D.P. Mohapatra, J. - (1.) Whether the appellant, on the evidence on record, is entitled to the price of hard coke supplied by it to the respondent at the enhanced rate, is the controversy raised in this case. The dispute was referred to an arbitrator pursuant to the arbitration clause in the agreement entered by the parties. The arbitrator held in favour of the appellant and accepted its claim of Rs. 2,34,097.41. A single judge of the Delhi High Court rejecting the objections raised by the respondent against the award, made it rule of the Court. On appeal, the Division Bench of the High Court reversed the order of the single judge and set aside the award passed by the arbitrator. As such the claimant is in appeal before this Court challenging the judgment of the Division Bench of the High Court.
(2.) The factual matrix of the case leading to the present proceeding may be shortly stated thus. The Delhi Development Authority (for short 'DDA'), respondent herein, floated a tender enquiry on 30th January, 1981 for supply of hard coke. M/s. Indu Engineering and Textiles Ltd., appellant herein, submitted its offer for supply of the material in response to the said notice on 12th February, 1981. The offer letter contained a price escalation clause to the following effect: "Our prices are based on the prevailing prices of pig iron, premium hard coke and ferro-silicon as announced by the Joint Plant Committee, Bharat Coking Coal Ltd., or any other agency authorised for this purpose, plus sales tax, cost of transportation and handling from main producers to our works at Agra. Any upward revision in the prices of the pig iron, hard coke and ferro-silicon shall have corresponding effect on our prices as per formula given below. Such revision in prices shall be effective from all material in transit, or tendered for inspection immediately from the date of announcement of revised prices by J. P.C., Bharat Coking Coal Ltd., etc." The tenders were opened by the respondent on 20th February, 1981. On 14th February, 1981 there was an escalation of the price of hard coke notified by Coal India Ltd. (a subsidiary of Bharat Coking Coal Ltd.). The price escalation was published in the newspapers on 1st March, 1981. On 16th April, 1981 negotiations were held with the parties who submitted offers, pursuant to which rates in respect of supply of ferro-silicon and the price escalation in respect of the same were reduced/dropped. however, the escalation clause with regard to premium hard coke and pig iron (no dispute in this proceeding) was maintained with certain modification. Regarding price escalation it was stated as follows: "Price Escalation : We agree to modify this clause to the same form as accepted by the Department in the previous tender with Indo-Swedish Pipes from whom this factory was bought by us. Under that escalation clause, escalation is payable only one statutory increase in prices of pig iron and premium hard coke. " On 6th May, 1981 the respondent communicated its acceptance with the following clause regarding price escalation: "Enhancement and deduction in pipes to be regulated on the basis of the pig iron and hard coke price of JPC and Bharat Coking Coal Ltd." This was followed by a confirmation letter by the appellant in which it was specifically stated that the escalation clause shall be effective for any increase/decrease after the date of the tender i.e. 12th February, 1981. The agreement incorporating the price escalation clause was signed between the parties on 14th May, 1981. When the appellant submitted bills for the hard coke and pig iron supplied to the respondent at the escalated price with effect from 14th February, 1981 the respondent denied its liability to pay the enhanced price for hard coke while admitting the liability for the escalated price in respect of pig iron. A dispute therefore, arose between the parties.
(3.) The dispute was referred to the arbitrator-Shri Banarasi Dass, superintendent Engineer by Engineer Member, DDA. The arbitrator, by a reasoned award passed on 16-5-1985 accepted the claim of the appellant in respect of the three items of claim including the claim in respect of hard coke (item No. 2). The respondent raised an objection to the award only in respect of item No. 2 i.e. hard coke. A single Judge of the High Court by the order passed on 7-4-1989 remitted the matter to the arbitrator for fresh decision after taking into consideration the effect of the letter dated 09-06-1982. Pursuant to the said decision the arbitrator passed the award dated 03-10-1989 after hearing both the parties. He gave detailed reasons in support of the award accepting the claim of the appellant in respect of item No. 2. He gave reasons for not accepting the letter dated 09-06-1982 as binding on the appellant holding that it was obtained after an year of the agreement and under duress and that the offer dated 12th February, 1981 itself was sufficient to justify the claim of the appellant. By the order dated 20th February, 1995 a single Judge of the High Court rejected the objections filed by the respondent against the award and made the award dated 03-10-1989 rule of the Court.;