BHARAT BARREL Vs. INDIAN OIL CORPORATION

JUDGEMENT

(1.) UNDER a written work order No. MM/36/133/77 dated 30. 9. 77 the petitioner agreed to manufacture drums for the respondent No. 1 on terms and conditions contained in the said document. The said work order contained an arbitration clause as follows: cl. 9 :

(2.) DISPUTES and differences having arisen between the parties, the petitioner, by its letter dated 30. 1. 79, addressed, to the Managing Director of the corporation, requested him to refer the disputes mentioned therein. The Managing Director, by his letter dated 22. 3. 79 appointed the respondent No. 2 as the sole Arbitrator. The Arbitrator by his letter dated nil of April 1979 directed the parties to file the statement of claim and the counter statement within the time mentioned therein. Pursuant to the said direction the petitioner filed its statement of claim on 18. 5. 79. The respondent No. 1 took several extensions for filing its counter statement. Ultimately by a letter dated 5. 6,79, addressed to the Managing Director, the respondent No. 1 alleged that they had a counter claim against the petitioner and sought his permission to press that claim in the reference. The letter did not disclose any particular of this alleged claim. The Managing Director was requested to advise the respondent No. 2 to consolidate the claims of both the parties and to adjudicate upon the same. The Managing Director, by his letter dated 5,6. 79 allowed the respondent No. 1 to press the alleged counter claim and advised the respondent No. 2 as follows :

(3.) THE counsel for the petitioner submitted that this alleged claim of the respondent No. 1 was never put forward nor any demand was ever made prior to the filing of this counter statement. Hence there was no occasion for the petitioner either to admit or to dispute this alleged claim which was for the first time, brought to light by way of counter claim. There was no dispute in existence when this counter claim was made and as such the arbitrator did not have the jurisdiction to entertain the same. He cited 53 C. W. N. 873 (Mathura Das Goverdhandas v. Khushiram Benarshilal) where the Division Bench of this High Court held: