8/13/2019 Delhi Development Authority V bharat construciton
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DELHI DEVELOPMENT AUTHORITY V. BHAGAT CONSTRUCTION CO. (P)
LTD. AND ANR
This case is an appeal from order passed by the single judge on
an arbitral award passed in
18.05.1988. The claim for pendent lite interest and counter
claims filed by the appellants was
rejected by the arbitrator and the appeal is preferred against
it. The contention of the appellant
was that the there are no sufficient reason given by the
arbitrator and therefore it should be
set aside. The allowed the claim for pendent lite interest and
dismissed the counter claims.
In this case, court reaffirmed the position that the court will
not substitute its own opinion for
that of the arbitrator. The issue for the consideration of the
court is whether the reasons given
by the Arbitrator are perverse or no reasonable person could
have come to that view. The
court held that if from the Award, it can be inferred that the
Arbitrator has applied his mind,
taken into consideration the relevant material for arriving at
the finding the Award cannot be
interfered with. Court also held that Arbitrator need not to
disclose the mathematical
calculations in the Award. If the Award shows the application of
mind and a view which is
plausible by the Arbitrator, it can be taken as correct.
Karam Chand Thapar & Bros. (Coal Sales) Ltd. v. Hindustan
Construction Company
Limited
The petition filed under Section 9 of the Arbitration and
Conciliation Act, 1996, petitioner
seeks injunction against respondent from encashing Performance
Bank Guarantee of Rs.
15.95 crores issued by HSBC for the appellant and also seeks
return of the said Performance
Bank Guarantee. In this case Sardar Sarovar Narmada Nigam
Limited granted a contract for
the construction of canal to the respondents. The respondents
subcontracted some part of its
works to the Petitioner. For the same, Petitioner issued a bank
guarantee. As per the contract,
if the principal contract is terminated, sub-contract will also
get terminated. In the present
case, the principal contract was terminated but was revived
later. The question before the
court is regarding the nature of the bank guarantee and whether
it can be encashed. The court
after considering all the relevant facts dismissed the petition
for the Injunction. The court
held that the bank guarantee was unconditional and irrevocable
payable to the respondent on
written demand by the bank. Court was of the opinion that even
if there would be any change
in condition or other modification of the terms of the said work
order issued in favour of the
respondent or of the works, the nature of the bank guarantee
being unconditional and
irrevocable would not be affected.
