K.V. NAGARAJA IYER AND BROTHERS Vs. THE UNION OF INDIA, REPRESENTED BY THE GENERAL MANAGER, SOUTHERN RAILWAY, MADRAS

JUDGEMENT

(1.) This is an appeal filed by the plaintiff in O.S. No. 4834 of 1969, against the order of the VI Assistant City Civil Judge, Madras, staying the trial of the suit on an application made by the plaintiff under S. 34 of the Indian Arbitration Act, 1940, and directing a reference of the matter to the arbitrators as per Cl. 25 of the conditions of the contract. The appellant is a firm of engineering contractors who entered into a contract with the Southern Railways, Madras, for the supply of a certain number of cross arm channels. Some dispute arose between the railway administration and the appellant as to whether the administration was right in rejecting the supplies made, whereupon the appellant instituted the suit against the railway administration for the recovery of a sum of Rs. 24528 -15 with interest at six percent per annum and for costs of suit. The defendant railway before filing a written statement, made a petition under S.34 of the Indian Arbitration Act and prayed that as per CL. 25 of the conditions of the contract between the parties, the dispute might be referred to two arbitrators, one to be nominated by the contractor and the other to be nominated by the railway administration. This petition was opposed by the appellant, firstly, on the ground that there was no arbitration clause at all in the contract between the parties, and secondly, on the ground that under S.34 of the Arbitration Act, the railway administration was not, either at the time when the proceedings were commenced or at the time of the application, ready and willing to do all things accessory to the proper conduct of the arbitration. The court below rejecting the objections, allowed the petition for stay. It is against this order that the present appeal has been filed.

(2.) The first round raised by the appellant may be disposed of at first. According to the learned counsel or the appellant, by the order placed by the railway administration with the appellant, which has been typed at page 2 of the typed papers, the appellant has been asked to deliver to the Assistant Signal and Telecommunications Engineer, Southern Railway, (sic), the articles contracted for, "subject to the general conditions of contract for the Stores Department of this railway and o addendum to the same specially applicable to this contract". Learned counsel would complain that no copy of the general conditions of the contract for the Stores Department of the railway was ever delivered into the hands of the appellant at the time of the contact. It was also his complaint that though he communed the railway administration to produce the tender made by his client, the administration failed to produce the same in the court below. In pursuance of our directions counsel for the railway administration he is produced the same and we find that the appellant has signed the tender in which 'he engages to supply the Southern railway with the articles specified above upon the terms of the Indian Railway Standard Conditions of Contract for Stores, Serial No. A.3 - -51, and upon the terms of the special conditions printed in the stores bulletin and the instructions for the guidance of the contractors issued by the railway, as amended from time to time'. The Indian Railway Code for the stores department contains, at page 533, the Standard Conditions of Contract, Serial No. A3 -5 Cl.25 of the said Standard Conditions runs as follows:

(3.) The next objection raised is that the Railway Administration was not at the relevant times ready and willing to do all things necessary to the proper conduct of the arbitration. In support of this argument, reliance is placed upon the lack of requisite allegations in the petition of the railway administration in which it has merely stated that the petitioner is willing and ready for arbitration." A supplemental affidavit was however, permitted to be filed later on, in which the railway administration alleged that it was always ready and willing for the arbitration, that is to say, both at the time of commencement of the proceedings and at the time of the petition. This supplemental affidavit was filed evidently in difference to certain observations made by Ramamurthi, J. in Padmanaban v/s. Srinivasan : A.I.R. 1967 Mad. 201. There, the learned Judge referred to the ruling of the Supreme Court in Anderson Wright Ltd. v/s. Motan and Co. : A.I.R 1955 S.C. 53 but has not in our view, stated the effect of that ruling correctly. This is what the Supreme Court said: