ALOK SHARMA,J. - (1.) This application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act of 1996') has been filed for appointment of an arbitrator under the arbitration clause 9 of the agreement dated 22.9.2016 to resolve the disputes and differences in regard to the work order dated 22.9.2016 having arisen between the parties.
(2.) Clause 9 of the agreement dated 22.9.2016 reads as under: "All disputes arising out of this agreement and all questions relating to the interpretation of this agreement will be decided by the RSFCSC and the decision of the RSFCSC will be final." That clause was in the backdrop of clause 69 of the Etender which provided as under: "In case of any dispute arising between the bidders and the purchasing authority, the Principal Secretary cum Chairman, Rajasthan State Food and Civil Supplies Corporation Limited will act as the arbitrator, and the decision of the arbitrator will be final and binding on all the parties concerned." Mr. Sandeep Taneja, counsel for applicant submitted that the respondent invited bids on 22.4.2016 for supply of spices (red chilly, coriander and turmeric powder) for a period of one year to all Fair Price Shops in Rajasthan. The applicant participated in the tender process and submitted its bid. The respondent accepted the bid of the applicant for supply of the spices (red chilly, coriander and turmeric powder) for one year. An agreement dated 22.09.2016 was executed between the applicant and the respondent. The respondent thereafter issued a work order dated 22.09.2016, according to which the applicant was required to supply spices (red chilly, coriander and turmeric powder) minimum 5 Kg. of per shop per month in 200 gms. packaging to all 8450 fair price shops situated in Districts Banswara, Dungapur, Rajsamand, Udaipur, Chittorgarh, Pratapgarh, Barmer, Jalore, Jaisalmer, Jodhpur, Pali and Sirohi. The applicant accordingly contacted the Fair Price Shopkeepers for supply of spices (red chilly, coriander and turmeric powder) but the Fair Price shopkeepers refused to take the supply from the applicant on the ground that they were already having the stocks in adequate quantity. The applicant was also informed by the Fair Price Shopkeepers that they were under no compulsion to accept the Raj Brand spices and would sell only those items which give them higher profits. In such circumstances, the applicant sent various letters to the respondent and requested to issue appropriate instructions to the Fair Price Shopkeepers to accept the supply from the applicant. The respondent, instead of issuing appropriate instructions, sent a letter dated 22.9.2016 to the applicant stating that the applicant had not supplied requisite quantity of spices to the Fair Price Shopkeepers and thereby breached the terms of the work order. The applicant through a letter requested the non applicant that the applicant was directed to distribute spices to total 8450 Fair Price Shops, but no information regarding the address and contact number of these Fair Price Shops was provided to the applicant. Further, there were various infirmities in the information provided by the respondent on their official website regarding the aforesaid Fair Price Shops. The said issue was raised in the meeting held amongst applicant, respondent and other suppliers, but to no avail. Furthermore, the applicant submitted the Logo in time, but the same was not approved by the non applicant till 6.10.2016, as a result of which the applicant was unable to make the supplies in time. The State Government had included around 1500 shops out of 8450 in the Annapurna Scheme and these 1500 shops who were exclusively procuring spices from Future Group bluntly refused to accept supplies of the Raj brand spices. In addition to above, around 1000 shops of 8450 were attached or for some other reasons were not available to receive the supplies. The applicant intimated the respondent number of times in this regard, but they remained non responsive. Conversely, the respondent issued a letter dated 6.2.2018 by which the applicant was directed to deposit the Exclusive Privilege Amount (EPA) on minimum supply as agreed between them and also for payment of outstanding Consumer Welfare Fund (CWF) with interest @ 18%. The applicant deposited the demands and raised his own for the respondent's breach of its obligation under the supply contract. In the circumstances, the applicant sent a notice dated 5.06.2018 to the respondent invoking arbitration clause for resolution / adjudication of the dispute and appointing Shri Prem Shankar Shukla, retired Addl. District and Sessions Judge as the arbitrator relating to and arising out of the agreement dated 22.9.2016.
(3.) Mr. Anil Mehta, AAG appearing for the State opposed the application and submitted that the parties to the agreement dated 22.09.2016 agreed that all disputes arising out of the agreement and all questions relating to interpretation of the agreement, would be decided by the Chairman, Rajasthan State Food and Civil Supplies Corporation (RSFCSC), and its decision would be final. In this view of the matter, the applicant's notice dated 5.6.2018 appointing Shri Prem Shankar Shukla, retired Addl. District and Sessions Judge as an arbitrator was non-est and a breach of the terms and conditions of the agreement, therefore, the respondent issued the letter dated 6.2.2018. The applicant withheld the amount of EPA and CWF, which was required to be deposited by the applicant as per terms of the work order. As per Clause 9 of the agreement dated 22.9.2019 and clause no.12 of the work order dated 22.09.2016, the Chairman, RSFCSC would be the arbitrator in case of any dispute having arisen between the parties qua the supply contract and only the Chairman, RSFCSC can be appointed as an Arbitrator, but till date the applicant has not submitted any claim before the Chairman, RSFCSC as mutually decided under the agreement dated 22.09.2016.;