ABC ENGINEERING WORKS Vs. SINGARENI COLLIERIES COMPANY LIMITED

JUDGEMENT

(1.) The short question which arises for consideration in this application is as to whether Section 7(4)(c) of the Arbitration and Conciliation Act, 1996 (for the sake of brevity hereinafter referred to as 'the Act') is applicable in the facts and circumstances of this case.

(2.) It is not in dispute that the applicant and the respondent entered into an agreement for blast hole drilling and earth work excavation of various rocks/earth cuttings, loading, transportation, dumping, etc. It is not in dispute that no objection clause existed in the agreement entered into by and between the parties. During pendency of the contract several disputes and differences had arisen between the parties. The applicant herein has laid various claims before the authorities. But the respondent issued a letter of termination dated 11.7.2000. This arbitration application was filed inter alia on the ground that by a letter dated 10.10.2000 it was stated: Though the Chairman and Managing Director in his letter Ref.No.CMD/PS/H/559, dated 10.6.2000 addressed to Shri S. V.Prasad, Secretary to C.M. has stated that the finalization of the contract would be done by General manager, Ramagundam Area-III, the settlement is not done till today. We, in our various correspondences dated 12.7.1999, 14.9.1999, 10.11.1999, 18.11.1999, 6.12.1999, 5.1.2000, 3.2.2000, 9.2.2000, 14.2.2000,19.2.2000, 6.4.2000 and 22.5.2000 have raised various issues inter alia the issues referred above, no final settlement has been done by the General Manager, Ramagundam Area-Ill. The Singareni Collieries instead of settling our disputes have issued the letter of termination on 11.7.2000. Even though the termination was 11.7.2000, our amounts amounting to more than Rs.1.68 corers have been withheld by the Singareni Collieries. In the said circumstances, we request your kind authority to refer the above stated issues to the General Manager, Ramagundam Area- Ill for complete settlement and for refunding of the entire amounts due to us in the interest of justice.

(3.) Mr.A.Sundershan Reddy, the learned Counsel appearing for the applicant, would submit that having regard to the fact that claims had been raised by reason of the aforementioned letter which had not been replied, an arbitration agreement would be presumed in terms of Section 7(4)(c) of the Act. Section 7(4)(c) reads thus: An exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.