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TMI Blog2015 (7) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the ONGC cannot be made legally liable to make any payment to the appellant. As stated hereinabove, only for the sake of convenience and to get the work of the ONGC done without any hassle, the ONGC had made payment to the appellant on behalf of the respondent without incurring any liability to make complete payment on behalf of the respondent. The ONGC shall not be liable to make payment, as rightly decided by the Arbitral Tribunal, to the appellant but the payment shall have to be made by the respondent, who had given a sub-contract to the appellant. Majority view of the Arbitral Tribunal on the above issue is confirmed and the view of the High Court is not accepted. - Decided in favor of appellant. - Civil Appeal No. 3353 of 2005, Civil Appeal No.3355 of 2005 - - - Dated:- 2-7-2015 - Anil R. Dave, Vikramajit Sen And Pinaki Chandra Ghose,J. JUDGMENT Anil R. Dave, J. 1. Being aggrieved by a common judgment dated 29th September, 2004, delivered in Appeals Against Order Nos.255 and 624 of 2003 by the High Court of Andhra Pradesh at Hyderabad, these appeals have been filed by M/s Essar Oil Ltd., who had been given a sub-contract by the first respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te with regard to non-payment and some other disputes had been referred to the Arbitral Tribunal consisting of Respondent nos.2, 3 and 4. It is pertinent to note here that the ONGC, who had given a contract to the respondent, was not before the Arbitral Tribunal because the ONGC was not a party to the Arbitration Agreement entered into between the appellant and the respondent. The question which was involved in the said dispute was not only with regard to determination of the amount to be paid to the appellant, but was also with regard to determination of a person who was liable to make payment to the appellant. 7. After hearing the concerned parties, the Arbitral Tribunal made an Award, but all the three Members of the Tribunal could not come to the same conclusion. The majority i.e. two Members of the Tribunal came to the conclusion that there was no privity of contract between the appellant and the ONGC; and the ONGC was not a party to the contract between the appellant and the respondent. In the aforestated circumstances, the ONGC, according to the majority view, could not be held liable for making payment to the appellant and the liability to make payment to the appellant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also held that as the ONGC was a party to the contract, it ought to have been made a party before the Arbitral Tribunal but as the ONGC was not represented before the Arbitral Tribunal, the Award made by the Tribunal was bad in law. The Award deserved to be set aside by the Principal District Judge but he did not and therefore, the orders passed in the Original Petitions filed before the learned Principal District Judge were also bad in law and accordingly the Award and the orders passed in the Original Petitions were quashed and set aside. 13. The main issue which is involved in these appeals is about ascertainment of a person, who is liable to make payment to the appellant. There is no dispute with regard to quality or quantity of the work done by the appellant at this stage. It is not in dispute that the appellant has not been paid the amount payable to it. It is also not in dispute that the appellant had been engaged by the respondent in pursuance of a contract entered into between the respondent and the ONGC and it was open to the respondent to avail services of any other person for doing the work entrusted to it by the ONGC. In the light of the aforestated undisputed facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It had been further submitted by the learned counsel that in view of the aforestated factual and legal position, the appeals deserve to be allowed and the respondent should be made liable to make payment to the appellant. 18. On the other hand, the learned counsel for the respondent had submitted that the ONGC was liable to make payment to the appellant and therefore, there is no liability on the part of the respondent to make payment to the appellant. 19. It had further been submitted by the learned counsel for the respondent that it is not necessary that in each and every case the contract should be in writing. The contract can be very well inferred by the act or conduct of the parties, whereby impliedly a party undertakes to make good a liability to make payment to someone. According to the learned counsel, even in the instant case, there was an implied contract amongst the appellant, the respondent and the ONGC and therefore, it was the liability of the ONGC to make payment to the appellant. 20. The learned counsel for the respondents had drawn our attention to correspondence exchanged between the ONGC and the respondent. He had specially referred to a letter dated 25t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected. The ONGC was interested in getting its work done promptly and without any hassles. In the circumstances, upon perusal of the correspondence, which had taken place between the ONGC and the respondent, it is clear that so as to facilitate the respondent, the ONGC had made payments on behalf of the respondent to the appellant directly. 25. Simply because some payments had been made by the ONGC to the appellant, it would not be established that there was a privity of contract between the ONGC and the appellant and only for that reason the ONGC cannot be saddled with a liability to pay the amount payable to the appellant by the respondent. 26. It is also pertinent to note that the Arbitration Agreement was only between the appellant and the respondent. The ONGC was not a party to the Arbitration Agreement. When a dispute had arisen between the appellant and the respondent in relation to payment of money, the appellant had initiated the arbitration proceedings. As the ONGC was not a party to the Arbitration Agreement, it could not have been represented before the Arbitral Tribunal. If the ONGC was not a party before the Arbitral Tribunal, the Tribunal could not have made a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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