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2013 Supreme(Gau) 8

IN THE HIGH COURT OF GAUHATI
B.D. Agarwal, J.
Assam Gas Company Ltd.
Vs.
Sankar Tea Company Pvt. Ltd. & Ors.
Arb. Appl. Nos. 20, 22 and 23 of 2012
Decided On: 04.01.2013

Advocates:
Advocate Appeared:
For Appellant/Petitioner/Plaintiff:Mr. S.N. Sarma, Sr. Advocate & Mr. A.N. Choudhury
For Respondents/Defendant:Mr. B.C. Das, Sr. Advocate, Mr. D.N. Bhattacharyya, Mr. S.S. Dey & Mr. S. Banik

Headnote:

Constitution of India, 1950 - Article 9 - Arbitration and Conciliation Act, 1996 - Sections 37, 9 and 21 - Agreements Renewal - Tea Companies - In this way contract agreements expired long back in year so far as two respondents are concerned and so far as Evergreen Tea Private Ltd is concerned though agreement is same expired due to some delay in commencement of agreement After expiry of period of contract appellant wrote to tea companies to renew their agreements - In proposal of renewal of agreements appellant proposed a new rate of transmission charges of gas and also stipulated that tea companies shall have to pay cost of gas as per price fixed by Ministry of Petroleum and Natural Gas - Not with standing dispute or difference which might have been referred to arbitration as mentioned in Clause all obligations under these agreement shall continue to be fulfil by both Company and Consume unless otherwise directed by Company in writing except as provided expressly in Agreement itself - Held, I have already mentioned earlier that appellants case is that neither is there any dispute arising out of any contract for referring same to arbitrator nor is there any scope of passing interim or final orders by court - It is difficult to comprehend mat just because Clause provides for a fresh agreement for supply of gas it can be construed that until a new agreement is executed previous agreement shall remain in force - If presumption can be drawn by court it would amount to rewriting terms of previous agreement where there was no such stipulation - Besides this Clause provides revision of price of gas at any time during subsistence of agreement - Even otherwise in Clause also it has been provided that transmission cost may be revised in new agreement - In this way I hold that though terms and conditions of expired agreement may have relevance in formulating new agreement but it does not mean that new agreement should be on same terms and conditions - Appeal allowed.

JUDGMENT

B.D. Agarwal, J.

1. Since a common question of law is involved in all these three arbitration appeals I propose to dispose of all these appeals by this common judgment. The appeals have been filed under Section 37 (1) (a) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Arbitration Act') against the judgments dated 22.8.2012, 31.82012, and 7.9.12 passed by the learned District Judge, Tinsukia, Assam putting the seal of the court on the interim orders passed in Misc. Arbitration Case Nos. 17 of 2010, 1 of 2011 and 2 of 2011. By these impugned judgments, the court has directed the appellant to maintain the 'status quo' of supply of gas to the factories of the respondents. The impugned orders have been passed by the learned District Judge on the basis of an applications filed by the respondents under Section 9 of the Arbitration Act

2. Heard Sri. S.N. Sarma, learned Sr. counsel for the appellant and Shri BC Das, learned Sr. Advocate and Sri SS Dey, learned counsel for the respondents. Also gone through the pleadings of both the parties; impugned orders and documents annexed with the pleadings.

3. The moot question that arises for consideration before this court is as to whether a prohibitory and protection order can be passed by the Court under Section 9 of the Arbitration Act after the expiry of the period of contract

4. Shorn of the details, the appellant and the respondents had entered into agreements whereby M/s. Assam Gas Company Ltd., a Government of Assam undertaking, agreed to supply gas to the factories of the respondents for a certain period at a fixed price as per the terms and conditions stipulated in the agreements. It may be mentioned herein that the stipulations in all the agreements arc identical.

5. Id the case of M/s. Sankar Tea Company Pvt. Ltd., the agreement was executed on 23.8.2003 for a period of five years. The agreement of M/s. J.M. Agro Industries was also for a period of 5 years with effect from 25.9.2003. However, the agreement of M/s. Evergreen Tea Pvt Ltd. was for a period of 10 years. In this way, the contract agreements expired long back in the year 2008 so far as two respondents are concerned and so far as M/s. Evergreen Tea Private Ltd. is concerned, though the agreement is dated 18.11.1999 the same expired on 15.6.2010 due to some delay in the commencement of the agreement After the expiry of the period of contract, the appellant wrote to the tea companies to renew their agreements. In the proposal of renewal of the agreements, the appellant proposed a new rate of transmission charges of the gas and also stipulated that the tea companies shall have to pay the cost of the gas as per price fixed by the Ministry of Petroleum and Natural Gas.

6. There were exchanges of letters from both sides. The respondents wanted certain clarifications regarding fixation of the quantity and price of gas to be supplied to them, whereas, the appellant was insisting for execution of new agreements on their own terms with a veil threat of discontinuation of supply of gas in the absence of any agreement Hence, the respondent companies filed separate applications under Section 9 of the Arbitration Act seeking a direction to Assam Gas Company to continue to supply gas to the petitioners' factories and also to restrain Assam Gas Company from withholding supply of gas. Pursuant to these applications, interim orders were passed directing the appellant company to continue to supply gas, subject to the condition that the companies shall make payment of the bills raised by Assam Gas Company, The interim orders were subsequently made absolute, which are under challenge in these appeals.

7. The controversy in the appellants revolve around Clauses 10, 17 and 19. Clause 10 relates to fixation of gas price; Clause 17 relates to arbitration of the dispute and Clause 19 is regarding tenure of the agreement For better appreciation of the contentious arguments of the learned counsel for the parties it w




































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