HEERA LAL RAMJI LAL INDUSTRIAL Vs. FOOD CORPORATION OF INDIA

JUDGEMENT

(1.) THE appellants -petitioners have filed this appeal under Section 13(1)(iv) of the India Arbitration Act, 1940 (for short that Act) against the judgment of Shri Amar Singh Godara, learned Addl. Distt. Judge No. 1, Hanumangarh dated 30.6.1981 passed in Civil Misc. Application No. 40/78, whereby the learned Addl. Distt. Judge allowed the application filed by the respondent under Section 20 of the Act and made an order of reference of the dispute to the arbitration in terms of Clause (19) of the agreement to have been executed between the parties.

(2.) THE relevant facts, in so far as they are relevant for the disposal of this appeal, may be stated as follows. The respondent, a statutory body, invited tenders for appointing a contractor for loading/unloading and transportation of foodgrains etc. In and round Hanumangarh town for a period of two years from 1.5.75 on the conditions mentioned in the notice inviting tenders. It is alleged that Shri Balkishan appellant, on behalf of the partnership firm M/s. Heera Lal Ramji Lal Industrial Mills, Hanumangarh Town, submitted his tender quoting the rate 231% above the scheduled rates to the Senior Regional Manager, Jaipur of the Corporation by putting his signature as also the seal of the firm alongwith a DD No. H 0968482 dated 14.2.75 of a sum of Rs. 3,000/ -. On scrutiny the rates of tender quoted by the appellant Shri Balkishan on behalf of the above partnership firm were found the lowest. The Corporation respondent, therefore, accepted the tender submitted by Shri Balkishan in the aforesaid manner for the contracted period of two years and the above firm was appointed contractor for execution of the above work. Information of this acceptance was conveyed by telegram to the appellant firm on 4.3.75. Vijay Kumar, partner of the appellant firm, by his letter dated 13.3.75 acknowledged the receipt of the acceptance. In pursuance of the compliance of the formalities asked by the Corporation, Shri Vijay Kumar sent a DD of Rs. 3,000/ - on 12.3.75. Regarding the remaining amount of earnest money namely, Rs. 3,000/ -, Shri Vijay Kumar put in an application praying that the above amount may be adjusted from the payment to be made by the Corporation to the above firm. Shri Vijay Kumar further sought 15 days' time to produce the copy of the partnership deed and the other documents. Accordingly, the copy of the partnership deed dated 24.3.75, Income -Tax Certificate and other documents were filed in the office of the Corporation. After completion of the above formalities, the appellant firm comenced the work but the appellant firm committed breach of the conditions of the contract and did no work for the period from 8.11.75 to 30.4.77. The Corporation, therefore, by telegram dated 15.11.76 and letter dated 4.12.75 asked the appellant firm to complete the above work as per the terms of the contract. It is alleged that despite the above notice that plaintiff firm did not commence the execution of the above work for the above period. The Corporation was, therefore, obliged to rescind the contract and forfeit the security of Rs. 6,000/ - deposited by the appellant firm for due performance of the work. It is further alleged that on account of the appellant firm backing out from its obligation to perform the above contract, Corporation had to engage other agencies to undertake the above work for the above period and in that connection, the Corporation incurred a loss of Rs. 1,47,595/ -. The Corporation raised the above demand and asked the appellant firm to reimburse the former for the above loss by a registered notice. The plaintiff firm, however, did not care to reply to the notice and the demand was also not respected. The Corporation, therefore, invoked the arbitration clause No. 19 of the agreement between the parties. The Corporation, by notice, asked the firm to comply with the above condition for appointing of an arbitrator, but, the latter did not reply. The Corporation, therefore, filed an application under Section 20 of the Act before the learned Addl. Distt. Judge No. 1. The Corporation authorised the District Manager, Sri Ganganagar to present the above petition. It may be stated that in the above application, the respondent has arrayed Ms. Heera Lal Rami Lal Industrial Mills, Hanumangarh (registered partnership firm) as non -petitioner No. 1 and Balkishan, Ramji Lal, Vijay Kumar, Banwari Lal and Jagdish Prasad as partners of the above firm.

(3.) NOW , I may make a brief reference to the documents produced before the learned Add. Distt. Judge: