Kulbir Singh Rattan Singh vs New Delhi Municipal Council & Ors.

on 5 February, 1998

Equivalent citations: 1998 VIAD Delhi 226, AIR 1998 Delhi 230 Bench: K Gupta Kulbir Singh Rattan Singh vs New Delhi Municipal Council & Ors. on 5/2/1998 JUDGMENT K.S. Gupta, J. 1. This petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 has been filed alleging that NDMC, respondent No.1 invited tenders for supply to stone grit and stone dust at NDMC hot mix plant. In response thereto the petitioner submitted its tender which was accepted after negotiations. Agreement bearing No. 8/MHMP/96-97 was executed between the parties. The contract is governed by the general conditions which provide for arbitration under Clause 14, of the aforesaid agreement in case of disputes between the parties. Supply of stone grit and stone dus was to be commenced from April 28, 1996 and completed within a period of six months i.e. by October 27, 1996. Contract was to be tune of Rs. 41,09,515/-. It is alleged that the petitioner made the supplies of the stone grit/stone dust of the total value of Rs. 4,25,000/- to respondent No.1 as per specifications uptil June 12, 1996. As respondent No. 1 failed to make the payment of the aforesaid amount, further supply of the stone grit/stone dust was not made by the petitioner. In order to cover the contractual failure the respondent No. 1 issued show cause notice and later on terminated the contract. By a letter dated October, 14, 1996, petitioner requested respondent No. 1 to withdraw the termination of contract and to release the amount due. By another letter dated October 31, 1996 petitioner called upon respondent No. 1 to make the payment of the amount due with interest @ 24% p.a. By yet another letter dated November 27, 1996 petitioner invoked the arbitration in terms of Clause 14 of the agreement and to make reference of the disputes/claims to arbitration but the respondents have failed to appoint any Arbitrator. Nature of the claims/disputes has been enumerated in para No. 7(xi) of the petition. It is prayed that respondents be directed to file original arbitration agreement and the disputes as noted in para No. 7(xi) of the petition be referred for adjudication to an independent technical person. 2. In the joint written statement filed by the respondents it is not denied that tenders were invited for supply of stone grit and stone dust; that the tender submitted by the petitioner was accepted after negotiations and agreement bearing No.8/MHMP/96-97 containing arbitration clause was executed between the parties as alleged. It is, however, stated that the petitioner supplied material of the value of Rs. 4,24, 605/- upto June 30, 1996 against the total contractual value of Rs. 41,09,515/-. On proportionate basis the petitioner was liable to supply material worth Rs. 10.30 lakhs upto June 30, 1996. Further, as per additional Condition No. 3 of the schedule of quantity, the petitioner was liable to maintain daily minimum book balance of 500 M3 of stone aggregate and 300 M3 of stone dust but it failed to adhere to that schedule. Accordingly, show cause notice bearing Office No. M/HMP/Ab/AI/636/D dated July, 4, 1996 were sent to the petitioner. It is further stated that in the meantime the rates of stone aggregates and stone dust increased considerably and apprehending that after release of the payment the petitioner would not make the further supplies, the amount dues was withheld. Thereafter, actions for forfeiture of the earnest money amount, recession of the contract to and have the balance quantity supplied by another agency at the risk and cost of the petitioner were taken by the respondents. Alleged disputes/claim are baseless and the petitioner is not entitled to claim any amount from the respondents, baseless and the petitioner is not entitled to claim any amount from the respondents. 3. I have heard the partie's Counsel. 4. As is manifest from the admissions made in the written statement, respondents do not dispute that after petitioner's tender for supply of stone grit and stone dust was accepted, agreement bearing No. 8/MHMP/96-97 containing arbitration clause was executed between the parties. In para 7(vii) of the petition the petitioner is alleged to have sent letter dated November 27, 1996 to the respondents invoking arbitration in
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Kulbir Singh Rattan Singh vs New Delhi Municipal Council & Ors. on 5 February, 1998

terms of Clause 14 of the aforesaid agreement for making reference of the disputes/claims in question. In corresponding para of the written statement respondents have not specifically denied the receipt of the aforesaid letter. Photostat copy of the said letter bearing the endorsement regarding receipt thereof in the office of the respondent No. 1 has been filed by the petitioner. In terms of the aforesaid letter. It may be noticed that the plea raised by the respondents is that the claims/ disputes raised in para No. 7(xi) of the petitioner are baseless and the respondents are not liable to make any payment whatsoever to the petitioner. Whether the disputes/claims raised in the aforesaid para are genuine or baseless can be decided only by the Arbitrator to be appointed by respondent No. 2 and not by the Court. Petition thus deserves to be allowed. 5. For the foregoing discussion, the petition is accepted and respondents are directed to file the original arbitration agreement in Court within two weeks from today. Respondent No. 2 is further directed to appoint Arbitrator to adjudicate upon the disputes/claims noted in para No 7(xi) of the petitioner within six weeks from today. It would be open for the respondents to make claim/counterclaim of four the Arbitrator. Arbitrator will make and publish the award within a period months from the date of his entering upon the reference. No order as to costs.

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