UNION OF INDIA Vs. PROMODE KUMAR AGARWALLA

JUDGEMENT

(1.) THIS is an appeal against an order by which S. K. Datta J. refused to stay an action under section 34 of the Arbitration Act.

(2.) ON January 7, 1960, the appellant union of India, accepted a tender submitted by the respondent No. 1 for transporting, loading and unloading goods at or around Katihar. Under the contract, the respondent No. 1 was liable to make good any compensation, demurrage or other charges or expenses that might be incurred by the appellant on account of delays in loading or unloading of trucks and wagons unless the delay was for reasons beyond his control. The decision of the Officer-in-charge, Government of India Godowns, in that respect was to be final and binding on the contractor. Moreover, under the contract, the appellant had the right to reimburse itself from the security deposit for any damage or loss suffered or incurred by the appellant owing to the negligence or unworkmanlike performance of any of the services or breach of any of the terms of the contract on the part of the respondent no. 1. The contract contained an arbitration clause, the material portion of which provided as follows : -

(3.) IT is also pleaded that should it be held that the contract is not enforceable against the appellant the agreement was entered into between the respondent No. 1 and the respondent no. 2 and the respondent No. 1 executed the work at the request of the respondent no. 2. The respondent No. 1 is entitled to claim refund of the security deposit and the value of the bills from the respondent No. 2.