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1995 DIGILAW 379 (PAT)

Steel Authority Of India Limited v. Raj Kumar And Bros. And Another

1995-07-18

P.K.DEB

body1995
Judgment P.K.Deb, J. 1. The judgment and order dated 29.4.1995 passed by Subordinate Judge, 4th Court, Dhanbad in Title (Arbitration) Suit No. 81 of 1994 has been challenged in this civil revision application by the plaintiff-petitioner. 2. The fact of the case run in a very narrow compass. On invitation of tender for transportation of middlings from the dams lying on the east of Dugdha Coal Washery and loading into wagons at No. 4 sidding, the defendants along with others made their offers and after negotiation, the defendant was found to be fit for entrusting the contract and as such the letter of intent was issued on 25.10.1992 to defendant No. 1 vide Ext. 13 in the suit. The defendant asked for work order, but it is the case of the plaintiff that before the contract cold be finalised it was decided by the authorities of the plaintiff that the work would be done departmentally through Bharat Coking Coal Limited and not by a third party and as such the defendants were asked to take back his earnest money. On the other hand the defendants case is that after the letter of indent was issued and the defendant was asked to proceed with the work, he had already taken steps towards proceeding With the contract work but as the authority of the plaintiff gave assurance to the defendant that he would be given a similar contract orders subsequently he was agreeable to take back the earnest money and on such assurance, he accordingly withdrew the earnest money, but when no contract order was given to him, he had invoked the provision of arbitration for the compensation and damages caused to him due to repudiation of the contract. The plaintiff then filed a petition under Sec. 33 read with Sec. 5 of the Arbitration Act (the Act) for determination as to the existence and validity of the agreement as also for revocation of arbitration. It appears that the learned court below registered the said petition as Title (Arbitration) Suit No. 81 of 1994 and proceeded to adjudicate the matter like that of a civil suit by framing issues and also taking evidence of both the parties. It appears that the learned court below registered the said petition as Title (Arbitration) Suit No. 81 of 1994 and proceeded to adjudicate the matter like that of a civil suit by framing issues and also taking evidence of both the parties. Be it what it may, by a lengthy judgment impugned in this civil revision application, the learned court below held that as the contract was complete on issuance of the letter of intent and when the earnest money had been withdrawn by the defendant on protest then the arbitration clause was very much available to the defendant for the purpose of conciliation regarding his compensation and damages. 3. Mr. M.M. Banerjee, learned Counsel appearing on behalf of the plaintiff-petitioner argued strenuously that issuance of letter of indents did not complete the contract and the agreement being not arrived at in writing, then the arbitration clause was not available to the defendant. His further submission is that the withdrawal of earnest money from the side of the defendant had closed the chapter and there was no scope for opening the same by way of arbitration. According to him, the withdrawal under protest is only an after thought on creation of some letters which were not available or received from the side of the plaintiff. On the other hand, Mr. Eqbal, learned Counsel appearing on behalf of the opposite parties repudiated the submissions of Mr. Banerjee, supporting the impugned judgment contended that acceptance of tender of the defendant and issuance of letter of intent has completed the vital parts of the contract regarding the offer and acceptance and only because some formalities were to be observed regarding sigrmg of paper and document etc., it cannot be said that the contract has not been completed and when the contract was not complete, the defendant has got every right to invoke the arbitration clause of the contract. His further submission is that acceptance of earnest money on protest does not conclude the chapter. He has relied on Currimbhog & Co. Ltd. V/s. LA. Greet and Ors. AIR 1933 Privy Council 29 and The Union of India V/s. Om Prakash -- . 4. As per the decision of the Privy Council as referred to by Mr. His further submission is that acceptance of earnest money on protest does not conclude the chapter. He has relied on Currimbhog & Co. Ltd. V/s. LA. Greet and Ors. AIR 1933 Privy Council 29 and The Union of India V/s. Om Prakash -- . 4. As per the decision of the Privy Council as referred to by Mr. Eqbal although in different context, it was held that the contract became inforceable even if some formal documents were yet to be signed for observance of formalities, 5. I am not going much into the factum regarding the completion"of contract or not on the basis of the letter of indent issued from the side of the plaintiff and taking it for granted that the contract was complete in the sense of offer and acceptance, but the implementation of the same was not there before it was repudiated as the plaintiff wanted the work to be done departmentally through its own wing Bharat Coking Coal Limited. Taking it for granted that the contract was repudiated then the chapter was closed after the earnest money was withdrawn by the defendant-opposite party, but if that withdrawal was a conditional one and under protest, then its effect is required to be seen for the purpose of invoking the clause of arbitration. Definitely it is necessary that the agreement of arbitration must be entered into and signed by the parties but that has not, been done and it has been submitted by Mr. Eqbal that in the form of such contracts, practically along with tender, all terms and conditions are being supplied, and on payment of such terms and conditions, tenders are being accepted and then the letter of intent was issued and as such it is not available to the department not to say that the terms and conditions including that of clause of arbitration was not available to the defendant. 6. Let us take this proposition as correct for the sake of argument as I am going to pass the order of different angle. Admitting this position to the effect that the earnest money was withdrawn by the defendant is admitted, the application for release as contained in Annexure-3 dated 8.9.1992 does not reveal any clause to the effect that the withdrawal would be under protest. Admitting this position to the effect that the earnest money was withdrawn by the defendant is admitted, the application for release as contained in Annexure-3 dated 8.9.1992 does not reveal any clause to the effect that the withdrawal would be under protest. The letter dated 4.9.1992 issued by the defendant addressed to the Deputy General Manager of the plaintiff shows that he was agreeable to withdraw the earnest money as he was given the assurance of giving him similar work immediately by the plaintiff but no reference is there of the letter dated 4.9.1992 in the withdrawal letter dated 8.9.1992 vide Annexure-3. It is the contention of Mr. Banerjee that this letter dated 4.9.1992 is only a connected one, but it appears from the impugned judgment that the learned court below on the.evidence of the plaintiff side has accepted that letter dated 4.9.1992 was within the knowledge of the plaintiff. The letter dated 12.9.1992 is in the form of protest that he had withdrawn the earnest money on the assurance of giving a similar contract but when the same has not been given, his withdrawal must be considered as under protest, but this subsequent letter dated 12.9.1992 shall have no bearing as the withdrawal was made before hand on 8. 9.1992. For the sake of argument, if it is admitted that the withdrawal of earnest money was money on assurance on giving a similar contract to the defendant then also the fact remains that the withdrawal of earnest money had completed the chapter of previous contract in question and if no second work is given to the defendant, then for that purpose, he might have grievance for the subsequent contract but by that alone, he cannot reopen the previous contract which was factually closed on withdrawal of earnest money, The remedy for any compensation or damages shall lie to the defendant by way of civil suit and not by invoking arbitration clause of the previous contract which was closed on withdrawal of earnest money. The assurance-of another contract can in no case reopen the previous contract. 7. In view of the above, I find much force in this civil revision petition. It has been submitted at the Bar that during the pendency of this civil revision application, the arbitrator had passed the award ex-parte and submitted to the court. As such it is the contention of Mr. 7. In view of the above, I find much force in this civil revision petition. It has been submitted at the Bar that during the pendency of this civil revision application, the arbitrator had passed the award ex-parte and submitted to the court. As such it is the contention of Mr. Eqbal that this revision petition has become infructuous. The jurisdiction of Secs. 30 and 33 of the Act stands on in different status and footings and they cannot be amalgamated and the question of invoking of arbitration clause cannot be agitated by way of Sec. 30 of the Arbitration Act, hence, I do not find that revision has become infructuous only because of filing of the ex-parte award. 8. The view expressed in the foregoing paragraphs, this civil revision application is allowed and the impugned order of revocation of the petition under Sec. 33 of the Act filed by the plaintiff-petitioner is hereby allowed, In the circumstances of the case, no cost is awarded to either of the parties.