UNION OF INDIA Vs. GOVIND DEO GLASS WORKS LIMITED

JUDGEMENT

(1.) THIS is a petition on behalf of the Union of India under Section 33 of the Arbitration Act for determination of .the effect .of .the arbitration agreement. The case of the Union is that a contract was entered into between the Union of India and the respondent for supply of certain stores by the respondent detailed in the agreement. In pursuance to the agreement, the respondent offered certain stores which were accepted. Extension of time for supply of remaining stores was asked for by the respondent and it was agreed to by the Union of India. Thereafter, certain stores were supplied by the respondent which were accepted by the Union of India on 18-12-1967 and also on 27-1-68. The respondent by letter dated 4-6-68 again applied for extension of time. Further extension was granted upto 28-2-1969 with usual R/R clause. During this period also the respondent supplied certain stores which were accepted by the Union of India. Since the respondent failed to supply the contracted stores within the stipulated period, the Union of India cancelled the contract for the supply of remaining quantity at the risk and cost of the respondent by letter dated 15-1-1970. Risk purchase was issued by the Union of India for the balance outstanding quantity. Since the risk purchase did not materialise, the Union of India claimed Rs. 1,32,395.24 on account of risk purchase loss. The respondent repudiated the claim. Disputes and differences having arisen between the parties, the same were referred to the sole arbitration of Shri P. C. Rao in accordance with the arbitration agreement. In the meeting held on 22-1-1972 before the Arbitrator, the respondent raised an objection that the arbitrator had no jurisdiction to proceed with the matter, as the contract out of which disputes had arisen was entered into between the respondent on the one hand and the States of Maharashtra and Tamil Nadu on the other hand and secondly the contract was cancelled by the Union of India and not by the States concerned. The claim was not made on behalf of the States. In view of the objection raised by the respondent, the learned Arbitrator adjourned the matter sine die and directed the parties to move the court of competent jurisdiction for decision on the question of jurisdiction of the Arbitrator.

(2.) THE case of the Union of India is that the contract was entered into for and on behalf of the States by the Union of India. Amendments in the contract were made and issued for and on behalf of the President of India and the indentor is the Director-General Health Services New Delhi. In view of this the objection of the respondent is without merit.