HIRAKHAND CEMENT DISTRIBUTORS Vs. CALCUTTA METROPOLITAN DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) This revisional application is directed against the judgment and order of Shri R.K. Ghatak, the learned Judge, 12th Bench, City Civil Court passed in Misc. Case No. 175 of 1988. The petitioner in this revision was appointed the by opposite parties/respondents, Calcutta Metropolitan Development Authority as agent for handling and clearing of cement from Railway Side at Shalimar. An agreement containing terms and conditions of the agency was entered into in writing on 30.7.82. In clause 25 of that agreement it is provided that for settling the disputes arising during the progress of the work or after the completion or abandonment shall he referred to the sole arbitrator or the Director/Unit Head C.M.D.A. having no connection with the particular work. The award passed in such arbitration shall be final, conclusive and binding on all parties to that contract. In working out the contract certain amount of money due to the petitioner was deducted on account of shortage and damage of the cement for which the petitioner was in no way responsible and such deduction was made at the penal rate not at the usual rate as prevalent in such contract. The security deposit and the other payments for execution of the work were also withhold for adjustment against the said deduction. The petitioner demanded arbitration of the disputes for withholding payments by the opposite/respondents. The opposite parties/respondents neither paid the amount due to the petitioner nor referred the matter to arbitration terms of clause 25 of the agreement. They took up different pleas. The gist of the defence is that' the dispute was settled amicably between the parties at a joint meeting and they came to certain terms as regard assessment of the damage and they wanted to settle the question of damage at penal rate by placing the case before the Controlling Authority, known as D.C.M. The learned Judge, City Civil Court held that in view of the facts and circumstance of the case disclosed by affidavits and the contentions raised by the parties that there was no existence of bona fide dispute for reference to arbitrator and he dismissed the application of the petitioner in this revision who figured as plaintiff before the trying Judge under Sec. 8 of the Arbitration Act. Being aggrieved by such judgment and order, the petitioner has come up in revision before this court.

(2.) Upon hearing both sides we are of the view that the learned Judge, City Civil Court failed to exercise the jurisdiction vested in him in this case. It is admitted by both sides that indeed there is clause 25 in the agreement which provides arbitration of all disputes relating to the contract, namely, claim, rights, matter as to the execution or other ancillary matters relating to the contract or failure of execution of work, during the progress of the work or after the completion or abandonment of the work. The contentions of the party made out in the affidavit and counter-affidavit filed by them indicate that the petitioner agreed to certain terms after the joint meeting With the opposite parties/respondents and there was also a proposal for reference to the unsettled portion of the dispute, namely, damage at the penal rate or at the usual rate to the D.C.M. The learned Advocate appearing for the opposite/parties/respondents has urged that the dispute of the parties have been fully and finally settled according to the terms arrived at the joint meeting. The learned Advocate for the petitioner, on the other hand, has urged that the dispute whether there has or has not been settlement is a referable dispute to the arbitration in terms of Clause 25 of the agreement. He has placed his reliance on the decision of the Supreme Court Damodar Valley Vs. K.K. Karl, AIR 1974 Supreme Court 158 . This decision laid down that the question of unilateral repudiation of the rights and obligations under the contract or of a full and final settlement of the contract relate to the performance or discharge of the contract. It has added that far from putting an end to the arbitration clause, they fall within the purview of it. Whether the contract subsists or whether the contract has been repudiated or has been settled fully or finally are all subject matter of arbitration. The arbitrator has, indeed, jurisdiction to decide the question if the dispute between the parties are fully are finally settled. (See para 7 of the decision). In our view, the learned Judge was wrong in rejecting the application holding that there are no disputes for reference to the arbitrator. We, therefore, set aside the impugned order after allowing. This application and send back the matter for decision in the light of the observations made in our judgment and order.

(3.) We make no order as to costs. Petition allowed