TaxTMI 
TaxTMI 
2024 (7) TMI 752
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....s contrary to clause 15.4 of the tender document which specifically provides that no claim shall lie against the purchaser in respect of interest. 4. It is further contended that Section 31 (7) of the 1996 Act binds the arbitrator to the contract between the parties. If the parties agree to non-imposition of interest, it is beyond the jurisdiction of the arbitrator to grant the same. 5. Section 28 (3) of the 1996 Act, it is argued, stipulates that while making an award, the tribunal shall in all cases take into account the terms of contract and trade usages applicable to the transaction. 6. Insofar as claim no. 2 is concerned, it is argued that Clause 21 of the Special Conditions of Contract (SCC) contains a denial clause which precludes the supplier from any benefit due to change of any statutory levies, customs duty variation, etc. which comes after expiry of the original delivery period as per the Purchase Order/Letter of Credit. The time for completion of the supply was extended at least five times and the VAT calculated under claim no. 2 pertains to a period after the expiry of the original delivery period. Thus, Clause 21 debars such claim. 7. It is contended by the petit....
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....rted at (2015) 3 SCC 49, where the scope of interference under Section 34, read with Section 5 of the 1996 Act, was discussed. 14. It is argued that, the law was laid down therein that there cannot be any interference on the ground of perversity unless a finding is based on no evidence, the arbitral tribunal takes into account something irrelevant to the decision or ignores vital evidence in arriving at its decision. 15. It is argued that none of the grounds under Section 34 of the 1996 Act has been made out in the present case. For the said proposition, a co-ordinate bench judgment in the matter of The Indian Iron & Steel Co. Ltd Vs. M/s J.G. Engineers Pvt. Ltd. reported at (2013) SCC OnLine Cal 54 is also relied on by learned counsel for the claimant/respondent. 16. It is argued that the Railways failed to provide storage space, as admitted in writing, for which the supply could not be effected by the claimant. 17. Moreover, it is argued that since the claimant suffered huge loss, having procured materials in terms of the orders of the Railways, the same was rightly compensated by the arbitrator. 18. It is argued that the Railway Authorities place reliance on a communication....
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....e products but procures the same from third parties for the purpose of supplying to the award-debtor. Hence, there does not arise any question of waiting for a period as long as four months for supplying such products if the claimant/award holder was all along ready with the material. 26. Thus, in the absence of any proof as to the claimant having kept the materials ready, there does not arise any question of loss being suffered by the claimant for refusal of the award-debtor to receive the same. 27. Importantly, Section 73 of the Contract Act embodies a principle which is cardinal to the fundamental policy of law in India, requiring actual loss to be proved through evidence for a claimant to be found entitled to unliquidated damages as in the present case. Here, the claimant has failed to substantiate or quantify such damages for not being able to supply 2596 nos. of Conductor Rail Support Insulator. 28. Another important aspect which was entirely overlooked by the arbitrator was the specific option clause in item no. 5 of the note in the schedule of the requirement-cum-offer form accompanying the tender. As per the same, +30% option was available to the purchaser, that is, the....
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....y debarred by Clause 21 of the General Conditions of Contract, which formed a part of the agreement between the parties. 33. The same logic applies to the grant of award in respect of claim no. 4, also a VAT component which relates back to claim no. 1. 34. Hence, the above components of the award fall outside the purview of the agreement between the parties, nay specifically barred by the contract. 35. It is well-settled that the very premise of arbitration is the consensus and concurrence between the parties to refer specific disputes to arbitration. The arbitrator is a creature of contract and as such, is bound by the terms of the agreement between the parties. Thus, being specifically debarred by the agreement and/or falling outside the purview of the agreement, the awards on the above components are categorically vitiated under Section 34(2)(a)(iv) of the 1996 Act, as well as by patent illegality as envisaged in Sub-section (2-A) of Section 34. 36. The short closure/termination was also not specifically challenged by the claimant. Thus, the premise of grant of the award on the balance items was palpably vitiated by patent illegality and perversity, since if the short closur....