JAMMU FOREST CO Vs. STATE OF J&K

JUDGEMENT

(1.) This is an application under section 20 of the Arbitration Act for filling an Arbitration agreement dated 28 -1 -1958 and for making an order of reference to the Arbitrator namely the Chief Conservator of Forests, Jammu and Kashmir. The brief facts that are relevant for the disposal of this application are that in pursuance of a tender notice in the year 1958 issued by the Conservator of Forests, Jammu Forest Circle, the petitioner tendered for felling of certain trees in Compartment Nos. 16 and 18 -A of the Ramban Division, Botate Range, offering Rs. 9,21,777/ -. This tender was accepted by the Government. There was a note No. III appended to the said tender notice, which is reproduced in the paragraph No. 3 of the petition. A formal agreement was drawn up between the State and the petitioner on 28 -1 -1958. The relevant clause which is contained in Note III of the tender notice states that the felling and logging would have to be done in the winter months and completed before March 1958. Long distance skyline cranes had to be installed by F. A. O. experts in these compartments. The experts did not instal the skyline cranes. The petitioner was informed by the D. F. O. Ramban on 31 -3 -1958 that Winkleman, the Swiss expert, could not instal the skyline crane and the petitioner should proceed with the conversion of the timber. This according to the petitioner resulted in grave hardship to him. He had to alter the whole arrangement of conversion and suffered huge losses and the net loss which he can recover from the State is Rs. 3,12,650. This was a consequence of the breach of the terms of the agreement by the State.

(2.) A notice of this application was given to the State. The learned Advocate General appeared for the State. He has put in brief objections to this petition of the petitioner. The objections are that the so -called breach has taken place in the year 1958 as the petitioner himself admits having been informed by the D. F. O. on 31 -3 -1958 that the skyline crane could not be installed. The application for seeking reference is time barred. That there is no referable dispute. That if the skyline crane had been set up, the State would have been entitled to an additional royalty. As the skyline crane was not installed, the State has lost the additional royalty. There is no clause in the agreement entitling the petitioner to damages The application of the petitioner is misconceived.

(3.) I have heard elaborate arguments of the learned counsel for the parties The present application consists of two parts, one is the reference of the dispute to the arbitration of the Chief Conservator of Forests in terms of Cl. 44 of the agreement. The second part that has been vehemently contended before me is if I make an order of reference and appoint the Chief Conservator of Forests as the arbitrator, whether I can and should stay the realization of the amount of royalty alleged to be recoverable by the State, Both these matters will be separately disposed or by me.