SCIENTIFIC INSTRUMENT CO LTD Vs. ARBITRATOR MANAGING DIRECTOR

JUDGEMENT

(1.) The petitioner has sought the quashing of the order dated 2nd June, 2009 passed by the Arbitrator by which the preliminary objection raised by the petitioner was rejected and it was held that the claim referred for decision before the Arbitrator was within the limitation period prescribed under Section 137 of the Limitation Act, 1963 (hereinafter referred to as the 'Limitation Act').

(2.) Respondent No. 2-U.P. State Sugar Corporation Limited, Sakoti Tanda, Lucknow (hereinafter referred to as the 'Corporation') filed a claim petition on 5th August, 2006 before the Arbitrator, namely the Managing Director of the Corporation, for refund of Rs. 9,19,168.56 from the petitioner with interest. It was mentioned that the Corporation had placed a purchase order dated 22nd January, 1990 with the petitioner-Company for supplying certain machines and under Clause 20 of the General Terms and Conditions enclosed with the said purchase order it was provided that if at any time any question, dispute or difference whatsoever arises between the purchasers and the sellers, the decision of the Managing Director of the Corporation shall be final within the meaning of the Indian Arbitration Act, 1940 and the Rules made thereunder, or any statutory modification or enactment thereof. The petitioner-Company had supplied material worth Rs. 11,83,840/-on 10th September, 1990 which was received by the Corporation on 19th September, 1990. Payment of Rs. 9,19,168.56/-was also made to the petitioner-Company by the Corporation between 15th February, 1990 and 10th July, 1992, but as the system supplied by the petitioner-Company was not running properly, a communication dated 21st April, 1994 was sent to the petitioner-Company by the Corporation informing it about the operational difficulties and the balance amount of Rs. 2,36,969/- to be paid to the petitioner-Company was withheld.

(3.) Communications were exchanged between the parties and ultimately a communication dated 18th February, 1998 was sent by the petitioner- Company to the Corporation expressing its inability to re install/commission the System again and the letter is as follows: