Jammu & Kashmir High Court - Srinagar Bench

The J&K Dairy Producers vs Union Of India & Ors on 2 March, 2021

                               HIGH COURT OF JAMMU AND KASHMIR
                                         AT SRINAGAR

                                                                            OWP No.1503/2014 c/w
                                                                             CPOWP No.296/2017
                                                                              CCP(S) No.28/2020


                                                             Reserved On: 25th of February, 2021
                                                             Pronounced On: 2nd of March, 2021


           The J&K Dairy Producers, Processors & Marketing Cooperative Union Ltd.

                                                                                      ..... Petitioner(s)
                                                  Through: -
                                      Mr A. H. Naik, Senior Advocate with
                                          Mr Zia Ahmad, Advocate.

                                                         V/s
           Union of India & Ors.
                                                                                   ..... Respondent(s)

Through: -

Mr Tahir Majid Shamsi, ASGI.

CORAM:

Hon'ble Mr Justice Ali Mohammad Magrey, Judge.

(JUDGMENT) OWP No.1503/2014:

01. By medium of the instant petition, the petitioner is praying for

the grant of following relief(s):

"(I) Mandamus, thereby directing the respondents to provide the rate of revision to the petitioner from the year 2007 after every 6-months as per Govt. of India Policy till 3/2020 and from 01-04-2010 to give to the petitioner rate revision after every 3-months as per the new Govt. of India Policy;

(II) Mandamus, thereby commanding the respondents to adhere to terms and conditions and policy of the Govt. of India in its letter and spirit for providing rate revision as per Govt. Policy Decision and also release back log rate revision from the year 2007 with interest at the rate of 18%;

and

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OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

(III) Any other order/ direction which this Hon'ble Court may deem just and proper in the circumstances of the case though not prayed for be also passed in favour of the petitioner and against the respondents."

02. The crux of the petition of the petitioner is that the petitioner

claims to be a member of the Cooperative Union of J&K Dairy Producers,

Processors and Marketing, Jammu, registered under the Societies Act. It is

stated that the Ministry of Defense, as a matter of policy, and in the year 2005,

decided that they will procure milk for the army personnel from registered

Cooperative Societies with the object of ensuring better milk and milk

products to the army personnel, besides benefitting the farmers directly.

Accordingly, the petitioner Union, right from the year 2005, after having

emerged successful participant in the contract process, has been supplying

milk to various Military Farms in Jammu as well as in Kashmir through the

respondents from 1st of October, 2005 till date, but the only rate revision for

the period from 1st of October, 2005 to 30th of September, 2006 for Military

Farm, Nowshera and Military Farm, Udhampur was sanctioned on 20th of

February, 2007 by the respondents and rate revision for the period of April

2006 to 31st of March, 2007, with sanction of the Quarter Master General

(QMG) dated 4th of April, 2007, for Military Farm, Jammu; Military Farm,

Rajouri; Military Farm, Srinagar; and Military Farm, Baramulla was given. It

is pleaded that the rate revision, since April, 2007 till 1st of April, 2014, has

not been provided by the respondents, despite the fact that as per the terms

and conditions of the contract governing the parties, the respondents were

under obligation to provide adequate rate revision. It is further submitted that

on 10th of May, 2010, a new policy regarding milk supply has been issued,

TAHIR MANZOOR BHAT 2021.03.02 17:11 I attest to the accuracy and integrity of this document

OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

wherein revision of rates has been provided after three months, instead of six

months, as was provided under the earlier policy of the Government. In this

behalf, the petitioner Union, from time to time, have been requesting the

respondents that they shall redress their grievance by giving them adequate

rate revision to which they are entitled to. It is also contended that the

petitioner Union has been supplying milk to the Military Farms to their best

satisfaction and, till date, no complaint whatsoever has been made against the

said supply of milk. The petitioner, as stated, claims to have supplied milk

even for the period when there was no contract in existence as the last rate

contract for supply of milk had expired on 30th of September, 2010, whereafter

the petitioner's contract was extended for a further period of six months.

Thereafter, the petitioner, in the shape of Affidavit dated 12th of January, 2011,

claims to have requested the respondents that the conditions of STA (Short

Term Agreement), as laid down in letter of Defense Ministry dated 10th of

July, 2010, be complied with, including revision of rate after every six months.

The petitioner has proceeded to contend that it has been continuously

requesting the respondents, both verbally and through written representations,

to revise the rates, but the grievance of the petitioner has not been redressed

compelling the petitioner to approach this Court through the medium of the

instant petition.

03. Interestingly, two proceedings are presently on record from the

respondents; one unsigned and purported to have been filed in the year 2015

by the then Assistant Solicitor General of India (ASGI), which is disputed to

be the valid and vetted one by the present Assistant Solicitor General of India TAHIR MANZOOR BHAT 2021.03.02 17:11 I attest to the accuracy and integrity of this document

OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

(ASGI); and the second one filed by Mr Tahir Majid Shamsi, the present

Assistant Solicitor General of India (ASGI), in the shape of Counter Affidavit

dated 24th of February, 2021, duly signed and vetted by the respondents. With

regard to the first reply purported to have been filed in the year 2015, Mr

Shamsi submitted that same is neither attested nor vetted by the respondents,

as such, the petitioner cannot rely on an unauthenticated document which has

not been endorsed or authenticated by the respondents. The learned Assistant

Solicitor General of India pleads that the petitioner cannot force the

respondents to adopt a reply which has not been finalized and attested as final

reply. May that be as it is, since the first reply placed on record by Mr Naik,

the learned Senior Counsel, is unsigned, coupled with the fact that Mr Shamsi

has denied its authenticity, it is thought just and proper to rely on the Counter

Affidavit filed by the respondents.

04. In the Counter Affidavit so filed by the respondents, it has been

contended that the subject matter involves disputed questions of rates and, as

such, cannot be adjudicated upon in Writ proceedings. It is submitted that the

rates claimed by the petitioner were never agreed or sanctioned and, as a

matter of fact, the petitioner is bound by the terms and conditions of the

contract mutually agreed between the parties. It is contended that neither the

terms and conditions of the subject contract nor the special conditions annexed

therewith contain any clause or averment which, expressly or impliedly,

suggests or binds the respondents to revise the rates agreed upon in the

contract and, therefore, the petitioner Union is not entitled to claim payment

at revised Civil Consumer Price (CCP) rates as a matter of right. It is also TAHIR MANZOOR BHAT 2021.03.02 17:11 I attest to the accuracy and integrity of this document

OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

pleaded by the respondents that in any case, if the petitioner Union had any

grievance in relation to the contractual liability qua it not being satisfied with

regard to the payment of rates, it had the option to refer the matter to

Conciliation and Arbitration proceedings under the Arbitration and

Conciliation Act as stipulated and agreed upon by the parties at Paragraphs 21

to 26 of the contract. In the end, the respondents have prayed that the petition

of the petitioner, being devoid of any merit, deserves to be dismissed.

05. Heard the learned counsel for the parties, perused the pleadings

on record and considered the matter.

06. In terms of order dated 26th of November, 2014, this Court, while

issuing notice to the other side, directed the respondents to consider the release

of payment as per revised rates in favour of the petitioner subject to furnishing

of undertaking by the petitioner to the effect that in case result of the Writ

petition ultimately goes against the petitioner, he shall reimburse the payment.

This order appears to have become the subject matter of two contempt

petitions, viz. CCP(S) No.28/2020 and CPOWP No.296/2017, which, too, are

clubbed herewith this petition.

07. Having heard the learned counsel for the parties, perused the

pleadings on record and considered the matter, I am of the considered view

that disputed questions of facts are involved herein this petition, which, in a

Writ proceeding, cannot be gone into, besides the very existence of an

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OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

'Arbitration Clause' in the contract governing the parties leaves no option to

the Court, but to point the parties in the direction of arbitration.

08. It is settled legal position that in exercise of Writ jurisdiction, this

Court cannot go into a fact-finding mission so as to ascertain the veracity of

the rival claims. A Writ petition is also not the proper proceeding for enforcing

contractual obligations; and, that if an alternative and equally efficacious

remedy, in the shape of having recourse to Arbitration provided in the terms

and conditions of the agreement governing the parties in the instant case, is

available to a litigant, he is required to pursue that remedy and not invoke the

jurisdiction of the High Court directly. At the same time, the Court is

conscious of the fact that even though there is no specific bar in approaching

this Court for the grant of relief of issuance of a 'Writ of Mandamus' for

compliance of the statutory obligation, yet it would be appropriate that the

parties binding by the 'Arbitration' clause provided in the agreement are,

firstly, insisted upon to seek the remedy of Arbitration which is a self-

contained exhaustive Code. The relief by invoking extraordinary jurisdiction

of this Court under Article 226 of the Constitution should not ordinarily and

frequently be allowed and resorted to. A litigant should ordinarily be insisted

upon to approach the Court of competent jurisdiction under the Arbitration

Act and, only in exceptional circumstances, permitted to approach this Court

under Article 226 of the Constitution of India where it is shown that the

respondent authorities have miserably failed to discharge the statutory

obligations arising out of an enactment. In the light of this settled position, the

TAHIR MANZOOR BHAT 2021.03.02 17:11 I attest to the accuracy and integrity of this document

OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

present petition cannot be treated as an exception to this general rule, moreso,

in view of the disputed claims having been raised therein.

09. Apart from the above perspective, it, needs, must be said that the

question as to whether the claim of the petitioner is valid or not is itself

arbitrable and the dispute which has been raised by the parties is within the

domain of the Arbitrator only. The only condition which is required to be

satisfied before issuance of directions for pointing the parties to arbitration

proceedings is that there must be a dispute or difference between the parties

and that the arbitration clause provided in the agreement must apply to the

disputes or differences. At this stage, the Court is not inclined to consider the

ultimate outcome of the disputes or differences and not to go into the merits

or demerits of the dispute. The essential conditions necessary to direct the

parties to arbitration are:

i. The parties must have entered into an arbitration agreement or there existed a statutory arbitration clause;

ii. such agreement must have been entered into or being existence with respect to its subject matters sought to be enforced or adjudicated; and

iii. The differences contemplated in the agreement should have arisen between the parties.

If all the aforesaid conditions are satisfied, the Court has to refer

the dispute to arbitration proceedings and the scope for enquiry, in that

circumstance, is very limited. All that the Court is required to see is whether

there is an arbitration agreement between the parties and whether the dispute

disclosed by the parties is covered by such arbitration agreement. If the answer

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OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

to both these questions is in the affirmative, as in the present case, the Court

has no option, but to direct the parties to have recourse to arbitration

proceedings as envisaged in the agreement in vogue between the parties.

10. Hon'ble the Supreme Court in case titled 'Wazir Chand v. Union

of India; AIR 1967 SC 990, has, while dealing with the subject of Arbitration,

held as under:

"..... In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation; that question falls within the province of the arbitrator to whom the dispute is referred."

Given the above legal and factual position obtaining in the

matter, it is crystal clear that there does exist a dispute between the parties in

the instant case which clearly falls within the ambit of the arbitration

agreement governing the relationship of the parties, therefore, the same is

certainly arbitrable and is required to be agitated before the Arbitrator(s) only.

11. For all that has been said and done hereinabove, the instant

petition is disposed of with liberty to the petitioner to seek reference of

disputes, as raised herein this petition, to the Arbitrator, strictly in accordance

with the mandate of 'Arbitration Clause' stipulated in the agreement

governing the relationship of the parties. The time period, starting right from

the date of filing of the Writ petition till one month from today, shall be

excluded for purpose of limitation, if any.

TAHIR MANZOOR BHAT 2021.03.02 17:11 I attest to the accuracy and integrity of this document

OWP No.1503/2014 c/w CPOWP No.296/2017; CCP(S) No.28/2020

12. Writ petition disposed of as above, alongwith all the CMs

pending therewith.

CPOWP No.296/2017; CCP(S) No.28/2020: