{"id":87304,"date":"2008-11-06T00:00:00","date_gmt":"2008-11-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/punjab-state-electricity-board-vs-ms-bombay-conductors-and-on-6-november-2008"},"modified":"2015-04-13T09:34:36","modified_gmt":"2015-04-13T04:04:36","slug":"punjab-state-electricity-board-vs-ms-bombay-conductors-and-on-6-november-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/punjab-state-electricity-board-vs-ms-bombay-conductors-and-on-6-november-2008","title":{"rendered":"Punjab State Electricity Board vs M\/S Bombay Conductors And … on 6 November, 2008"},"content":{"rendered":"
Punjab-Haryana High Court<\/div>\n
Punjab State Electricity Board vs M\/S Bombay Conductors And … on 6 November, 2008<\/div>\n
 IN THE HIGH COURT OF PUNJAB AND HARYANA\n               AT CHANDIGARH\n\n                                             F.A.O. No. 1097 of 1985\n                                           Date of Decision : November 06, 2008\n\n\nPunjab State Electricity Board, Patiala\n                                                                .....Appellant\n                                  Versus\n\nM\/s Bombay Conductors and Electricals Ltd.\n                                                              .....Respondent\n\n\nCORAM : HON'BLE MR JUSTICE T.P.S. MANN\n\n\nPresent :   Mr. J.P.S. Sandhu, Advocate\n            for the appellant\n\n            Mr. I.K. Mehta, Senior Advocate with\n            Mr. M.S.Kohli, Advocate\n            for the respondent.\n\n\nT.P.S. MANN, J.\n<\/pre>\n
            Against the award dated 29.8.1983 delivered by Shri S.N.<\/p>\n
Khosla, sole Arbitrator, the appellant filed its objections, which were<\/p>\n
dismissed by learned Additional Senior Sub Judge, Patiala on 11.6.1985<\/p>\n
and the aforementioned award made rule of the Court. The appellant is<\/p>\n
now before this Court in an appeal under Section 39 of the Indian<\/p>\n
Arbitration Act, 1940.\n<\/p>\n<\/p>\n
            Vide    purchase     order-cum-contract      agreement      dated<\/p>\n
11.9.1978, the appellant-Board placed an order for manufacture and
\n F.A.O. No. 1097 of 1985                                              -2-<\/span><\/p>\n
purchase of 1300 K.Ms. of A.C.S.R. Zebra Conductors etc. at the rate of<\/p>\n
Rs.23,820\/- per K.M. F.O.R. destination with the respondents, M\/s<\/p>\n
Bombay Conductors and Electricals Limited, Ahmadabad. Clause 2 of<\/p>\n
the agreement provided that the price of the material to be supplied by the<\/p>\n
respondent was subject to variation depending upon the base price, there<\/p>\n
being no ceiling to the price variation. The supply was to commence<\/p>\n
within two months from the date of receipt of purchase order by the<\/p>\n
respondent and to be completed at the rate of 300 K.Ms per quarter.<\/p>\n
When the respondent could not supply the contracted material in time, the<\/p>\n
date for supply of the same was extended for a period of six months by<\/p>\n
the appellant-Board. All other terms and conditions remained unchanged.<\/p>\n
The respondent, however, could not supply the material by the extended<\/p>\n
date and again applied for extension of time for completion of its part of<\/p>\n
the agreement. On 27.4.1981, the appellant-Board again extended the time<\/p>\n
for supply of the material upto 30.6.1981 without levy of any penalty. It<\/p>\n
was, however, mentioned in the letter issued on 27.4.1981 that the rate of<\/p>\n
conductors to be supplied shall be as prevelent during March, 1981 before<\/p>\n
the price rise. The respondent fulfilled its part under the agreement within<\/p>\n
stiuplated period. The appellant-Board claimed that vide its letter dated<\/p>\n
27.4.1981 the respondent was entitled to the price of the material supplied<\/p>\n
as was prevalent during March, 1981 and not entitled to any further price<\/p>\n
increase. However, the respondent felt that the price of raw material was<\/p>\n
enhanced by the Government of India on 27.3.1981 and in view of Clause
\n F.A.O. No. 1097 of 1985                                              -3-<\/span><\/p>\n
2 of the agreement, it was entitled to the enhanced rate from the appellant-<\/p>\n
Board. In view of the arbitration clause in the agreement dated 11.9.1978,<\/p>\n
the matter was referred to the sole Arbitrator to be appointed by the Board<\/p>\n
and consequently Shri S.K. Khosla was appointed as such, who entered<\/p>\n
upon the arbitration reference on 30.10.1982. On the basis of the material<\/p>\n
placed before him by the parties, the Arbitrator held that the respondent<\/p>\n
was entitled to recover a sum of Rs. 9,42,214.08 p. from the appellant-<\/p>\n
Board in lieu of the price increase in the raw material. This amount was<\/p>\n
calculated on the basis of the stipulation contained in Clause 2 of the<\/p>\n
agreement regarding the price variation. The appellant-Board was ordered<\/p>\n
to pay the aforementieond amount to the respondent within a period of<\/p>\n
two months from the date of the award, failing which future interest at the<\/p>\n
rate of 12% per annum was also liable to be paid.\n<\/p>\n<\/p>\n
            The stand of the appellant-Board while filing its objection<\/p>\n
was that the award was against the law and facts and had been announced<\/p>\n
after the expiry of the period of limitation. The Arbitrator had ignored<\/p>\n
various clauses of the agreement. It was pleaded that the extension of<\/p>\n
delivery schedule was made by the appellant-Board on the specific<\/p>\n
condition that variation in price rise would not be allowed and the<\/p>\n
respondent would have no right to claim any increase due to price rise of<\/p>\n
the material.\n<\/p>\n<\/p>\n
            The respondent opposed the objection petition by filing its
\n F.A.O. No. 1097 of 1985                                               -4-<\/span><\/p>\n
reply stating therein that the impugned award was perfectly just and valid.<\/p>\n
It was also pleaded that the delay in submission of the award was due to<\/p>\n
unreasonable attitude adopted by the Board and its officials.<\/p>\n
            Learned Additional Senior Sub Judge, Patiala vide order<\/p>\n
dated 24.7.1984 framed the following issues :-\n<\/p>\n<\/p>\n
            1.     Whether the award is liable to be set aside on
\n                   the ground as alleged in the objection
\n                   petition? O.P. Objector.\n<\/p><\/blockquote>\n
            2.    Whether the respondent is entitled to interest
\n                  as adjudicated in the award and also future
\n                  interest till the recovery of the amount ?
\n                  O.P.R.\n<\/p><\/blockquote>\n
            3.     Relief.<\/p><\/blockquote>\n
            On the basis of the evidence and the material placed on the<\/p>\n
record, learned Additional Senior Sub Judge, Patiala held that the award<\/p>\n
was perfectly just and valid and the objections raised by the appellant-<\/p>\n
Board were totally misconceived.        Accordingly, the objections were<\/p>\n
dismissed and the award made rule of the Court.\n<\/p>\n<\/p>\n
            Learned counsel for the appellant has submitted that when the<\/p>\n
request of the respondent for extension of time was granted by the<\/p>\n
appellant-Board on 27.4.1981, it was specifically stated in its letter of the<\/p>\n
even date that there would be no additional financial liability and the rates
\n F.A.O. No. 1097 of 1985                                              -5-<\/span><\/p>\n
as prevalent during March, 1981 before the price rise announced by the<\/p>\n
Government of India shall be applicable for the supply of the raw<\/p>\n
material. Therefore, the respondent was not entitled to charge the price of<\/p>\n
the material as per its own whims or fancies.\n<\/p>\n<\/p>\n
            Initially in the agreement dated 11.9.1978 it was stipulated<\/p>\n
between the parties, that the price of the material to be supplied by the<\/p>\n
respondent was subject to variation depending upon the base price of the<\/p>\n
raw material and there was to be no ceiling to the price variation. When<\/p>\n
the respondent failed to supply the contracted material even by the<\/p>\n
extended date and again applied for extension of time for completion of<\/p>\n
its part of the agreement, its requests was accepted by the appellant-Board<\/p>\n
on 27.4.1981 by extending the time for supply of the contracted material<\/p>\n
upto 30.6.1981. At that time, it specified that such an extension was<\/p>\n
without levy of any penalty and also without any additional financial<\/p>\n
liability and the rates applicable for the supply of conductors was to be as<\/p>\n
prevalent during March, 1981 but before the price rise as announced by<\/p>\n
the Government of India. All other terms and conditions of the original<\/p>\n
purchase order-cum-agreement were to remain the same. This implied<\/p>\n
that any increase in the price of the raw material, was to be borne by<\/p>\n
the appellant-Board in view of the specific mention made in Clause 2<\/p>\n
of the agreement, which specified that there was to be no ceiling<\/p>\n
to the price variation in case of any increase in the price of the raw<\/p>\n
material within the extended time as granted by letter dated 27.4.1981.
\n F.A.O. No. 1097 of 1985                                               -6-<\/span><\/p>\n
Even before the extension of time, as granted by appellant-Board on<\/p>\n
27.4.1981, there was sharp increase in the price of the raw material in<\/p>\n
view of Central Government notification dated 27.3.1981.           Once the<\/p>\n
appellant-Board had undertaken to bear any price esclation of the raw<\/p>\n
material, it could not later on, on its own discretion, avoid paying higher<\/p>\n
price to the respondent and, that too, in view of the Central Government<\/p>\n
notification. The clause incorporated by the appellant-Board in its letter<\/p>\n
dated 27.4.1981 regarding the price to be paid as prevalent during March,<\/p>\n
1981, was an arbitrary and one sided step taken by it to the determinent of<\/p>\n
the respondent. There was no clause in the original agreement that the<\/p>\n
appellant-Board could change the terms and conditions of the same<\/p>\n
without taking the respondent into confidence. Initially, it was agreed<\/p>\n
between the parties that the price of the material was subject to variation<\/p>\n
depending upon the base price of the raw material and there was to be no<\/p>\n
ceiling to the price variation. None of the parties could unilaterally change<\/p>\n
the said term and condition. On the other hand, the request made by the<\/p>\n
respondent-Board for extension of time was duly entertained and accepted<\/p>\n
by the appellant-Board. To that an extent, the original agreement could<\/p>\n
be valid but no terms and conditions as relating to the price of the material<\/p>\n
to be supplied. The stipulation regarding avoidance of financial<\/p>\n
implication so made by the appellant-Board in its letter dated 27.4.1981<\/p>\n
was, thus, rightly found to be not justified.\n<\/p>\n<\/p>\n
            Another argument on behalf of the appellant is that the award
\n F.A.O. No. 1097 of 1985                                                    -7-<\/span><\/p>\n
was delivered by the Arbitrator after the expiry of the period of limitation,<\/p>\n
therefore, the same could not have been made the rule of the Court.<\/p>\n
            As is apparent from the records, the Arbitrator entered upon<\/p>\n
arbitration reference on 30.10.1982 when the first arbitration meeting took<\/p>\n
place. The period for giving award was extended from time to time. Last<\/p>\n
of all, on 6.2.1983, it was extended upto June, 1983.                 However, on<\/p>\n
16.6.1983, the appellant-Board sought an adjournment of the case to<\/p>\n
July, 1983. The proceedings were adjourned to 3.7.1983 when, once<\/p>\n
again, similar request was made for some other date. It is, thus, made out<\/p>\n
that the Arbitrator had to post-pone the proceedings on the basis of the<\/p>\n
various requests made by the appellant-Board from time to time. No<\/p>\n
material is available on the file to show that the respondent delayed the<\/p>\n
proceedings pending before the Arbitrator.\n<\/p>\n<\/p>\n
            No other point arises for consideration. The appeal is without<\/p>\n
any merit and, therefore, dismissed.<\/p>\n
\n\n\n\n\n                                                          ( T.P.S. MANN )\nNovember 06, 2008                                             JUDGE\nsatish\n\n\n\n\n                 Whether to be referred to the Reporters : YES \/ NO\n <\/pre>\n","protected":false},"excerpt":{"rendered":"
Punjab-Haryana High Court Punjab State Electricity Board vs M\/S Bombay Conductors And … on 6 November, 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O. No. 1097 of 1985 Date of Decision : November 06, 2008 Punjab State Electricity Board, Patiala …..Appellant Versus M\/s Bombay Conductors and Electricals Ltd. …..Respondent CORAM : […]<\/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":[8,28],"tags":[],"class_list":["post-87304","post","type-post","status-publish","format-standard","hentry","category-high-court","category-punjab-haryana-high-court"],"yoast_head":"\nPunjab State Electricity Board vs M\/S Bombay Conductors And ... on 6 November, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/punjab-state-electricity-board-vs-ms-bombay-conductors-and-on-6-november-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Punjab State Electricity Board vs M\/S Bombay Conductors And ... on 6 November, 2008 - 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