Gujarat High Court
Food Corporation Of India & vs Kundanlal L Harwani Heirs & Legal ... on 7 February, 2014
Bench: M.R. Shah, R.P.Dholaria
C/FA/1240/1990 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 1240 of 1990
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH sd/
and
HONOURABLE MR.JUSTICE R.P.DHOLARIA sd/
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1. Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2. To be referred to the Reporter or not ? NO
3. Whether their Lordships wish to see the fair copy NO
of the judgment ?
4. Whether this case involves a substantial question NO
of law as to the interpretation of the constitution
of India, 1950 or any order made thereunder ?
5. Whether it is to be circulated to the civil judge ? NO
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FOOD CORPORATION OF INDIA & 1....Appellant(s)
Versus
KUNDANLAL L HARWANI HEIRS & LEGAL REPRESENTATIVES OF
DECD....Defendant(s)
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Appearance:
MR SHAKEEL A QURESHI, ADVOCATE for the Appellant(s) No. 1 2
MR KG SUKHWANI, ADVOCATE for the Defendant(s) No. 1 , 1.2
MR RM VIN, ADVOCATE for the Defendant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE R.P.DHOLARIA
Date : 07/02/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. Present First Appeal has been preferred by the appellants hereinoriginal defendantsFood Corporation of India and Another challenging the impugned order passed by the learned Judge, City Civil Page 1 of 7 C/FA/1240/1990 JUDGMENT Court, Ahmedabad dated 29.12.1989 passed below Exh.62 in Civil Suit No.3134 of 1984, by which, the learned Judge has allowed the said application and has directed that the dispute between the parties be sent to the Managing Director of the Food Corporation for appointing an arbitrator in terms of the clause xx of the agreement Exh.21.
2.0. That the respondent hereinoriginal plaintiff was awarded contract dated 12.11.1980 for handling and transporting of the goods arrived at its railway station and Food Corporation godowns at Surendranagar. That the said contract was for a period of two years from 1.1.1981 to 13.12.1982 on the terms and conditions contained in the tender. That an agreement was entered into between the parties. That the dispute arose between the parties on various issues. That as per the clause 19 / 20, all the disputes arising between the parties in respect of the contract were required to be referred to the Arbitration of any person appointed by the Managing Director, Food Corporation of India, New Delhi or Administrative Head dealing with the Contractor at the time of such appointment or to the sole discretion of the Managing Director of Food Corporation of India, New Delhi. Therefore, the respondent sent notice dated 9.12.1983 calling upon the appellants to appoint arbitrator as per clause 20 of the Arbitration agreement. However, the appellants / Managing Director failed to appoint the Arbitrator and therefore, respondent hereinoriginal plaintiff instituted Civil Suit No.3134 of 1984 claiming various amounts under the different claims (19 in numbers). That the plaintiff put forth following 19 claims.
Claim No.1 amounting to Rs.10,20,000/ on account of supply of warners by recipients.
Claim No.2 amounting to Rs.36000/ on account of heard shunting of wagons.
Claim No.3 amounting to Rs.18000/ on account of uncoupling of wagons.
Claim No.4 amounting to Rs.26000/ on account of cleaning of Page 2 of 7 C/FA/1240/1990 JUDGMENT wagons.
Claim No.5 amounting to Rs.4,79,109/ on account of handling of wagons at loose siding.
Claim No.6 amounting to Rs.14,14,236/ on account of taking loaded trucks through longer route.
Claim No.7 amounting to Rs. 27050/ on account of supply of petromax.
Claim No.8 amounting to Rs.36,247/ on account of rejection of bags at the time of delivery.
Claim No. 9 amounting to Rs.1,95,000/ on account of enhancement rates for transport due to increase of price in petrol, diesel oil, fuel and spare parts etc. Claim No.10 amounting to Rs.3,65,275/ on account of enforcement of minimum Wages Act.
Claim No.11 amounting to Rs.10000/ on account of refund of demurrage charges illegally recovered.
Claim No.12 amounting to Rs.1,64,970/ on account of arrangement of water.
Claim No.13 amounting to Rs.1,00,000/on account of construction of road.
Claim No.14 amounting to Rs.4,47,280/ on account of extra transportation charges.
Claim No.15 amounting to Rs.72,765/ on account of engaging additional casual labours for cleaning pallas. Claim No.16 amounting to Rs.1,94,970/ for item no.1(a) twice. Claim No.17 amounting to Rs.4,00,000/ for miscellaneous services rendered during the two years of contract period. Claim No.18 amounting to Rs.62,500/ on account of refund of security deposit.
Thus, according to the plaintiff, the claims arising out of the agreement are to the tune of Rs.50,79,402/ on these allegations, the plaintiff prays for the reliefs aforesaid as stated in para 11 of the application.
2.1. That the appellantsoriginal defendants submitted written statement at Exh.11 refuted the claim of the plaintiff inter alia contending that plaintiff has not completed the work in all respects; that the payments for service rendered under the terms of the contract have been made nothing remains due to the plaintiff for rendering service. The defendants denied that any payments are due to the plaintiffs by them.
2.2. That in the said suit, plaintiff submitted application Exh.62 Page 3 of 7 C/FA/1240/1990 JUDGMENT under Section 20 of the Indian Arbitration Act for causing the defendants to file the original agreement dated 12.11.1980. That by impugned order, the learned Judge, City Civil Court, Ahmedabad has allowed the said application and has passed the following order.
"The application is allowed.
The defendants are directed to file the arbitration agreement no. S & C 13(2) /80 dated 12.11.1980 into the Court and it is further directed that the agreement be sent to the Managing Director of the defendant Corporation for appointing an arbitrator in terms of clause XX of the agreement Exh.21 for resolving the disputes between the parties to this proceedings."
2.3. Feeling aggrieved and dissatisfied with the impugned order, the appellants hereinoriginal defendants have preferred present First Appeal.
3.0. Shri Qureshi, learned advocate for the appellants has assailed the impugned order passed by the learned Judge, City Civil Court, Ahmedabad on two grounds (1) that the application / suit was barred by law of limitation and (2) that at the relevant time there was no subsisting dispute between the parties as claims were not refuted by the appellant.
3.1. Shri Qureshi, learned advocate for the appellants has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Major (Rtd.) Inder Singh Rekhi vs. Delhi Development Authority reported in AIR 1988 SC 1007.
4.0. However, considering the fact that period of contract was between 1.1.1981 to 31.1.1982 and the dispute was raised and the reference for appointment of arbitrator was made on 9.12.1983 it can be said to be within a period of limitation. Shri Qureshi, learned advocate for the appellants is not in a position to dispute that as such the dispute Page 4 of 7 C/FA/1240/1990 JUDGMENT raised cannot be said to be barred by limitation.
4.1. Now, so far as contention on behalf of the appellants that there was no subsisting dispute and / or the claim was vague and / or there was no refutation of any of the claim made by the appellants original applicant s and the reliance placed upon AIR 1988 SC 1007 is concerned, it is required to be noted that as such as many as 19 different claims were made by the respondentoriginal plaintiff original applicant, therefore, it cannot be said that the claims were vague. It also cannot be said that there was no subsisting dispute between the parties. Now, so far as case on behalf of the appellants that as the claim was not refuted by the appellants and unless and until the same are specifically denied and refuted it cannot be said that there was subsisting dispute is concerned, it is required to be noted that considering various correspondences between the parties as such the learned Judge has specifically mentioned the different claims made by the original applicant. Not only that but even while filing the written statement at Exh.11 there is a specific denial of the claim by the appellants. In para 14 and 15, the learned Judge has observed as under:
14.Learned advocate Mr.Shah for the defendants has relied on the decision reported in AIR 1988, SC, 1007. It has been held that in order to be entitled to order of reference under section 20, it is necessary that there should be an arbitration agreement and secondly, difference must arise to which this agreement applied.
But in order to be entitled to ask for a reference under section 20 of the Act there must not only be an entitlement to money but there must be a difference or dispute must arise. In the case before the Hon'ble Supreme Court, the final bill was not prepared. It has been observed that a dispute arises In the case before the Hon'ble Supreme Court, the final bill was not prepared. It has been observed that a dispute arises where there is a claim and a denial and repudiation of the claim. The existence of dispute is essential for appointment of an arbitrator under section 8 or a reference under section 20 of the Act.
Page 5 of 7C/FA/1240/1990 JUDGMENT I am in respectful agreement with the law laid down by the Hon'ble Supreme Court. In my humble opinion, the principal laid down would not be applicable to the facts of the present case for the reasons that in the present case, the bill has been prepared and the plaintiff has been paid and certain amounts have been deducted whereas certain amounts have not been paid. Thus on preparation of the bill and noninclusion of the amounts claimed by the plaintiff, the dispute can be said to have arisen apart from the correspondence produced by the plaintiff to suggest the claim.
15.Letter exh. 29 suggests that the plaintiff requested to issue the order for sanction of warner charges to Rs.10/ per truck, but the plaintiff was not given any satisfaction and the said letter has not been replied. Letter exh.31 dated 9481 suggests that the plaintiff demanded the amount under the head of hand shunting and cleaning of wagons at Surendranagar. Bythis letter, the plaintiff requested to sanction the extra rate for hand shunting of wagons as for each wagon, labourers had to make hand shunting. Some times, hand shunting had to be made for about a long distance as railway authority desired at that place. Letter exh.33 dated 24 6081 suggests the claim of the amount for cleaning of wagons. Letter exh. 35 dated 15785 suggests that the plaintiff had demanded the amount for transporting the stocks through longer routes and the plaintiff had to give workships as per item 2(iii) and the plaintiff thereby demanded the workslip as per item 2(iii) as agreed by the defendant. Vide letter exh.37 dated 14981, the plaintiff demanded extra remundration for handling wagons at loose siding as the plaintiff were supposed to handle the wagons placed on platforms and not to the loose siting. Vide letter exh. 39 dated 13981, the manded the wages of labourers since minimum wages of the labourers had been raised by the Government during subsistence of the contract. It will be seen that all these letters have been written by the plaintiff to the defendant during the subsistence of the contract, that is, between 1181 to 311282. It need hardly be said that the final bill of defendants would be prepared only after completion of the work or expiry of the contract period. Now, the plaintiff would come to know about rejection of his claim only at the time of preparing final bill. So long as final bill is not prepared, the plaintiff would not come to know that his claims vide above referred letters have been repudiated by the defendants. So, the claims put forth by the plaintiff vide above referred letters can be said to have been rejected or repudiated by the defendants on preparation of final bill and it is only at that point of time it can be said that 'dispute' has arisen with regard to the claims put forth by the plaintiff vide above referred letters. The conduct of the defendants in preparing the final bill ignoring the plaintiff's claims vide above referred Page 6 of 7 C/FA/1240/1990 JUDGMENT letters would constitute a 'dispute'. In my opinion, the dispute with regard to the claims put forward by the plaintiff vide above referred letters can be said to have seen the light of the day when the plaintiff's claims on these counts were rejected in as much as the final bill did not include any of the claims put forward by the plaintiff vide above referred letters. For these reasons, I am unable to accept the submission of learned advocate Mr.Shah that there is no referable dispute within the meaning of section 20 of the Act so as to deny the reference to the arbitration of the disputes raised by the plaintiff.
4.2. Considering the above, it cannot be said that there was no dispute subsisting at the relevant time when the original applicant submitted application for referring the dispute to the arbitrator.
5.0. In view of the above and for the reasons stated above, as such no error has been committed by the learned Judge in passing the impugned order. Under the circumstances, present appeal fails and same deserves to be dismissed and is accordingly dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs.
sd/ (M.R.SHAH, J.) sd/ (R.P.DHOLARIA,J.) Kaushik Page 7 of 7