H.K. Bagchi vs Mahanagar Telephone Nigam ...
1994 Latest Caselaw 645 Del

JUDGMENT

R.C. Lahoti, J.

(1) This suit originates on a petition under Section 20 of the Arbitration Act, 1940. According to the petitioner, in response to tender No.AGM(SP)MM-15/89 dated 23.8.1989 for trench, laying of cables and other connected jobs for Mahanagar Telephone Nigam Limited, Delhi (hereinafter called the Mtnl, for short), the petitioner submitted his tender. It was accepted by therespondent. The contract bearing the same number as the tender was executed between the parties on 1.12.89. The period of contract having expired, it was extended from time to time up to 28.2.91,30.4.91 and 31.5.91. Thereafter there was no extension up to 31.7.91. The petitioner executed the works under the work orders issued by the respondent up to 31.7.91. Consequent to the measurement made of the works executed up to 31.7.91 the petitioner submitted his Bills to the tune of Rs.18,85,535.00 but the respondents made a huge deduction of Rs.11,04,430.00 in violation of the terms of the contract. The petitioner sought for the following disputes to be referred to arbitration, in accordance with the arbitrationclause, (Clause No.33 of the Contract dated 1.12.89) :- "(I)Dispute pertaining to non-payment of balance amount of submitted bills for the work executed up to 31.7.1991 in Contract No. AGM(SP)-MM-15/89 dated 1.12.1989 total amounting to Rs. 11,04,430.00 the details of which more particularly mentioned in annexure 'A';(ii) Dispute pertaining to interest on the above said amount to Rs. 11,04,[email protected] 24% per annum from the date of submissions of respective bills to tillrealisation;(iii) Dispute pertaining to damages suffered due to wrongful with holding of above said bills. The petitioner claims Rs.5,00,000.00 (Rupees fivelakhs) as damages suffered for wrongful act and omission of therespondent.

(2) The arbitration clause i.e. Clause No. 33 provides for any question dispute or differences arising out of the contract or in connection therewith to be referred to an Arbitrator appointed by the Chief General Manager of MTNL.

(3) In the reply filed by the respondent the factum of Contract dated 1.12.89having been entered into between the parties is not disputed. However, it is stated that the period of the petitioner's contract was extended only up to 30.4.91 where after there was no extension. Fresh offers were invited for contract thereafter and the petitioner had submitted a fresh offer on 1.4.91 the rates quoted wherein were far below the rates quoted in the contract dated 1.12.89. Fresh contract could be executed on 2.8.91. Whatever work the petitioner did in between i.e. after 1.5.1991and up to 31.7.91, that was done on work orders placed but not under the contract dated 1.12.89. It is submitted that the contract dated 1.12.89 stood terminated w.e.f.30.4.91 and hence the disputes raised by the petitioner are not referable to arbitration by reference to the contract dated 1.12.89. It is further submitted that the rates quoted by the petitioner in his offer dated 1.4.91 were far below the rates quoted under the previous contract and the idea of the petitioner in submitting the disputed bills and in filing the present petition is to take advantage of the higher rates in the contract dated 1.12.1989 contrary to the offer dated 1.4.91. In any case,it is submitted that, the disputes do not arise out of the contract dated 1.12.89 and cannot be referred to arbitration under Clause 33 thereof.

(4) The petitioner has come out with a replication. It is pointed out by him that all the work orders placed by the respondents and annexed with the replication as Annexures 1 to 53 were referable to the contract dated 1.12.89. The new contract was executed on 2.8.91. It is filed as Annexure VI. The petitioner submits that the work orders having been placed by reference to the contract dated 1.12.89 he was entitled to claim bills at the rates mentioned in the contract dated 1.12.89. the petitioner's claim could not be considered under the offer dated 1.4.91 which came into existence only on 2.8.91 on the contract having been entered into between theparties.

(5) A perusal of the contract dated 2.8.91 (Annexure Vi with replication)demonstrates that this contract was for a period of one year commencing with2.8.91. Though the contract records to have come into existence in response to the petitioners tender dated 1.4.91, it does not state to have become effective w.e.f.1.4.91.

(6) The pleadings show that for the period 1.5.91 to 2.8.91 there was no contract between the parties, still work orders were placed by the respondents and the works were executed by the petitioner. The source of dispute is the submission of, offer dated 1,4.91 by the petitioner. The petitioner might have been under an apprehension that so long as a fresh contract pursuant to the offer dated 1.4.91 wasn to executed between the parties, the rates quoted in the offer dated 1.4.91 would not bind the petitioner and he would have the advantage of the rates referable to the contract dated 1.12.89. He submitted his bills on that basis. The respondent applied the rates quoted in the offer dated 1.4.91 and reduced the amount claimed in the bills put up by the petitioner.

(7) It is not necessary to express any opinion on the maintainability or otherwise of the stand taken by the petitioner or by the respondent on the rates which would be legally and justly applicable to the works done by the petitioner for the period between 1.5.91 to 1.8.91. For the purpose of this suit what is relevant is only to note the contract of the petitioner having expired w.e.f. 30/04/1991.The stand taken by the respondent in its reply is very specific that the contract had expired on 30.4.91 where after it was not extended. There is no material available on record to hold the period of contract having been extended after 30.4.91. Clause7 of the contract dated 1.12.89 provides the period of operation as one year. The Chief General Manager (Telephones) has been vested with discretion to extend the period of contract. There is no communication by the Cgm (Telephones) brought on record showing extension of contract for any period after 30.4.1991. That being the factual position, the petition seeking appointment of Arbitrator for adjudication of disputes arising for the period between 1.5.91 and 1.8.91 by reference to the arbitration clause contained in the Contract dated 1.12.89 which seized to existw.e.f. 30.4.91 is not maintainable.

(8) The petition is dismissed, though without any order as to costs in the facts and circumstances of the case.Petition dismissed.