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Oil And Natural Gas Corporation Ltd v/s M/S.P.R. Catering Co.Jorhat

    M.A. (F) 119 of U995

    Decided On, 30 January 1996

    At, High Court of Assam


    For the Appearing Parties: D.K. Talukdar, B.J. Talukdar, D. Das, A.C. Das, K. Sharma, Advocates.

Judgment Text


(1.) This appeal is directed against the JUDGMENT and ORDER dated 15.5.95 passed by the Assistant District Judge, Jorhat in Title (Arbitration) Suit No. 86 of 1993 allowing the petition filed by the respondent under Section 8 read with Section 20 of the Arbitration Act and directing the parties to go for an arbitration and to suggest the name of an Arbitrator. Appellants Oil and Natural Gas Corporation Ltd. and others preferred this appeal against this order.

(2.) Facts for the purpose of disposal of this appeal are as follows :- The appellant Corporation through appellant No.6 invited quotations for catering and house keeping services to the officers of the appellant No.1. Pursuant to that respondent No.1 quoted its rate for rendering the services. The rate offered by respondent No.l was accepted by the appellant corporation and respondent No.l started rendering its services from 1.10.91. Meanwhile, on 21.9.91 a formal deed of agreement was signed by and between the 1st respondent and the 6th appellant. The agreement provides an arbitration clause in case of any dispute. The arbitration clause of the said agreement is extracted below : "6-0 ARBITRATION : Except as otherwise provided in the agreement, all questions and disputes relating to this agreement and as to the quality of the workmanship or of the items supplied or as to any other question claim, right or thing whatsoever in any way relating to this agreement or otherwise concerning the execution or failure to execute the same during the period of this agreement or during the extended period or after completion/termination/abundonment thereof, shall be referred to the sole arbitration of the person appointed by the Commission at the time of the dispute. There will be no objection to any such appointment that the arbitrator so appointed is a Commission's employee, that he had to deal with the matter to which the contract relates and that in the course of his duties as Commission's employee he had expressed views on all or any of the matters in disputes of difference. The Arbitrator to whom the matter is originally referred to being transferred or vacating his office or being unable to act for any reason, the Commission shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such persons shall be entitled to proceed with reference from the stage at which it was left by his predecessor. Subject as aforesaid, the provisions of the Indian Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force, shall apply to the arbitration proceeding under this clause. The arbitration proceedings shall be held at Jorhm." After rendering the services as per the agreement, respondents submitted bills. However, the bills were not paid. Several reminders were sent demanding payment. In spite of that the bills remained unpaid. Ulti- mately by a letter dated 15.9.93, the respondents demanded payment and also informed that in the event of failure the dispute should be referred to an arbitration proceedings in terms of the arbitration agreement. Even then the appellants remained silent. Situated thus, the respondents filed an application under Section 8 read with Section 20 of the Arbitration Act for orders to refer the dispute to an arbitrator. Objections were invited, and, thereafter, the learned Assistant District Judge by order dated 15.5.95 directed the parties to go for arbitration proceeding and also to suggest the name of arbitrator. Being aggrieved and dissatisfied with the JUDGMENT and ORDER passed by the Assistant District Judge, Jorhat dated 15.5.95 in Title (Arbitration) Suit No. 86 of 1993 the appellants have preferred the present appeal.

(3.) We have heard both sides.

(4.) Mr. D.K. Talukdar, learned Standing Counsel appearing on behalf of the appellant No.1 have challenged the aforesaid judgment and order on two grounds. First, the learned Assistant District Judge committed manifest error of law by passing the impugned JUDGMENT and ORDER inasmuch as there was no proper notice as required under Section 8 of the Arbitration Act and without such notice the Court ought not to have referred the dispute to the Arbitration. Secondly, learned Court below while deciding Issue No.1 decided the case on merit which may influence toe Corporation at the time of arbitration proceeding. According to Mr Talukdar, except few letters demanding payment no other notice was ever issued to the Corporation by the respondent No.l and, therefore, the learned Assistant District Judge was wrong in referring the matter. Further contention of Mr. Talukdar is that it is the service of notice as contemplated under Section 8 of the Arbitration Act which gives jurisdiction to a Court to refer the matter to arbitrator. That being the position, passing of the impugned JUDGMENT and ORDER are illegal and without jurisdiction. Mr Talukdar has drawn our attention to the following portion of the judgment:-

"In the above circumstances, the point No.l for determination is decided affirmatively in favour of the plaintiffs; M/s P.R. Catering Co. etc."

According to Mr Talukdar, this is a decision on merit.

(5.) Mr. D. Das, learned counsel appealing on behalf of the respondents, on the other hand, has supported the impugned judgment. According to him, notice as contemplated under Section 8 of the Arbitration Act was issued and on the basis of this the learned Assistant District Judge rightly referred the matter. Mr. Das has further submited that inspite of service of notice the Corporation - appellant No.1 or its officers remained silent. Therefore, the learned Assistant District Judge rightly passed the impugned judgment. Regarding the other contention of Mr. Talukdar, Mr. Das has very fairly submitted before this Court that it is the Arbitrator who will decide the entire matter on merit and, therefore, there is nothing wrong in it.

(6.) On the rival contentions of the parties it is to be seen whether the impugned judgment can sustain in law.

(7.) From record It appears that after rendering services respondent No.1, as per contract, submitted bills. However, bills were not paid. Several reminders were issued, but the Corporation remained silent. Further submis- sion of Mr. Das is that mon-payment of bills itself will indicate that there is a dispute. Letter dated 15.9.93 is very clear. By the said letter addressed to one of the officers of appellant No.l, respondent No.l brought several reminders to the notice of the appellants and also informed the appellants about the difficulties faced by them for non-payment of the bills. In the said letter a notice was given to the appellants to refer the matter to arbitration in terms of clause 6-0 of the agreement. We quote the relevant portion of the letter :-

"Inspite of the aforesaid letters you have (sic) made payment in respect of the said work to M/s Paradise Hotel and Restaurant, although they liave not done the said work. Therefore a dispute has arisen in respect of the payment of the aforesaid bills. Notice is hereby given and sent to you to refer the aforesaid matter for arbitration in terms of clause 6.0 of the Arbitration agreement within a period of 15 days from the date of receipt of the said notice, failing which we will be compelled to approach the Court of Law for equitable relief."

(8.) From the record we also find that several letters were written to the appellant No.l, but there was no reply. The appellants remained silent even after receipt of the aforesaid letter dated 15.9.93. The letter dated 15.9.93 clearly shows that respondents had sent that letter by way of notice as contemplated under Section 8 of the Arbitration Act.

(9.) In view of the above, we are of the opinion that notice under Section 8 of the Arbitration Act was duly issued and, therefore, we find

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no merit in the submission of Mr. Talukdar that there was no notice as contemplated under Section 8 of the Arbitration Act. Regarding the other submission of Mr. Talukdar that the learned Asstt. District Judge while deciding issue No.1, decided the matter on merit, we find some force in it. The entire matter is required to be decided in arbitration proceeding. Therefore, the Assistant District Judge had no reason to decide on merit. It is the Arbitrator who will decide the matter on his own after looking in-to the facts and circumstances and the materials available on record. (10.) For the aforesaid reasons we find no merit in the appeal. The appeal is dismissed with the above observations. the Arbitrator shall dispose of the arbitration proceedings as early as possible. The interim order dated 5.9.95 passed in Misc. Case No. 249/95 (in this appeal) shall stand vacated.