TMI Blog2019 (11) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT R. BANUMATHI, J. This appeal arises out of the impugned judgment dated 19.07.2010 passed by the High Court of Delhi in FAO(OS) No.435 of 2010 in and by which the High Court dismissed the appeal filed by the appellant thereby upholding the judgment of the learned Single Judge thereby affirming the dismissal of the objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 against the arbitral award dated 18.03.2005. 2. Brief facts which led to filing of this appeal are as under:- An agreement dated 30.08.2001 was entered into between the respondent-Central Warehousing Corporation and the appellant for a period of two years from 28.08.2001 to 27.08.2003 for carrying out the work of Handling and Transportation at Inland Clearance Depot (ICD), Varanasi. The respondent-Corporation terminated the contract on 21.02.2002 under Clause X(A) and X(B) of the agreement due to appellant s poor performance as Handling and Transportation Contractor and deterioration of the situation at the Inland Clearance Depot. The security deposit furnished by the appellant upto the date of termination was also forfeited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,30,284/- towards refund of security deposit) and counter claim No.4 (claim of ₹ 15,75,484/- including interest of ₹ 4,64,815/- towards illegal detention of the fork lift) were decided against the appellant. It was held by the Arbitrator that the termination of the contract is legal and justified and in view thereof, the respondent had the right to forfeit the security deposit. As to the claim of the appellant towards alleged detention of the fork lift and hand trolleys, the Arbitrator held that the detention of the equipments is right and justified. The Arbitrator held that it is seen from Clause 5(g) of the tender conditions of the contract that the respondent has the right to demand the balance due when sufficient sum is not available to cover the full amount recoverable from security deposit and other dues. In view of the heavy claim amount of M/s Bhola Nath Industries and Customs/Excise Department and others, the learned Arbitrator concluded that there is no illegality in the action on the part of the claimant in detaining the equipments like fork lift and hand trolleys as security. 6. The appellant filed objections under Section 34 of the Arbitration an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as the terms of reference made to the arbitrator and the order of the learned Single Judge to replace the bank guarantee is untenable and prayed for allowing of the appeal. 9. Insofar as the forfeiture of security deposit is concerned, Mr. K.K. Tyagi, learned counsel for the respondent-Corporation has submitted that M/s Bhola Nath Industries, whose containers remained missing for a long time on account of the conduct of the appellant had lodged a claim against the respondent for a sum of rupees forty lakhs and though the same has been dismissed for non-prosecution, the same may be restored at any time at the instance of the complainant M/s Bhola Nath Industries Ltd. It was therefore, contended that the forfeiture of the security amount and fork lift cannot be said to be arbitrary or unjustified and in accordance with the terms of the contract. Learned counsel further submitted that the respondent Corporation had to furnish a bank guarantee of rupees ten lakhs to get the container released in view of the suit filed by the third party-M/s ODC against the appellant for retaining the container till their dues are paid by the appellant and the case is still pending and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten lakhs by the respondent-Corporation. The trial court released the container only on furnishing of bank guarantee of rupees ten lakhs. It is stated that the said civil suit is still pending in the Ghaziabad Court and is at the stage of recording evidence. 13. Insofar as the allegation of detention of fork lift and hand trolleys, the respondent-Corporation has stated that after finalisation of the arbitration case between the respondent-Corporation and the appellant, all the dues as per the order of the Arbitrator has been paid to the contractor; but the appellant did not approach the respondent-Corporation for lifting their equipments and as such the same were lying at ICD, Bhadohi occupying valuable space. According to the respondent-Corporation, for the space occupied by the equipments, the total rent for the period up to 31.05.2007 works out to ₹ 41,746/- and ₹ 89,049/- for fork lift and hand trolleys respectively. Be that as it may, according to the respondent- Corporation, the detention of the equipments were made as per the terms of the agreement at Clause 5(g) and the same was accepted by the arbitrator. As held by the learned Arbitrator, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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