TMI Blog1999 (5) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... been referred to arbitration and there would not have been any necessity for delving into a matter in the manner as we have, herein before, but it is by reason of the factum of incorporation of clause 12 and the subsequent abandonment thereof by reason of a decision to have the claim covered under clause 12 to be adjudicated by a forum different from that of the Senior Regional Manager, we also have no option left but to record our concurrence with the finding of the High Court that the fourth dispute being the subject matter of a civil suit initiated by the Food Corporation of India be also referred to arbitration. Be it noted that this order is passed in the peculiar facts and circumstances of the facts in issue and the issue as regards the excepted matters have not been delved into in detail excepting however as above.Appeal dismissed. - C.A. 1582 OF 1994 - - - Dated:- 14-5-1999 - Umesh C. Banerjee and V.N.Khare, JJ. JUDGMENT These appeals by the grant of Special Leave pertains to the effect of the usual excepted clause vis-a- vis the arbitration clause in a Government contract. While it is true and as has been contended, that the authorisation of the arbitrators to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Managing Director of the FCI. It will be no objection to any such appointment that the person appointed is or was an employee of the Corporation that he had to deal with the matters to which the contract relates and that in the course of his duties as such employee of the corporation he had expressed views on all or any of the matters in dispute of difference. The Board of such Arbitration shall be final and binding on the parties of this contract. It is a term of this contract that in the event of such arbitration to whom the matter is originally referred being transferred or vacating his office or being unable to act for reasons the Manager/Managing Director of the FCI at the time of such transfer, vacation of office or inability to act shall appoint another person as arbitrator. Such persons shall be entitled to proceed with reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by the Managing Director as aforesaid shall act as Arbitrator and if for any reasons that it is not possible the matter is not be referred to Arbitration at all. It is term of a contract that the party invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff from out of the amounts due in this present contract? (d) Whether the defendants are not liable to pay to the plaintiffs a sum of Rs.70,000/- in respect of the transport of Rice from Madras to Ronigunta from June to August 1979?" It is this inclusion of Claim (d) which stands objected by the Appellant herein and the learned Trial Judge by reason of the same being covered under clause 12 of the agreement declined to include the same. Since the issue pertains to such an exclusion it is convenient also to note Clause 12 of the agreement, Clause 12 reads as below: "The decisions of the Senior Regional Manager regarding such failure of the contractors and their liability for the losses etc. suffered by the Corporation shall be final and binding on the contractors." The Factual backdrop further depict that after the order of the Learned Trial Judge the matters were taken up to the appellate court wherein on an application for stay the respondent herein has obtained an order of stay. Incidentally, during the pendency of Section 20 matter, there was also an application under Section 34 for stay of the suit - the application under Section 34 however was dismissed though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Clause III of the Contract also. But what about the rights preserved under clause 12, we searched in vain, in that regard: The plaint is delightfully silent on that score excepting the averment as contained in paragraph 8 as noticed above. The Food Corporation therefore, as a matter of fact desired an adjudication of their claim to the extent of Rs.1,89,775/- together with interest at the rate of 18 per cent per annum from the Civil Court rather than relying on to the adjudicatory process available in the contract itself through their own Senior Regional Manager. The agreement as noticed above expressly provide that the adjudication shall be effected by the Senior Regional Manager and by no other authority and the decision, it has been recorded in the agreement, of the Senior Regional Manager, would be final and binding on the parties. There is therefore, a positive act on the part of the Food Corporation of India not to put any reliance on to that particular clause of the agreement. There is, as a matter of fact, thus on the state of facts, as above, appears to be a positive relinquishment or abandonment of a right so far as the adjudication of the excepted matters are conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t taking recourse to the provisions of the agreement for adjudication of its claims. The other party namely the contractor has already filed a suit in terms of Section 20 and the suit has been disposed of by an order of reference by the Court in terms of provisions of Section 20 in so far as three principal disputes are concerned. The other claim concerning wharfage stands negated by the learned Trial Judge and in our view very rightly by reason of clause 12 of the agreement - here comes thereafter a situation which is rather significant and as noted above singularly singular: the Food Corporation itself gives a go by to its right of adjudication through the Senior Regional Manager as regards the wharfage claim and initiates proceeding in the Civil Court. It is this initiation which has been objected to by the contractor on the plea that since the civil courts adjudicatory process has been taken recourse to by the dominant litus, the court ought to direct to sub-serve the ends of justice in a manner so that the issue covering the Corporation s suit be also referred to arbitration since that has direct nexus with the other three issues as already been directed to be referred to arb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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