RAJASTHAN STATE ELECTRICITY BOARD JAIPUR Vs. HINDUSTAN BROWN BOVERI LTD
HIGH COURT OF RAJASTHAN
RAJASTHAN STATE ELECTRICITY BOARD, JAIPUR
HINDUSTAN BROWN BOVERI LTD., BOMBAY
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(1.)THIS is a revision application by the Rajasthan Stale Electricity Board, hereinafter to be referred as the "board", and is directed against an order dated 28-8-68 passed by the Additional District Judge, Jaipur on an application by the respondent Messrs. Hindustan Brown Boveri Limited, hereinafter to be referred as the "company" for grant of a temporary injunction in certain proceedings instituted by the Company against the petitioner Board under Section 20 of the indian Arbitration Act. By his order under challenge the learned Additional District judge directed the petitioner Board "to refrain itself from making purchases of the material of the specifications for which order was placed with the Company bv the board to the extent of 9000 kilometers of All Aluminium Conductors till the matter was disposed of through arbitration. " The relevant facts are briefly these:
(2.)ACCORDING to the Company, the Board had invited tenders sometime in the early part of 1965 for the supply of All Aluminium Conductors as per their specifications. The company submitted its tender in response to the tender notice and, according to the Company, its tender was accepted by the Board. All Aluminium Conductors of three categories were to be supplied. 6000 kilometers of the specification known as 'ladybird' were to be supplied at the rate of Rs. 770/- per kilometer, 2000 kilometers of the category known as 'fly' were to be supplied at the rate of rs. 1135/- per kilometer and the third category was 'blue Bottle' and 3000 kilometers of that category were to be supplied at the rate of Rs. 1305/-per kilometer. The total value that was to be paid by the Board after making discount of 5 per cent, was Rs. 1,02,64,000/-and odd. Then there was some correspondence between the parties and on account of the devaluation of the indian rupee that had come in the meantime the Company claimed increased rates on account of the consequences arising out of devaluation and it is averred that this was agreed to by the Board. Thereafter a meeting of the representatives of the Board and the Company had taken place and certain schedule of delivery was agreed upon. The case of the company inter alia was that on receiving despatch instructions from the Board the company bad supplied 'ladybird' conductors which were 2000 kilometers and the supply had been accepted by the Board. This happened sometime in February, 1967. According to the company, the Board had failed to give further despatch instructions for the remaining quantity of goods to be supplied, of the three categories, and eventually in violation of the terms of the contract between the company and the Board, the Board invited fresh tenders for the purchase of 3000 kilometers of 'ladybird' Conductors and 2000 kilometers of 'blue Bottle' Conductors sometime in the last week of April, 1968. The advertisement containing a tender notice is said to have been published in the Times of India on 28-4-68. This inviting of fresh tenders, according to the Company, was in breach of the contract between the Board and the Company and as according to the Company, there was an arbitral clause in the tender notice which formed the basis of the contract between the Board and the Company, the Company invoked that arbitral clause and on 13-5-68 put in an application under Section 20 of the Arbitration Act in the Court of the Senior Civil Judge No. I, Jaipur City which court after June, 1968, came to be redesignated as the Court of Additional District Judge No. 1, jaipur City. In this application it was inter alia prayed that the Board be directed to produce the conditions of the contract containing the arbitration agreement between the parties and the dispute between the parties be ordered to be referred to arbitration as per the aforesaid arbitral clause. It was further prayed that during the pendency of the proceedings before the court and the arbitrator the Board, its servants and agents be restrained by an injunction from taking any action on the notice issued by the Board inviting tenders on 28-4-68. Along with this application a separate application under Section 41 and Schedule II of the Arbitration Act read with Order 39, Rules 1 and 2, as also Section 151 of the code of Civil Procedure was moved. By this application it was urged that in the light of the contract between the parties the Board was not entitled to buy the conductors stipulated to be bought from the Company from any other source till such time that the supplies under the contract had been received by the Board from the Company. It was further urged therein that as there was a subsisting contract between the Board and the Company, it was essential that status quo be maintained and the Company be not allowed to alter or change the situation to the detriment of the Company. It was pointed out that the Company has made a huge investment to [he tune of rupees one crore in buying the imported aluminum ingots for the manufacture of the Conductors and since the programme of manufacture of these Conductors had to go on for a sufficiently long time, the company had not accepted any other orders for manufacture of such goods in its factory at Ghaziabad and further, according to the Company, there was no ready market for these specific goods to he manufactured for and supplied to the Board. The balance of convenience according to it was that the Board be prevented from committing any breach of contract by accepting supplies from other sources. This application of the Company was opposed by the Board. It is unnecessary to refer to the intervening proceedings and I straight off come to the order under challenge.
(3.)THE learned Judge observed therein to start with, that the facts were almost admitted on behalf of the Board and the Board had admitted that an order for the supply of 11000 kilometers of All Aluminium Conductors was placed with the company and that 200 kilometers of All Aluminium Conductors had been received. It was further admitted that new tenders for the supply of the same type of conductors had been invited by the Board and that the quantity was much less than the quantity which the Company was required to supply under the contract. It was contended by the Company before the learned Judge that the Board had not pointed out any defect or deviation from the specifications that were required or supplied and for no reasonable cause the Board had taken up the attitude of not accepting the goods from the Company which were ready for despatch. In spite of this, on the other hand, the Board had invited fresh tenders for the supply of the same material. It was further urged that this gave a reasonable apprehension to the Company that the Board was bent upon committing a breach of the contract for no fault of the company and this, according to the Company, demonstrated lack of good faith and bona fides on the part of the Board. Then it was argued that in order to save the Company from incurring future losses which were heavy and which could not be measured in terms of money immediate protection of the court was essential in the interest of justice. It was also stated before the court that the conductors were specially produced under the specific orders of the Board and since the material was of particular specific type, it could not be disposed of elsewhere.
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