{"id":197718,"date":"2003-10-09T00:00:00","date_gmt":"2003-10-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/pure-helium-india-pvt-ltd-vs-oil-natural-gas-commission-on-9-october-2003"},"modified":"2015-09-22T08:11:32","modified_gmt":"2015-09-22T02:41:32","slug":"pure-helium-india-pvt-ltd-vs-oil-natural-gas-commission-on-9-october-2003","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/pure-helium-india-pvt-ltd-vs-oil-natural-gas-commission-on-9-october-2003","title":{"rendered":"Pure Helium India Pvt. Ltd vs Oil &amp; Natural Gas Commission on 9 October, 2003"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Pure Helium India Pvt. Ltd vs Oil &amp; Natural Gas Commission on 9 October, 2003<\/div>\n<div class=\"doc_author\">Author: S.B. Sinha<\/div>\n<div class=\"doc_bench\">Bench: Cji, S.B. Sinha.<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  6478 of 2001\n\nPETITIONER:\nPure Helium India Pvt. Ltd.\t\t\t\t\n\nRESPONDENT:\nOil &amp; Natural Gas Commission\t\t\t\t\n\nDATE OF JUDGMENT: 09\/10\/2003\n\nBENCH:\nCJI &amp; S.B. Sinha.\n\nJUDGMENT:\n<\/pre>\n<p>J U D G M E N T<\/p>\n<p>S.B. SINHA, J :\n<\/p>\n<p>\tWhether jurisdiction of an arbitrator to interpret a contract can<br \/>\nbe subject-matter of an objection under Section 30  of the Arbitration<br \/>\nAct, 1940 (hereinafter referred to as &#8216;the Act&#8217;, for the sake of<br \/>\nbrevity) is in question in this appeal which arises out of the judgment<br \/>\nand order dated 24.2.2000 of the High Court of Judicature at Bombay in<br \/>\nAppeal No.612 of 1996 arising out of a judgment and order of a learned<br \/>\nSingle Judge dated 13.10.1995 dismissing the  said objection of the<br \/>\nrespondent.\n<\/p>\n<p>BACKGROUND FACT :\n<\/p>\n<p>The parties hereto entered into a contract for supply of Helium<br \/>\nDiving Gas pursuant to a notice inviting global tender dated 2.5.1989.<br \/>\nIn terms of the said notice inviting tender, the respondent herein was<br \/>\nto take supply of Helium gas, which is one of the rare gases being not<br \/>\nchemically produced and  is mainly extracted from the natural gas wells<br \/>\nin mineral form.  The said gas is ordinarily imported from U.S.A.,<br \/>\nAlgeria, Poland and Russia.  In terms of the said notice inviting<br \/>\ntender, three different categories of rates were to be quoted  by the<br \/>\ntenderers both foreign and Indian.   Whereas the foreign tenderers were<br \/>\nto quote their prices in foreign currency, the Indian bidders could<br \/>\nindicate the nature of payment, i.e. if  a part thereof  was recoverable<br \/>\nhaving foreign exchange component.  Pursuant to or in furtherance of the<br \/>\nsaid notice inviting tenders, the tenderers submitted their technical<br \/>\nbids. The bidding was to be in two stages; in terms whereof the<br \/>\ntechnical bids were to be opened first whereafter only final bids were<br \/>\nto be considered.  The appellant&#8217;s bid was found to be the lowest in<br \/>\nthat the appellant had bid a price of Rs.150\/- per cubic meter out of<br \/>\nwhich US$ 5 was to be the foreign exchange component.  The said bid of<br \/>\nthe appellant having been found to be the lowest, the parties entered<br \/>\ninto a negotiation; pursuant to or in furtherance whereof, the appellant<br \/>\nlowered its offer to Rs.149\/- per cubic meter, out of which US$ 4.60 was<br \/>\nto be the foreign exchange component.\n<\/p>\n<p>The respondent having felt the need of Helium gas urgently,<br \/>\npending execution of the contract, placed an order for ad hoc supply of<br \/>\n52000 cubic meters of Helium gas with the appellant.  The respondent<br \/>\nagain placed an order for supply of 300000 cubic meters of Helium gas<br \/>\non 25.5.1990.\n<\/p>\n<p>The Ministry of Petroleum and Natural Gas, Government of India,<br \/>\nvide its letter dated 21.5.1990 released foreign exchange for<br \/>\nprocurement of Helium gas, by reason of letter addressed to the<br \/>\nrespondent stating :\n<\/p>\n<p>&#8220;I am directed to refer to your letter<br \/>\nNo.DlH\/BOP\/OBG\/OS\/30\/90 dated 19.4.90 on the<br \/>\nabove subject and to convey the approval of the<br \/>\nPresident to the procurement of 3,00,000 M3 of<br \/>\nHelium Gas from M\/s Pure Helium India Ltd.,<br \/>\nBombay at a cost of Rs.4.47 crores including a<br \/>\nforeign exchange component of Rs.2.38 crores (US<br \/>\n$ 1.380 million @ US$ 5.7875 = Rs.100\/-).&#8221;\n<\/p>\n<p>The respondent thereafter issued two supply orders on 12.6.1990 to<br \/>\nthe appellant for supply of 52000 cubic meters and 300000 cubic meters<br \/>\nHelium gas respectively at a price of Rs.149 per cubic meter inclusive<br \/>\nof foreign exchange component of US$ 4.60.  Having regard to the<br \/>\nincrease in price of the US dollar, the appellant herein claimed the<br \/>\ndifference of price of US dollar as on the date of the contract and the<br \/>\ndate of supply.  The claim of the appellant was recommended by the<br \/>\nSecretary, Petroleum and Natural Gas Department as well as by certain<br \/>\nother senior officers.  The respondent, however, rejected the claim on<br \/>\nor about 14.7.1992 whereafter the arbitration agreement was invoked.<br \/>\nThe arbitrators entered into a reference on 1.3.1993.  A non-speaking<br \/>\naward was made by the arbitrators on 13.8.1993 holding that the<br \/>\nrespondent was liable to compensate the appellant for Exchange Rate<br \/>\nFluctuation in the sum of Rs.1,03,41,309\/- with interest at the rate of<br \/>\n18% per annum from the date of the invoices till the date of the award.<br \/>\nThe respondent herein questioned the validity of the said award by<br \/>\nfiling a petition under Section 30 of the Act before the Bombay High<br \/>\nCourt which was marked as Arbitration Petition No.52 of 1994.  A learned<br \/>\nSingle Judge of the High Court of Judicature at Bombay dismissed the<br \/>\nsaid petition and directed the award to be made a rule of the Court by<br \/>\nan order dated 13.10.1995.\n<\/p>\n<p>Aggrieved by and dissatisfied therewith the respondent preferred<br \/>\nan appeal thereagainst which by reason of the impugned judgment has been<br \/>\nallowed.  The appellant is, thus, in appeal before us.\n<\/p>\n<p>SUBMISSIONS :\n<\/p>\n<p>Mr. Dipankar P. Gupta, learned Senior Counsel appearing on behalf<br \/>\nof the appellant, would contend that the Division Bench of the High<br \/>\nCourt committed a manifest error insofar as it proceeded to determine<br \/>\nthe dispute on the premise that the claim could not have been preferred<br \/>\nunder any clause of the contract. The learned counsel would contend that<br \/>\nthe arbitrators had, having regard to the scope and purport of the<br \/>\narbitration agreement entered into by and between the parties were<br \/>\nentitled to go into the question of the construction of contract and<br \/>\nthey, thus, having the requisite jurisdiction therefor, the High Court<br \/>\ncould not have independently construe the same.\n<\/p>\n<p>\tDrawing our attention to various clauses of the contract as also<br \/>\nthe claim petition, the learned counsel would contend that the<br \/>\narbitrator had analyzed the terms and conditions of the contract having<br \/>\nregard to the facts and circumstances of this case as also keeping in<br \/>\nview the pleadings of the parties and in that view of the matter the<br \/>\nHigh Court while exercising its jurisdiction under Section 30 of the Act<br \/>\ncould not have interfered therewith particularly as the award was a non-<br \/>\nspeaking one.  It was urged that such a claim was also maintainable<br \/>\nhaving regard to a circular letter dated 25.9.1989 issued by the<br \/>\nGovernment of India.\n<\/p>\n<p>\tMr. Gupta would submit that the approach of the respondent in<br \/>\ndenying the just claim of the appellant must be held to be arbitrary and<br \/>\nunfair insofar as payments on similar terms as claimed by the appellant<br \/>\nhad been made not only to the foreign bidders but in fact had been made<br \/>\nto the other Indian bidders where the price was payable in the Indian<br \/>\ncurrency.  By preferring such a claim, the learned counsel would urge,<br \/>\nthe appellant had not asked for any escalation in the price but merely<br \/>\nclaimed damages in terms of the provisions of the contract occasioned by<br \/>\nfluctuation in the rate of dollar in terms of the notification issued by<br \/>\nthe Reserve Bank of India under Section 40 of the Reserve Bank of India<br \/>\nAct and such revision was permissible also in terms of clause 23 of the<br \/>\ncontract.\n<\/p>\n<p>\tIn support of the said contentions, Mr. Gupta  strongly relied<br \/>\nupon <a href=\"\/doc\/512138\/\">W.B. State Warehousing Corporation and Another vs. Sushil Kumar<br \/>\nKayan and Others<\/a> [(2002) 5 SCC 679], <a href=\"\/doc\/1847351\/\">K.R. Raveendranathan vs. State of<br \/>\nKerala<\/a> [(1998) 9 SCC 410], <a href=\"\/doc\/990351\/\">P.V. Subba Naidu and Others vs. Government of<br \/>\nA.P. and Others<\/a> [(1998) 9 SCC 407], <a href=\"\/doc\/529896\/\">H.P. State Electricity Board vs.<br \/>\nR.J. Shah and Company<\/a> [(1999) 4 SCC 214], Shyama Charan Agarwala &amp; Sons<br \/>\netc. vs. Union of India etc. [(2002) 6 SCC 201].\n<\/p>\n<p>\tThe learned counsel would further argue that for the purpose of<br \/>\ninterpretation of a contract not only the terms thereof but also the<br \/>\nconduct of the parties and surrounding circumstances are relevant.<br \/>\nReliance has been placed on <a href=\"\/doc\/1986314\/\">Khardah Company Ltd. vs. Raymon &amp; Co.<br \/>\n(India) Private Ltd.<\/a> [(1963) 3 SCR 183].  In any event, the learned<br \/>\ncounsel would contend that the respondent was bound by the policy<br \/>\ndecision of the Central Government in the matter of payment of<br \/>\ndifference in the rupee value owing to fluctuation in the rate of US<br \/>\ndollar.\n<\/p>\n<p>\tMr. Mukul Rohtagi, learned Additional Solicitor General, on the<br \/>\nother hand, would submit that the bid price for supply of Helium gas<br \/>\nmade by the appellant herein in terms of the contract being firm, the<br \/>\nappellant was not entitled to any escalation in the price and, thus, in<br \/>\nthe event, the contention of the appellant is accepted, the same would<br \/>\nrun counter to the clause in the contract prohibiting escalation in the<br \/>\nprice of the goods.\n<\/p>\n<p>\tMr. Rohtagi would contend that disclosure of the foreign exchange<br \/>\ncomponent in the price to be paid in Indian currency was sought for only<br \/>\nfor the purpose of evaluation of bids.  He would urge that for all<br \/>\nintent and purport, the foreign exchange component had nothing to do<br \/>\nwith the payment of the price for supply of Helium gas to the appellant.<br \/>\nIn support of his contention, Mr. Rohtagi relied upon Rajasthan State<br \/>\nMines &amp; Minerals Ltd. Vs. Eastern Engineering Enterprises and Another<br \/>\n[(1999) 9 SCC 283].\n<\/p>\n<p> The learned counsel would further argue that the notifications<br \/>\nissued by the Reserve Bank of India do not constitute &#8216;any change in<br \/>\nlaw&#8217; in terms of the provision of Section 40 of the Reserve Bank of<br \/>\nIndia Act or otherwise.\n<\/p>\n<p>RELEVANT CLAUSES IN THE CONTRACT :\n<\/p>\n<p>&#8220;1.16 Prices :\n<\/p>\n<p> 1.16.1 In cases where payments are required in Indian<br \/>\nRupees, the bidder should clearly indicate<br \/>\nif it shall need any foreign exchange for<br \/>\ncompleting the supplies\/services that may<br \/>\nbe ordered on him.  For this purpose they<br \/>\nshould quote the total price along with its<br \/>\nbreakdown between Indian Currency portion<br \/>\nand the foreign currency indicating the<br \/>\nspecific currency.\n<\/p>\n<p>The bidder shall also indicate the nature<br \/>\nof payments which it intends to cover<br \/>\nforeign exchange payments, viz., whether it<br \/>\nis towards acquisition\/hiring of<br \/>\nequipment\/services, payments of personnel<br \/>\nor acquisition of sub-assemblies, spare<br \/>\nparts or purchase of raw materials or for<br \/>\nany other purpose.\n<\/p>\n<p>A bidder who would not need any foreign<br \/>\nexchange for completion of the order should<br \/>\nstate this categorically.\n<\/p>\n<p>In case the bidder would require any<br \/>\nassistance\/certification from ONGC to help<br \/>\nhim secure the required foreign exchanges<br \/>\nit should be so stated.&#8221;\n<\/p>\n<p>&#8220;1.16.3 Price preference for supplies :\n<\/p>\n<p>Domestic manufactures are entitled to get<br \/>\nprice preference over the foreign<br \/>\nsupplier.\n<\/p>\n<p>The price preference is admissible over<br \/>\nthe CIF price of the lowest technically<br \/>\nacceptable foreign offer received in<br \/>\ninternational competition.\n<\/p>\n<p>The criteria for giving price preference<br \/>\nis domestic value added Domestic value<br \/>\nadded to an indigenous  offer will be as<br \/>\nfollows :\n<\/p>\n<p>CIF price of lowest<br \/>\nAcceptable foreign<br \/>\nTendered<\/p>\n<p>Direct import requirement of<br \/>\nraw material components &amp;<br \/>\nconsumable of Indian bidder<\/p>\n<p>Domestic value = &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\nCIF price of lower acceptable foreign tender<\/p>\n<p>The price preference admissible to indigenous<br \/>\nmanufacturer will be as under :\n<\/p>\n<pre>Extent of domestic       \tExtent of price\nValue\t\t\t\tpreference\t\t\t---------\n----------\t\t-------------\t\t\t\n1. Upto 20%\t\t\t\tNil\n2. More than 20% upto 50%\t\tupto 15%\n3. More than 50% and upto 70%\tupto 25%\n4. More than 70%\t\t\tupto 35%\n\n\n<\/pre>\n<p>  2.6  Bidder shall quote a firm price and they<br \/>\nshall be bound to keep this price firm<br \/>\nwithout any escalation for any ground<br \/>\nwhatsoever until they compete the work<br \/>\nagainst this tender or any extension<br \/>\nthereof.\n<\/p>\n<p>2.7\tThe prices shall be given in the currency<br \/>\nof the country of the bidder.  If the<br \/>\nbidder expects to incur a portion of this<br \/>\nexpenditure in currencies other than those<br \/>\nstated in his bid, and so indicates in his<br \/>\nbid payment of the corresponding portion<br \/>\nof the prices as so expended will be made<br \/>\nin these other currencies.\n<\/p>\n<p>6.2\tIn case the price quoted by two or more<br \/>\ndomestic bidders are within the price<br \/>\npreference limits and only Indian bidders<br \/>\nremain in contention for award of<br \/>\ncontract, then the foreign exchange<br \/>\ncomponent of their bid would be  loaded by<br \/>\na factor of 25% for the purpose of<br \/>\nrelative compensation of such domestic<br \/>\nbids.  Domestic bidders are required to<br \/>\nquote the prices in the price schedule and<br \/>\nindicate the import content in their<br \/>\noffer.  If there is no import content in<br \/>\nthe offer then it should be specifically<br \/>\nstated as NIL&#8221;.\n<\/p>\n<p>&#8220;12. (i)\tCommission shall pay for Helium at<br \/>\nthe rate of Rs.149 per M3 all<br \/>\ninclusive for offshore supply as<br \/>\nindicated in Anneuxre II.\n<\/p>\n<p>(ii) The invoice with the following<br \/>\nsupport documents, should be<br \/>\nsubmitted in triplicate immediately<br \/>\nafter receipt of material by<br \/>\nCommission to DGM (F&amp;A) 712 B,<br \/>\nVasudhara Bhavan, Bandra (E),<br \/>\nBombay-400 051.\n<\/p>\n<p>a)\tThe quantity of gas received<br \/>\nduly certified by Commission&#8217;s<br \/>\nrepresentative.\n<\/p>\n<p>b)\tThe computer analysis of the<br \/>\ngas chromatograph showing the<br \/>\npurity of the gas.&#8221;\n<\/p>\n<p>&#8220;21. Arbitration<\/p>\n<p> If any dispute, difference or question shall at<br \/>\nany time arise between the parties herein or<br \/>\ntheir respective representative or assignees in<br \/>\nrespect of these present or concerning anything<br \/>\nhereto contained or arising out of these present<br \/>\nor as to the rights liabilities or duties of the<br \/>\nsaid parties hereunder which cannot be mutually<br \/>\nresolved by the parties, the same shall be<br \/>\nreferred to arbitration, the proceedings of<br \/>\nwhich shall be held at Bombay, India within<br \/>\nthirty (30) days of the receipt of the notice of<br \/>\nintention of appointing arbitrators.\n<\/p>\n<p>Each party shall appoint an arbitrator of its<br \/>\nown choice and inform the other party.  Before<br \/>\nentering upon the arbitration, the two<br \/>\narbitrators shall appoint the Umpires.  In case<br \/>\neither of the parties fail to appoint its<br \/>\narbitrator within thirty (30) days from the date<br \/>\nof receipt of a notice from the other party in<br \/>\nthis behalf or the two arbitrator fail to<br \/>\nappoint the Umpire, the Chief Justice of the<br \/>\nSupreme Court of India shall appoint the<br \/>\narbitrator and\/ or the Umpire as the case may<br \/>\nbe.\n<\/p>\n<p>The decision of the arbitration and in the event<br \/>\nof the arbitrators failing to regain an agreed<br \/>\ndecision then the decision of Umpire shall be<br \/>\nfinal and binding on the parties hereto.\n<\/p>\n<p>The arbitration proceedings shall be held in<br \/>\naccordance with the or provisions of Indian<br \/>\nArbitration Act, 1940 and the rules made<br \/>\nthereunder as amended from time to time.\n<\/p>\n<p>The arbitration or the Umpire as the case may be<br \/>\nshall decide by whom and what proportions the<br \/>\narbitrators or Umpire fee as well as costs<br \/>\nincurred in arbitration shall be borne.\n<\/p>\n<p>The arbitrator or the Umpire may with the<br \/>\nconsent of the parties enlarge the time, from<br \/>\ntime to time to make an publish their or his<br \/>\naward.  Arbitration will be conducted in English<br \/>\nlanguage and either party may be represented by<br \/>\npersons not admitted to practice law in India.&#8221;\n<\/p>\n<p>&#8220;23. In the event of any change or amendment of<br \/>\nany Act or law including Indian Income Tax Acts,<br \/>\nrules or regulations of Govt. of India or Public<br \/>\nBody or any change in the interpretation or<br \/>\nenforcement of any said Act or law, rules or<br \/>\nregulations by Indian Govt. or public body which<br \/>\nbecomes effective after the date as advised by<br \/>\nthe Commission for submission of final price bid<br \/>\nfor this contract and which results in increased<br \/>\ncost of works under the contract, through<br \/>\nincreased cost by the Commission subject to<br \/>\nproduction of documentary proof to the<br \/>\nsatisfaction of the Commission to the extent<br \/>\nwhich is directly attributable to such change or<br \/>\namendment as mentioned above.  Similarly, if any<br \/>\nchange or amendment of any Act or law including<br \/>\nIndian Income Tax Acts, Rules or Regulation of<br \/>\nany Govt. or Public Body or any change in the<br \/>\ninterpretation or enforcement of any said Act or<br \/>\nlaw, rules or regulations by Indian Govt. or<br \/>\npublic body becomes effective after the date as<br \/>\nadvised by the Commission for submissions of<br \/>\nfinal price bid for this Contract and which<br \/>\nresults in any decrees in the cost of the<br \/>\nproject through reduced liability of taxes,<br \/>\n(other than personnel taxes) duties, the<br \/>\nContractor shall pass on the benefits of such<br \/>\nreduced costs, taxes or duties to the<br \/>\nCommission.\n<\/p>\n<p>Notwithstanding the abovementioned provisions,<br \/>\nCompany shall not bear any liability in respect<br \/>\nof:\n<\/p>\n<p>i)\tPersonnel taxes, customs, duty and<br \/>\ncorporate tax&#8221;.\n<\/p>\n<p>RELEVANT PARAGRAPHS OF STATEMENT OF CLAIM OF THE APPELLANT :\n<\/p>\n<p>\tIn its statement of claim, the appellant, inter alia, contended :\n<\/p>\n<p>&#8220;&#8230;The claimant has reason to believe that the<br \/>\nBombay Regional Office of the respondent had<br \/>\nrecommended that the respondent be made such<br \/>\npayments as they rightly believed that such<br \/>\npayments were legitimately due to the claimant<br \/>\nunder the terms of contract.\n<\/p>\n<p>That apart from the reason that the said amounts<br \/>\nwere due to the claimant under the contract<br \/>\nterms itself, the same is also supported by<br \/>\nvirtue of a notification of the Government of<br \/>\nIndia setting out internal guidelines as<br \/>\ncontained in Notification No.D-19011\/7\/87-ONG-<br \/>\nUA(EO) dated 25th of September 1989 issued by the<br \/>\nMinistry of Petroleum and Natural Gas.  A copy<br \/>\nof this notification is placed at Document No.27<br \/>\nand its relevant contents are reproduced<br \/>\nhereinbelow :-\n<\/p>\n<p>&#8220;It has now been decided that&#8230;the Indian<br \/>\nbidder&#8217;s foreign exchange component may be<br \/>\nallowed to be quoted in foreign currency for<br \/>\npurposes of actual payment and the actual<br \/>\npayment made in rupee equivalent to the foreign<br \/>\nexchange component as per the BC selling rates<br \/>\non the date of actual payment for the imported<br \/>\nsupplies.&#8221;\n<\/p>\n<p>Subsequently, the respondent issued a circular<br \/>\nNo.74\/89 dated 8th November, 1989 in compliance<br \/>\nof the abovesaid Ministerial Notification, a<br \/>\ncopy of which is Documents.  This Circular was<br \/>\nto be implemented in all regions and be<br \/>\napplicable to all contracts.&#8221;\n<\/p>\n<p>\tThe appellant in the said statement of claim, inter alia, made the<br \/>\nfollowing submissions before the arbitrator :\n<\/p>\n<p>&#8220;2.\tIt is submitted that the foreign exchange<br \/>\nrate fluctuations did not and cannot<br \/>\nresult into a price variation\/increase.<br \/>\nIt is submitted that the firm price<br \/>\nrelative to this contract was a composite<br \/>\nprice stated in Rupees and Dollars and it<br \/>\nwas that which was and has been held firm,<br \/>\nby the claimant.  The claimant is not<br \/>\nseeking additional benefit or profit but<br \/>\nis merely seeking to recover a specified<br \/>\ncontract consideration.\n<\/p>\n<p>3.\tThat the ministry notification dated<br \/>\n25.09.1989 has the force of law and the<br \/>\nrespondent is not entitled to act in<br \/>\nviolation of the same.\n<\/p>\n<p>5.\tThat it is further submitted that this<br \/>\nvery respondent has in other suppliers<br \/>\nentered into prior to the conclusion of<br \/>\nthis contract applied this notification in<br \/>\nthe manner in which it ought to have been<br \/>\napplied and has given due benefit to<br \/>\nvarious other suppliers.  It is also<br \/>\nsignificant that the respondent has had no<br \/>\nhesitation in applying the said<br \/>\nnotification to the claimant&#8217;s benefit in<br \/>\na subsequent contract.\n<\/p>\n<p>6.\tThat without prejudice to what is stated<br \/>\nabove, it is further submitted that the<br \/>\ncontract between the claimant and<br \/>\nrespondent was concluded subsequent to the<br \/>\nissuance of the notification and,<br \/>\ntherefore, any endeavour on the part of<br \/>\nthe respondent to construe the effective<br \/>\ndate of the notification as subsequent<br \/>\nthereto is misconceived and factually<br \/>\nincorrect.\n<\/p>\n<p>7.\tIt is submitted that exchange rate<br \/>\nfluctuations brought into effect in<br \/>\nexercise of powers conferred on the<br \/>\nReserve Bank of India under Section 40 of<br \/>\nthe Reserve Bank of India Act 1934 and<br \/>\nupon directions given by the Government of<br \/>\nIndia has the complete force of law.  That<br \/>\nbeing the position, any change arising<br \/>\ntherefrom is clearly covered under clause<br \/>\n23 of the Tender Document.  Being so, the<br \/>\nrespondent is bound under the contract to<br \/>\ncompensate the claimant as to such<br \/>\nincreased costs arising out of such<br \/>\nexchange rate fluctuations.  It is further<br \/>\nsubmitted that refusal on the part of the<br \/>\nrespondent to compensate the claimant<br \/>\nwithout disclosing any reasons itself is<br \/>\narbitrary.\n<\/p>\n<p>8.\t&#8230;Any interpretation of the contract<br \/>\nwherein foreign suppliers would be paid in<br \/>\nforeign currency at the current rate while<br \/>\nIndian suppliers would be paid at the rate<br \/>\nof exchange prevailing on the date of the<br \/>\nsubmission of the Price Bid would<br \/>\ndiscriminate against the Indian suppliers<br \/>\nin as much as any increase in the value of<br \/>\nthe dollar against the Indian rupee would<br \/>\ndestroy the costing of the Indian<br \/>\nsuppliers.  The claimant states that this<br \/>\ninterpretation of the contract is<br \/>\ndiscriminatory against the Indian<br \/>\nsuppliers, violative of public policy and<br \/>\nagainst stated government guidelines,<br \/>\nobjectives and intentions.&#8221;\n<\/p>\n<p>ISSUES BEFORE THE ARBITRATORS :\n<\/p>\n<p>\tThe respondent in their rejoinder having joined issues with the<br \/>\naforementioned contentions of the appellant, the following issues which<br \/>\nwere raised by the appellant herein, fell for consideration by the<br \/>\nlearned arbitrators.\n<\/p>\n<p>&#8220;1.\tWhether the proper interpretation of terms<br \/>\nof the contract entitle the claimant to be<br \/>\ncompensated for all consequences arising<br \/>\nout of exchange rate variations between<br \/>\nthe date of the submission of the Price<br \/>\nBid and the completion of all supplies.\n<\/p>\n<p>2.\tWhether, in addition or in the alternative,<br \/>\nthe claimant is, under clause 23 of the<br \/>\nTender Document entitled to be compensated<br \/>\nfor all exchange rate variations between<br \/>\nthe date of the submission of the Price Bid<br \/>\nand the completion of all supplies.\n<\/p>\n<p>3.\tWhether, in the alternative, the respondent<br \/>\nis bound to effectuate in favour of the<br \/>\nclaimant notified State policy as contained<br \/>\nin the Ministerial notification dated<br \/>\n25.09.1989.\n<\/p>\n<p>4.\tWhether, the respondent&#8217;s circular<br \/>\nNo.74\/89 dated 8th November, 1989 estoppes<br \/>\nthe respondent from any interpretation of<br \/>\nthe contract contrary thereto.&#8221;\n<\/p>\n<p>AWARD :\n<\/p>\n<p>By reason of the impugned award, the learned arbitrators held :\n<\/p>\n<p>&#8220;1.\tWe hold that the Claimants are entitled to<br \/>\nbe compensated for increase in cost<br \/>\narising out of Foreign Exchange Rate<br \/>\nFluctuations in respect of payment made by<br \/>\nthe Respondents to the Claimants on the<br \/>\nfrom the respective dated of devaluation<br \/>\nof the Indian Rupee, namely 8.7.1991 and<br \/>\n28.2.1998 and not on payments made before<br \/>\nthe said dates.  Accordingly we direct<br \/>\nthat the Respondent do pay to the<br \/>\nClaimants a sum of Rs.1,03,41,309\/- only<br \/>\n(in words Rupee One crore three lakhs<br \/>\nforty one thousand three hundred and nine)<br \/>\nRs.24,97,905\/- under Invoice dt.\n<\/p>\n<p>9.10.1991, Rs.25,20,160\/- under Invoice<br \/>\ndt. 15.1.1998 and Rs.53,23,241\/- under<br \/>\nInvoice dt. 22.6.1998) in full and final<br \/>\nsettlement of their claim under their<br \/>\naforesaid three invoices.\n<\/p>\n<p>2.\tRespondents do further pay to the<br \/>\nClaimants interest at the rate of 185 per<br \/>\nannum on the aforesaid three amounts<br \/>\nawarded to them under the said invoices<br \/>\nfrom the respective dates of those<br \/>\ninvoices till the date of this Award.&#8221;\n<\/p>\n<p>OBJECTIONS TO THE AWARD BY THE RESPONDENT :\n<\/p>\n<p>(1)\tThe subject-matter of the arbitration was not arbitrable in<br \/>\nview of the terms of the contract;\n<\/p>\n<p>(2) The appellant was not entitled to any escalation  in price.\n<\/p>\n<p>IMPUGNED JUDGMENT :\n<\/p>\n<p>The Division Bench of the High Court set aside the award holding<br \/>\nthat the same was without jurisdiction wherefor two questions were<br \/>\nframed.\n<\/p>\n<p>(a)\tWhether a claim of the nature preferred by the<br \/>\nrespondent is specifically barred under the<br \/>\ncontract?\n<\/p>\n<p>(b)\tWhether there is any clause in the contract, under<br \/>\nwhich such a claim could be preferred?\n<\/p>\n<p>OUR CONCLUSION :\n<\/p>\n<p>The questions framed are self-contradictory and inconsistent.<br \/>\nWhereas in framing question (a) a right approach had been adopted by the<br \/>\nDivision Bench, a wrong one had been adopted in framing question (b).<br \/>\nIt is not in dispute that there were three different nature of bids;<br \/>\nwhich were required to be made in terms of the notice inviting tenders :\n<\/p>\n<p>(i) by  foreign bidders; (ii) by Indian bidders quoting Indian price<br \/>\nwith the foreign exchange component therefor as import was required to<br \/>\nbe made; (iii) payable only in Indian rupee without foreign exchange<br \/>\ncomponent.\n<\/p>\n<p>Before the arbitrators apart from construction of the contract<br \/>\nagreement, the questions which, inter alia, arose were : (a) the effect<br \/>\nand purport of circular letter dated 25.9.1989 issued by the Central<br \/>\nGovernment: (b) the conduct of the respondent in making the payments to<br \/>\nthe persons similarly situated.\n<\/p>\n<p>Construction of a deed sometimes pose a great problem.\n<\/p>\n<p>Justice Frankfurter said : &#8220;there is no surer way to misread a<br \/>\ndocument than to read it literally.&#8221; [Massachusetts B. &amp; Insurance Co.<br \/>\nvs. U.S. (1956) 352 US 128 at p. 138].\n<\/p>\n<p>We, however, as discussed in details a little later are strictly<br \/>\nnot concerned as regard true import and purport of the relevant clauses<br \/>\nof the contract agreement.  Our concern is merely to see as to whether<br \/>\nthe learned arbitrators exceeded their jurisdiction in making the award.\n<\/p>\n<p> The learned arbitrators, as noticed hereinbefore, in making the<br \/>\naward took into consideration the documentary as well as circumstantial<br \/>\nevidence including rival pleadings of the parties. It is trite that the<br \/>\nterms of the contract can be express or implied.  The conduct of the<br \/>\nparties would also be a relevant factor in the matter of construction of<br \/>\na contract.\n<\/p>\n<p>In Khardah Company Ltd. (supra), this Court held :\n<\/p>\n<p>&#8220;&#8230;We agree that when a contract has been<br \/>\nreduced to writing we must look only to that<br \/>\nwriting for ascertaining the terms of the<br \/>\nagreement between the parties but it does not<br \/>\nfollow from this that it is only what is set out<br \/>\nexpressly and in so many words in the document<br \/>\nthat can constitute a term of the contract<br \/>\nbetween the parties.  If on a reading of the<br \/>\ndocument as a whole, it can fairly be deduced<br \/>\nfrom the words actually used herein that the<br \/>\nparties had agreed on a particular term, there<br \/>\nis nothing in law which prevents them from<br \/>\nsetting up that term.  The terms of a contract<br \/>\ncan be expressed or implied from what has been<br \/>\nexpressed.  It is in the ultimate analysis a<br \/>\nquestion of construction of the contract.  And<br \/>\nagain it is well established that in construing<br \/>\na contract it would be legitimate to take into<br \/>\naccount surrounding circumstances&#8230;.&#8221;\n<\/p>\n<p>Construction of the contract agreement, therefore, was within the<br \/>\njurisdiction of the learned arbitrators having regard to the wide<br \/>\nnature, scope and ambit of the arbitration agreement and they cannot,<br \/>\nthus, be said to have misdirected themselves in passing the award by<br \/>\ntaking into consideration the conduct of the parties as also the<br \/>\ncircumstantial evidence.\n<\/p>\n<p>A dispute as regard the construction of clause 23 of the contract<br \/>\nvis-\u00e0-vis the notification issued under Section 40 of the Reserve Bank<br \/>\nof India Act also fell for their consideration.  Such a question of law,<br \/>\nit is trite, is also arbitrable and was specifically raised by the<br \/>\nappellant.  The learned arbitrators were further entitled to consider<br \/>\nthe question as to whether the appellant had been discriminated against<br \/>\ninsofar as similar claims have been allowed by the respondent.\n<\/p>\n<p>CASE LAWS ON THE POINT :\n<\/p>\n<p><a href=\"\/doc\/1010255\/\">In State of U.P. vs. Allied Constructions<\/a> [2003 (6) SCALE 265],<br \/>\nthis Court held :\n<\/p>\n<p>&#8220;&#8230;Interpretation of a contract, it is trite,<br \/>\nis a matter for arbitrator to determine (see <a href=\"\/doc\/588099\/\">M\/s<br \/>\nSudarsan Trading Co. vs. The Government of<br \/>\nKerala, AIR<\/a> 1989 SC 890).  Section 30 of the<br \/>\nArbitration Act, 1940 providing for setting<br \/>\naside an award is restrictive in its operation.<br \/>\nUnless one or the other condition contained in<br \/>\nSection 30 is satisfied, an award cannot be set<br \/>\naside.  The arbitrator is a Judge chosen by the<br \/>\nparties and his decision is final.  The Court is<br \/>\nprecluded from reappraising the evidence.  Even<br \/>\nin a case where the award contains reasons, the<br \/>\ninterference therewith would still be not<br \/>\navailable within the jurisdiction of the Court<br \/>\nunless, of course, the reasons are totally<br \/>\nperverse or the judgment is based on a wrong<br \/>\nproposition of law.  As error apparent on the<br \/>\nface of the records would not imply closer<br \/>\nscrutiny of the merits of documents and<br \/>\nmaterials on record.  One it is found that the<br \/>\nview of the arbitrator is a plausible one, the<br \/>\nCourt will refrain itself from interfering&#8230;&#8221;\n<\/p>\n<p>\tIn K.R. Raveendranathan (supra), the law was laid down in the<br \/>\nfollowing terms :\n<\/p>\n<p>&#8220;2. The learned counsel for the appellant points<br \/>\nout that the question in issue in the present<br \/>\nappeals is squarely covered by the decision of<br \/>\nthis Court in Hindustan Construction Co. Ltd. v.<br \/>\nState of J&amp;K ((1992) 4 SCC 17). In particular,<br \/>\nit drew our attention to para 10 of the judgment<br \/>\nand the portion extracted from the decision in<br \/>\nSudarsan Trading Co. case <a href=\"\/doc\/588099\/\">(Sudarsan Trading Co.<br \/>\nv. Govt. of Kerala,<\/a> (1989) 2 SCC 38) wherein it<br \/>\nwas said that by purporting to construe the<br \/>\ncontract the Court could not take upon itself<br \/>\nthe burden of saying that this was contrary to<br \/>\nthe contract and, as such, beyond jurisdiction.<br \/>\nThat is exactly what the Court has done in the<br \/>\ninstant case&#8230;&#8221;\n<\/p>\n<p>\t K.R. Raveendranathan (supra) has been followed by this Court in<br \/>\nP.V. Subba Naidu (supra) stating :\n<\/p>\n<p>&#8220;4. The entire thrust of the judgment is on<br \/>\nexamining the terms of the contract and<br \/>\ninterpreting them. The terms of the arbitration<br \/>\nclause, however, are very wide. The arbitration<br \/>\nclause is not confined merely to any question of<br \/>\ninterpretation of the contract. It also covers<br \/>\nany matter or thing arising thereunder.<br \/>\nTherefore, all disputes which arise as a result<br \/>\nof the contract would be covered by the<br \/>\narbitration clause. The last two lines of the<br \/>\narbitration clause also make it clear that the<br \/>\narbitrator has power to open up, review and<br \/>\nrevise any certificate, opinion, decision,<br \/>\nrequisition or notice except in regard to those<br \/>\nmatters which are expressly excepted under the<br \/>\ncontract, and that the arbitrator has<br \/>\njurisdiction to determine all matters in dispute<br \/>\nwhich shall be submitted to the arbitrator and<br \/>\nof which notice shall have been given.\n<\/p>\n<p>5. In the present case all the claims in<br \/>\nquestion were expressly referred to arbitrator<br \/>\nand were raised before the arbitrator. The High<br \/>\nCourt was, therefore, not right in examining the<br \/>\nterms of the contract or interpreting them for<br \/>\nthe purpose of deciding whether these claims<br \/>\nwere covered by the terms of the contract.&#8221;\n<\/p>\n<p>\tThe same view has been reiterated in H.P. State Electricity Board<br \/>\n(supra).  Upon taking into consideration a large number of decisions and<br \/>\nreferring to K.R.Ravendranathan (supra), this Court held that the court<br \/>\nwould not be justified in construing the contract in a different manner<br \/>\nand then to set aside the award by observing that the arbitrator had<br \/>\nexceeded the jurisdiction in making the award, when the arbitrator is<br \/>\nrequired to construe a contract, only because another view is possible.<br \/>\nIt was stated :\n<\/p>\n<p>&#8220;26. In order to determine whether the<br \/>\narbitrator has acted in excess of jurisdiction<br \/>\nwhat has to be seen is whether the claimant<br \/>\ncould raise a particular dispute or claim before<br \/>\nan arbitrator. If the answer is in the<br \/>\naffirmative then it is clear that the arbitrator<br \/>\nwould have the jurisdiction to deal with such a<br \/>\nclaim. On the other hand if the arbitration<br \/>\nclause or a specific term in the contract or the<br \/>\nlaw does not permit or give the arbitrator the<br \/>\npower to decide or to adjudicate on a dispute<br \/>\nraised by the claimant or there is a specific<br \/>\nbar to the raising of a particular dispute or<br \/>\nclaim then any decision given by the arbitrator<br \/>\nin respect thereof would clearly be in excess of<br \/>\njurisdiction. In order to find whether the<br \/>\narbitrator has acted in excess of jurisdiction<br \/>\nthe court may have to look into some documents<br \/>\nincluding the contract as well as the reference<br \/>\nof the dispute made to the arbitrators limited<br \/>\nfor the purpose of seeing whether the arbitrator<br \/>\nhas the jurisdiction to decide the claim made in<br \/>\nthe arbitration proceedings.&#8221;\n<\/p>\n<p>\tYet again in Sushil Kumar Kayan (supra), it was held :\n<\/p>\n<p>&#8220;&#8230;In order to determine whether the arbitrator<br \/>\nhas acted in excess of his jurisdiction what has<br \/>\nto be seen is whether the claimant can raise a<br \/>\nparticular claim before the arbitrator. If there<br \/>\nis a specific term in the contract or the law<br \/>\nwhich does not permit the parties to raise a<br \/>\npoint before the arbitrator and if there is a<br \/>\nspecific bar in the contract to the raising of<br \/>\nthe point, then the award passed by the<br \/>\narbitrator in respect thereof would be in excess<br \/>\nof his jurisdiction&#8230;&#8221;\n<\/p>\n<p>\tSome of the aforementioned decisions have been considered by us in<br \/>\n<a href=\"\/doc\/722729\/\">Bharat Coking Coal Ltd. vs. M\/s Annapurna Construction<\/a> [2003 (7) SCALE<br \/>\n20].\n<\/p>\n<p>\tRajasthan State Mines &amp; Minerals Ltd. (supra) whereupon Mr.<br \/>\nRohtagi placed strong reliance, this Court held that the dispute to the<br \/>\narbitrator could not be termed as without jurisdiction but proceeded to<br \/>\nconsider the question as to whether he will have authority or<br \/>\njurisdiction to grant damages or compensation in the teeth of the<br \/>\nstipulation providing that no escalation would be granted and that the<br \/>\ncontractor would only be entitled to payment of the composite rate as<br \/>\nmentioned and no other or further payment of any kind or item whatsoever<br \/>\nshall be due and payable by the Company to the contractor.\n<\/p>\n<p> It was concluded :\n<\/p>\n<p>&#8220;(a) It is not open to the Court to speculate,<br \/>\nwhere on reasons are given by the arbitrator, as<br \/>\nto what impelled the arbitrator to arrive at his<br \/>\nconclusion.\n<\/p>\n<p>(b) It is not open to the Court to admit to<br \/>\nprobe the mental process by which the arbitrator<br \/>\nhas reached his conclusion where it is not<br \/>\ndisclosed by the terms of the award.\n<\/p>\n<p>(c) If the arbitrator has committed a mere error<br \/>\nof fact or law in reaching his conclusion on the<br \/>\ndisputed question submitted for his adjudication<br \/>\nthen the Court cannot interfere.\n<\/p>\n<p>(d) If no specific question of law is referred,<br \/>\nthe decision of the Arbitrator on that question<br \/>\nis not final, however much it may be within his<br \/>\njurisdiction and indeed essential for him to<br \/>\ndecide the question incidentally. In a case<br \/>\nwhere specific question of law touching upon the<br \/>\njurisdiction of the arbitrator was referred for<br \/>\nthe decision of the arbitrator by the parties,<br \/>\nthen the finding of the arbitrator on the said<br \/>\nquestion between the parties may be binding.\n<\/p>\n<p>(e) In a case of non-speaking award, the<br \/>\njurisdiction of the Court is limited. The award<br \/>\ncan be set aside if the arbitrator acts beyond<br \/>\nhis jurisdiction.\n<\/p>\n<p>(f) To find out whether the arbitrator has<br \/>\ntravelled beyond his jurisdiction, it would be<br \/>\nnecessary to consider the agreement between the<br \/>\nparties containing the arbitration clause.<br \/>\nArbitrator acting beyond his jurisdiction is a<br \/>\ndifferent ground from the error apparent on the<br \/>\nface of the award.\n<\/p>\n<p>(g) In order to determine whether arbitrator has<br \/>\nacted in excess of his jurisdiction what has to<br \/>\nbe seen is whether the claimant could raise a<br \/>\nparticular claim before the arbitrator. If there<br \/>\nis a specific term in the contract or the law<br \/>\nwhich does not permit or give the arbitrator the<br \/>\npower to decide the dispute raised by the<br \/>\nclaimant or there is a specific bar in the<br \/>\ncontract to the raising of the particular claim<br \/>\nthen the award passed by the arbitrator in<br \/>\nrespect thereof would be in excess of<br \/>\njurisdiction.&#8221;\n<\/p>\n<p>With respect we agree with the conclusions arrived at in Rajasthan<br \/>\nState Mines &amp; Minerals Ltd. (supra).\n<\/p>\n<p>\tClause (g) of the conclusion in the said case, as quoted supra, is<br \/>\nnot applicable in the instant case inasmuch as there does not exist any<br \/>\nprovision which does not permit or give the arbitrator the power to<br \/>\ndecide the dispute raised by the claimant nor there exist any specific<br \/>\nbar in the contract to raise such claim.\n<\/p>\n<p>To the same effect is the decision of this Court in  <a href=\"\/doc\/1571995\/\">Food<br \/>\nCorporation of India vs. Surendra, Devendra &amp; Mahendra Transport Co.<\/a><br \/>\n{(2003) 4 SCC 80].\n<\/p>\n<p>\tIn  Shyama  Charan Agarwala (supra), this Court observed :\n<\/p>\n<p>&#8220;19. Testing the case on hand on the touchstone<br \/>\nof well-settled principles laid down by courts,<br \/>\nwe are unable to hold that the High Court<br \/>\nexceeded its jurisdiction in interfering with<br \/>\nthe award or failed to exercise the jurisdiction<br \/>\nvested in it to set aside the award. The<br \/>\napproach of the High Court cannot be said to be<br \/>\ncontrary to the well-settled principles<br \/>\ngoverning the scope of interference with an<br \/>\naward of the arbitrator under the old Act. As<br \/>\nregards the first item, the question was whether<br \/>\nthe contract contemplates the use of stone<br \/>\naggregate and stone metal from the local sources<br \/>\nonly, the source of supply being silent in the<br \/>\nrelevant clause. The arbitrator was of the view<br \/>\nthat the unprecedented situation of the<br \/>\nContractor being put to the necessity of<br \/>\nprocuring the stone material from far-off places<br \/>\nwas not visualized and the parties proceeded on<br \/>\nthe basis that such material was available<br \/>\nlocally. He further noted that the sample kept<br \/>\nin the office of the Engineer concerned<br \/>\nadmittedly pertained to the material procured<br \/>\nfrom local sources. A letter addressed by the<br \/>\nChief Engineer in support of the Contractor&#8217;s<br \/>\nclaim was also relied on in this context. Hence,<br \/>\nin these circumstances, the arbitrator can be<br \/>\nsaid to have taken a reasonably possible view<br \/>\nand therefore the High Court rightly declined to<br \/>\nset aside the award insofar as the quantity of<br \/>\nstone aggregate\/stone metal brought to the site<br \/>\nup to 24-1-1994 is concerned. The arbitrator<br \/>\nacted within the confines of the jurisdiction in<br \/>\nmaking the award on this part of the claim.&#8221;\n<\/p>\n<p>ANALYSIS OF THE CASE LAWS :\n<\/p>\n<p>The principles of law laid down in the aforementioned decisions<br \/>\nleave no manner of doubt that the jurisdiction of the court in<br \/>\ninterfering with a non-speaking award is limited.\n<\/p>\n<p>The upshot of the above decisions is that if the claim of the<br \/>\nclaimant is not arbitrable having regard to the bar\/prohibition created<br \/>\nunder the contract, the court can set aside the award but unless such a<br \/>\nprohibition\/bar is found out, the court cannot exercise its jurisdiction<br \/>\nunder Section 30 of the Act.  The High Court, therefore, misdirected<br \/>\nitself in law in posing a wrong question.  It is true that where such<br \/>\nprohibition exists, the court will not hesitate to set aside the award.\n<\/p>\n<p>\tIn the instant case, the appellant did not ask for any enhancement<br \/>\nin the price.  It only asked for the difference in price occurred owing<br \/>\nto fluctuation in the rate of dollar.\n<\/p>\n<p>\tIt is true that by taking recourse to the interpretation of<br \/>\ndocuments, the appellant did not become entitled to claim a higher<br \/>\namount than Rs.149\/- but, thereby the appellant had not unjustly<br \/>\nenriched itself.  Had the price of the dollar fallen, the respondent<br \/>\nwould have become entitled to claim the difference therefor.\n<\/p>\n<p>\tThe appellant quoted the foreign exchange component in its bids in<br \/>\nterms of the notice inviting tenders.  The same was asked for by the<br \/>\nrespondent itself for a definite purpose.  A contract between the<br \/>\nparties must be construed keeping in view the fact that the fluctuation<br \/>\nin the rate of dollar was required to be kept in mind by the respondent<br \/>\nhaving regard to the fact that the tender was global in nature and in<br \/>\nthe event the respondent was required to pay in foreign currency, the<br \/>\nsame would have an impact on the cost factor.\n<\/p>\n<p>Clauses 2.6 and 2.7 aforementioned must be construed in such a<br \/>\nmanner so that effect to both of them may be given.  Whereas Clause 2.6<br \/>\nprohibits escalation; Clause 2.7 makes the bidder liable for exchange<br \/>\nfluctuations which does not amount to an escalation of the price or<br \/>\ndisturb their cost evaluation.  The bid of the appellant had two<br \/>\ncomponents, namely, Indian currency component and US Dollar component.<br \/>\nThe appellant claimed $ 4.60 within the total price of Rs. 149\/- which<br \/>\nwas to be paid in Indian currency.  In any manner, the claim did not<br \/>\nviolate clause 2.6.  The appellant merely claimed foreign exchange<br \/>\ncomponent at the rate of $ 4.60 and no more.\n<\/p>\n<p>\tThe very fact that three different types of quotations were<br \/>\ninvited from the bidders itself is suggestive of the fact that each one<br \/>\nof them was required to be construed in such a manner so as to apply in<br \/>\ndifferent situations.  The submission of Mr. Rohtagi, the learned<br \/>\nAdditional Solicitor General to the effect that if such a factor was to<br \/>\nbe taken into consideration, the person who had quoted only in terms of<br \/>\nIndian rupee would be at a disadvantage is stated to be rejected.  The<br \/>\nquestion as to whether suppliers quoting their bid in Indian currency<br \/>\nalone would face disadvantage or not will depend upon the question as to<br \/>\nwhether they were similarly situated.  One bidder may have to import the<br \/>\nraw-materials; other may not have to.  This itself will lead to a<br \/>\ndifference.  In fact, those who did not bid with the amount of foreign<br \/>\nexchange component cannot be placed on equal footing to those who in<br \/>\ntheir bid pursuant to the notice inviting tender disclosed that they<br \/>\nwould have to make import wherefor only the foreign exchange component<br \/>\nin the price had to be disclosed.\n<\/p>\n<p>Furthermore, the circular letter dated 25.9.1989 issued by the<br \/>\nGovernment of India itself clearly shows that a decision had been taken<br \/>\nto make such payments.  The contract having not been entered into by the<br \/>\nparties herein as on the said date, the decision to include the said<br \/>\nterm would mean that the same shall be incorporated in the contracts<br \/>\nwhich were to be executed in future.\n<\/p>\n<p>\tIt is further not in dispute that the respondent is bound by the<br \/>\ndirectives issued by the Union of India.  In fact from the letter dated<br \/>\n21.5.1990 it is evident that even for the purpose of entering into the<br \/>\ncontract approval of the Central Government was sought for and granted.<br \/>\nSuch a directive of the Central Government was not required to be made<br \/>\nby way of a notification nor the same was required to have the force of<br \/>\nlaw as the matter involved a contract between the parties.\n<\/p>\n<p>\tMr. Rohtagi is not correct in his contention that such condition<br \/>\nwas required to be incorporated in the NIT inasmuch as from a plain<br \/>\nreading of the said letter, it is evident that such a clause was to be<br \/>\nincorporated in the notice inviting tenders ex majori cautela.\n<\/p>\n<p>\tAs regard the contention as to whether the notification issued<br \/>\nunder Section 40 of the Reserve Bank of India would be rules or<br \/>\nregulations having an impact in the cost factor is concerned, the<br \/>\narbitrator had jurisdiction to decide the same, subject of course to<br \/>\napplication of correct principles of law in relation thereto.\n<\/p>\n<p>\tEven assuming that the arbitrators faulted in that regard, it must<br \/>\nbe borne in mind that  such a contention was raised on behalf of the<br \/>\nappellant, only for the purpose of showing that several aspects of the<br \/>\nmatter arose before the learned arbitrators for making the award and<br \/>\nany-one of them would be sufficient to uphold the award.\n<\/p>\n<p>\tThe court, having regard to the proposition of law that the<br \/>\njurisdiction of the arbitrator will be ousted only in the event that<br \/>\nthere exists a specific bar in the contract as regard raising of a<br \/>\nparticular claim must necessarily hold that the award was sustainable.<br \/>\nAs in the instant case there did not exist any such bar, it is<br \/>\nenforceable in law.  Furthermore, in the event the ratio of the decision<br \/>\nof the High Court is accepted, the same would amount to re-hearing of<br \/>\nthe entire arguments once over again by the court as regard construction<br \/>\nof a contract which is impermissible in law.\n<\/p>\n<p>\tThe arbitrators were called upon to determine a legal issue which<br \/>\nincluded interpretation of the contract.  The arbitrators, therefore,<br \/>\ncannot be said to have been travelled beyond jurisdiction in making the<br \/>\naward.\n<\/p>\n<p>CONCLUSION :\n<\/p>\n<p>We, for the reasons aforementioned, are of the opinion that the<br \/>\njudgment of the High Court is not sustainable.\n<\/p>\n<p>However, one aspect of the matter which requires our<br \/>\nconsideration.  The respondent rejected the claim of the appellant as<br \/>\nfar back as on 14.7.1992 whereafter the disputes and differences between<br \/>\nthe parties were referred to the arbitrators. The arbitrators entered<br \/>\ninto the reference on 1.3.1993 and passed an award on 13.8.1993.  The<br \/>\nsaid award was set aside by the High Court.  If the award is to be<br \/>\nsatisfied in its entirety, the respondent will have to pay a huge amount<br \/>\nby way of interest.\n<\/p>\n<p>In order to do the complete justice to the parties, in exercise of<br \/>\nour jurisdiction under Article 142 of the Constitution of India, we<br \/>\nthink it appropriate to  direct that the award shall carry interest at<br \/>\nthe rate of 6% per annum instead and in place of 18% per annum.   This<br \/>\norder shall, however, not be treated as precedent.\n<\/p>\n<p>\tFor the reasons aforementioned, the impugned judgment is set<br \/>\naside.  The appeal is allowed with the aforementioned modifications.<br \/>\nHowever, in the facts and circumstances of the case, there shall be no<br \/>\norder as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Pure Helium India Pvt. Ltd vs Oil &amp; Natural Gas Commission on 9 October, 2003 Author: S.B. Sinha Bench: Cji, S.B. Sinha. CASE NO.: Appeal (civil) 6478 of 2001 PETITIONER: Pure Helium India Pvt. Ltd. RESPONDENT: Oil &amp; Natural Gas Commission DATE OF JUDGMENT: 09\/10\/2003 BENCH: CJI &amp; S.B. Sinha. JUDGMENT: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-197718","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pure Helium India Pvt. 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