STATE OF TRIPURA Vs. SABITRI SALT SUPPLIERS

JUDGEMENT

(1.) THE above appeal and cross -appeal are against the judgment and order dated 21.01.2000 passed by learned District Judge, West Tripura, Agartala in Misc. (Arb.) No. 6 of 1999 whereby the award dated 28.12.1998 passed by the sole arbitrator in Arbitration Ref. No. 4/1998 has been affirmed.

(2.) IODISED salt being an essential commodity, the State Government collect the same from Jamnagar Zone, West Coast, Gujarat for sale at subsidized rate through fair price shops under Public Distribution System (for short PDS). On the requisition of the State Government, the Salt Commissioner allotted iodised salt for the year 1996, which was to be lifted from that zone. The State Government (appellants herein) invited tenders in two spells for six months each for lifting and carrying the allotted salt from Jamnagar to Central Stores at Agartala and the godowns at Dharmanagar within the State and the respondent herein was selected for the job, its offered rate being acceptable. For the period from January to June 1996 and for the period from July to December 1996, two agreements were signed. The first agreement was dated 26.02.1996 for carrying four B.G. rakes of salt, the rate being Rs. 145.41 per quintal, for Agartala Godowns and Rs. 116.51 per quintal for Dharmanagar Godown. The second agreement for the second spell from July to December 1996 was signed on 16.09.1996 for six B.G. rakes of iodised salt. Thus, as per the two agreements, the respondent was under obligation to lift and carry by railway and road ten B.G. rakes of salt. One of the salient features of the said agreements is that the respondent would itself buy the salt at Jamnagar against the quota allotted in favour of the State Government by the Salt Commissioner and supply the same to the respective godowns in the State bearing initially the entire cost and only after supply, it would raise bills for the quantity actually supplied at the accepted rate, which included both buying and transportation cost. It may be mentioned here that in the second tender the accepted rates were little higher, being Rs. 154.92 per quintal for Central Store at Agartala and Rs. 125.91 per quintal for godown at Dharmanagar. The respondent, however, booked at Jamnagar only seven B.G. rakes of salt out of ten. For the first spell, he booked 55,386 quintals in 73,710 bags, but received from the railway at Dharmanagar only 50,450.98 quintals in 67,290 bags. There was thus a shortfall of 4,815 quintals. During the second spell, the respondent booked 83,885 quintals in 1,12,417 bags where the railway delivered only 74,537.49 quintals in 1,00,608 bags. Thus, the shortfall in the second spell was 8,992.75 quintals. Again, during road transport from Dharmanagar Railway Station to respective godowns there was a further shortfall to the extent of 4.51% and 4.75% respectively. The State -appellant, in terms of the agreements between the parties under which the supplier is required to pay for the shortfall beyond 6%, directed that the supplier should pay Rs. 42,10,409 for the shortfall of 12,029.74 quintals of salt @ Rs. 350 per quintal, which was the prevailing rate of iodised salt in the open market. The supplier submitted bills at the accepted rate only for the actual quantity of salt supplied from which the appellants deducted Rs. 24,71,861 and asked the supplier to deposit Rs. 17,38,548 to make the total amount of Rs. 42,10,409 being the value of the total shortfall.

(3.) THE objections of the respondent against the deduction, as aforesaid, were rejected by the appellants prompting the supplier to seek arbitration. But the same having been turned down, the supplier, respondent herein, approached this court and by an order in Arbitration Proceeding No. 4 of 1998, the dispute was referred for arbitration by Chief Secretary or an officer nominated by him. Accordingly, Mr. Lalvohliana, the Secretary to the Government of Tripura (as he then was) was appointed as sole arbitrator.