Decided on April 03,2006

Shivalik Foods Appellant
UNION OF INDIA Respondents


- (1.) THE petitioner is proprietorship concern registered as A -Class contractor with respondents. The respondents invited tenders for supply of frozen meat dressed at Chandigarh for Ladakh Sector for the period commencing from June 9, 2003 upto 31.3.2006. The petitioner submitted its tender which was accepted and a Contract Agreement No. CD -60 of 2003 -04 came to be executed between the parties. Under the agreement the petitioner was to make supply of a specified quantity of meat per year on daily basis. Accordingly the petitioner started making supplies.
(2.) DURING the currency of the contract, however, the respondents demand for supply of meat could not be met by the petitioner to its entirety. The respondents, therefore, made good the shortfall by purchasing the same from the market at the risk and responsibility of the petitioner. For the excess money spent by the respondents for purchasing the shortfall recovery was levied upon the petitioner. On the question of said recovery the petitioner disputed his liability. Therefore, disputes arose between the parties. The petitioner on December 6, 2003 issued a notice to the Commanding Officer asking for the appointment of an arbitrator to settle the disputes. The Commanding Officer Shri Major Rajan Kadyan 2IC responded vide its letter dated 10th December 2003 which was received by the petitioner on 15.12.2003 by saying the office and staff of Contracting Operating Officer is, however, helpful in smooth functioning of contract within the framework of Contract deed. In case of any more problem you are requested to discuss the same with the authorities for immediate result instead of wasting precious time in writing letters. The Commanding Officer also forwarded the notice of the petitioner dated 6.12.2003 to his Headquarters Northern Command as well as HQ 14 Corps for information and necessary action.
(3.) FROM the response of the Commanding Officer it is manifest that he did not accede to the request of the petitioner for the appointment of an arbitrator. It may be pointed out here that admittedly the agreement has been executed by and Major General MG ASC Northern Command Executive Officer for and on behalf of President of India. The Commanding Officer to whom the petitioner had served the notice was the Contract Operating Officer appointed in terms of Clause 6(a) of the Agreement. When the Contract Operating Officer i.e. Commanding Officer by his letter dated 10th December 2003 declined the request of the petitioner for appointment of an arbitrator, the petitioner filed the present application under section 11 of Jammu and Kashmir Arbitration and Conciliation Act, 1997(for short the Act) for seeking appointment of the arbitrator. On 11 December 2003 the application of the petitioner was registered and respondents were put on notice. The respondents have filed their objections for contesting the application of the petitioner. During the pendency of this case the respondents filed CMP No.2 of 2005 on 15.3.2005 and therein pleaded as follows: - "That the respondents most respectfully submit that respondents have decided to refer the matter to the Arbitrator as per terms and conditions of the Contract Agreement as the contract has become unworkable. Since the applicant/contractor has prayed in its arbitration application that the subject matter be referred to an arbitrator as per terms and conditions of the contract agreement, the arbitration application titled above as such( has become infructuous) and liable to be dismissed." ;

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