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Rajasthan High Court · body

2008 DIGILAW 355 (RAJ)

Suwalka Transport Co. v. M/s. Hindustan Zinc Ltd.

2008-02-05

MANAK MOHTA

body2008
JUDGMENT 1. - Heard learned counsel for the parties in respect of application filed under Section 11 read with Section 10 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996) for appointment of Arbitrator. 2. It is submitted by the learned counsel that the applicant is partnership firm and is a fleet Owner and Transport Contractor engaged in the work of transportation under the name and style of "Suwalka Transport Company". It is further submitted that during June-July, 1994 tenders were invited by M/s. Hindustan Zinc Limited for the transportation of Zinc and lead concentrates from Zawar Mines, Udaipur to Chanderia Lead-Zinc Smelter, Chittorgarh and in accordance with that, the applicant filed in tender form on 07.10.1994, which was ultimately accepted on 15.11.1994 as the bid of applicant being the lowest, the applicant was awarded work vide work-order No. ZM/ML/PROC/94/434 dated 04.12.1994 for the "transportation of Zinc and Lead concentrates from Zawar Mines, District Udaipur to Chanderia Lead Zinc Smelter, Chittorgarh by dumpers, by road" and an agreement was also executed in this respect between the parties having arbitration Clause 29.0 in it wherein it has been provided that in case any sort of dispute arises in respect of said agreement, the matter will be referred to Arbitrator. As per Clause 15.1 of agreement, the contract was to remain in force for a period of one year from the date of acceptance of the offer. 3. It was further stated that immediately after receipt of aforesaid work order, the applicant raised a protest and requested the concerned authority to amend the transit loss (which was mentioned very low) and stated that until and unless the moisture in transit loss is increased in case of Lead concentrate from 0.40 to 1% and 0.25 to 1% in case of Zinc concentrate, the contractor is not going to take up the job of transportation. Thereafter, on the verbal assurance of Senior Manager of respondent-Company that the transit loss will be increased and will be made at par with other Transporters and that the applicant would not be made to suffer. On this assurance, the applicant commenced the work of transportation through dumpers. 4. Thereafter, on the verbal assurance of Senior Manager of respondent-Company that the transit loss will be increased and will be made at par with other Transporters and that the applicant would not be made to suffer. On this assurance, the applicant commenced the work of transportation through dumpers. 4. The applicant carried out the assigned work of transportation of lead and zinc concentrate from 26.12.1994 to 26.02.1995 (for two months) through Dumpers and in all transported 1172.015 MT zinc concentrate and 3923.675 MT of lead concentrate from Jawar Mines, Udaipur to lead-zinc smelter plant of M/s. Hindustan Zinc located at Chanderia, Chittogarh (which is at a distance of 350 Kms from Jawar Mines, Udaipur) and ultimately submitted a bill for Rs. 8,61,187/- towards transportation of zinc and lead concertrate, however, the payment of bill was stopped on count of shortage of goods, upon which the contractor in writing refused to continue with the transportation work stating that because of stoppage of payment, he was unable to make payments to drivers and servants, not he could get the diesel filled in the dumpers and get the vehicle repaired. 5. Now the allegation of the applicant is that a total of Rs. 8,61,187/- has not been paid and further a deduction of Rs. 80,484/- has been made on count of short transportation of the concentrates. Finally a sum of Rs. 80,484/- was deducted from the applicant's final bill without assigning any reason and when nothing was heard, the applicant gave a legal notice dated 19.09.1997 mentioning therein that payment has not been made by the respondent-Company. A demand was raised by the applicant that on account of transit loss, the applicant had to stop the job of transportation and his four dumpers remained idle, thus, he suffered a loss of Rs. 40,000/- (@ Rs. 10,000/- per dumper), as also the applicant had to bear the expenses of staff, drivers etc. which the applicant is entitled to recover from the respondent Company Thus, a demand of Rs. 80,484.00 + Rs. 86,119.00 alongwith interest till date was claimed. Further the applicant also demanded Rs. 40,000/- per month loss on account of this from the date of stopping of the transportation till date. It is stated that even after receiving part-payment, a huge amount due and dispute remained. Further he made a request several times but to no avail. 80,484.00 + Rs. 86,119.00 alongwith interest till date was claimed. Further the applicant also demanded Rs. 40,000/- per month loss on account of this from the date of stopping of the transportation till date. It is stated that even after receiving part-payment, a huge amount due and dispute remained. Further he made a request several times but to no avail. He also prayed to refer the matter for arbitral proceedings as per terms of the Agreement, but no heed was given, therefore, this application has been filed. Thus, it is prayed that the application may be allowed and the matter be referred to Arbitrator. 6. On the other hand learned counsel for the respondent-Company opposed the application and raised a preliminary objection that in accordance with the terms and conditions of agreement entered into between the parties, as per Clause No. 29.5 in the full settlement the agreed transit loss was restricted upto 10%, as such, the agreement itself came to an end and since there is no agreement in existence between the parties, no dispute existed, therefore, the application under Section 11 is not maintainable. In reply all the other allegations made in the application were denied. It is further stated that a total of Rs. 8,61,187/- was deducted from the bills of the contractor in terms of Clause No. 17.1 and under the head of transit loss a sum of Rs. 4,17,409/- was rightly deducted. A prayer is made to dismiss the application. 7. I have heard both the learned counsel for the parties and considered the contentions advanced before me. I have gone through the material available on record. 8. After considering the contentions. It is the admitted position on record that a work-contract was given to the applicant and an agreement was executed between the parties. Further, from the material placed by the parties and submissions made thereon, the factum of dispute has been written and for resolving that dispute, provision of arbitration clause is there in the agreement itself, which is prima facie established and that has not been disputed. Further, from the material placed by the parties and submissions made thereon, the factum of dispute has been written and for resolving that dispute, provision of arbitration clause is there in the agreement itself, which is prima facie established and that has not been disputed. It is also borne out from the application that the applicant had sent letters for referring the dispute to Arbitrator in terms of Clause 29.1 of the agreement but despite lapse of reasonable time, the matter has not been referred to Arbitrator, therefore, an independent Arbitrator is required to be appointed to resolve the disputes between the parties. 9. In the net result, the application is allowed. Shri Sunder Lal Mehta, Retired District Judge is hereby appointed as the Sole Arbitrator to resolve the dispute between the parties. The parties are free to raise their dispute, claim, counter-claim etc. before the Arbitrator. It is further directed that the initial expenses of Rs. 5000/- shall be deposited by the applicant with the Arbitrator so that the learned Arbitrator may start the arbitration proceedings, that deposit will be subject to final determination and final fees. The fee of arbitrator and the cost of arbitration shall be determined by the Arbitrator himself and that shall be borne equally by both the parties. The Arbitrator may be informed accordingly. The application stands disposed of accordingly.Application allowed. *******