G.S. Singhvi, J. - (1.) Whether letter dated 16.11.1985 issued by the Director of Industries, Uttar Pradesh (appellant No. 2) conveying acceptance of the bid given by the respondent for supply of 200 metric tonnes Zinc Sulphate, Agriculture Grade, could be treated as an agreement executed by the parties, whether the respondent could invoke the arbitration clause contained in the tender document, whether the Arbitrator appointed by Civil Judge (Senior Division), Lucknow (hereinafter referred to as Rs. the trial Court) acted in violation of the rules of natural justice by declining the appellants prayer for adjournment and whether the award passed by the Arbitrator is vitiated by patent error of law are the questions which arise for consideration in this appeal filed by the State of U.P. and two others against the judgment of the Division Bench of the Allahabad High Court, which dismissed the appeal preferred by the appellants against the order passed by the trial Court making award of the Arbitrator rule of the Court.
(2.) By an advertisement dated 19.8.1985, appellant No. 2 invited bids for supply of 2000 metric tonnes Zinc Sulphate of Agriculture Grade on quantity basis to meet the requirement of the Agriculture Department. Clause 16 of the tender form, which has bearing on this case, reads thus: Tender Form: 16. In the event of any dispute arising out of or concerning this Agreement (except as to any matters the decision of which is specifically provided for in this Agreement), the same shall be referred to the arbitration of an arbitrator nominated by the Director of Industries, Uttar Pradesh and an arbitrator nominated by the contractor, or in the case of the contractor or the said Director failing to nominate an arbitrator within the time fixed in the notice to be served on him by the said Director or the contractor, as the case may be by the arbitrator, nominated by the said Director or the contractor, or in case of disagreement between the said arbitrators to an umpire appointed by them and the decision of such arbitrators/arbitrator/umpire as the case may be, shall be final and binding on the parties. The arbitrators/arbitrator/umpire may from time to time with the consent of the parties enlarge the time for making and publishing the award.
(3.) The bid given by the respondent (Rs. 5,451/- per metric tonne) was found to be the lowest. The purchase committee of the Directorate of Industries approved the same. Thereafter, appellant No. 2 issued acceptance letter dated 16.11.1985 to the respondent for supply of 200 metric tonnes of Zinc Sulphate to the Directorate of Agriculture. The relevant portions of that letter are extracted below: ACCEPTANCE LETTER From Value: Rs. 10,90,200/- (Rupees Ten Lacs Ninety Thousand Two Hundred only) The Director of Industries, Stores Purchase Department, Uttar Pradesh, Kanpur. To, M/s. Combined Chemicals Pvt. Ltd. 15/1, 2 & 5, Industrial Estate Vidisha-464002. Ref. No. SPS/VII-T. No. 272(G)/85 Dated: a) This office tender notice / enquiry No. 272(G)/85 dated 19.8.1985 b) Contractors tender quotation No. A-4242/A80/4GP/ZS dated 08.08.1985 c) Indentors Indent No. Dated d) Designation and full address of the indentor Director of Agriculture, U.P. e) If rate contract - All Government Department and quasi -Government Departments. Dear Sir, On behalf of the Governor of Uttar Pradesh, I accept your tender/quotation referred to above for the supply of stores as per details given in Schedule A hereafter subject to the terms and conditions specified in the tender notice/ enquiry referred to above and in this acceptance letter. 2. The supply order shall be placed on you by the indenting officer/officers direct giving full instruction regarding dispatch, insurance of goods, name of consignee, destination, railway station, payment of bills, etc. 4. Period of Contract - Until the supply is satisfactorily completed in accordance with the aforesaid terms and conditions. 7. Inspection - For the purpose of this contract the consignee receipt shall be deemed as the inspection certificate unless an inspection is stipulated before dispatch. Ordinarily, the decision of the consignee or consignees as regards the acceptability or otherwise of the stores shall be final. Defective supplier shall have to be replaced at your cost. 10. Formal Agreement - If so required, the successful tenderer shall have to execute a formal agreement deed within the time fixed by the Director of Industries. 12. You are required to send a statement giving details of order placed on you and executed by you against this contract together with their value, within one month after the expiry of this contract. 14. In the case of rate of contract order shall be placed by the officer of various Government Department directly. In the case of quasi-Government Departments, such as Local Bodies and Municipal Boards, etc. the orders shall be placed this office. Please acknowledge receipt. Yours faithfully, Sd/- For and on behalf of the Governor. Uttar Pradesh. Accompaniment Forms. No. 475(I)/SPS VII-T. No. 272(G)/85 of dated 16.11.1985 Copy forwarded (1) Director of Agriculture, U.P., Lucknow. (1) He will please place a supply order on the firm immediately giving detailed instructions regarding dispatch, insurance of goods, name of consignee, destination, railway station payment bills, etc. If the supply is not effected in time he will please report to this office immediately about the delay in supplies. SCHEDULE A Description Unit Price Quantity F.O.R. Per unit No. SPECIFICATIONS. For M.T. @Rs.5451/- 200 M.T. Destination. (Rs. Five Thousand Four hundred and Fifty One only) Qty. Two hundred Metric Tonnes only. ZINC SULPHATE AGRICULTURE, GRADE ISI Mark with IS: 8249-1976 • The price shall remain firm till the supply is completed satisfactorily. This contract shall exclusively be governed by the terms and conditions mentioned in the Acceptance letter, Tender Form and the Agreement Forms. No other condition shall be acceptable. • Agreement form must be received to this office within 15 days from the date of issue of this Acceptance Letter. • The contract is being made for and on behalf of the Governor of U.P. (emphasis supplied);