GREENLAND FOODS PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an application by Messrs. Greenland Foods Private Ltd. (hereinafter called the petitioner) under Section 20 of the Arbitration Act for the filing of the arbitration agreement, contained in the Acceptance of Tender No. 16/2/1147/ 68Pur- V dated the 20th December, 1968 and for directing the Secretary to the Government India, Ministry of Food and Agriculture, for appointing an arbitrator in terms of the arbitration agreement. The petitioner entered into a contract for the supply of 8,117 packs (Vegetarian) 5-Men Comp Pack rations at Rs. 42.10 per pack for delivery on various dates to be completed by 25th May, 1969 with the respondent, Union of India (Chief Director of Purchases, Ministry of Food and Agriculture, Department of Food, New Delhi). The petitioner delivered the contracted quantity of stores in terms of the contract. On completion of the supply of the contracted stores the petitioner submitted the bills for payment to be respondent. The pay and Accounts Officer Ministry of Food Agriculture, under the direction of the Chief Director of Purchases, deducted a sum of Rs. 1,04,819-37 paise from the amount due to the petitioner. The petitioner pleaded that it is entitled to the payment of Rs. 1,04,819-37 paise which has been wrongly with held by the respondent as amounts recoverable from the petitioner under other contracts. The petitioner pleaded that it had called upon the respondent to release the amount of Rs.1,04,819-37p. and the security deposit of Rupees 34,173.00 but the Government had refused to pay the same and disputes had arisen between the parties to the contract which are liable to be referred to arbitration under clause 21 of the agreement.

(2.) The respondent in its reply pleaded that a sum of Rs.18,265-48 p. was deducted with respect of its claim arising our of the breach of the warranty clause of the argument committed by the partition and the balance of the amount deducted by the respondent is on account of the sums due to the respondent from the other contract between the parties, and the disputes concerning those contracts cannot form subject matter of the present proceeding, nor could such claims in respect of the other agreement be referred for arbitration in the present proceedings. The respondent pleaded that it could have validly retained the sum of Rs.18,265-48 by virtue of the power under clause 8 (3) (C) of the agreement. The respondent also pleaded that in terms of the clause 21 of the agreement, the petitioner was to apply in writing for arbitration within a period of one year from the date of completion of the contract and since the petitioner did not make an application for arbitration on within one year the petitioner is debarred from making the present application.

(3.) The respondent, in addition to the pleas on merits raised a few preliminary objections, namely, (a) that under clause 21 of the agreement dated 20th December, 1968, all questions, disputes or differences arising under or out of or in connection with the conditions mentioned in the contract were to be referred to the sole arbitration of any person appointed by the Secretary of the Ministry or the Department of the Government of India administratively dealing with the contract and the petitioner should have applied for the appointment of an arbitrator to adjudicate the disputes and the petitioner having failed to make an application to the Secretary of the Ministry for referring the disputes to arbitration, the present application is liable to be rejected as premature, (b) that under clause 21 of the agreement the petitioner was to make a request in writing for arbitration within one year from the date of the completion of the contract and the petitioner having failed to do so, his claims under the contract are to be deemed to have been waived and the respondent discharged and released of all its liabilities under the contract. The respondent pleaded that the supply of the contracted stores having been completed on May 25, 1969, the present application which was filed on April 6, 1971, is clearly beyond the period of one year prescribed in clause 21 and, therefore, the application is not maintainable, and (c) that the disputes concerning the amount in excess of Rs. 18,265-48 p. are referable to various other contracts between the parties and are not covered by the arbitration clause and cannot from the subject-matter of arbitration.