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* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Pronounced on: 12.08.2024 + FAO (COMM) 59/2021 & CM APPL. 25418/2023 UNION OF INDIA ..... Appellant versus M/S PARISHUDH MACHINES PVT. LTD. ..... Respondent Advocates who appeared in this case:

For Appellant : Ms Pratima N. Lakra, CGSC with Mr Chandan Prajapati and Ms Yashika Garg, Advs.

For Respondent : Mr Sanjeev Agarwal and Mr Ekansh Agarwal, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER HON'BLE MS. JUSTICE TARA VITASTA GANJU

JUDGMENT

TARA VITASTA GANJU, J.:

1. The present Appeal has been filed by the Appellant, Ministry of Railways [hereinafter referred to as “Railways”] under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as “the Act”] against the judgement dated 31.08.2020 passed by the learned Commercial Court in OMP (COMM) 75/2019 [hereinafter referred to as “Impugned Judgment”].

1.1 By the Impugned Judgment, the learned Commercial Court dismissed the petition filed by the Railways under Section 34 of the Signature Not Verified Digitally Signed Act challenging the Award dated 22.04.2019 [hereinafter referred to as “the Award”].

2. By the order dated 05.01.2023, the present Appeal was dismissed in default and for non-prosecution by a Coordinate Bench of this Court. Subsequently, the Railways filed an Application for restoration of the Appeal albeit after a delay. An Application seeking condonation of delay of 96 days was also filed alongwith the Appeal.

2.1 By its order dated 16.05.2023, a Coordinate Bench of this Court condoned the delay of 96 days and passed an order restoring the present Appeal.

2.2 Aggrieved by this order, the Respondent, M/s Parishudh Machines Pvt. Ltd. [hereinafter referred to as “Parishudh”] filed a Special Leave Petition [hereinafter referred to as “SLP”] before the Supreme Court, being SLP No.22108/2023. The Supreme Court by its order dated 03.10.2023 disposed of the SLP with the following directions:-

“This Court is of the opinion that all contentions including the petitioner’s argument that the application and the appeal restored on the file of the Division Bench, are delayed should be kept open and considered on their own merits. The Division Bench is requested to expedite the hearing of FAO (COMM.) 59/2021 since the final order under Section 34 of the Act was made on 31^st August, 2020 and the award made on 22^nd April, 2019.”

[Emphasis is ours]

3. Briefly the facts are that Parishudh was a successful bidder for a contract for delivery of locomotives to the Indian Railways through Central Organisation For Modernisation Of Workshops [hereinafter Signature Not Verified Digitally Signed referred to as “COFMOW”]. Pursuant to a tender inquiry issued by the Railways, a contract dated 11.12.2014 was awarded to Parishudh for supply of the machine described as CNC Twin Spindle Chucker on Turnkey basis as per technical specification No. COFMOW/CNCTSC-200/2013 including concomitant accessories [hereinafter referred to as “the Machine”] for a sum of Rs.2,19,34,696/-, initially which was revised to Rs.2,19,30,835/- [hereinafter referred to as the “Contract”]. The machine was to be delivered to Diesel Locomotive Works at Varanasi [hereinafter referred to as “DLW”] by Parishudh within a period of 300 days from the date of Contract, i.e., by 07.10.2015.

4. Undisputably, the delivery period was extended initially to

06.06.2016 and then thereafter to 31.01.2017 by the Railways. However, Parishudh requested for a further extension of the delivery period which was not given and by a letter dated 29.03.2017 [hereinafter referred to as “Cancellation Letter”], the Contract between the parties was terminated and the disputes were referred to a sole Arbitrator [hereinafter referred to as “Arbitral Tribunal”] appointed by the Competent Authority, COFMOW, on

25.10.2017.

5. The Arbitral Tribunal entered into reference on 15.11.2017.

Parishudh filed its Statement of Claims making the following claims as recorded in the Award:-

“a. Direct the Re