JUDGMENT

Harpreet Kaur Jeewan, J.

The present appeal has been filed impugning the order dated 23.01.2023 passed by the Additional District Judge, Patiala, whereby the objection petition under section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) filed by the appellant challenging the Arbitration Award dated 28.09.2020 passed by the Arbitration Tribunal was dismissed.

2. As per the facts on record, the respondent-contractor (hereinafter referred to as "the contractor") is engaged in providing engineering products such as process Equipment, Power Plants, Boilers, Plants and Machinery, Mechnical and Hydraulic Presses, Steel and Iron Castings, Contract Manufacturing and Trading, civil works etc. A purchase order No.01/17/4513/1/564187 dated 19.11.2016 for a total amount of Rs.17,31,11,872/- for supply of 40 Nos. 16 Cylinder Alco Engine Block fully machined was issued to the Contractor by the diesel loco Modernization Works, Patiala-appellant (hereinafter referred as "the Railways") and the delivery of the same was to be made within eight months from February, 2017 i.e. upto 30.09.2017. The delivery period was extended upto 30.11.2018 vide amendment No.1 dated 23.10.2017 and the value of the purchase order was reduced to Rs.16,29,60,000/- vide amendment No.2 dated 13.06.2018. The delivery period was further extended upto 30.09.2019 vide modification advice No.000118 dated 09.01.2019. Prior to this purchase order, the petitioners have also issued two purchase orders i.e. dated 03.10.2013 for supply 10 Nos. Engine Blocks (subsequently quantity enhanced to 20 Nos.) and the purchase order dated 08.04.2016 for supply of 15 Nos. Engine Blocks. The purchase order dated 03.10.2013 was marked as 'Development Order' and the subsequent purchase order dated 08.04.2016 was marked as 'Trial Order'. As per letter dated 30.04.2015, the railway had imposed a condition on the Contractor to get one engine block prototype inspected/cleared by RDSO against their previous purchase order dated 03.10.2013. The respondents vide letter dated 30.05.2015 intimated that they would be ready for inspection on 15.06.2015. The final clearance by the RDSO was issued vide letter dated 25.08.2017.

2.1 The respondent-contractor completed the supply within the extended period, however, the Railways deducted a sum of Rs.1,56,44,160/- and withheld the same on account Liquidated Damages. The Contractor raised a total claim of Rs.2,13,88,330/- inclusive of the balance payment of Rs.1,56,44,160/- alongwith interest against the appellant and the matter was heard and decided by the Arbitral Tribunal and an award dated 28.09.2020 was passed. The Arbitral Tribunal observed that the reduction made by the appellant towards the Liquidated Damages were not justified, as such, a sum of Rs.1,56,44,160/- was decided to be paid by the appellant to the respondent-contractor within a period of 60 days from the date of the award failing which the petitioner was held to pay interest @ 12% per annum with effect from the date of the award till actual payment.

3. The appellant-Railways challenged the findings of the Arbitration Tribunal by way of filing objection petition under Section 34 of the Act. Reply to the said objection petition was filed by the respondent-contractor contesting the objections raised in the said petition. After hearing the counsel for the parties, the Additional District Judge, Patiala dismissed the petition vide order dated 23.01.2023.

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