BHARAT REFRACTORIES LTD Vs. R K DAS

JUDGEMENT

(1.) This appeal is directed against the order dated 10-7-1989, passed by the learned Subordinate Judge I, Monghyr, in Money Suit No. 53 of 1987, by which he has rejected the petition filed on behalf of the appellants for stay of the suit under Section 34 of the Arbitration Act.

(2.) The brief facts of the case are that the plaintiff-respondent had entered into an agreement with the appellants for supply of some materials. Subsequently, because of delay in payment of the price of the materials plaintiff-respondent No. 1 filed Money Suit No. 53 of 1987 in the court of learned Subordinate Judge, Monghyr, praying for a decree of Rs. 76,666/-with interest thereon. The suit was filed on 2-9-1987 and after the notices were issued, the defendants (present appellants) appeared and filed a petition on 17-11-1987, purported to be a petition under Section 34 of the Arbitration Act, for staying of the suit. It was contended on behalf of the defendants-appellants that in view of the terms of clause 18 of the General Conditions of Contract contain arbitration clause and in view of the fact that the defendants-appellants were willing to refer the matter to the Arbitrator, the said suit could not proceed. The plaintiff-respondent No.1 also filed a rejoinder to the petition stating that the petition was not maintainable as the defendants-appellants while inviting tender for supply of Quartzite did not enclose any copy of the General Conditions of Contract in their letter dated 15-6-1985 and it was nowhere stated that the general conditions of contract was condition precedent for the acceptance of the tender. It was also further stated that even after the purchase orders were given to the plaintiff-respondent No.l, the general terms and conditions of the Company was never supplied to the plaintiff and since the general conditions of contract were model terms subject to modification or variation with the consent of the parties it was not binding upon the plaintiff-respondent. The learned lower court after considering the facts stated in the petition and in the rejoinder and after hearing both the parties came to this conclusion that the conditions of clause 18 of the General Conditions of Contract were not binding against the plaintiff and therefore, the petition of the appellants was dismissed. Against this order the present appeal has been filed.

(3.) It has been contended on behalf of the appellants that the appellants had invited sealed quotation for supply of 1200 metric tonnes of quartzite required for the appellants' factory by a notice issued on 15-6-1985. It was also stated in the notice that the terms and conditions under which the appellants were ready to enter into contract were mentioned in the general conditions to be supplied by the office on demand. It is also further stated that Clause 11 of the tender notice specified that the supplier will be deemed to have read, understood and accepted the General Conditions prescribed by the purchasers-appellants, which could be seen at the office of the General Manager (Commercial) on any working day. Thereafter, on 28-6-1985 the plaintiff-respondent submitted their quotation in pursuance to tender notice dated 15-6-1985. Then some negotiations took place and on 18-9-1985 the plaintiff submitted a fresh quotation incorporating several terms, including an arbitration clause as Clause 13. This clause says that no terms, which is not specifically agreed to, shall be binding on the parties. However, the negotiation between the parties continued and the deal was finalised between the parties after discussion held on 5-12-1985 and by a letter of that date the plaintiff confirmed the terms. Thereafter, the appellant issued a purchase order for 250 M.T. of quartzite. However, the said purchase order was subject to the terms and conditions printed overleaf. The first condition of the purchase order was as follows :- 'This order will be governed by our terms and conditions of contract which can be had from our office." It is further stated that the appellant is a Government of India Enterprise and the contracts made by it are on standardised form containing general conditions of contract. So an offer made by the appellant has to be governed by the general conditions of contract in the standard form. It is further stated that in pursuance to the purchase order the plaintiff-respondent started supplying the material and thus the contract was concluded. However, when the supplies commenced it was detected that instead of 250 M.T, the contractor had supplied only 176.26 M.T of material and shortfall in supply gave rise to the dispute between the parties regarding payment, and, accordingly, the suit was filed.