9911796707
TMI Blog2001 (7) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court. 2. The factual matrix of the case leading to the present proceeding may be shortly stated thus : The Delhi Development Authority (DDA), respondent herein, floated a tender enquiry on 30-1-1981, for supply of hard coke. Indu Engineering & Textiles Ltd., appellant herein, submitted its offer for supply of the material in response to the said notice on 12-2-1981. The offer letter contained a price escalation clause to the following effect: "Our prices are based on the prevailing prices of pig iron, premium hard coke and ferro-silicon as announced by the Joint Plant Committee [JPC], Bharat Coking Coal Ltd., or any other agency authorised for this purpose, plus sales tax, cost of transportation and handling from main producers to our works at Agra. Any upward revision in the prices of pig iron, hard coke and ferro-silicon shall have corresponding effect on our prices as per formula given below. Such revision in prices shall be effective from all material in transit, or tendered for inspection immediately from the date of announcement of revised prices by J.P.C., Bharat Coking Coal Ltd., etc." 3. The tenders were opened by the respondent on 20-2-1981. On 14-2-1981, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect of the letter dated 9-6-1982. Pursuant to the said decision, the arbitrator passed the award dated 3-10-1989 after hearing both the parties. He gave detailed reasons in support of the award accepting the claim of the appellant in respect of item No. 2. He gave reasons for not accepting the letter dated 9-6-1982 as binding on the appellant holding that it was obtained after a year of the agreement and under duress and that the offer dated 12-2-1981, itself was sufficient to justify the claim of the appellant. By the order dated 20-2-1995, a Single Judge of the High Court rejected the objection filed by the respondent against the award and made the award dated 3-10-1989 rule of the court. 5. The respondent filed the appeal, FAO(OS) 219 of 1995, against the said order which was allowed by a Division Bench of the Court holding, inter alia, that the award of the arbitrator accepting the claim of the appellant for escalated price of hard coke was without evidence. The Division Bench held, inter alia, that in the negotiations held on 16-4-1981 between the parties the price of hard coke as quoted by the appellant was not increased. The Division Bench further held that the price esca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hotels v. U.P. State Electricity Board [1989] 1 SCC 359, this Court in paras 17 and 18 observed as follows : "17. It appears that the main question that arises is : whether the decision of this Court in Indian Aluminium Co. v. Kerala State Electricity Board [1975] 2 SCC 414 case was properly understood and appreciated by the learned umpire and whether he properly applied the agreement between the parties in the light of the aforesaid decision. It was contended that the question was whether the sums payable under clause 9 included discounts. On the aforesaid basis, it was contended that there was an error of law and such error was manifest on the face of the award. Even assuming, however, that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion, such an error is not an error which is amenable to correction even in a reasoned award under the law. Reference may be made to the observations of this Court in Coimbatore District P.T. Sangum v. Bala Subramania Foundry [1987] 3 SCC 723, where it was reiterated that an award can only be set aside if there is an error on its face. Further, it is an error of law and not mist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement between the parties, hence, the parties were bound by the decision of the umpire. Our attention was drawn to the observations of this Court in Hindustan Tea Co. v. K. Sashikant & Co. [1986] Supp. SCC 506, where this Court held that under the law, the arbitrator is made the final arbiter of the dispute between the parties, referred to him. The award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate facts. Where the award which was a reasoned one was challenged on the ground that the arbitrator had acted contrary to the provisions of section 70 of the Contract Act, it was held that the same could not be set aside." (p. 368) 7. This Court, while dealing with the power of courts to interfere with an award passed by arbitrator, had consistently laid stress on the position that an arbitrator is a judge appointed by the parties and, as such, the award passed by him is not to be lightly interfered with. In the case at hand, the only question that arose for consideration was whether the appellant was entitled to claim the enhanced price of hard coke for the quantity supplied by it to the respondent. Under the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conclusion should have been otherwise, it was not open to it to interfere with the award on that score. Another fallacy committed by the Division Bench in the judgment is recording the finding that the escalation clause in the agreement had prospective operation with effect from 14-5-1981, i.e., the date on which the agreement was entered into by the parties. As noted earlier, under the agreement, a specified quantity of the commodity was to be supplied by the appellant to the respondent within the period specified in the agreement and the appellant, while submitting its tender, had made it clear that any subsequent upward change in price of the commodity will entitle it to claim at such rate and subsequently, the price escalation clause was modified in a manner not relevant for deciding the dispute referred to the arbitrator, the question of the price escalation clause having prospective effect was of no consequence. If the claimant was entitled to the enhanced price, the respondent was liable to pay the same for the entire stock supplied. If the position was otherwise, the claim of the appellant was to be rejected in toto. 9. On the discussions in the foregoing paragraphs, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
