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1998 DIGILAW 346 (PAT)

Rourkela Steel Plant, through its General Managers v. Associated Cement Companies Ltd.

1998-04-28

GURUSHARAN SHARMA

body1998
ORDER 1. Heard the parties and with their consent this appeal is disposed of at the stage of hearing under Order 41, Rule 11 of the Code of Civil Procedure. 2. The plaintiff-respondent no. 1 filed Money Suit No. 59 of 1994 in the court of the Subordinate Judge, Patna, against the defendants-appellants, seeking a decree for a sum of Rs. 12,70,658.06 paise, as per account shown in Schedule I to the plaint. The defendants appeared in the suit and on 5.7.1995 filed a petition under Section 34 of the Arbitration Act, 1940, contending, inter-alia, that the suit was not maintainable and the parties were obliged to approach the named arbitrator for adjudication of the disputes, if any. A prayer, therefore was made to stay the suit, till adjudication by the arbitrator. 3. It was stated that purchase orders under the contract for supply of cement between the parties were subject to general terms and conditions of the contracts known as SAIL P/1 (Annexure-1) and clause 18 thereof provided reference of dispute to the Arbitration of the Managing Director or R.S.P. of the defendant-company or any person nominated by him. 4. In their rejoinder dated 22.1.1996, the plaintiffs denied to have entered into or signed such agreement containing an arbitration clause, nor they were bound by it nor the provisions of Section 34 were attracted. 5. By impugned order dated 24.2.1997 the trial court was pleased to reject the defendants' petition and asked them to file written statement. 6. Mr. Chatterjee, counsel for the respondent no. 1 produced release orders Issued by the plaintiff-company in connection with sale transaction of cement between the parties. 7. According to him the contract in question was governed not by the aforesaid purchase orders, which were annexed by the defendants in their reply dated 22.4.1996 to the rejoinder filed by he plaintiff dated 22.1.1996 in the suit, but by the release orders issued by the plaintiff-company. 8. 7. According to him the contract in question was governed not by the aforesaid purchase orders, which were annexed by the defendants in their reply dated 22.4.1996 to the rejoinder filed by he plaintiff dated 22.1.1996 in the suit, but by the release orders issued by the plaintiff-company. 8. A perusal of a copy of the said release order shows certain terms and conditions, including clause 20 on its overleaf, whereby all disputes whatsoever which would arise during continuance of the agreement or afterwards between the parties were to be referred to arbitration in Bombay or in the relative branch or city where the contract was made, as the case may be, to a single arbitrator in case parties agree upon one, otherwise two arbitrators one to be appointed by each party to the differences in accordance with law and subject to the provisions of the Act. 9. It is not in dispute that this aspect of the matter was neither canvassed nor considered by the trial court, while passing the impugned order and thereby rejecting the petition filed under Section 34 of the Act. 10. In such circumstance, I set aside the impugned order and remit the matter to the trial court to consider the prayer made for staying the suit and referring its subject matter for arbitration and after giving opportunity to the parties to dispose of the same in accordance with law. If necessary, supplementary petitions and materials may also be filed.