1 IN THE BOMBAY HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.23 OF 2005 Controller of Stores. ... Petitioner. vs. Rotomac Electricals Pvt. Ltd. ... Respondent. --- Mr.Sureshkumar, for Petitioner. Mr.U.S.Samudrala, for Respondent. --- CORAM: D.K.DESHMUKH,J. DATED: 15th March, 2005. P.C.:- 1. By consent of parties, the petition is taken up for final hearing. By this petition, filed under Section 34 of the Arbitration and Conciliation Act,1996, the 2 petitioner challenges the Award made by the Sole Arbitrator directing the petitioner to pay certain amount to the respondent. The facts that are material and necessary for deciding this petition are that the petitioner placed an order on 28th February,1994 for supply of Eight sets of machines by the Respondent to the petitioner. It was stated in the order that the delivery of the machines should be completed by 5th July,1994. The period of delivery, at the request of the respondent, was extended till 31st July,1995. It was stated in the letter that “Please note that no further extension would be granted. This is to be treated as Final Notice and action for Risk Purchase will be arranged in the event of default without any further reference to you.” Thus, the final extension was granted till 31st July,1995. Admittedly, there was no supply made till 31st July,1995, even the machines were not offered for inspection before 31st July,1995. The letter dated 16th June,1995 from the respondent to the petitioner shows that according to the respondent, the first set of four motors were offered to be supplied around mid-July,1995. It was stated that the inspection will be given soon. It is thus, clear that till 16th June,1995 even the inspection was not offered. Perusal of the letter dated 4th August,1995, from the respondent to the petitioner shows that the 3 respondent had not even manufactured the machines as the respondent was supplied with the defective material by its supplier and the respondent stated in the letter that the respondent can give an inspection on 16th October,1995. It is clear that the contractual relationship between the parties in so far as the supply of material is concerned, was valid till 31st July,1995. Therefore, whatever has been done by the respondent after 31st July,1995 was at its own risk and the petitioner cannot in any way be held responsible for the same. Perusal of the letter dated 16th January,1996, shows that even at that time the respondent was saying that it will offer inspection shortly. 2. Perusal of the record shows that though an objection, that the contract had come to an end on 31st July,1995 so far as supply of material by the respondent is concerned, and therefore, there is no question of any liability in relation to that contract of the petitioner, was specifically raised, but perusal of the Award shows that that contention has nowhere referred to and dealt with by the Arbitrator. It is clear that by letter granting extension upto 31st July,1995, the respondent was clearly informed that this is the last extension granted and no further extension would be granted and the 4 purchase at the risk of the respondent would be made. It is clear that according to the petitioner, the respondent had committed breach of the contract and therefore, there was no question of receiving the motors from the respondent. As observed above, the Arbitrator has totally ignored this crucial aspect of the matter and has made the Award directing the petitioner to pay certain amounts to the respondent. The Award thus suffers from non-application of mind, and therefore, the Award is liable to be set aside. It is accordingly set aside. The respondent is directed to pay cost of the petition to the petitioner as incurred by the petitioner. 15.3.2005 ---