O.M.P. (COMM) 182/2021

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on:17.01.2022

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O.M.P. (COMM) 182/2021 and IA Nos. 7430/2021 &

7432/2021

CONTAINER CORPORATION OF INDIA LIMITED

AND ANR

..... Petitioners

versus

M/S WATRANA TRACTION COMPANY

..... Respondent

Advocates who appeared in this case:

For the Petitioner

: Mr Ajay K. Jain, Advocate.

For the Respondent

: Mr Manish Vashisht, Senior Advocate with

Mr Sanjeev Kumar, Mr Pankaj Kashyap and

Mr Manashwy Jha, Advocates.

CORAM

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

1.

The petitioners have filed the present petition under Section 34

of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C

Act’) praying that the Arbitral Award dated 20.01.2021 (hereafter ‘the

impugned award’) be set aside.

2.

The impugned award was rendered by an Arbitral Tribunal

constituted by a Sole Arbitrator (hereafter ‘the Arbitral Tribunal’), in

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

O.M.P. (COMM) 182/2021

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the context of disputes that had arisen between the Container

Corporation of India Limited (hereafter ‘CONCOR’) and the

respondent (hereafter ‘WTC’) in connection with a contract for

Mechanized

Cargo

Handling

and

Inventory

Management

at

CONCOR’s facility at Tughlakabad, New Delhi.

Factual Background

3.

CONCOR is a Government company and is primarily engaged in

providing

rail

transportation

services

between

Inland/Domestic

Containers Depots/Terminals and Ports within the country. WTC is a

partnership firm and is engaged in the business of renting forklift trucks,

warehousing equipments, containers and other vehicles on a contractual

basis.

4.

CONCOR had issued a Notice Inviting Tenders (hereafter ‘NIT’)

for

the

work

of

Mechanized

Cargo

Handling

and

Inventory

Management Services at Inland Container Depot (ICD) – Tughlakabad,

New Delhi. Pursuant to the aforesaid NIT, WTC had submitted its

online bid. WTC was declared as the successful bidder and CONCOR

issued a Letter of Intent dated 11.09.2017 (hereafter ‘the LoI’).

Thereafter, on 18.09.2017, the parties signed an agreement (hereafter

‘the Agreement’), whereby WTC agreed to provide the specified

services, for a term of four years extendable by a further period of one

year. In terms of the said LoI, WTC was required to furnish a Bank

Guarantee (BG) in the sum of ₹25,00,000/-within a period of fifteen

days from the date of issuance of the LoI, that is by 25.09.2017.

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

O.M.P. (COMM) 182/2021

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Thereafter, on 10.10.2017, CONCOR called upon WTC to commence

its work.

5.

In terms of the Agreement, WTC was obliged to deploy the

specified machines, equipment and manpower at the ICD for cargo

handling and inventory management. However, WTC would be

remunerated on the basis of certain activities executed by it at the agreed

rates.

6.

WTC did not deploy certain machinery as agreed. Consequently

in the month of March 2018, CONCOR imposed a penalty of

₹2,73,045/-, which included a sum of ₹1,49,000/- on account of non-

deployment of machinery by WTC. In this context, WTC sent a letter

dated 21.04.2018 setting out the equipment deployed by it. It requested

that the penalty amount of ₹1,49,000/-, which was imposed by

CONCOR and deducted from its bill, be waived as it was suffering

losses in performing the Agreement. WTC also stated that it had not

defaulted in performance of any work and there was no pendency in

performance of its work. WTC followed this by another letter dated

15.05.2018, once again, requesting that the penalty imposed for non-

deployment of certain equipment [18 T Hydra & 10 T Forklift] be

waived. It also stated that it was suffering huge losses and its billing

income in the month of April was less than its fixed expenses. WTC

requested CONCOR to waive the penalty on compassionate grounds

because of business conditions. It also requested CONCOR to permit

it to remove