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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 ..... ermitted to avail services of any other person for doing the aforestated work entrusted to it. In other words, it was open to respondent no.1 to engage a sub-contractor for getting the work done. Other respondents in these appeals are the arbitrators, who are formal parties. 3. In pursuance of the aforestated understanding arrived at and the contract entered into between the ONGC and Hindustan Shipyard Ltd. (who has been referred to as 'the respondent' hereinafter), the respondent had entered into a contract with M/s Essar Oil Ltd., who is the appellant in both these appeals. Thus, the appellant was a sub-contractor in respect of the contract which the respondent had to fulfill for the ONGC. 4. It appears that for the sake of convenience and so as to obviate certain financial difficulties of the respondent, certain payments had been made to the appellant directly by the ONGC. The appellant, upon getting certain work done under the sub-contract and upon getting necessary certificates with regard to the quality and quantity of the work done from the respondent, had received some payment from the ONGC on the strength of those certificates. 5. In the process of carrying out the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant only if the respondent is paid the unpaid amount by the ONGC. Thus, the minority view was that the liability to make payment to the appellant was that of the ONGC, but as the ONGC was not a party before the Tribunal, the proper course open to the appellant was to take appropriate legal action against the ONGC for recovery of the amount due and payable to the appellant. 9. The respondent was aggrieved by the Award of the Arbitral Tribunal as according to the majority view of the Tribunal, the respondent was liable to make payment to the appellant. In the circumstances, the respondent filed OP NoS.989 of 2001 and 96 of 2002 before the Principal District Judge, Visakhapatnam, under Section 34 of the Arbitration and Conciliation Act, 1996. 10. The Principal District Judge, Visakhapatnam, decided both the Original Petitions by orders dated 10th October, 2002 and 1st November, 2002, respectively. The learned Principal District Judge confirmed the award on the issues with which we are concerned, but he remanded the matter to the Arbitral Tribunal on the issues regarding counter claim etc., with which we are not concerned in this case. 11. Being aggrieved by the aforestated two or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-contract in nature. In absence of any contract between the ONGC and the appellant, the appellant could not have made any claim before the ONGC and as there was no contract between them, it was also not possible for the appellant to make the ONGC a party before any Court or Authority for recovery of the amount payable to it in pursuance of the sub-contract given by the respondent. 15. It had been fairly admitted by the learned counsel appearing for the appellant that very often payments were made to the appellant by the ONGC. It had further been submitted that the payments were made by the ONGC so as to facilitate the appellant and to get the work of the contract done smoothly. Every time when payment was made by the ONGC to the appellant, the ONGC used to debit the account of the respondent i.e. the amount so paid by the ONGC to the appellant was treated by the ONGC as if the said payment was made by the ONGC to the respondent. Thus, so as to obviate a long procedure and to expedite payment to the appellant, who was actually doing the job for the ONGC, instead of the ONGC paying to the appellant through the respondent, the ONGC was paying directly to the appellant. 16. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t established the fact that the ONGC had undertaken the liability to make payment to the appellant. The aforestated letter dated 25th October, 1991 and other letters which had been exchanged between the respondent and the ONGC were placed on record to show that there was a contract between the ONGC and the appellant. 21. For the aforestated reasons, it had been submitted by the learned counsel for the respondent that the view of the High Court that the ONGC was liable to make payment to the appellant is correct and therefore, the appellant should take appropriate action against the ONGC for recovery of the unpaid amount. The learned counsel had, therefore, submitted that the view taken by the High Court is absolutely correct and the respondent is no more liable to make any payment to the appellant. 22. We have heard the learned counsel for the parties at length and have also considered some judgments cited by them and the documents which had been placed on record and relied upon by them. 23. Upon hearing the learned counsel and looking at the contract entered into between the appellant and the respondent and upon perusal of other letters, we believe that the view expressed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will have to take legal action against the ONGC for recovery of the amount payable to it. If one looks at the relationship between the appellant and the respondent, it is very clear that the respondent had given a sub-contract to the appellant and in the said agreement of sub-contract, the ONGC was not a party and there was no liability on the part of the ONGC to make any payment to the appellant. Moreover, we could not find any correspondence establishing contractual relationship between the ONGC and the appellant. In the 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. 28. The learned counsel appearing for the appellant failed to show any document in the nature of a contract entered into between the appellant and the ONGC whereby the ONGC had made itself liable to make payment to the appellant. Even when the payment had been made by the ONGC, it was very clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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