the area demarcated to M/s. Steel Products Limited; but it was not done. Rather iron scraps were dumped in the unallotted areas and so the contractor suffered huge loss and damage and submitted claim of Rs. 18, 74. 18, 787.31 paise, which was calculated on the basis of the quantity alleged to have not dumped in the earmarked area multiplied by the price and over and above the loss of profit and interest. Subsequently amount of claim was revised and it was reduced to Rs. 3,00,00,512.55 paise. According to SAIL in the total contract value of Rs. 2,04,54,545/- in which on subsequent escalation came to Rs. 2,15,63,173/-, the contractor already recovered materials worth more than Rupees Six crores. The sole arbitrator by non-speaking award dated 30.1.1990 directed SAIL to pay a sum of Rupees fiftyseven lacs to the contractor in full and final settlement of all claim and counter claim of the parties, which were subject matter of arbitration.

2. Mr. R.K. Merathia, counsel for appellant, submitted that in terms of Clause 3 of the tender document vis-a-vis Clause 19 of the sale order, the contractor was precluded from claiming any damage on account of nonavailability of the materials and quality of materials. The contractor also failed to prove actual damage, if any, suffered on account of any breach of contract on the part of SAIL.

3. It appears that the sole arbitrator in his cross-examination by SAIL stated that he had duly considered Clause 3 of the tender document and Clauses 19 and 20 of the sale order and gave his award on the basis of force majaure clause. There was no force majaure contingency during operation of contractual period in question. As per Clause 20 Bokaro Steel Plant after


Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top