Delhi High Court New Delhi Municipal Council vs Ames Impex Electricals Pvt Ltd on 18 February, 2020 $~ * % Reserved on : 06.02.2020 Pronounced on: 18.02.2020 + O.M.P. (COMM) 5/2019 AMES IMPEX ELECTRICALS PVT LTD THROUGH ITS DIRECTOR ..... Petitioner Through Mr.Vikas Mehta with Mr.Apoorv Khator, Advocates versus NEW DELHI MUNICIPAL COUNCIL ..... Respondent Through Mr.Yoginder Handoo with Mr.Nishant Kumar, Advocates for NDMC. + O.M.P. (COMM) 22/2019 and I.A. 530/2019 (stay) NEW DELHI MUNICIPAL COUNCIL ..... Petitioner Through Mr.Vikas Mehta with Mr.Apoorv Khator, Advocates versus AMES IMPEX ELECTRICALS PVT LTD ..... Respondent Through Mr.Yoginder Handoo with Mr.Nishant Kumar, Advocates for NDMC. HON'BLE MS. JUSTICE JYOTI SINGH JUDGMENT 1. O.M.P. (COMM) 5/2019 has been filed by Ames Impex Electricals Pvt. Ltd. under Section 34 of the Arbitration and Conciliation Act, 1996 („Act‟) for setting aside the Arbitral Award dated 06.09.2018. Ames OMP(COMM) 5/2019 and 22/2019 Page 1 of 20 Impex Electricals Pvt. Ltd. is referred to as petitioner hereinafter. O.M.P. (COMM) 22/2019 is a petition filed under Section 34 of the Act by New Delhi Municipal Council („NDMC‟) against the same Award. NDMC is being referred to as the respondent hereinafter. Since both the petitions have been filed challenging the same Award, they are being disposed of by a common judgment. 2. Shorn of unnecessary details, the brief facts to decide the present cross petitions are that the respondent floated two tenders bearing nos.9/200910/EE(SI) for supply of 1000 KVA Dry Type Cars Rasin Transformers for indoor duty application and the other being tender no. 4/200910/EE(SI) for supply of 1600 KVA Dry Type Cars Rasin Transformers for indoor duty application. 3. The petitioner was declared as a successful bidder in both the tenders. A prebid earnest money deposit was made by the petitioner with respect to both the tenders, which was to be returned after completion of supply. Respondent issued a purchase order dated 09.10.2009 with respect to the first tender for supply of 57 transformers with a total value being Rs.4,97,61,000/. The Supply Order was accepted by the petitioner vide acceptance report dated 13.10.2009. Another purchase order was issued on 03.03.2010 for supply of 37 transformers against the second tender for a total value of Rs.4,66,20,000/. The petitioner accepted the order by an acceptance report dated 08.03.2010. OMP(COMM) 5/2019 and 22/2019 Page 2 of 20 4. It is the case of the petitioner that in both the Supply Orders, the scope of work was restricted only to supply of the transformers after they were duly tested by the respondent / agencies appointed by the respondent. The scope of work did not include maintenance, erection, commissioning, etc. The petitioner was to be discharged from its obligations the moment the supplies were complete. 5. It is the further case of the petitioner that the Supply Orders were for "in door duty transformers" i.e. the transformers were meant to be kept indoors with proper channel for ventilation and were manufactured strictly as per the said specification. As per clause 10 of the terms and conditions of the Supply Orders, the respondent was required to make 100% payment within 30 days of receipt of the supply. Petitioner was to submit duly stamped and prereceipted bills. Under clause 11, petitioner was required to furnish a Performance Bank Guarantee of 5% of the total value of the work, and the same was accordingly furnished by the petitioner with respect to both the Supply Orders. As per the petitioner, the PBGs amounting to Rs.55,06,856/ have not been returned till date. Even the earnest money deposit had not been returned by the respondent though supply was complete long ago. 6. Petitioner further avers that the transformers were tested and inspected by a third party agency M/s. RITES in presence of Engineers of the respondent. Transformers under both the Supply Orders were successfully tested at ERDA Baroda and in fact one from each lot of supply was picked up randomly by the inspection team of the respondent and was tested as HEAT RUN Type. It is only when the respondent had OMP(COMM) 5/2019 and 22/2019