WEST BENGAL ESSENTIAL COMMODITIES SUPPLY CORPORATION LTD Vs. INTERNATIONAL TRADING CORPORATION OF INDIA

JUDGEMENT

(1.) THIS is application for interim stay of the operation of the judgment and order dated September 29, 1983 passed by a learned single Judge of this Court appointing a member of the Bar an arbitrator for the adjudication of all disputes as raised by the respondent in the application under Section 20 of the Arbitration Act as well as the counter claims as made by the appellant in the affidavit-in-opposition. The application has been filed by the appellant, the West Bengal Essential Commodities Supply Corporation Ltd., a government undertaking in the connected appeal preferred against the above judgment and order of the learned Judge passed under Section 20 of the Arbitration Act.

(2.) ON April 7, 1981 the respondent, M/s. International Trading Corporation of India, a proprietorship firm entered into agreement with the appellant for the supply of crushed common salt and superfine salt for the year 1981-82. The appellant was described in the said agreement as 'purchaser' and the 'respondent as "seller". Clause 10 of the agreement which is an arbitration clause runs as follows:--

(3.) IT was inter alia alleged by the respondent in the said application under Section 20 of the Arbitration Act that pursuant to the order of the appellant, the respondent had been supplying crushed common salt. But, suddenly, the appellant by its telegram dated February 22, 1982 instructed the respondent to stop despatch of crushed common salt until further order. Thereafter, in spite of repeated requests made by the respondent, the appellant did not allow the respondent to supply the balance quantity of salt and, ultimately, the appellant by its letter dated September 16, 1982 cancelled the contract unilaterally and thereby committed breach thereof. The respondent, by an Advocate's letter dated November 10, 1982, called upon the appellant to make payment of the sum of Rs. 7,71,212.50 alleged to be the amount of loss suffered by it together with interest thereon at the rate of 18% per annum and also demanded from the appellant the refund of security deposit being the sum of Rs. 25,000/-.