IN THE HIGH COURT OF GAUHATI (AGARTALA BENCH)
R.B. Misra and A.B. Pal, JJ.
J. Deep Chemicals and Fertilizers - Appellants
Vs.
State of Tripura and Ors. - Respondent
Decided On: 22.11.2006
arbitration - agriculture products - [Contract Act, 1976, Section 22] - The court discussed the arbitration clause in the agreement between the parties and emphasized that the dispute arising out of the contract should be referred to the arbitrator. The court highlighted that the agreement contained provisions for arbitration and therefore the writ petition was not maintainable.
Fact of the Case:
The writ petitioner sought payment for agricultural products supplied to the State authorities. The State authorities withheld the remaining payment citing a laboratory test report indicating non-conformity of the supplied materials to the relevant specifications.
Finding of the Court:
The court found that the dispute arising out of the contract should be referred to the arbitrator as per the arbitration clause in the agreement. It emphasized that the writ petition was not maintainable due to the existence of the arbitration clause.
Issues: The main issue was the non-payment of the remaining amount for the supplied agricultural products, which was withheld by the State authorities based on a laboratory test report.
Ratio Decidendi: The court held that the dispute arising out of the contract should be referred to the arbitrator as per the arbitration clause in the agreement. It emphasized that the writ petition was not maintainable due to the existence of the arbitration clause.
Final Decision: The court set aside the previous order and remanded the case back to the learned Single Judge for adjudication, emphasizing that the dispute should be resolved based on the merits of the case and the documents available on record.
R.B. Misra, J.
1. The present writ appeal has been preferred against the order dated 13.06.2001 passed by the learned Single Judge in W.P.(C) No. 34 of 2001 indicating that the writ petition is not maintainable as the writ petitioner's remedy was provided in the agreement itself for which the writ petitioner might refer the dispute to the arbitrator in accordance with the provision of the agreement.
2. The writ petitioner, M/s. J. Deep Chemicals and Fertilizers preferred the writ petition No. 34 of 2001 with a prayer for issuance of writ of mandamus or other directions to the Director as well as the Deputy Director of Agriculture, Government of Tripura to make payments of the outstanding dues of the writ petitioner along with 20% interest from the date of supply of the materials. It appears that the writ petitioner has been dealing in agriculture products, chemicals, fertilizers, manures and pesticides. Pursuant to the Notice Inviting Tender (for short 'NIT') floated by the State-respondents on 10.08.1999, the writ petitioner participated by offering quotation for plant protection chemicals under the trade name "Captan 75%" which was accepted by the State-respondents at the rate of Rs. 494/- per Kg. inclusive of all charges vide letter of acceptance issued by the Director of Agriculture, Tripura dated 13.12.1999. It appears that the writ petitioner supplied the entire quantity of chemicals on 26.07.2000 followed by bill demanding 90% payment dated 27.07.2000, wherein the writ petitioner charged 4% Tripura Sales Tax in addition to the charge of the consignment delivered as per the agreed rate. The writ petitioner laid his claim in the aforesaid bill dated 27.07.2000 for Rs. 1,54,128/-, but a part payment of Rs. 1,25,970/- was made on 23.11.2000 and the balance amount of Rs. 28,158/- was remained to be paid for which the writ petitioner served demand notice and thereafter the above mentioned writ petition was filed for the relief as indicated above.
3. The affidavit-in-opposition was not filed by the State of Tripura and its authorities before the learned Single Judge but they have submitted before the learned Single Judge by producing an agreement dated 28.12.1999 already entered into between the writ petitioner and the Director of Agriculture, State of Tripura. However, for the reasons best known to the writ petitioner the existence of the written agreement was not disclosed in the writ petition. The written agreement dated 28.12.1999, inter alia, among other things contains an arbitration Clause, which reads as follows:
22. Subject to the other provision of this agreement in case of any dispute between the parties to this agreement arising out of the contract the same shall be referred to the sole arbitration of the Secretary, Department of Agriculture, Government of Tripura. The Secretary may, in this behalf appoint some other person or officer to act as a sole arbitrator if he is unwilling or unable to act as an Arbitrator on account of his pre-occupation.
4. In the impugned order dated 13.06.2001, learned Single Judge has noted as revealed from the State Government's departmental file that the department had sent a sample of the consignment supplied by the writ petitioner to the Regional Pesticides Testing Laboratory, Government of India for analysis and report and after analysis the analyst submitted his report dated 17.11.2000 to the State Government indicating that the sample does not conform to the relevant IS specification in the active ingredient test requirement and, hence, misbranded and this report pertains to pesticide "Captan 75%". On receipt of such analyst's report the State authorities communicated the same on 28.02.2001 with a copy to the writ petitioner and for that reason the payment was withheld subject to further investigation. The learned Single Judge has further observed that despite existence of written agreement having been executed between the parties, the same was concealed and when there was an
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