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1998 Supreme(Cal) 256

High Court Of Calcutta
S. B. SINHA, DIBYENDU BHUSAN DUTTA
ANIL BARAN SAHOO AND GURU PADA SAHU - Appellant
Versus
WEST BENGAL STATE ELECTRICITY BOARD - Respondent
F. M. A.  193  Of  1995
Decided On : 06/24/1998

Advocates Appeared:
ARUNAVA ROY, G.L.Ghosh, Jayanta Mitra, M.K.ROY, PARIMAL KUMAR DAS GUPTA

The main legal point established is that the arbitration agreement contained in the General Condition of Contract must be applicable to the specific contract in question to be enforceable.

Headnote:

Arbitration Act - Dispute over Contract for Unloading and Transportation of Coal - Court held that the General Condition of Contract with an arbitration clause was not applicable to the case and the arbitration agreement contained therein cannot be said to have any application in the instant case.

Fact of the Case:

Dispute arose between the parties relating to performance of a contract for unloading and transportation of coal. Appellants appointed their own arbitrator, but respondents did not appoint any arbitrator, leading to an ex parte award. The respondents filed an application to set aside the award, which was registered as a suit.

Finding of the Court:

The Trial Judge held that the General Condition of Contract with an arbitration clause was not applicable to the case, and the arbitration agreement contained therein cannot be said to have any application in the instant case.

Issues: Dispute over the applicability of the arbitration clause in the General Condition of Contract to the contract for unloading and transportation of coal.

Ratio Decidendi: The court found that the General Condition of Contract with the arbitration clause did not apply to the specific contract in question, and therefore, the arbitration agreement contained therein was not enforceable in the instant case.

Final Decision: The appeal was dismissed with observations urging the respondent Board to act fairly and reasonably and consider entering into an arbitration agreement to resolve the disputes raised by the appellants.

S. B. SINHA, J.

( 1 ) THIS appeal is directed against a judgment and order dated 30th March, 1993 passed by Shri A. N. N. Yusuf Ali, Assistant District Judge, 5th Court, Alipore, whereby and whereunder he dismissed an application filed by the appellant-respondents under section 17 (2) of the Arbitration Act. The fact that the parties had entered into a contract relating to unloading and transportation of coal is not in dispute. Dispute and difference arose between the parties relating to performance of the said contract. The claims of the appellants were entertained but no payment was made. Relying on or on the basis of a provision in the General Provisions of Conduct which contained an arbitration clause, the appellant appointed his own Arbitrator calling upon the respondent to appoint its own arbitrator. The respondents although asked for time to appoint their own Arbitrator, but ultimately they did not appoint any arbitrator whereafter the Arbitrator appointed by the appellants entered into the reference and passed the impugned award ex parte. After passing of the said Award, the aforementioned application was filed which was registered as a suit. The learned Trial Judge by reason of the impugned judgment held that as the General Condition of Contract was not applicable in the instant case as the same applies only to the civil contract, Arbitration agreement contained therein cannot be said to have any application in the instant case not can it be said that such an agreement was incorporated by reference.

( 2 ) MR. Mitra, learned senior counsel appearing on behalf of the appellant, very fairly submits that the judgment of the learned trial Judge is unassailable. The learned counsel however, urges that keeping in view the fact that at one point of time not only the officers of the West Bengal State Electricity Board but also its Chairman considered the claims of the appellant and found the same to be genuine, the respondents may now enter into an arbitration agreement and refer the claims of the appellant. In this connection, our attention has been drawn to a letter dated 19. 6. 87 as contained in annexure 'g' to the application for setting aside the Award filed by the respondents. In that letter it was stated-". . . We may pray that this ex parte award would not be enforced upon us and if possible with further notice to the now management this may be reopened and proceeded afresh. "

( 3 ) ALTHOUGH this court is not in a position to issue any direction upon the respondents, but we may observe that the respondent Board being a State within the meaning of Article 12 of the Constitution of India should not behave as ordinary litigant. It must act fairly and reasonably. We are sure that if the claims of the appellant have any basis, irrespective of the fact that the same is barred under the law of Limitation or not the respondent Board shall discharge its duties as a State and see that justice is done to the appellant. We hope that in the event the appellants brings this order to the notice of the Chairman, West Bengal Power Development Corporation, the said authority shall bestow his serious consideration and see to it that justice is done and if necessary, enter into an arbitration agreement and referring the disputes raised by the appellants to the Arbitrator (s ).

( 4 ) THIS appeal is dismissed with the aforementioned observations, but without any order as to costs.

( 5 ) LET a plain copy of this order duly countersigned by the Assistant Registrar (Court) be handed over to the learned counsel for the parties on usual undertaking. D. B. Dutta, J.-I agree. Appeal dismissed

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