GAYA ELECTRIC SUPPLY COMPANY LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) This appeal by special leave arises out of an application made by the State of Bihar against the Gaya Electric supply Co. Ltd., under S. 34, Arbitration Act, for stay of proceedings in a suit filed by the company on 28-9-1950. The facts relevant to this enquiry are these :

(2.) The arbitration clause is contained in a letter dated 13-10-1949 and was substantially accepted by the company in its letter dated 17-10-1949. As set out by the State Government in its application under S. 34, it runs as follows :

(3.) On 19-1-1950 the Company sent a statement of valuation of the assets amounting to Rupees 22,06,072 to the Chief Electrical Engineer, Bihar. The Chief Electrical Engineer characterized the valuation of 22 lakhs by the company as fantastic and stated that according" to a rough valuation the amount would be approximately five lakhs and that the final valuation would be settled after the company had furnished a detailed history of the plants and machineries. The company declined to give any further details and stated that time was of the essence of the contract and it would be extended from 28-1 to 15-2-1950.On 6-4-1950 the Chief Electrical Engineer intimated that the valuation amounted to Rs. 5,56, 221. No reply to this letter was received and the State Government intimated to the company that as difference and dispute had arisen relating to valuation, Mr. M.S. Rao, I.C.S., was being appointed as sole arbitrator to decide the dispute.