- (1.) PRAFULLA C. Pant, J. This appeal, preferred under Section 37 of the Arbitration and Conciliation Act, 1996, is directed against the judgment and order dated 11-1-2005, passed by learned District Judge, Dehradun, in Misc. Arbitration Case No. 46 of 2003, whereby the said Court has refused to set aside the award given by the Arbitrator.
(2.) HEARD learned Counsel for the parties and perused the record. Brief facts of the case are that appellant No. 1-Council of Scientific and Industrial Research (herein after referred as CSIR) is doing research in the field of Science and Technology. Appellant No. 2-Indian Institute of Petroleum (herein after referred as IIP) is a constituent laboratory under CSIR and is a Society registered under Societies Registration Act, Respondent- M/s. Goodman Drug House Pvt. Ltd. (herein after referred as Goodman), which is a private limited company registered under the Companies Act, entered into an agreement on 21-8-1996 with the appellant for the purpose of setting up a project for conversion of Menthone to Menthol. The scope of project and time schedule of the work is mentioned in Annexure 1 to the agreement, which provided five months time schedule for the same. As per the agreement, in consideration of work done by IIP and for using intellectual property generated for conversion of Menthone to Menthol, respondent-Goodman agreed to pay to IIP a sum of Rs. 3,00,000/ -. It is also agreed between the parties that the Goodman shall further pay a consolidated sum of Rs. 9,00,000/towards the royalty in three equal instalments. A royalty was to be distributed in a proportionate ratio of 50: 50 per cent between the two parties in the agreement. The royalty agreement between the parties was for a period or ten years. The work was to be carried out in the project and was to be reviewed every month by the IIP and the Goodman till the completion of the project. The IIP has to submit Basic Engineering Package (BEP) apart from In-Plant training to Goodman's operating personnel. The procedural formality for securing and maintaining the intellectual property rights/patents was the responsibility of the IIP. It was also agreed that for a period of five years, parties to the agreement would maintain strict confidentiality to prevent disclosure of method of conversion of Menthone to Menthol. There was an Arbitration Clause in the agreement to refer the dispute between the parties to a sole Arbitrator, selected by Chairman and Managing Director of respondent-Goodman and Director of IIP. It appears that after an agreement was entered, the respondent incurred the huge expenditure in setting up the project of industrial development. The allegations of respondent-Goodman is that the know-how supplied by the appellant failed to show the result of conversion from Menthone to Menthol. The respondent- Goodman has further alleged that the appellant IIP committee breach of contract, as they had failed to supply the technology for successful conversion of Menthone to Menthol due to which the respondent-Goodman suffered huge losses not only in making investment in setting up the unit but also deprived of the profits, which he would have earned on transfer of technology for conversion from Menthone to Menthol.
(3.) IT appears that respondent-Goodman made certain claims regarding the losses and sought appointment of sole Arbitrator. Justice K. D. Sahi (retired Judge) was appointed Sole Arbitrator on the following claims : " (a) Rs. 142. 010 lacs with interest @ 24% as compensation for the amount incurred due to the expenses and investment of installing the plant and machinery, operation of the plant for trial production and other losses due to failure of project vide details as per Annexure P-XXVI. (b) Rs. 4,95,60,000. 00 as damages suffered by the claimant due to non-running of the plant alongwith interest @ 24% per annum till final payment vide details as per Annexure P-XXVII. (c) Rs. 1. 50 crores as compensation for losses suffered by the claimant due to non-maintenance of plaughing back owing to failure of the project. (d) Rs. 20. 00 lacs as compensation for loss of time, energy and for mental agony to claimant. (e) Rs. 40,000/- with interest @ 24% per annum till payment as compensation as medical expenses incurred by the claimant in his medical treatment Annexure P-XXIX. (f) Compensation on account of heart attack, general land special damages due to reduction of lie expectancy Rs. 30. 00 lacs. (g) Rs. 3. 00 lacs incurred by the claimant for under going angiography and bye-pass surgery. (h) Medical expenses approximately Rs. 1,500/- per month (medicines Rs. 1,000/- + ECG Rs. 100/- + kl Consultancy Charges + Tests etc. ). (i) The cost of arbitration litigation CZB-DDN-Nainital, Supreme Court, Nainital-till finalization of arbitration proceedings and award". The Arbitrator entered into the arbitration and after considering the claims of the Goodman and the objections of the appellant- IIP it gave award dated 15-1-2003, whereby claim for Rs. 90,00,000/- (Ninety lakh) was allowed and directed to be paid by IIP within a period of two months in default of payment of which, interest of 12% per annum was further awarded by the Arbitrator. The appellants challenged the award under Section 34 of Arbitration and Conciliation Act, 1996, before the District Judge, Dehradun, who after hearing the parties dismissed the application for setting aside the award. Aggrieved by the judgment and order dated 11-1-2005, passed by learned District Judge, Dehradun, this First Appeal has been preferred by CSIR and IIP.;