Gupta Textile Mills vs Union Of India & Another
2000 Latest Caselaw 935 Del

ORDER

K.S. Gupta, J.

1. Petition under Sections 14, 17 and 29 of the Arbitration Act, 1940 being Suit No.2566-A/96, was filed by Gupta Textile Mills against Union of India alleging that the parties had certain disputes relating to A/T No. T2/T3/101/0092/23.5.90/063 dated 7th December 1990 and respondent No. 2 was appointed as arbitrator to resolve those disputes. Respondent No. 2 has made the award on 12th July, 1996. It was prayed that respondent No. 2 be directed to file the award alongwith entire record of the proceedings being arbitration case No. 9-B/95 in court and thereafter award be made the Rule of Court.

2. Sh. Shiv Khurana appearing for said Gupta Textile Mills made statement that the award had since been filed in Suit No. 1587-A/97 which was fixed for 28th October 1998. Subject to the Registry confirming if the award filed in the said case pertained to this petition, this petition was ordered to be attached with the file of Suit No.1587-A/97 by the concerned Joint Registrar by the order dated 28th May, 1998.

3. On award being filed in said Suit No.1587-A/97, notices were directed to be issued to both the parties in regard to filing of award dated 12th July, 1996 in Court. Pursuant to that notice, Union of India filed I.A. 1096/98 under section 20 read with section 151 CPC alleging that the contract evidenced by AT No.T2/T3/101/0092/23.5.90/COAD/0633 dated 7th December, 1990 was entered at Bombay where the tender was submitted and accepted. Contract was also performed at Bombay by making part supplies of contracted stores by Gupta Textile Mills. Entire arbitration proceedings were held at Bombay and the award too was made and published at Bombay. It is further alleged that under clause 20(3) of the conditions of contract governing the contract (DGSD-68 Revised) the courts of the place where tender was accepted, shall alone have the jurisdiction. It is claimed that the arbitrator had wrongly filed the award in this court. It was prayed that award be returned to the arbitrator for being filed in a competent court at Bombay.

4. Gupta Textile Mills contested the said application by filing reply. It is, inter alia, alleged that advance acceptance of tender was issued from New Delhi on 15th October, 1990 and, therefore, this Court has the territorial jurisdiction to try the petition.

5. I have heard Sh.Dalip Singh for Union of India and Sh. Shiv Khorana for Gupta Textile Mills and have also been taken through the record.

6. Short point which arises for determination is whether advance acceptance of tender conveyed through the telegram dated 15th October, 1990 by Union of India would confer jurisdiction on courts at Delhi to deal with these petitions ?

7. It is not in dispute that in the matter of determination of jurisdiction of courts, clause 20(3) of the General Conditions of Contract DGS&D-68 (Revised) is applicable. This clause reads as under:-

"20(1)

(3) The courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract."

8. In support of their respective cases both the parties have led evidence on affidavits. In Para 2 of the affidavit of P.C. Gupta, one of the partners of Gupta Textile Mills. It is averred that the firm made an offer to Union of India on receipt of an enquiry No.T-3/038/G/0092, opened on 14th August, 1990, for supply of 18,000 numbers of Nets Mosquito Universal Khaki, modified pattern at Rs.178/- per number and the validity of offer was for 90 days which was to expire on 14th November, 1990. On receipt of said offer O.P. Sharma, Section Officer for and on behalf of President of India, from the office of DGS&D, New Delhi, issued a telegram on 15th October, 1990 to the firm intimating the advance acceptance of contract. In para 3 it is further averred that by virtue of this advance acceptance a concluded contract had come into existence between the parties. Para 4 of the affidavit further notices that in the formal acceptance of tender purported to be dated 7th December, 1990 issued by Union of India, it is stated that the same was issued in continuance of the advance acceptance conveyed through the said telegram. Alongwith the affidavit of A.V.Muralidharan working as Assistant Director in the office of Director of upplies (Textiles) New C.G.O. Building, New Marine Lines, Mumbai filed on behalf of Union of India, the photostat copies of the said telegram dated 15th October, 1990 (on page 28) and formal contract (on page 8 to 24) have been filed. Relevant portion of the telegram dated 15th October, 1990 is reproduced below:-

"REG. CELL/T-3/038/G/0092(.) YOUR OFFER AGAINST TENDER ENQUIRY NO.T-3/038/G/0092 OPENED ON 14.8.90 IS HEREBY ACCEPTED' FOR 80,000 NOS NETS MOSQUITO UNIVERSAL KHAKI MODIFIED PATTERN AT THE RATE OF RUPEES ONE HUNDRED AND SEVENTY EIGHT ONLY PER NUMBER (.) CST EXTRA (.) 5% S.D. APPLICABLE F.O.R. GOHANA (.) DELIVERY AS OFFERED (.) PRICES FIRM AND FIXED (.) STORES CONFORMING TO TENDER ENQUIRY SPECIFICATIONS/DESCRIPTION (.) TERMS & CONDITIONS OF CONTRACT AS PER DGS&D-68 (REVISED) INCLUDING ARBITRATION CLAUSE 24 THEREOF & DGS&D-229 AS AMENDED UPTO DATE (.) CONTRACT CONCLUDED BY THIS ADVANCE ACCEPTANCE (.) FORMAL CONTRACT WILL FOLLOW FROM DGS&D (TEX) BOMBAY (.) ACKNOWLEDGE."

Photostat copy of formal contract towards the beginning notices that the same was issued in continuance of advance acceptance as contained in DGS&D, New Delhi telegram No.REG.CELL/T3/038/G/0092 dated 15th October, 1990.

9. Under the heading "Definitions and Interpretation" in DGS&D-68 (Re-vised) in clause 1(a) `Acceptance of Tender'has been defined thus:-

"'Acceptance of Tender' means the letter or memorandum communicating to the contractor the acceptance of his tender and includes an advance acceptance of his tender."

10. Taking note of this definition as also the contents of telegram dated 15th October, 1990 and the contract referred to above, there cannot be any manner of doubt that by issue of the said telegram a concluded contract for supply of 80,000 numbers of nets mosquito had come into existence between the parties at New Delhi. Formal execution of contract at Bombay thereafter was not the factor on which hinged the coming into force of a concluded contract. This Court thus has the territorial jurisdiction to try these petitions within the meaning of said clause 20(3) of the Conditions of Contract DGS&D-68 (Revised). Aforesaid objections taken on behalf of Union of India, therefore, deserve to be repelled being without merit. Unreported decision in Suit No. 2041/94 Gupta Textile Mills Vs. Union of India, decided on 13th August, 1997 by a learned Single Judge of this Court is distinguishable as the issue of advance acceptance of tender was not considered therein.

11. Since Union of India has not filed any objections against the award dated 12th July, 1996, same deserves to be made the rule of Court.

12. For the foregoing discussion, I.A.1096/98 is dismissed and the award dated 12th July 1996 is made the rule of court. Both the petitions also stand disposed of accordingly. No order as to costs.