Raghavan, J.- The defendants in O.S. No. 6 of 1972 (A.A.) are appellants.

2. The suit is for an order (1) that the agreement dated nth July, 1962, between the parties providing for a reference to arbitration in respect of matters in dispute to which the agreement relates be filed into Court; (2) determining the questions of difference between the parties to which the agreement dated nth July, 1962, applies and (3) appointing an arbitrator with a direction to proceed with the arbitration in respect of matters in dispute between the parties and pass an award in favour of the plaintiffs. The first defendant is a Company incorporated under the Indian Companies Act having its Registered Office at No. 136, Jessore Road, Calcutta. The second defendant is a Company incorporated under the Indian Companies Act having its Registered Office at No. 51, Canal East Road, Calcutta. The Cromption Engineering Company (Madras) Ltd. hereinafter referred to as the plaintiff entered into an agreement dated nth July, 1962, with the Electrical Manufacturing Company Ltd., hereinafter referred to as the first defendant, whereunder the first defendant agreed to fabricate all requirements of steel towards substation structures of the plaintiffs in three different areas viz. Bhilai Bodghat area, Jabalpore - Narasinghpur area and Korba-Amarkantak area at the rates specified in paragraph 12 of the said, agreement. The said agreement inter alia contained the following terms and consditions: —

“(i) Cromptons, (the plaintiffs herein), are to provide the Electrical Manufacturing Co., Ltd., with all the steel and zinc required for fabrication and galvanization of towers and structures ordered from time to time by the plaintiffs.

(ii) The Electrical Manufacturing Co., Ltd.) the first defendant herein), shall provide free of charge sufficient separate space for the storage of the steel and zine entrusted to them by Cromptons,

(iii) The Electrical Manufacturing Co., Ltd. (the first defendant herein), shall maintain proper accounts of steel and zinc received from Cromptons and send to Cromptons fortnightly statement of receipts, issues and stocks of steel and zinc.

(iv) The said Electrical Manufacturing Co., Ltd., (the first defendant) shall not in any circumstance use the steel or zinc or any part thereof entrusted to them except for the purpose stipulated in the agreement”.

On behalf of the first defendant and as their agents another Company by name E. M. C. Projects (P.) Ltd., Calcutta, hereinafter referred to as the second defendant, was handling some of the matters of the first defendant, in order to maintain with ease and speed, the works which were entrusted to the first defendant and a supplementary agreement dated 8th October, 1965, was executed at Madras between the plaintiffs, the first defendant and the second defendant. The plaintiffs on their part gave a tender on 26th March, 1962, to the Madhya Pradesh Electricity Board, Jabalpore (not a party herein) for fabrication of steel towers and erection thereof in three different areas viz., Bhilai Bodghat area and Jabalpore-Narasinghpur area and Korba-Amarkantak area. The said tender was accepted on 16th February, 1964, by the Madhya Pradesh Electricity Board and a contract was entered into between the plaintiff and the Madhya Pradesh Electricity Board for the fabrication of towers and erection thereof in specified areas. The contract itself provides that the fabrication of the tower members will be got done by the Electrical Manufacturing Co. Ltd. (first defendant). The said contract contains a specific clause (Clause X) to the effect that the plaintiffs are responsible for the steel delivered at the fabricator’s works and for affording facilities to the Board’s Engineers for inspection of steel stocks etc. Pursuant to the contract entered into by the plaintiffs with the Madhya Pradesh Electricity Board and on the basis of the agreement dated nth July, 1962 the Madhya Pradesh Electricity Board was periodically s

Click Here to Read the rest of this document