- (1.) An interim award for Rs.25 lakh is under challenge in these proceedings under Section 34 of the Arbitration and Conciliation Act, 1996. Pursuant to tender invitations issued by the Eastern Railway the respondent submitted offers for supply of store material. It is the respondent?s case in the reference that the goods were supplied without any contemporaneous objection as to quality or quantity and the Railways thereafter failed to make payment of the amounts due. The claim goes back to the year 1990. The respondent instituted divers proceedings before this Court and ultimately filed a suit in the year 1994. According to the interim award, the reference commenced in the year 2007.
(2.) The Arbitrator has recorded that the parties had filed the statement of claims and statement of counter-claims and rejoinders. Written notes of argument had also been filed by the respondent claimant. The interim award notices that the Railways had admitted having withheld payment of 108 bills in an affidavit filed before the Supreme Court in 1992, a statement which was corroborated in another affidavit filed before this Court in 2002. The Arbitrator found 'clear judicial admission' which, according to him, "constitute(d) adequate proof that the materials were supplied and also that Bills to realize the value of supplies made was also raised by the Claimants and submitted to the Respondents." The claimant had received a total payment of Rs.11,16,528.80 in respect of such 108 bills prior to the interim award being made.
(3.) The Arbitrator found that though the Railways had asserted in an affidavit filed in the Supreme Court in the year 1992 that they had rejected six items of supply against six purchase orders, there was no communication of rejection of any goods and the Railways had failed to produce any material to substantiate their claim of rejection of the six items. The interim award thereafter records as follows: "WHEREAS it is also necessary to record that allegations of malpractices against the Claimants in the matter of securing the contracts was raised by the Respondents in their Statement of Counter-Claim, but the Respondents have failed to substantiate their allegations by submitting any proof or evidence, in spite of adequate opportunity given to them in the course of the arbitral hearings. Since no irregularity/malpractice in the matter of placement of the contracts have been proved, the contracts are considered valid, binding and enforceable, making the respondents liable to make payments against materials received there against." The Arbitrator has held that after deducting the bills relating to the alleged rejection of six items and the payment of Rs.11,16,528.80 already received by the claimant, the residual figure came to Rs.39,69,564.79 "out of which, I am inclined to pass partial/interim award for Rs.25 lakhs for the present.";