TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 2019
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....espondent herein, M/s Harvinder Singh & Company, for a "pre-tender tie up" for execution of the aforementioned work of construction of the pavement for development of the DCT, Okhla, New Delhi. Clauses 1 to 5, 8, 9, 12, 18 and 21 of the said MOU, which are self-speaking, may be reproduced as under: "1. NPCC, Limited has decided to participate in the tender for the work of construction of Pavement for development of DCT Okhla, New Delhi on CONCOR. 2. M/ HSC's offer has been accepted for pre-tender tie up for the execution of above said work at rates quoted in their offer dated 2.12.03 and on the terms and conditions as contained in the N.I.T of "Client" issued to NPCC Limited and subsequently issued by "NPCC Limited to M/s HSC". M/s. HSC further confirmed that rates quoted by them are inclusive of taxes, duties, levies, and royalities including WCT/TOT etc. Total TOT/WCT payable on NPCC's contract value with client shall be responsible of M/s. HSC. In case NPCC pays any WCT/TOT on the above project, the same shall be recovered from M/s. HSC by deduction from bills. 3. In the event of NPCC Limited being successful in getting the work, NPCC Limited has agreed to award M/s. HSC....
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....PM/PERT chart indicating clearly the manner in which all the activities will be carried out by you to ensure completion of work by the scheduled date. You are further requested to mobilize at site and to start work immediately and contact unit office- NPCC Limited, CONCOR Unit New Delhi for taking further instructions in this regard. The detail work order / agreement shall be issued to you in due course. The LOI is being issued to you in duplicate, you are requested to return one copy of the same duly signed and stamped as token of your acceptance. Thanking you, Yours faithfully, (N.K.S. Gahlowt) Dy. General Manager (CO)" 4. As required by the MOU, dated 4th December, 2003 (supra), the appellant and the respondent entered into a formal agreement dated 1st September, 2004. The said agreement may be reproduced, in extenso, thus: "NATIONAL PROJECTS CONSTRUCTION CORPORATION LIMITED AGREEMENT FOR WORK This agreement No. 799/Cont/made on this 1st day of Sept, 2004 between National projects Construction Corporation Limited Company registered under the Companies Act 1956 and having its registered office at Raja House, 30-31, Nehru Place, New Delhi - 110....
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.... M/s HSC's IInd letter dated 22.03.04. 10. M/s HSC's letter dated 05.04.04. 11. NPCC agreement with M/s. CONCOR for this work terms, conditions, specification etc., as applicable to NPCC Limited. 12. Additional terms and conditions of NPCC Limited. 13. Schedule "A" - Schedule of Items, Raters and Quantities based on NRSOR - 96 14. Schedule "B" - Schedule of Items, Rates and Quantities (non schedule items). AND THE NPCC LIMITED do hereby agree that if M/s. HSC shall duly perform the same work in the manner aforesaid and observe to keep the said terms and conditions NPCC Limited will pay cause to be paid to M/s HSC for the said work, due in that respect, the rates payable to NPCC by the M/s. CONCOR minus the percentage as agreed to foregoing para. It is hereby agreed that all the provision of the said conditions, specifications which have been carefully read and understood by M/s. HSC and bill of quantities shall be all binding upon M/s. HSC and upon NPCC LIMITED and if the same has been repeated herewith shall be read as part of these presents. For M/s HSC For M/s. NPCC....
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.... live railway tracks, which were being used by the Railways, resulting in inability, on the part of the respondent, to use the short passage for reaching the work site and resulting in consequential delay; change of drawings from time to time; and that the termination of the contract, by the appellant, on 31st March, 2005, was illegal. 7. On the said grievances remaining unresolved between the appellant and the respondent, the matter was referred, in accordance with the arbitral clause, contained in the agreement dated, 1st September, 2004 (supra), to a learned Sole Arbitrator, for arbitration and decision on the claims of the respondent. Counter-claims were also filed, by the appellant, before the learned Sole Arbitrator. 8. It is also relevant to note that, in the interregnum, CONCOR terminated its agreement with the appellant, on the ground that the appellant had sub-let the contract to the respondent, in contravention of the proscription, against such sub-letting, contained in the contract between CONCOR and the appellant. 9. Of the various claims raised by it, the learned Sole Arbitrator awarded, to the respondent, only Claim Nos. 1 and 10. The counterclaims filed by t....
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....10th November, 2008, rejected the submission of the appellant that it was entitled to withhold payments due to the respondent, merely because CONCOR had defaulted in making payments to it. Resultantly, Claim No. 1, of the respondent, was allowed for Rs. 16,08,789/-. 14. Claim No. 10 of the respondent related to refund of security deposit. The only ground, urged by the appellant, before the learned Sole Arbitrator, for failing to refund the security deposit to the respondent, was that it was payable by CONCOR at the end of the defect liability period. The learned Sole Arbitrator rejected this submission, as well, holding that, as the contract between the appellant and the respondent was terminated by the appellant, the appellant could not withhold the security amount of the respondent (which was Rs. 5,60,000/-), which had, necessarily, to be refunded to the respondent. Claim no.10 was, therefore, also allowed to the extent Rs. 5,60,000/-. 15. As already noted above, the counter claims of the appellant were rejected by the learned Sole Arbitrator. 16. The aforementioned Award dated 10th November, 2008 of the learned Sole Arbitrator, was challenged by the appellant as wel....
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....udes that it would be the obligation of NPCC to pay the amount to the contractor and later, seek remedy against CONCOR. 16. Even otherwise a perusal of the terms shows that there is no provision which specifically states that in case of failure of CONCOR to release payments to NPCC which are legitimately due and payable, the liability of NPCC to release payments to the contractor gets extinguished. The above noted provisions, namely, clauses 22,29 and 35 merely stress that the terms and conditions of the contract between NPC and CONCOR will apply back to back to the contractor. Specifically clause 29 which was stressed upon by the learned senior counsel for the NPCC merely states that payment when received by NPCC shall be released to the contractor within five working days. It is not implicit in this clause that in case the payment is not released by CONCOR for the work done, the contractor is not entitled to any payment. 17. The above interpretation of the clauses of the agreement between the parties by the learned Arbitrator is a reasonable and plausible interpretation. Further, on a finding of fact the learned Arbitrator has concluded that there was inaction and delay whi....
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....nt. 23. We are unable to agree with Mr. Bhambhani, and find no reason to interfere with the impugned judgment of the learned Single Judge, or for that matter, the decision of the learned Sole Arbitrator on this aspect of the matter. 24. We are in entire agreement with learned Sole Arbitrator, as well as with the learned Single Judge, that there was no privity of contract between the respondent and CONCOR. The various clauses, on which Mr. Bhambhani relies, merely stipulate that, out of the payment received by the appellant from CONCOR, the appellant was entitled to deduct its profit and commission, before making payment to the respondent. These clauses cannot be interpreted in such a way, as to disentitle the respondent to payment for work rendered by it, as instructed of the appellant and in accordance with the agreement between the appellant and the respondent, merely because the appellant did not receive payment from CONCOR. Any such interpretation would be grossly unjust, inequitable and against public policy, as it would amount to holding that the services rendered, and work done, by the respondent for the appellant, in terms of a bilateral contract duly drawn up between the....
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....a fair and efficient arbitral procedure, (b) to provide for the passing of reasoned awards, (c) to ensure that the arbitrator does not transgress his jurisdiction, and (d) to minimize supervision, by courts, in the arbitral process. (ii) The merits of the award are required to be examined only in certain specified circumstances, for examining whether the award is in conflict with the public policy of India. (iii) An award would be regarded as conflicting with the public policy of India if (a) it is contrary to the fundamental policy of Indian law, or (b) it is contrary to the interests of India, (c) it is contrary to justice or morality, (d) it is patently illegal, or (e) it is so perverse, irrational, unfair or unreasonable that it shocks the conscience of the court. (iv) An award would be liable to be regarded as contrary to the fundamental policy of Indian law, for example, if (a) it disregards orders passed by superior courts, or the binding effect thereof, or (b) it is patently violative of statutory provisions, or (c) it is not in public interest, or (d) the arbitrator has not adopted a "judicial approach", i.e. has not acted a fai....