HIM SPORTS Vs. STATE OF HIMACHAL PRADESH

JUDGEMENT

(1.) The parties entered into an agreement on 10.7.1975 whereby the Defendant, State of Himachal Pradesh, agreed to sell standing Willow and other species trees to the Plaintiff for the manufacture of sport goods and other allied products, subject to availability. The agreement starting from 1.4.1975, was to remain in force and effective for a period of ten years and covered the supply of 400 cubic metres and available volume of other broad leaf species annually for the purpose of manufacture of sport goods in the factory to be set up by the Plaintiff at Mehatpur in Districtr Una.

(2.) Since there were complaints that the Plaintiffs was defrauding the Defendant by selling the wood outside the State and that the Plaintiff had neither factory nor machinery for the manufacture of sport goods, an enquiry was conducted into the matter by the Deputy Commissioner, Una. On the basis of the report of the Deputy Commissioner a show cause notice was issued to the Plaintiff and thereafter the agreement dated 10.7.1975 was rescinded by the Defendant. A penalty of Rs. 1, 14, 210 was also imposed on the Plaintiff.

(3.) Disputing the allegations made against him, the rescission of the agreement and the imposition of penalty, the Plaintiff filed a suit in the Court of Senior Sub-Judge, Una, for restraining the Defendant from cancelling the agreement and imposing penalty on the Plaintiff. Such suit was, however, dismissed for want of notice under Section 80, Code of Civil Procedure. After serving the requisite notice, another suit was filed by the Plaintiff. The Defendant pleaded arbitration clause. Consequently, the suit was stayed under Section 34, Arbitration Act, 1940.