BALSUKH REFRACTORIES AND CERAMICS LTD Vs. HINDUSTHAN STEEL LTD
LAWS(CAL)-1976-7-6
HIGH COURT OF CALCUTTA
Decided on July 23,1976

BALSUKH REFRACTORIES AND CERAMICS LTD Appellant
VERSUS
HINDUSTHAN STEEL LTD Respondents


Referred Judgements :-

EAKERSLEY V. MERSEY DOCKS [REFERRED TO]
UNION OF INDIA V. PROMODE KUMAR AGARWALLA [REFERRED TO]
A M MAIR AND CO VS. GORDHANDAS SAGARMULL [REFERRED TO]
HAKAM SINGH VS. GAMMON INDIA LIMITED [REFERRED TO]
B K DHAR PRIVATE LTD VS. UNION OF INDIA [REFERRED TO]





JUDGEMENT

Ray, J. - (1.)THIS revisional application under Section 115 of the Code of Civil Procedure arises out of an application filed by the petitioner under Section 31 read with Section 33 and Section 9 of the Arbitration Act of 1940 and it is directed against order No. 21 dated December 6, 1972 passed in Misc. Case No. 50 of 1972 by the learned Subordinate Judge, Asansol.
(2.)THE petitioner Company carried on business as manufacturers of and dealers in fireclay bricks and refractory goods in mouja Salanpur P. S. Salanpur, Sub-Division Asansol, District Burdwan, THE opposite party No. 1 is a fully owned Government Company in public sector carrying on business as manufacturers of and dealers in Iron and Steel at Bhilai Steel Plant, Bhilai, District Durg, Madhya Pradesh. Sometime in 1966 the opposite party No. 1 sent a letter No. Expm/BM/Pur -- 17 (1)/66 to the petitioner inviting tenders for supply of fireclay bricks and refractory goods of certain specifications to the opposite party No. 1. On February 24, 1966, the petitioner sent a letter to the opposite party No. 1 intimating that the petitioner could supply a certain quantity of fireclay bricks and refractory materials of the specifications mentioned therein and enclosed with it the tender No. BRCS/35/1832. THE said letter contained all the terms and conditions. THE opposite party No. 1 by letter dated December 31, 1966 accepted the said tender on certain terms and conditions. In the said letter there was a remark which is set out hereunder : "Subject to conditions of acceptance of tender attached."
In accordance with the said agreement the petitioner from time to time sold and delivered diverse quantities of goods to the opposite party No. 1 at the petitioner's works' at Salanpur after the same had been duly inspected and approved at its factory at Salanpur. The opposite party No. 1 made payments from time to time in respect of goods so sold and delivered and after deducting the amounts paid by the opposite party No. 1 a sum of Rs. 86,120.45 paise remains due from the opposite party No. 1 as the balance of price of goods sold and delivered besides other dues. The opposite party No. 1 in spite of repeated demands failed and neglected to pay the said sum. There was serious labour unrest in the petitioner's factory. Moreover, the opposite party No. 1 did not pay the balance price of the goods supplied. For these reasons the petitioner was compelled to declare a closure of its factory on August 4, 1969 and as such the aforesaid contract became impossible of further performance and void. The notice of such closure was given to opposite party No. 1 in due time.

(3.)IN February, 1971, the opposite party No. 1 wrongfully alleged that the petitioner had committed a breach of the said contract by not supplying the balance quantity of goods and the opposite party No. 1 had thereby suffered loss and damage. As such a dispute had arisen and the same should be referred to arbitration. It has been stated that though the said contract did not embody any arbitration clause the opposite party No. 1 by letter dated February 8, 1971, appointed the opposite party No. 2 as its arbitrator purportedly relying upon Clause 23 of the General Conditions of Contract and intimated the same to the petitioner asking it to appoint a person as the second Arbitrator. It has been submitted that the said contract did not contain any arbitration agreement and the said appointment by the opposite party No. 1 is illegal and invalid and the opposite party No. 2 has no jurisdiction to act as arbitrator. On February 20, 1971, the petitioner under protest appointed one Mr. Satipati Banerjee, Advocate, as the Second Arbitrator. The petitioner, thereafter, received a letter dated September 24, 1971 from the opposite party No. 1 intimating it that the opposite party No. 3 by its letter dated May 1, 1971, requested Mr. Satipati Banerjee to intimate when he would be able to come to Bhilai to discuss matters regarding appointment of an umpire. IN spite of reminders no reply was received and so the petitioner was called upon to appoint another person as arbitrator in place of Mr. Satipati Banerjee within 15 days of the receipt of the said letter. On November 1, 1971, the petitioner came to know from a copy of the letter by opposite party No. 1 to opposite party No. 2 that the opposite party No. 1 purported to appoint the opposite party No. 2 as the sole arbitrator.
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