ROYAL FOUNDRY Vs. UNION OF INDIA

JUDGEMENT

(1.) .The above named petitioner has filed this petition under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the "Act") a direction on the respondent to file the Arbitration Agreement in the court and for referring the disputes between the parties to an Arbitrator which may be appointed by this Court.

(2.) .The petition has been filed with the averments and allegations that the petitioner is a partnership firm duly registered under the Partnership Act and is engaged in the manufacture and supply of machinery and equipment for industrial purposes inter-alia including radial drilling machines. Vide a Contract Agreement dated 2.4.1992, the respondent No.2 awarded a contract to the petitioner for supply of 22 Nos. of radial drilling machines at different destinations. However, the formal Agreement on the contract form was executed on 29.9.1992. After the award of the work and completing the requisite formalities the petitioner undertook the manufacturing of the machines and actually supplied 9 radial drilling machines at various destinations. The remaining machines could not be supplied within the stipulated period and the period for supply was extended upto 30.9.1994 but due to exigencies inter-alia arising out of force majeur conditions. the petitioner could not supply the balance number of machines. Vide a letter No. DGET-7(4)/92-CPIU/PE dated 16.2.1995 the respondent No.2 terminated the Contract Agreement. Vide another communication dated 16.2.1995, the respondent No.2 threatened to initiate action for forfeiture of the Performance Guarantee No.B/G 38/24 dated 14.7.1992 in the sum of Rs.4,71,704/- which was issued by the State bank of India, Batala (Punjab) on the request of the petitioner. The petitioner tried to explain to the respondent the circumstances under which the balance number of radial drilling machines could not be supplied but to no avail.

(3.) .Itis alleged that the Contract Agreement dated 2.4.1992 and 29.9.1992 contain an Arbitration Agreement in Clause 15 which reads as under: