Ramendra Mohan Datta, J. - (1.) THIS appeal arises from the judgment and order of Sabyasachi Mukharji, J. dated May 9. 1977: (Reported in AIR 1977 NOC 263 (Cal) in an application for setting aside the award of the Arbitrator Sri S. K. Sen dated June 12, 1969.
(2.) THE matter arose out of a contract between the Union of India represented by the Iron & Steel Controller and the respondent (hereinafter called Apeejay) regarding supply of enamelled sheets, black plates etc. from the United States of America which was to be financed out of the Development Loan Fund placed at the disposal of the Government of India by the U. S. Government. One of the terms of the said contract was for security deposit to the extent of 5% of the contract value of the goods by Apeejay. Such security amount at the calculated rate amounted to a sum of Rs. 1,99,156. In terms of the said contract a guarantee bond was executed by Apeejay in favour of the Union of India in lieu of the said security amount through Punjab National Bank. In the absence of the Arbitrator's records which were not placed before us during the hearing of this appeal it is difficult to appreciate what was meant by the Arbitrator and by the learned Judge of the court below when they referred to the performance guarantee bond and what were the terms and conditions thereof. All that we have ascertained is that the guarantee bond could be enforced by forfeiture in case of breach of the said contract. It appears that the facts are that the Union of India opened three letters of credit each dated Jan. 20, 1962 of the total value of $829716.00 with the Chase Manhattan Bank of New York, U.S.A. Against the said letters of --credit Apeejay in terms of the said contract shipped 53.745 tonnes of contracted materials within the time stipulated but failed to ship the balance quantity within such stipulated period. The Union of India no doubt -- extended such time for shipment at the request of Apeejay but the time was so extended without prejudice to their right to levy liquidated damages for delay in shipment in accordance with the terms of the contract. The terms of the contract provided that except in the case of Force Majeure Apeejay would be liable to pay such liquidated damages for delay in shipment even though the time might be extended by the Union of India.
(3.) AFTER such extension Apeejay shipped certain quantity of goods but failed and neglected to ship 162 tonnes being the balance quantity of the said materials entailing forfeiture of the said security deposit on account of such breach.;