FAO(OS)(COMM) No.97/2021 Page 1 of 15

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 02.08.2021

Date of Decision: 11.08.2021

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FAO(OS)(COMM) 97/2021 & CM APPLs. 23582-83/2021

BENTWOOD SEATING SYSTEM P LTD.

.....Appellant

Through

Mr.S.D.Singh with Mr.Rahul

Kumar Singh, Mr.Jitender

Singh and Ms.Meenu Singh,

Advs.

versus

AIRPORT AUTHORITY OF INDIA

..... Respondent

Through

Mr.K.K.Rai, Sr. Adv. with Mr.

Digvijay Rai, Mr.Aman Yadav,

Ms.Sreoshi Chatterjee and

Mr.Ramkrishna Veerendra,

Advs.

CORAM:

HON'BLE MR. JUSTICE MANMOHAN

HON'BLE MR. JUSTICE NAVIN CHAWLA

NAVIN CHAWLA, J.

1. This appeal has been filed by the appellant under Section 37 of

the Arbitration and Conciliation Act, 1996 (hereinafter referred to as

the ‘Act’) challenging the judgment and order dated 27.05.2021

passed by the learned Single Judge of this Court in O.M.P. (COMM)

No.262/2019, titled Airports Authority of India vs. Bentwood Seating

2021:DHC:2429-DB

FAO(OS)(COMM) No.97/2021 Page 2 of 15

System (P) Ltd., allowing the said petition filed under Section 34 of

the Act by the respondent.

2. The above petition was filed by the respondent herein under

Section 34 of the Act challenging the Arbitral Award dated

13.03.2019 passed by the learned Sole Arbitrator in arbitration case

reference No. DIAC/2225/09-18 between the parties. By the

Impugned Judgment, the learned Single Judge has been pleased to

allow the said petition and set aside the Arbitral Award on the ground

that the learned Arbitral Tribunal has failed to decide one of the

principal disputes between the parties in relation to the submission of

the respondent that the purchase order dated 13.07.2017 (hereinafter

referred to as ‘Purchase Order’) issued by the respondent in favour of

the appellant had been procured by the appellant by fraud.

3. The dispute between the parties arises out of the Purchase Order

dated 13.07.2017 placed by the respondent on the appellant for supply

of 4000 Stainless Steel Type Passenger Baggage Trolleys (hereinafter

referred to as ‘PBTs’). It need only be noticed that the respondent

issued a Show Cause Notice dated 08.01.2018 to the appellant, calling

upon the appellant to show cause why the contract should not be

terminated as only 550 PBTs had been supplied till that date. The

appellant replied to the Show Cause Notice on 17.01.2018, however,

the respondent terminated the Purchase Order on 20.02.2018. The

respondent also invoked the Bank Guarantee furnished by the

appellant and debarred the appellant for a period of three years with

effect from 20.02.2018 from participating in any tender of the

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FAO(OS)(COMM) No.97/2021 Page 3 of 15

respondent in future. Aggrieved of the above, the disputes between the

parties were referred to arbitration under the aegis of the Delhi

International Arbitration Centre.

4. Before the learned Arbitrator the appellant prayed for the

following reliefs:

“ (a declare the action of the Respondent

(d) award the cost of the present proceedings”

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FAO(OS)(COMM) No.97/2021 Page 4 of 15

5. The learned Arbitrator vide the Award dated 13.03.2019 was

pleased to set aside the termination order dated 20.02.2018 of the

respondent, including the invocation of the Bank Guarantee as also the

action of debarring the appellant. The learned Arbitrator also granted

specific performance of the contract in the following terms:

“In view of the above, the Respondent - AAI is

PBTs’ will be dispatched by the Claimant –

dated 13.07.2017.”

6. The learned Arbitrator further directed payment to the appellant

for 55