JUDGMENT

MANOJ JAIN, J.

1. The present appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “said Act”) impugns order dated 29.11.2021 passed by Sh. Gurvinder Pal Singh, learned District Judge (Commercial Court-02), Patiala House Courts, New Delhi whereby, the objection petition filed by the appellant herein under Section 34 of said Act has been dismissed.

2. Let us refer to the facts germane for the disposal of the present appeal.

3. A tender was floated by the appellant for procurement of 4550 Metric Tons (MT) of „Dal Arhar‟.

4. The respondent M/s Indian Agro Marketing Co-operative Limited participated in such tender process and was awarded work contract to supply 800 MT of Dal Arhar @ at the rate of Rs. 6,225/-

per quintal.

5. The appellant issued acceptance letter on 04.06.2013. The total value of the work was Rs. 4,98,00,000/- and the delivery was to be made between 16.06.2013 to 20.06.2013.

6. The respondent submitted unconditional Bank Guarantee of Rs.

49,80,000/- as per the stipulated terms and conditions of the contract.

7. The appellant extended the delivery schedule from time to time and eventually issued „performance notice‟ dated 22.08.2013 directing respondent to perform its contractual obligation to make supply on or before 30.08.2013, supplementing that if such supply was not made, the contract would be cancelled.

8. The respondent could supply 590 MT „Dal Arhar‟ out of 800 MT. Even out of the above supplied 590 MT, 223.942 MT of Dal Arhar had „gone bad‟ during the warranty period and such rejected material was even taken back by the respondent.

9. Since the respondent failed to supply the balance quantity of 210 MT „Dal Arhar‟ despite grant of sufficient opportunities, the contract was cancelled on 19.02.2014 and the appellant, in terms of the clause 18 (d) (viii) of Appendix to Tender Enquiry and clause 7(4)

of DGS&D-68 (Revised), forfeited the Bank Guarantee.

10. Since there was an „arbitration clause‟ in the contract, respondent approached the Court for appointment of Arbitrator and Shri A.K Garg, Additional District Judge (retired) was appointed as Sole Arbitrator to adjudicate the disputes between the parties.

11. The stand of the respondent before the Arbitral Tribunal was that the delivery period mentioned in the contract was superfluous, impossible and impractical as the commodity in question i.e. „Dal Arhar‟ was not available in the market during the relevant period. The encashment of Bank Guarantee was also challenged on various grounds. The prime and foremost contention from the side of the respondent was that once the special mode of „risk-purchase‟ had been agreed to between the parties, no amount by way of „general damages‟ could have been claimed by the appellant. It was also contended that, even otherwise, there was nothing to suggest that the appellant had suffered any losses and that compensation, if any, could only be given for actual damages or loss suffered. If damage or loss is not suffered, the law does not provide for a windfall. Thus, proof of actual damage or loss caused was sine qua non and since, it was not even the case of the appellant that they had suffered any losses due to alleged breach of contract, the forfeiture was illegal and without any authority. It will be worthwhile to mention here that besides challenging the forfeiture of Bank Guarantee and refund of amount thereunder, the respondent/claimant also sought recovery of Rs. 1,39,53,210/-on account of illegal rejection and losses suffered by the claimant in sale of the rejected material.

12. The appellant refuted all such contentions before the Arbitral Tribunal. It was argued that the terms and conditions of the contract were accepted by the respondent, knowingly and consciously and if the respondent was of the view that it was difficult to fulfil the terms and conditions of the contract and that its performance was impossible, it should not have even entered into any contract. It wa