TMI Blog2018 (1) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... qua particular number of objects/class of objects. Respondent No.2 is right in its submission that the fundamental breach, by its very nature, pervades the entire contract and once acted committed, the contract as a whole stands abrogated. It is on the aforesaid basis that the Arbitral Tribunal has come to the conclusion that the termination of contract by respondent No.2 was in order and valid. The proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto. Award of Damages - Held that: - the appellant cannot now turn around and raise objection to the award of damages which are measured having regard to the loss suffered by respondent No.2 in terms of lease rent for reasonable period for which it would have been entitled to otherwise - the Arbitral Tribunal, for the purpose of classification, considered a 30% reduction in lease rent to compute damages for installed objects, 50% reduction in lease rent to com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng regard to the Arbitration Agreement contained in the contract between the parties) and those arbitration proceedings culminated in the Arbitral Award dated June 18, 2004. An application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act ) was filed by the appellant, questioning the correctness of the Award which was dismissed by the learned Single Judge of the High Court vide orders dated March 18, 2009 and April 30, 2009 thereby affirming the Arbitral Award. Intra-court appeal thereagainst, which was preferred by the appellant, has been dismissed by the Division Bench of the High Court vide judgment dated October 19, 2013. It is the validity of that judgment which is the subject matter of the instant appeal. 2) With the aforesaid preliminary comments on the nature of proceedings, we turn to the events that took place, in a chronological manner, that are relevant for deciding the lis: EVENTS : The respondent was awarded a contract for installation of Low Tension Load Management Systems (LTLMS) at various locations by the appellant during the year 1993-1994. The respondent participated in another tender in the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant also did not renew the Letter of Credit (LC) through which the lease rentals were being paid for the installed objects. A series of correspondence was exchanged between the parties on the aforesaid two counts as the appellant maintained that it had not committed any fault in respect of any of the aforesaid aspects. As against the total number of 47497 LTLMS to be installed by the respondents, it installed 17294 numbers and thereafter terminated the contract vide letter dated February 19, 1999 alleging breaches on the part of the appellant which according to the respondent entitled the respondent to terminate the contract. The respondent undertook to maintain 17,294 contracts objects installed by them on the condition that lease rental of the same would be paid by the appellant. The respondent further claimed that they had manufactured 14,206 numbers objects which were waiting to be installed for which locations were not intimated by the appellant. 4) As per the appellant, under the original tender of 1996, the respondent was only entitled to supply and maintain 11760 contract objects and 12555 replacement of 1993/94 contract was as a package, with 23672 supply of contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors, the respondents had primarily contended two defaults by the appellant. First, that the appellant did not supply the list of locations where the contract objects had to be installed and second, that the appellant did not renew the LC through which the lease rentals were being paid for the installed objects. 8) The Arbitral Tribunal, however, found no fault with the appellant as regards non-renewal of the LC observing that the respondent had terminated the contract in its entirety on April 21, 1999 whereas the LC was valid upto April 30, 1999. The finding regarding non-renewal of LC by the Arbitral Tribunal was affirmed by the learned Single Judge (Justice D.K. Deshmukh) vide judgment dated August 3, 2005 when the Award was initially set aside. The said finding was also affirmed by the Ld. Division Bench of the Bombay High Court vide its judgment dated October 22, 2008. However, partly allowing the appeal of the respondent, the judgment of the learned Single Judge dated August 3, 2005 was set aside and the matter was remanded back for fresh consideration. While adopting this course of action, the Division Bench in its judgment dated October 22, 2008 observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle Judge, appeal be placed for admission. 2. Appeal No. 165 of 2009 be heard along with this Appeal. 3. Since contentions raised before the Ld. Single Judge are in dispute as stated above and the Petitioner has been directed to approach the Ld. Single Judge for the purpose of correction and/or modification, and also in view of the fact that the impugned order has not attained finality for the purpose of being considered by us, we find it inappropriate to consider Notice of Motion (being Notice of Motion No. of 2009) for interim relief at this stage. The said notice of motion will be considered after the appropriate orders are passed by the Ld. Single Judge on approach to the Ld. Single Judge by the Petitioner. 10) The learned Single Judge by order dated April 30, 2009 clarified her order by saying that although the appellant has argued the matter challenging the award being beyond the contract between the parties and being opposed to public policy, the learned Single Judge in her considered opinion rejected the same under Section 34(2)(iv) of the Act. 11) Appeal of the appellant was thereafter listed before the Division Bench in which order dated May 2, 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions and finding on Point No.(ii) Whether the contract was one complete contract and the same could not be split up as argued by the Claimants? 10. Submissions and finding on Point No.(iii) Whether Claimants/DSL waived their right to receive complete lists of locations; and on Point No (iv) Whether the Award is contrary to the public policy as mentioned under Section 34 of the Arbitration and Conciliation Act, 1996? 11. Submissions and finding on Point No. (iv) Whether the Award is contrary to the Public Policy as mentioned under Section 34 of the Arbitration and Conciliation Act, 1996? (v) Whether the damages were properly awarded? and (vi) Whether the aspect of mitigation was properly considered? 12. Chamber Summonses filed by MSEB 13. Conclusion. 14) After narrating the scope of the work and the gist of the dispute which led to initiation of arbitration proceedings, the High Court noted that respondent filed its claims under various heads aggregating to ₹ 1053,06,78,342/- and the counter claims of the appellant were to the tune of ₹ 1273,70,26,669/- crores approximately. Appellant had examined as many as 26 witnesses in support of its case wherea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aspect of mitigation was properly considered? 15) Thereafter, discussion ensued on each of the aforesaid issue, one-by-one. On the first point, the High Court has concluded that the Arbitral Tribunal was justified in coming to conclusion that the appellant had committed breach of the contract by not supplying DTC list. While so concluding, the High Court went into the events which took place in this behalf, gist of the evidence as well as the manner in which the issue was upraised by the Arbitral Tribunal. The High Court has held that the finding which was given by the Arbitral Tribunal, after taking into consideration the rival contentions raised in the claim and in the written statement on this aspect is a finding of fact which was given after examining the material on record. The High Court further noted that this finding was upheld by the learned Single Judge also and the manner in which the learned Single Judge dealt with the issue has been taken note of. This being a finding of fact, as per the High Court it was not possible for it to substitute its own view to the views taken by the Arbitral Tribunal or the learned Single Judge and arrive at different conclusion, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n thereafter in a meeting which was held on 11/3/1999 between the Chairman of the MSEB, DSL and other two parties who were awarded the contract, as mentioned in clause 17 of the minutes of the meeting, the Chairman informed DSL that the Lists were readily available in Kolhapur Zone and asked Mr. Datar to take up the work under B-II and B-III schedule immediately and the Chairman directed that CEs present in the meeting that it was the Board's responsibility to give the list with maps to the agencies and expeditious steps should be taken in that regard. It was, therefore, contended that as late as 11/3/1999, the Chairman himself had conceded that the Lists were not made available to DSL. In this context, certain letters assume importance regarding change of sequence of work. The work order dated 27/3/1997 shows that the work initially had to be done in Kolhapur Zone, then in Nasik Zone and finally in Aurangabad Zone. Thereafter, Chief Engineer, MSEB by his letter dated 4/11/1997 changed the sequence and directed that the work should be completed initially in Nasik Zone in respect of B-I, B-II, B-III Lists, then in Kolhapur Zone and finally in Aurangabad Zone. This sequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mants from doing so? While answering this point, the point was discussed in two parts. Firstly, whether the Claimants were ready and willing to perform their part of the contract and, secondly, whether Respondents have prevented the Claimants from doing so. In this context, after having held that Claimants were ready and willing to perform their part of the contract, while considering the second point, the Tribunal had taken into consideration the question of supply of DTC Lists and whether it was a fundamental term of the contract. After having held that MSEB had prevented DSL from performing their part of the contract even though they were ready and willing to do so, the question of damages has been thereafter separately considered and on that point Tribunal has adopted a particular method of calculation of damages. In our view, it is not permissible for MSEB to now change their submissions in this manner. However, even if the submissions, as advanced before us by MSEB, are taken into consideration, they are devoid of merits. 17) Thereafter, the High Court took note of another argument of the appellant herein, namely, the contract was terminated by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation was Kolhapur, Nasik and Aurangabad. This sequence was later on changed to Nasik, Kolhapur and Aurangabad. This was again changed and permission was given to DSL to install the objects at any time at any place and, lastly, again, this was changed and direction was given to DSL to adhere to the sequence as per the Work Order. This being the position, even assuming that B-II Lists were available, DSL could not have installed these contract objects because they were asked to follow the schedule again by letter dated 21/12/1998 and, therefore, even if the lists were available, it was not possible for DSL to simultaneously install all those objects since they were told to adhere to the sequence in the Work Order if the lists of locations under B-I were not given, even assuming that they had B-II lists of locations they could not have and were not actually allowed to install at the said B-II locations. It has come on record that more than 10,000 objects were manufactured and ready for installation. There is no earthly reason why DSL would fail to install the objects which were inspected and ready for installation. The only obvious reason would be that they were unable to do so on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of right to receive list of DTC locations, the only option which was available to the respondent was to have given notice to the appellant that it was accepting the performance of the promise other than at the time agreed upon or that the respondent was entitled to any compensation. 20) With the aforesaid findings on Point no. 3, the High Court rejected the contention of the appellant that the award of damages was against the public policy. 21) Thereafter, the High Court discussed the question of quantum of damages as raised in Point No. 5. It went through the exercise done by the Arbitral Tribunal in this behalf, i.e., the manner in which the damages are calculated by the Tribunal. It found that the Tribunal had appreciated to determine the damages payable to the respondent in respect of lease rent for duration of seven years for 17294 contract objects which were installed and a figure of ₹ 108,02,53,173/- in this behalf was arrived at. In respect of 14206 stranded objects, the Tribunal held that the damages which were payable on account of aforesaid stranded objects were to the tune of ₹ 14,28,55,536/- for a period of one year at the rate of ₹ 10,05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant and, therefore, no damages were awardable. In respect of uninstalled objects, the respondent had 16473 lists of location and they were obliged to maintain 2500 buffer stock. However, the respondent had manufactured only 14206 objects, therefore, there was no question of payment of any damages qua uninstalled objects. 23) Since this issue was connected with Point No. 6, i.e., mitigation of damages, the High Court dealt with the argument of mitigation as well. Here, contention of the appellant was that according to the respondents the breach, if at all, took place only on December 21, 1998 when permission for simultaneous installation in B-III was withdrawn and no steps whatsoever to remedy the breach thereafter were taken by the respondents. This showed that the respondents had not tried to mitigate their loss and were not entitled to get damages. Here the argument of the respondent was also noted and after considering the respective arguments, the High court has not found any substance in the submissions of the appellant. It has given following reasons for adopting this course of action: 73. We agree with the submissions made by the learned Senior Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Tribunal to have awarded damages for the uninstalled objects and the objects which were not manufactured. This submission is totally misconceived, firstly because it has been consistently held that the Arbitral Tribunal alone is competent to decide the manner of calculation of damages which are to be awarded as also the method which is to be adopted by the Tribunal. In the present case, the Arbitral Tribunal has held that lease rent is one of the measures for ascertaining damages. The Apex Court in McDermott vs. Burn Standard [(2006) 11 SCC 181] has observed as under:- 106. We do not intend to delve deep into the matter as it is an accepted position that different formulae can be applied in different circumstances and the question as to whether damages should be computed by taking recourse to one or the other formula, having regard to the facts and circumstances of a particular case, would eminently fall within the domain of the arbitrator. 110. As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. We, however, see no reason to interfere with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t those efforts did not succeed. The question of mitigation, therefore, was considered by the Tribunal and the submissions of MSEB were not accepted. In our view, reasoning given by the Tribunal cannot be faulted. 25) According to the High Court, the Arbitral Tribunal had awarded damages in a most conservative manner and, thus, committed no illegalities in awarding these damages. At the end, the High Court dealt with the Chamber Summons which were filed by the appellant and on detailed discussion thereupon, dismissed all these Summons. 26) As a consequence, the appeal of the appellant stood dismissed. ARGUMENTS OF THE APPELLANT : 27) Mr. Vikas Singh referred to the tender of 1993-94, pursuant to which the respondent had installed 12,555 numbers of LTSC, and submitted that the respondent was maintaining the same but large scale complaints about the inefficiency of LTSC was received with the appellant. Having regard to this criticism faced by the respondent, it volunteered to replace the installations made in the earlier contract and charge the old rental in respect of the same. In the meantime, pursuant to tender of the year 1996 for installation, the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to remain alive even after termination of the contract on February 19, 1999 in order to make payment of future rentals qua the uninstalled objects. In spite thereof, the respondent, vide its communication dated April 21, 1999, terminated the contract. It was submitted in the aforesaid backdrop that the action of the respondents was clearly illegal. It was further argued that the findings of the Arbitral Tribunal that the appellant had committed the fundamental breach of the contract in not providing the complete list of the contract objects to the respondents is clearly erroneous which is patently illegal and contrary to the terms of the contract. It was submitted that the entire premise of the Arbitral Tribunal to record this finding was on the basis of the letter of the appellant dated December 21, 1998 which had only debarred the respondent from installing B-III locations as the respondent was indulging in the malpractice of charging bills higher than what they were entitled to which is proved by the credit note given by the respondents themselves on February 18, 1999. The said letter did not debar the respondent from installing the B-II locations which were 10,541 remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led while permitting the respondents to retain the same. Likewise, the award was faulted with to the extent that the Arbitral Tribunal awarded the amount for the raw material available with the respondent, without directing the respondent to handover the said raw material to the appellant. Though, this order dated August 3, 2005 was set aside by the Division Bench in appeal which was preferred by the respondent, submission of the learned senior counsel was that it was erroneously set aside on the only ground that the Single Judge while allowing Section 34 petition had not specifically mentioned the particular section under which the petition had been allowed when clearly the order of the learned Single Judge had been passed on the ground that the award is against the public policy of India and hence it was clearly referable to Section 34(2)(b)(ii) of the Act. Hence, there was no occasion or necessity to remand the matter back to the Single Judge of the High Court. Since the direction by the Division Bench were to the Single Judge was to decide the matter in a time bound manner, even before the appeal against the order of the Division Bench could be heard by the Supreme Court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly 14, 1997 as the date of making available the complete list of locations without actually receiving the said list from the circle office. The clause very clearly provided the four month period to commence from the date of receipt of list of complete locations and admittedly the respondent did not receive the list of locations on July 14, 1997 nor any time thereafter till they started installation on November 18, 1997, considering the four month period to start from July 19, 1997 i.e. the date of receipt of the communication dated July 14, 1997. Clearly, the respondent had enough time after July 14, 1997 to insist upon the complete list of locations before any installation was started by them on November 18, 1997. Therefore, argued the learned senior counsel, it is the respondent which committed breach of contract in not completing the work. 33) Mr. Vikas Singh once again emphasised the submission which was made before the learned arbitrator as well as the High Court, that there was a waiver by the respondent in respect of list of DTC location and the consequences of such a waiver had to flow as per Section 55 read with Section 63 of the Contract Act. It was submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in fact, it is the respondent which had failed to perform its obligations under the contract and was, thus, responsible for the breach thereof. On that premise, the submission was that award of the Arbitral Tribunal qua the uninstalled object is patently illegal and it also shocks the conscience of the Court and is liable to be set aside as being opposed to public policy. Specifically adverting to the damages awarded qua installed objects, it was argued that the work order clearly provided that each contract object was a separate contract between the appellant and the respondent and, therefore, it was incumbent upon the Arbitral Tribunal to decide as to what fault had been committed by the appellant qua the installed objects before granting any damages for the same. Absence of this exercise, contended the learned senior counsel, had rendered the award illegal and in violation of public policy as mentioned in Section 34 of the Act. 35) While questioning the damages awarded in respect of objects not even manufactured; quantum of damages awarded by the Tribunal and failure on the part of the respondent to mitigate the losses, the same arguments were advanced which were ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrict offices of the appellant. Both parties were ad idem that time had started to run and installation was to be completed before 18.03.1999 (twenty months from 18.07.1997, i.e. the date of receipt of the letter dated 14.07.1997 from the appellant). Despite rigorous follow up and distress appeals by respondent No.2 through more than 120 letters, the appellant did not furnish complete lists of DTC locations. On 21.12.1998, the appellant directed the work to proceed strictly in the sequence Kolhapur, Nasik and Aurangabad Zones, with further sequences B-1, B-2 and B-3. The appellant stopped work under B03 indefinitely without assigning any reason. However, even till 19.02.1999, respondent No.2 was not provided with complete list of B-I locations in Kolhapur. Despite representation of 11.02.1999 from Technical Member of the appellant to give lists within four days, i.e. by 15.02.1999, no lists were received. Realizing the futility of expecting cooperation from the appellant, respondent No.2 terminated the contract on 19.02.1999. 39) It was further submitted that respondent No.2 still offered to maintain the 17294 installed objects (however, the appellant was admitting ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 had adequate lists of locations available and still failed to install the contract objects. (vi) It is obvious that there is something seriously wrong in the working of the appellant. Once a letter is listed in the affidavit of documents, it is surprising how the letter was not traceable. Be that as it may, the fact remains that prior to the date of termination of contract, at least in three Circles, the appellant had directed stoppage of installation work. (vii) It is unfortunate that the Head Office of the appellant lacked control over the field offices and which ultimately led to the failure of the project. It is futile to even suggest that the breach was not a fundamental one. (viii) Respondent No.2 was ready and willing to perform their part of the contract while the appellant committed a breach by failure to supply DTC locations as per the terms of the contract. (ix) Respondent No.2 invested ₹ 163 crores in the project. (x) The appellant failed to prove that deductions effected in the Performance Certificates were proper. (xi) The appellant indulged in tampering the commissioning reports produced on record. The attempt does not behove to a statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The arbitrators did not focus on a particular breach qua particular number of objects/class of objects. Respondent No.2 is right in its submission that the fundamental breach, by its very nature, pervades the entire contract and once acted committed, the contract as a whole stands abrogated. It is on the aforesaid basis that the Arbitral Tribunal has come to the conclusion that the termination of contract by respondent No.2 was in order and valid. The proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto (See Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, and S. Munishamappa v. B. Venkatarayappa Ors., (1981) 3 SCC 260) . 44) At this stage, we may deal with the contention of the appellant to the effect that the arbitrators have themselves recorded a finding that the LC was still in operation and had not expired and, therefore, the finding of the Tribunal that the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 which is contemporaneous to the letter of termination, wherein respondent No.2 categorically alleged fabrication of Commissioning Reports of installed objects and the financial blockade created by the issue of NIL Performance Certificates by the appellant. This letter is referred to in the letter of 19.02.1999 by incorporating references contained in the letter dated 23.12.1998. Respondent No.2, in its Statement of Claim, has also asserted the harassment and deliberate breach of the appellant in the course of installation of objects such as fabrication of failure reports and commissioning reports, obstructing payments by bogus deductions in performance certificates and other wrong practices of the appellant staff. The serious grievances of respondent No.2 in respect of installed objects were considered at length by the Arbitral Tribunal and accepted the same. 47) We have already referred to these findings hereinabove. Learned senior counsel appearing for respondent No.2 referred to the judgment of this Court in Juggilal Kamlapat v. Pratapmal Rameshwar (1978) 1 SCC 69 wherein it has been held that repudiation of a contract can be justified on the basis of any g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I and it was practically unviable to install objects of category B-II selectively. The list of B-II category was also required to be re identified by the Respondents separately as was done for the Nasik Circle and (d) the Respondents unilaterally willingly revoked the permission granted earlier to install simultaneously by letter dated December 21, 1998. Some of the reasons given by the witness cannot be termed as unreasonable in the facts and circumstances of the case. It cannot be overlooked that in respect of installation of objects under category B-II, the Claimants were entitled only to the rates fixed under year 1993 and 1994 contract till the expiration of six year period while in respect of categories B-I and B-III, the lease rentals were considerably high. In any event, it does not lie in the mouth of the Respondents to urge that the claimants should have installed contract objects under category B-II when specific directions were given on December 21, 1998 to install objects under category B-II only after completion of installation under category B-I. The Respondents claimed that 16,477 locations were available on February 19, 1999 but that is not correct because tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad. This was again changed and permission was given to DSL to install the objects at any time at any place and, lastly, again, this was changed and direction was given to DSL to adhere to the sequence as per the Work Order. This being the position, even assuming that B-II Lists were available, DSL could not have installed these contract objects because they were asked to follow the schedule again by letter dated 21/12/1998 and, therefore, even if the lists were available, it was not possible for DSL to simultaneously install all those objects since they were told to adhere to the sequence in the Work Order if the lists of locations under B-I were not given, even assuming that they had B-II lists of locations they could not have and were not actually allowed to install at the said B-II locations. It has come on record that more than 10,000 objects were manufactured and ready for installation. There is no earthly reason why DSL would fail to install the objects which were inspected and ready for installation. The only obvious reason would be that they were unable to do so on account of various orders which were passed by MSEB from time to time preventing them from performing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoke public policy to challenge the award on the said premise. This aspect has been considered by the Division Bench at para 73, which has already been reproduced above. 54) We see substance in the contention of respondent No.2 and are of the opinion that the appellant cannot now turn around and raise objection to the award of damages which are measured having regard to the loss suffered by respondent No.2 in terms of lease rent for reasonable period for which it would have been entitled to otherwise. 55) That apart, we also find that the Arbitral Tribunal, while awarding the damages, has relied upon the judgment of this Court in Union of India Ors. v. Sugauli Sugar Works (P) Ltd. (1976) 3 SCC 32 wherein a cardinal principle of damages had been laid down to the effect that the injured party should be placed in as good a position as money could do as if the contract had been performed. Following passage from the said judgment was kept in mind by the Arbitral Tribunal: 22. The market rate is a presumptive test because it is the general intention of the law that, in giving damages, for breach of contract, the party complaining should, so far as it can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lessor may also require accelerated payment of the value of the future rentals, where the leasing agreement so provides, or may terminate the leasing agreement and after such termination: (a) recover possession of the equipment; and (b) recover such damages as will place the lessor in the position in which it would have been had the lessee performed the leasing agreement in accordance with its terms. 58) In the aforesaid backdrop, we agree with the approach of the High Court in spelling out the proposition of law that once it is established that the party was justified in terminating the contract on account of fundamental breach thereof, then the said innocent party is entitled to claim damages for the entire contract, i.e. for the part which is performed and also for the part of the contract which it was prevented from performing. We may usefully refer to the following dicta laid down in Suisse Atlantique Societe d'Armament SA v. NV Rotterdamsche Kolen Centrale 1966 A.C. 361 (pages 397-398) : ...if facts of that kind could be proved I think it would be open to the arbitrators to find that the respondents had committed a fundamental or repudiato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract objects stranded in the factory to other Electricity Boards but those efforts did not succeed. It was contended by the Respondents that the claimants should have dismantled the stranded contract objects and sold the components thereof. The submission is only required to be slated to be rejected. Once an electronic instrument is dismantled, then the value almost becomes nil. In any event, the Claimants have established that efforts were made to mitigate the loss. 61) The learned Single Judge as well as the Division Bench of the High Court has given its imprimatur to the aforesaid findings. It, therefore, becomes apparent that the objects in question were manufactured by respondent No.2 to suit the specific needs of the appellant ad they could not be used otherwise. Therefore, there was no possibility on the part of respondent No.2 to make an endeavour to dispose of the same in order to mitigate the loses. RE : WAIVER 62) The argument of the appellant on waiver is also successfully met by respondent No.2. Submission of Mr. Dada, on this argument, was that both parties went to trial before the Arbitral Tribunal on the basis that the time to start work under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area and with the interaction of large number of people. These factors cannot establish that the claimants have waived their right to complaint about the failure to supply lists of location... 63) Mr. Vikas Singh, learned senior counsel appearing for the appellant, referred to and relied upon various judgments in support of his contention. These judgments deal with the scope of interference in the awards passed by the arbitrators. It is not even necessary to deal with these judgments inasmuch as, on the facts of this case, as discussed in detail hereinabove, none of the judgments gets attracted. Likewise, effort on the part of the appellant to rely upon the judgment of the learned single Judge of the High Court in the first round is futile as that was set aside by the Division Bench and matter was remitted back to the single Judge of the High Court to decide it afresh. RE: ORDER ON CHAMBER SUMMONS 64) Three chamber summons were taken out by the appellant during the pendency of this appeal before the Division Bench. By these chamber summons, the appellant intended to amend the petition which was filed by it under Section 34 of the Act as well as the appeal. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
