DDA Vs. M S SATNA CEMENT WORKS

JUDGEMENT

(1.) IA No.6410/2006 (by defendant No.1 under Order VII Rule 11 CPC) This is an application under Order VII Rule 11 CPC for rejecting the plaint.

(2.) THE plaintiff has filed this suit for recovery of Rs.33,65,599/-. It is alleged in the plaint that the defendant No.1, which is a Unit of defendant No.2 entered into an Agreement with the plaintiff for supply of 75,000 MT of non levy cement with 10% deviation. Under the Agreement, the supply was to commence on 10.5.1985 and was to be completed by 9.11.1985. It is further alleged that the defendants, however, commenced supply only in July, 1985 and the last supply was made in February, 1987.

(3.) ADMITTEDLY, the plaintiff invoked arbitration clause contained in the Agreement on 18.3.1991 and an Arbitrator was appointed on 1.5.1991, to adjudicate upon the disputes between the parties. During pendency of the arbitration proceedings, the Executive Engineer of plaintiff/DDA referred the matter to Director (Material Management), whose decision was to be final and binding between the parties in terms of Clause 2 of the Agreement, to decide the amount of liquidated for late supply of the cement. The Arbitrator vide order dated 21.9.2005 took a view that the claim pertaining to Clause 2 of the Agreement was beyond the purview of arbitration. The Director (Material Management) had, in the meanwhile, vide his decision dated 31.8.2004 decided to levy compensation amounting to Rs.924615 on the defendants.