HARYANA TELECOM LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner by means of the instant petition under Section 11(6) of the Arbitration & Reconciliation Act, 1996, seeks appointment of an Arbitrator and an order restraining the respondents from encashing the bank guarantees. The petitioner-company is a manufacturer of Jelly filled telephone cables at Rohtak. On 23rd February, 1994, the Department of Telecommunication floated a tender for the purpose of purchase of various quantities of Polythene Insulated Jelly Filled cables (for short 'PIJF') on cash basis. In response to the invitation the petitioner submitted its tender. The tender was accepted and the parties thereafter entered into an agreement on 20th September, 1994 (for short the "initial contract"), a copy whereof has been presented in Court today. Subsequently, by letter dated 2nd February, 1995, the Assistant Director General (LF), Government of India, DoT wrote to the petitioner as follows :

(2.) Pursuant to above the letter of the Assistant Director General, the petitioner signified its consent to the offer vide communication dated 9th February, 1995, (page 65 of the paper book, vol. III). Thereupon, after the receipt of the abovesaid letter of the petitioner, the respondents by their letter dated 6th March, 1995 requested the petitioner to enter into deferred payment agreements for procurement of the undermentioned quantities of PIJF/UG cables (page 66 of the paper book. Vol. III). <FRM>JUDGEMENT_463_DLT68_1997Html1.htm</FRM>

(3.) The letter was accompanied by the terms and conditions for deferred payment agreement. Since the supplies related to three circles, therefore, the parties entered into three separate contracts on 7th April, 1995, 22nd May, 1995 and 24th April,1995.It may be pointed out that at the time of entering into the initial contract on 20th September, 1994, the petitioner had furnished a Bank Guarantee dated 28th September, 1994 to the tune of Rs. 85 lacs for due performance of the contract. Subsequently, when the respondents placed order for PIJF cables on deferred payment, the petitioner in terms of the subsequent agreements furnished asecond Bank Guarantee on 5th April, 1995 (page 24, part III of the Court record) for a sum of Rs. 15 lacs. It appears that the parties differed on certain matters and disputes arose between them. On 14th March, 1997, the respondents by means of two separate letters invoked the abovesaid Bank Guarantees. The petitioner feeling aggrieved by the said invocations filed the instant petition for the following reliefs: