NDLI: Maharashtra State Electricity Distribution Company Ltd. Vs. M/s. Datar Switchgear Limited & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Contract – Claim for damages
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Arbitration and Conciliation Act, 1996 – s.34 – Contract between parties – Termination of, on ground of fundamental breach – Propriety of – Respondent no.2 awarded tender/contract by appellant, in 1993-1994, for installation of Low Tension Load Management Systems (LTLMS) at various locations – Another tender by appellant in 1996 which was for installation of 23000 numbers of LTLMS – Respondent no.2 participated in this tender also, wherein work order for installation of 11760 numbers of LTLMS was awarded to Respondent no.2 and balance quantities were awarded to other tenderers – In view of large scale complaints and issue of defective equipments supplied against 1993-1994 tender, Respondent no.2 offered to not only supply 11760 LTLMS against the 1996 tender but also to replace all the defective Low Tension Switched Capacitators (LTSCs) supplied against the contract of 1993-1994, with new technology LTLMS at the old lease rentals– Appellant issued Letter of Intent– However, issues arose between the parties during the execution of said contract– Contract terminated by respondent no.2 – Arbitration Tribunal passed arbitral award in favour of respondent no.2 – Challenged by appellant u/ s.34, dismissed by High Court – On appeal, held: Findings of facts were arrived at by Arbitral Tribunal after appreciating the evidence and documents on record – From these findings it stands established that there was a fundamental breach on the part of appellant in failing to furnish the list of locations where the contract objects had to be installed, with no fault of Respondent no.2 – Such fundamental breach pervaded the entire contract and once committed, the whole contract stood abrogated – Respondent No.2 was always ready and willing to perform its contractual obligations, but was prevented by appellant from such performance – Termination of contract by respondent No.2 was valid and justified– No question of law is involved in the present appeal and the only attempt of appellant was to re-argue the matter afresh, which is impermissible – Costs imposed –Constitution of India – Art. 136 – Contract Act, 1872 – ss. 55, 63 – UNIDROIT Convention on International Lease – Art.13(2) – Waiver.Practice and Procedure – Findings of facts by Arbitral Tribunal – Held: Arbitral Tribunal is the master of evidence – Findings of fact 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.Contract – Claim for damages – Entitlement to – Held: 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.Contract – Award of damages – Principle for – Held: Injured party should be placed in as good a position as money could do as if the contract had been performed – In the instant case, applying the said principle, the Arbitral Tribunal rightly awarded almost the same amount as was invested by respondent No.2 for the project – Thus, there is no question of interdicting with the same.
Judge	Hon'ble Mr. Justice Arjan Kumar Sikri
Neutral Citation	2018 INSC 33
Petitioner	Maharashtra State Electricity Distribution Company Ltd.
Respondent	M/s. Datar Switchgear Limited & Ors.
SCR	[2018] 1 S.C.R. 733
Judgement Date	2018-01-18
Case Number	10466

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