GENUINE PAINTS AND CHEMICALS COMPANY v. UNION OF INDIA
1989-02-24
C.L.CHAUDHRY
body1989
DigiLaw.ai
C. L. Chaudhry ( 1 ) THIS is a petition under Section 20 of the Arbitration Act by which directions are sought to be issued to the respondent for filing the arbitration agreement in court and for reference of disputes for arbitration. The petitioner was awarded a contract by the Union of India on 6,8. 1982 for supply of 75,000 litres of paint on the terms and conditions incorporated in the contract No. RGC TP-6/rgc-803/paod/rp/894 dated 6 8. 1982. ( 2 ) ACCORDING to the petitioner 10,000 litres of items No. 39a and 5,000 litres of item No. 56 were supplied per month. The petitioner offered several quantities including a lot of 6. 000 litres of item No. 56 within the delivery period which was 15-11-1982. The stores of the petitioner were illegally rejected. It was protested by the petitioner, who demanded damages and the balance price for the stores supplied and also the amounts illgally with held by the respondents. Request for appointment of an Arbitrator was made. It is the case of the petitioner that cancellation of the contract by letter dated 8-4-1987 at the risk and costs of the petitioner is illegal. The respondent was called by notice dated 1-9-1988 to pay a sum of Rs. 3,26,705 or appoint an arbitrator to adjudicate the disputes. According to the petitioner the following disputes and differences have arisen between the parties : (A) Whether the rejections made by the respondent were legal and valid. (b) Whether there was force majure circumstances making the petitioner to absolve from the further performance. (c) Whether the cancellation made by the respondent was legal and valid. (d) Whether the petitioner committed any breach of contract. (e) Whether the petitioner is entitled for sum of Rs. 3,26,705 or any other amount with 21% interest per annum from due date till actual realisation. It is stated that the contract in question contains an arbitration clause which is clause 24 of DOS and D-68 (Revised), General Conditions of Contract which provides that in the event of any question, dispute and difference arising under these conditions shall be referred to the sole arbitrator or an officer in the Ministry of Law appointed to be the Arbitrator by the Director General of Supplies and Disposal. It is claimed that the disputes referred to above come within the ambit of the arbitration clause.
It is claimed that the disputes referred to above come within the ambit of the arbitration clause. Under these premises it is claimed that the respondent be directed to file the arbitration agreement and the disputes be referred for arbitration. ( 3 ) WRITTEN statement has been filed on behalf of the respondents. They have denied the allegations on merits made by the petitioner. It is stated that the petitioner failed to replace the rejected stores and the case was initiated for repurchase of the stores from other sources and notice was given to the petitioner demanding the loss incurred by the purchaser in repurchase. It is further stated that the respondents are entitled to claim damages to the tune of Rs. 75,201 towards cost of rejected stores, apart from claim of damages for the loss due to breach of contract amounting to Rs. 34,722. 72. According to the respondents the following disputes have also arisen between the parties : (A) Whether the petitioner has performed his part of the contract ? (b) Whether the goods supplied by the petitioner was not validly rejected ? (c) Who has committed the breach of contract ? (d) To what amount of damages the respondent is entitled. It is further stated that the request for arbitration made by notice dated 1-9-1988 was under consideration whereas in the meanwhile the petitioner filed petition under Section 20 of the Arbitration Act. ( 4 ) I have heard the learned counsel for the parties and have considered the matter. In my opinion sufficient cause has not been shown for not referring the disputes for arbitration. Arbitration agreement is admitted. ( 5 ) IN the result I allow this petition and direct the respondents to file the arbitration agreement in court. The Director General of Supplies and Disposal is directed to appoint an Arbitrator for adjudication of the disputes raised by the petitioner as well as by respondents and refer the disputes to him. The Arbitrator should be appointed within 2 months from the date of receive of this order. The Arbitrator should give his award within 4 months from the date of entering upon reference. The petition is disposed of.