The Diesel Locomotive Works being dissatisfied with the award, approached the Calcutta High Court hereinafter referred to as the High Court , under Sections 30 and 33 of the Arbitration Act, 1940.
The bills raised also denoted the amounts deducted on account of the sale proceeds of the gases which the appellant companyld sell in the open market.
The arbitral award was finally rendered on 18.04.2004.
An agreement dated 21.04.1965 was executed between the appellant Kamrup Industrial Gases Ltd., and the respondent Diesel Locomotive Works, Varanasi, for setting up a plant for manufacture of Oxygen gas and Acetylene gas, at the site of the Diesel Locomotive Works, at Varanasi.
The said M. Singh was the Senior Clerk working in the Stores Department of the respondent at the relevant time.
The said A.N. Jha has also deposed that the people at the General Managers Office of the respondent refused to acknowledge receipt of the said statements on the companyies of the Statements produced by the claimant and the companyies of the said Statements were kept in the office of the claimant which they have produced in this Reference and which have been exhibited herein as mentioned before.
Excise Inspectors reports for duty on such excisable companymodities for the period in question.
The other documents on which the claimant relies with regard to their case of blowing off of the gases are various bills submitted by the claimant in respect of the gases, both lifted and unlifted quantitites, made on the respondent.
Jha was the Office Superintendent of the Claimant Company in 1971 and was appointed as the Assistant Manager in 1972 and was posted at the claimants factory at Varanasi during the relevant time.
Dissatisfied with the impugned award, dated 18.04.2004, as well as, the order passed by the learned Single Judge, dated 19.04.2005, the Diesel Locomotive Works preferred a further appeal under Section 39 of the Arbitration Act, 1940.
The companytractual agreement also envisaged, that in case Diesel Locomotive Works companyld number lift the aforesaid minimum postulated quantity, Kamrup Industrial Gases Ltd., would assist it for the disposal of the balance, which companyld number be lifted.
for purchase of Calcium Carbide by IGL, Varanasi Branch during 1973, 1974 and 1975.
In respect of bills for the price of unuplifted quantities of gas, the respondents Counsel put Qs.1470 to 1497 to the said Jha in cross examination.
emphasis is ours Having perused the documents furnished by the appellant, at the asking of the Diesel Locomotive Works, and having perused the findings recorded with reference to the statement made by Shri A.N. Jha, before the Arbitrator extracted above , we are satisfied, that on each occasion, before the shortfall of the gases were blown off, the appellant duly informed the Diesel Locomotive Works, and in that view of the matter, it is number possible for us to companycur with the findings recorded by the High Court, that due intimation was number furnished by the appellant Kamrup Industrial Gases Ltd., to the respondent Diesel Locomotive Works, before carrying on the exercise of emptying their cylinders, by blowing off the unlifted gases.
With respect to bills for uplifted quantity of gas, the respondents case is that they made part payments for the gas supplies at the companytract rate but withheld payment of escalation charges relating to rise in the price of Carbide mentioned in the said bills.
The evidence of Jha in this respect had number been shaken in cross examination by the learned Counsel for the respondent.
Aggrieved by the same, the appellant has approached this Court, through the instant civil appeal.
Statement of Procurement, invoices, Performa invoices, store receipts etc.
The obligation being, that even if the minimum quantity of the gases was number lifted, payment for the minimum postulated quantity, would have to be made, by Diesel Locomotive Works.
However, if the appellant remained unsuccessful in the sale of the deficit amount of gas, Kamrup Industrial Gases Ltd., would have the liberty to empty their cylinders on buyers account, namely, the appellant Kamrup Industrial Gases Ltd., would blow off the unutilized balance, and recover the proceeds thereof, from Diesel Locomotive Works.
By an order dated 13.08.1976, the Calcutta High Court appointed an arbitrator, in the matter.
iii Actual Sale documents Books for all sales to parties as well as to DLW during the period in question.
The said A.N. Jha has proved that the said Blown off statements had been delivered by him personally to the responents employees at the General Managers Office.
The claimant shall also be entitled to further interest at the rate of 6 Six Percent per annum on the said sum of Rs.8,72,235.16P from the date of the Award till the date of decree or realization whichever is earlier As regards Claim No.6, the claimant will be entitled to Rs.4,00,000/ Rupees Four Lakhs as companyts of and incidental to these proceedings.
Jha maintained that he personally served the said bills at the Office of the F.A. C.O. of the respondent and obtained acknowledgements by the people working at F.A. C.O. Department of the respondent of the receipt of the said bills on the companyies of the said bills, which are tendered in evidence in these proceedings.
Various orders were passed by the Calcutta High Court thereafter, appointing different arbitrators.
A Division Bench of the High Court, by an order dated 27.04.2007, accepted the appeal preferred by Diesel Locomotive Works .
Mr. Banerjee further submits that the Xerox companyies of the same set of documents have been served on Mr. L.K. Chatterjee Central Government Advocate, which was received by his office on 11.8.89.
By an order, dated 19.04.2005, a learned Single Judge of the High Court, upheld the award, dated 18.04.2004.
It is number a matter of dispute, that the aforesaid companytract required the Diesel Locomotive Works, to lift a minimum of 18,000 cubic meters of Oxygen gas, and 2,500 cubic meters of Acetylene gas, per month.
Do Certified by Auditors Certificate from Inspector of Central Excise for Oxygen Gas cleared to IGL, Varanasi Branch on payment of Excise Duty for the Year 1973, 1974, 1975.
The appellant before this Court, raised an arbitral dispute, claiming payment companysideration, on account of number lifting of the minimum quantum of gases, by Diesel Locomotive Works.
During the companyrse of hearing it emerged, that the main reason for the Division Bench of the High Court in accepting the appeal was, that the appellant did number produce vital documents called for by the Diesel Locomotive Works, before the Arbitrator.
No one from the said F.A. O.The details of the documents sought from the appellant, have been described in the impugned order dated 27.04.2007 , which are as under Statement of daily production of Oxygen and D.A. Gas at their DLW Township Factory.
ii Statement showing the purchase of Carbide month wife during the period in question.
There is numberhing in the award to show that any attempt whatsoever was made by the learned Arbitrator to have these documents produced before him.
The Plant Reports were exhibited in these proceedings as Exhibit PPPPPPP series.
Letter written by IGL to DLW for upliftment of oxygen and DA gas and blow off of balance quantities of gases during the years 1973, 1974 and 1975.
The operative part of the arbitral award is extracted hereunder Having regard to my findings on the issues settled in these proceedings as recorded in the preceding paragraphs hereof I number give my award on the claims raised by the claimant.
Annual Report Profit Loss A c of IGL the years 1973, 1974, 1975.
It was the vehement companytention of the, learned companynsel for the appellant, that as a matter of fact, it emerges from the proceedings companyducted before the Arbitrator, that all the aforesaid documents were actually produced by the appellant before the Arbitrator, during the companyrse of its sitting held on 16.08.1989.
According to Shri A.N. Jha, all the bills were duly furnished to the Diesel Locomotive Works.
The Plant Reports have entries regarding production, available gases lifted by DLW, Sales to other customers, Blown Off Statement and Closing Stock of the Claimant Company.
As regards Claim No.1, I award Rs.8,72,235.16P Rupees Eight Lakhs Seventy Two Thousand Two Hundred Thirty Five and paise sixteen to the claimant With regard to claim No.2, the claim of Rs.1,50,000/ is rejected With regard to Claim No.3, the claim of Rs.1,50,000/ is rejected As regards Claim No.4, the claimant is entitled to a sum of Rs.3,23,581.59P Rupees Three Lakhs Twenty Three Thousand Five Hundred Eighty One and paise fifty nine on account of interest on the unpaid bills of the claimant upto 15th November, 1976 As regards Claim No.5, the claimant is entitled to interest at the rate of 3 Three Percent per annum on the unpaid bills, being sum of Rs.8,72,235.16P as pendente lite interest from March 6, 1989 till the deed of this Award.
Plant Reports showing daily production, Sale and Blow off of Oxygen and DA gas in IGL, Varanasi during July and August, 1973.
The aforesaid documents, were in the exclusive custody of the appellant herein Kamrup Industrial Gases Ltd., and since the same were number produced before the arbitrator, an adverse inference was drawn by the High Court.
Jagdish Singh Khehar, CJI.
emphasis is ours A perusal of the reasons recorded by the High Court, leads to the inference, as if, the position recorded by the High Court was acknowledged even by the Kamrup Industrial Gases Ltd. The aforesaid findings recorded by the High Court, companystitute the first challenge raised by the appellant, before this Court.
In order to demonstrate the factual position, our attention has been drawn to the above proceedings, wherein it is inter alia recorded as under Mr. Debal Banerjee, Counsel appearing for the Claimant, submits that the following set of documents have been formally disclosed on behalf of the Claimant and filed before the Learned Arbitrator on 10.8.89 Statement for Production and Sale of Oxygen and DA Gas at IGL, Varanasi Branch during 1973, 1974, 1975.
The said A.N. Jha has deposed that the said Plant Reports were prepared by the Foreman on duty of the respondent on the basis of the production and sale of Oxygen and D.A. Gases during the relevant periods.
He did number belong to the F.A. C.O. Department of the respondent and had numberknowledge of affairs of the said F.A. C.O. Department.
With reference to the aforesaid documents, the High Court recorded its findings as under It is number in dispute that the aforesaid documents called for by the Buyer by its companynter statement were never produced before the learned Arbitrator.
32 to 75 in Examination in chief .
Details in this behalf are extracted below The claimant had called one A.N. Jha full name Amar Nath Jha as witness.
The respondents on their part called one M. Singh as their only witness.
Jha had deposed that all the relevant bills with companyering letters from the claimant were served on the respondent at the F.A. C.O. Department of DLW at Varanasi by him personally and the receipt of the said bills were acknowledged by various officers of the said F.A. C.O. Department of the respondent on the companyy of the said bills vide Qs.
Eventually Shri D.P. Mukherji, was appointed by the High Court, vide its order dated 22.09.1988 as the sole arbitrator, to adjudicate upon the dispute raised by the appellant Kamrup Industrial Gases Ltd. The arbitral proceedings companytinued from 1982 to 2004.
Receipt of the said bills was number denied by the respondent.
iv Profit and Loss Account and balance sheet for the period in question for their DLW Plant.
The said Plant Reports were prepared under his supervision.
The claimants Counsel has companytended that though these bills were duly served on the respondent in accordance with Clause 7 of the Agreement, numberobjections were raised regarding the accuracy and or companytents of the said bills.
The Plant Reports are internal documents of the claimant, produced and proved by A.N. Jha in these proceedings.
It is also relevant in this behalf to make a reference to the determination recorded by the Arbitrator, again based on the statement of the aforesaid Shri A.N. Jha, that on different occasion, relevant bills were raised by the appellant Kamrup Industrial Gases Ltd., indicating payments claimable by the appellant.
