AVADH BEHARI ROHATGI

( 1 ) THE petitioner has made an application under sec. 20 of the Arbitration Act for reference of the disputes between the parties to arbitration. With this petition he has made another application under sec. 41 read with Schedule 2 of the Indian Arbitration Act and O. 39 rules I and 2 of the Code of Civil Procedure. This order will govern them both.

( 2 ) THE salient facts are simple. The petitioner. Pesticides India, wanted to purchase raw material known as Carbaryl Technical through the canalised agency of State Chemicals and Pharmaceuticals Corporation of India Ltd. , (Corporation), respondent No. 1. Pesticides made an application in the prescribed form. They entered into an agreement with the Corporation. They gave earnest money to them in the form of two bank guarantees Nos. 16 and 17 of 1979 issued on 14th April, 1979 by the State Bank of Bikaner and Jaipur (hereinafter called the, bank), each one being for an amount of Rs. 1,44,000.

( 3 ) IN their application dated 6th June, 1979 Pesticides stated that they require 40 metric tonnes of Carbaryl Technical which may be supplied to them. "the Corporation imports this raw material from foreign countries and

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