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1987 DIGILAW 81 (DEL)

SHARMA TIMBER WORKS v. UNION OF INDIA

1987-02-17

N.C.KOCHHAR

body1987
N. C. Kochhar ( 1 ) THE petitioner, M/s Sharma Timber Works, have filed this petition under Sections 8 and 20 of the Arbitration Act stating that contract No. A/t. No. TP-/timber/assam/pricing/79-83/577/paoc dated 3rd February, 1981 was entered into between the petitioner and the respondent and by virtue of the said contract, the respondent had initially placed an order for supply of 1200 cubic meters of hard wood but the demand was later on raised to 1500 cubic metres of the value of Rs. 14,98,500i- and that though the petitioner was exempted from furnishing the security, the respondent firstly imposed a security of Rs. 59,240. 00 and latter on enhanced the amount to Rs. 74,9251. 00- vide latter dated I8th April, 1981 and after wasting good period, the respondent reduced the security amount to Rs. 30,000. 00 vide letter dated 24th August, 1981 with the result that there was delay in performance of the contract. It has also been stated that the respondent committed further breaches of the contract and also caused commissions and commissions by delaying the payments and delaying the return of inspection copy Nos. 2 and 5 to receive his full payment but in spite thereof, the petitioner executed the order for very substantial quantity and submitted its bill but the respondent kept additional sum of Rs. 30,000. 00 with the result that a sum of Rs. 60,000. 00 was kept towards security by the respondent. It is also alleged that the respondent failed to make payment in the sum of Rs. 1,63,191. 52 towards the balance price and Rs. 21, 304. 00 towards the 10% besides retaining the above said amount of Rs. 60,000. 00and as such a sum of Rs. 2,44,495. 50 was due to the petitioner from the respondent. The petitioner also claimed interest at the rate of 21% p. a. on the above said amou beside claiming damages to the tune of Rs. 1,00,000. 00 on account of losses sufferred by the petitioner due to the breaches committed by the respondent. It has been alleged that the petitioner had called upon the respondent vide notice dated 6th January, 1986 to pay the amount or to refer the matter to arbitrator in terms of the arbitration clause contained in the contract between the parties but the respondent neither paid the amount nor referred the matter to arbitration. Hence this petition. It has been alleged that the petitioner had called upon the respondent vide notice dated 6th January, 1986 to pay the amount or to refer the matter to arbitrator in terms of the arbitration clause contained in the contract between the parties but the respondent neither paid the amount nor referred the matter to arbitration. Hence this petition. It has thus been prayed that the arbitration agreement between the parties be filed in court and the disputes be referred to arbitration. The petitioner also prayed that the cost of the petition be also awarded to him. ( 2 ) NOTICE of the petition was issued to the respondent. The respondent had filed the reply written statement. By way of preliminary objection, it has been pleaded that specific disputes have not been made out by the petitioner and as such the petition is not maintainable, that there was no dispute arising out of the contract in as much as the respondent had not refused the payment of Rs. 1,63,191. 52 and certain formalities were to be complied before payment could be made such as getting the entire store in good condition and recovering the liquidated damages due to delay in supplies and that the disputes are not covered under the arbitration clause. It has also been stated that the petitioner has no cause of action in as much as it has not approached the respondent for the arbitrator. The liability of the respondent to pay any amount over and above the said amount of Rs. 1,63,191. 52 was denied. It was denied that any amount had been illegally retained. ( 3 ) ON the pleadings of the parties, following issues were framed on 8th August, 1986: 1. Whether the petitioner served a notice on the respondent calling upon the respondent to joint in reference as alleged by the petitioner ? If not, to what effect ? 2. Whether any referable dispute has arisen between the parties ? 3. Relief. ( 4 ) THE parties were allowed to lead their evidence by way of affidavits. ( 5 ) I have beared Mr. Shiv Khurana, counsel for the petitioner, Mrs. Anuradha Kaushik, Advocate for Mr. S. K. Misra, counsel for the respondent and have have also perused the record of the case. 3. Relief. ( 4 ) THE parties were allowed to lead their evidence by way of affidavits. ( 5 ) I have beared Mr. Shiv Khurana, counsel for the petitioner, Mrs. Anuradha Kaushik, Advocate for Mr. S. K. Misra, counsel for the respondent and have have also perused the record of the case. My findings on the issues are as under : ( 6 ) THE petitioner has filed affidavit dated 5th September, 1986, sworn by Mr. U. S. Khandelwal, one of the partners of the petitioner firm. In this affidavit it has been stated that the notice dated 6th January, 1986 was served on the respondent vide receipt dated 8th January, 1986. The copies of the notice and of the receipt have been attached with the affidavit. There is no evidence in rebuttal. 1 have therefore, no reason to disbelieve that the notice dated 6th January, 1986 was delivered at the office of the Directorate General of Supplies and Disposal on 8th January, 1986. ( 7 ) A persual of the notice dated 6th January, 1986 shows that the petitioner had made demand of the payment of the amounts mentioned in this petition and had requested the Director General of Supplies and Disposals to pay the amount or to refer the disputes to arbitration in terms of the arbitration clause between the parties. The issue is decided accordingly. ( 8 ) THE disputes mentioned in the petition and noted above have been raised by the petitioner. The fact the respondent is denying the liability to pay the amounts clearly shows that the disputes have arisen between the parties. The disputes regarding payment of the price of the goods, the interest on the amount so far not paid by the respondent to the petitioner, the refund of security deposit and the damages for delay on the part of the respondent are such disputes which arise out of the contract between the parties and it has not been pointed out to me as to how these disputes do not arise out of the contract. The issue is accordingly decided in favour of the petitioner and against the respondent. The issue is accordingly decided in favour of the petitioner and against the respondent. ( 9 ) IN view of my findings on issue No. 1, I hold that the dispus arising out of the contract between the parties have arisen between them, and are covered by the arbitration agreement between the parties, I therefore, direct that the arbitration agreement between the parties be filed in court. 1 further direct the Director General of Supplies and Disposals, New Delhi to appoint an arbitrator in terms of the arbitration agreement within a period of one month from today. The respondent will also pay cost of the petitioner of this petition which 1 assess at Rs. 500. 00.