Ram Syal And Sons vs Food Corporation Of India
1986 Latest Caselaw 295 Del

JUDGMENT

H.C. Goel, J.

(1) This is a petition under Section 20 of the Arbitration Act praying that the matters in dispute as stated in the petition be referred to arbitration of the arbitrator to be appointed by the Managing Director of the Food Corporation of India, respondent, in accordance with the terms of the arbitration agreement as arrived at between the parties. Mr. Narsimhan, learned counsel for the respondent, submitted that as per Clause 10 of the terms and conditions governing the agreement the contractor is not entitled to any compensation or damages on account of any delay in supply or non-supply thereof of all or any such material or store. It Is submitted that in view of this term of the agreement the claim of the petitioner for damages on account of non supply or short supply of cement by the respondent to the petitioner for the execution of the work is not liable to be referred to arbitration. I do not agree with this submission. The portion of Clause 10 of the terms and conditions of the contract as relied on by Mr. Narsimhan is an integral part of the terms and conditions of the agreement as entered into between the parties. The arbitration clause No. 25 of the agreement is a very wide and comprehensive clause. As per ibis clause any question, (claim), right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings etc or the execution or failure to execute the work whether arising during the progress of the work or after the work or after the completion or amendment thereof has to be referred to arbitration. Thus the question of the interpretation of the terms of the contract is also a question which is very much within the jurisdiction of the arbitrator. The arbitrator is competent to interpret and to see the effect of the portion of clause 10 as relied on by Mr. Narsimhan. The question as to whether in view of that clause the petitioner-contractor is entitled to claim any compensation or damages on account of the delay in supply of or on account of non-supply of the cement or not is accordingly for the arbitrator to decide in the reference and it is not for this court to interpret the contract including the said term, thereof. The only proper course for the Court to do at this stage is to refer the matters in dispute as provided by the petitioner in the petition to the arbitration of the arbitrator to be appointed by the Managing Director of the respondent- corporation. In support of his above submission Mr. Narsimhan referred to a decision of the Division Bench of the Calcutta High Court in the case of Hindustan Milk Food Manufacturers Ltd. v. G. Atherton & Co. a short note of which is reported in . This judgment is of no help to the case of the respondent. In that case the plaintiff was appointed the sole selling agent of the defendant for a number of years. The sole selling agreement was, however, terminated and a new agreement was entered into between the parties. The plaintiff sought reference of certain disputes that had arisen between the parties under the new agreement. He, however, also claimed reference of the disputes relating to the sole selling agency. That was, however, not referred to arbitration. It was held that the dispute relating to the sole selling agency was not a dispute about the breach of any of the terms of the agreement that was got filed by the court and the disputes that had arisen under the new contract were only directed to be referred to arbitration. Such is not the situation in the case before us. It is also stated here that there is no clause in the agreement as arrived at between the parties specifically excluding the jurisdiction of the arbitrator from entertaining and deciding any claim of the contractor for compensation or damages on account of any delay in the supply of any material or on account of non-supply of the material.

(2) Mr. Narsimhan raised another objection, namely, that the disputes as stated by the petitioner in para No. 6 of the petition are not specific disputes and for that reason they do not deserve to be referred to arbitration. It was submitted by Mr. Narsimhan that the different claims as stated in para No. 6 of the petition overlap each Other and they lack in details. The question as to whether some of the claims overlap and, if so, to what extent, is a question to be considered and decided by the arbitrator and the court cannot decline to refer the disputes as raised by the petitioner in the petition for reference to arbitration, on that ground. Similarly, the fact that the petitioner has not given full details of the claims is also in my opinion, no ground for refusing reference of the disputes to arbitration. It is certainly better and more appropriate if a petitioner in a petition under section 20 of the Arbitration Act gives fairly sufficient details of the claims arising out of the disputes that have arisen between the parties. However, as the parties have to file their detailed claims before the arbitrator, the mere fact that the petitioner has not furnished the details of the claims in the petition under section 20, to my mind, is no ground on which the court can legitimately decline to refer the disputes as stated in the petition to arbitration. I was taken through the various claims as stated in para No. 6 of the petition. These are specific and distinct claims and are intelligible enough to know as to what these claims are. It may be stated that so far as Claim No. 9 is concerned i.e. claim of Rs. 5,000.00 for costs of the arbitration proceedings, Mr. Sehgal, learned counsel for the petitioner, stated that as the parties to the reference can always request the arbitrator to award costs of arbitration proceedings, this claim need not be referred to arbitration specifically by this court As regards Claim No. 8 of interest at 18% p.a. from the date of suit and pendente lite period Mr. Narsimhan submitted that the petitioner is not entitled to claim interest on the amounts as claimed by the petitioner as no notice has been served claiming interest under the Interest Act and, therefore, this claim should not be referred to arbitration. I do not agree with this submission. The question as to whether the petitioner is at all entitled to charge interest on any of the amounts and if so, at what rate and for which periods is a matter to be decided by the arbitrator and it has not to be gone into by the court at this stage and that is no ground to decline to refer this part of the claim by the petitioner as well to arbitration.

(3) The petition is accordingly allowed. The matters in dispute as stated in para No.6 of the petition excepting Claim No. 9 be referred to arbitration of the arbitrator to be appointed by the Managing Director of the Food Corporation of India-respondent within two months from today. It shall be open to the Food Corporation of India, respondent, to file its counter claim, if any, before the arbitrator.