BHILAI WIRES LTD Vs. BHARAT SANCHAR NIGAM LTD

JUDGEMENT

(1.) FACTS : On perusal of the pleadings as well as documents disclosed in the proceedings before the arbitrator as well as before the learned Single Judge and included in paper book it appears that the parties agreed to have a business transaction under which the appellant would supply to the respondent wire required for telecommunication purpose. The facts reveal that the respondent issued a purchase order on December 5 1985 as would appear from page 55 onwards of the paper book. The appellant contended before us that the agreement dated December 5 1985 was the parent agreement under which different purchase orders were issued being one on December 5 1985 followed by three others dated September 1 1986 May 27 1987 and March 7 1988 respectively. The respondent however contended that all those four purchase orders were distinct and would constitute a separate agreement and had no connection with the first agreement dated December 5 1985. Under the contract the main raw material being the steel was to be arranged by the respondent from various steel plants belonging to the Central Government. Facts remain that such arrangement could not be done and there had been some difficulty on the part of the parties to work on such terms being manufacture of the wires out of the steel to be supplied by SAIL. It was the case of the appellant that they had to purchase steel from open market resulting in substantial involvement of financial resource which could not be anticipated. According to the appellant it was an additional burden upon them. Supplies were made by the appellant from time to time. Payments were made by the respondent from time to time. Last of such payment was made on August 13 1991. The respondent contended it was related to the third agreement/purchase order dated May 27 1987 whereas the appellant contended that there was only one parent agreement under which the payments were made from time to time last of which was received by them on August 13 1991.

(2.) CONTENTION OF THE APPELLANT : Mr. Jayantra Mitra learned senior counsel appearing for the appellant argued on the three principles issued referred to above. According to Mr. Mitra the Act of 1940 stood repealed by the ordinance dated January 26 1996 which was substituted by a regular statute being the said Act of 1996 that came into force with effect from August 22 1996. The appellant demanded arbitration in 1994. The respondent refused such prayer. Having no other alternative the appellant approached the writ Court. The writ Court vide order dated December 12 1995 directed resolution of dispute through arbitration. Till that date the said Act of 1940 was in force. The respondent approached the Division Bench. The Division Bench vide judgment and order dated February 19 1997 set aside the order of the Single Bench holding that the said order was bad as it was passed in a wrong proceeding. The Division Bench granted liberty to the appellant to approach the arbitration Court being the proper forum. While doing so the Division Bench possibly overlooked the fact that the old law had since been repealed and the new law by that time came into effect. Hence the observation of the Division Bench should be construed as a liberty to approach the arbitration Court in accordance with law.

(3.) CONTENTION OF THE RESPONDENT : Opposing the appeal Mr. Debabrata Saha Roy learned counsel appearing for the respondent contended that the Division Bench categorically granted liberty to approach the Court under the old Act. Hence without any clarification being obtained from Division Bench the appellant could not have proceeded under the new Act. The order passed thereunder and the subsequent proceedings were thus vitiated by illegality. As and by way of an alternative submission Mr. Saha Roy contended that if Section 21 of the said Act of 1996 could be read along with Section 85(2) thereof it would appear that although the old law stood repealed the proceeding commenced under the old Act was permitted to continue to be governed by the old law and the new law would have no application. On the commencement Mr. Saha Roy contended that the day when the arbitration was demanded by the appellant the ball started rolling and that should be the relevant date for the purpose of commencement of the arbitration proceeding. Hence the new law would have no application.