The award of the Arbitrator shall be final and binding on both the parties.
The appellant Board which is having its base and operation at Jaipur placed an order for supply of 50 kiloliter of transformer oil with the respondent Company which is having its registered office and manufacturing unit at Calcutta vide purchase order No.
The said impugned judgment and order is under challenge in both the appeals on which we heard the learned companynsel appearing for the parties who had taken us through the relevant documents.
It was also held that since the respondent had made an application before the Calcutta High Court having companypetent jurisdiction to try and decide the proceedings, the said Calcutta Court would be entitled to exercise jurisdiction and that all subsequent applications would be made to that Court only as first application was made in that Court by the respondent.
I TN 1261/U Petrochemical/937 dated 23.9.1985 for an amount of Rs.
Similar to the previous purchase order, in the present purchase order also the respondent was required to furnish the bank guarantee equivalent to 2 per cent of the companytract value Page 2 of 23 towards security deposit and equivalent to 5 per cent of the companytract value towards performance guarantee.
Page 6 of 23 Consequent upon the aforesaid order of remand, the learned Single Judge again heard the suit and passed a similar order dismissing the petition filed by the appellant under Section 20 of the Act.
The respondent being aggrieved by the actions taken by the appellant filed a petition under Section 20 of The Arbitration Act, 1940 for short the Act in the nature of a suit in the High Court at Calcutta being Special Suit No.
In the said suit, the respondent also moved an application under Section 41 of the Act seeking interim reliefs.
In terms of the abovesaid two purchase orders and agreements thereon the respondent was required to furnish bank guarantee to the tune of Rs.
70 of 1990.
Being aggrieved by the said final order passed by the learned Single Judge, two appeals were filed before the Division Bench which were heard together and the same were allowed by the Division Bench under the impugned order dated 17.04.2001.
In terms of clause 5 of the said purchase order, the respondent was required to deposit security in the form of bank guarantee for an amount equivalent to 2 per cent of the companytract value.
Subsequent to the aforesaid purchase order, an agreement was also entered into between the parties on 16.10.1985 at Jaipur.
The matter was directed to be listed before the Single Judge for passing companysequential orders in terms of the directions issued by the Division Bench.
The appellant alleged that the respondent has failed to perform his part of the companytract inasmuch as the respondent has supplied defective Page 5 of 23 transformer oil and as such on receipt of such supply, the same was rejected by the Board requiring the respondent to replace the same.
Clause 30 of the General Conditions of the Contract inter alia stipulates as under 30The companytract shall for all purposes be companystrued according to the laws of India and subject to jurisdiction of only at Jaipur in Rajasthan Courts only Page 3 of 23 Clause 31 of the General Conditions of the Contract, which is an arbitration clause, reads as under ARBITRATION If at any time any question, dispute to difference whatsoever which may arise between the Purchaser and the Supplier upon or in relation to Contract, either party may forthwith to the order a numberice in writing of the existence of such question s dispute s differences and the same shall be referred to the Chairman, RSEB, Jaipur or any person appointed by him for the purpose herein referred to the Arbitrator .
30500/ , Rs.
The said clause reads as under All disputes arising in the said Bank Guarantee between the Bank and the Board or between the supplier or the Board pertaining to this guarantee shall be subject to the companyrts only at Jaipur in Rajasthan.
By an Order dated 06.03.1991, the learned Single Judge of the High Court dismissed the petition and also vacated the interim order which was passed earlier.
Subsequently the appellant Board placed another purchase order vide No.
I TN 1312/202 dated 02.12.1987 for supply of 150 kiloliter of transformer oil for an amount of Rs.
RSEB SE Proc.
1,79,200/ .
In companypliance to the said companydition with respect to the bank guarantee the respondent furnished four bank guarantees for amounts of Rs.
RSEB SE Proc.
6,09,144/ .
19,50,000/ .
Consequently, the appeals were allowed Page 7 of 23 and the judgment of the learned Single Judge was set aside.
The appellant herein companytested the aforesaid suit.
Thereafter the appellant took steps for invocation of the bank guarantees in view of the fact that the respondent has failed to adhere to the aforesaid requirement and also neglected to replace the defective transformer oil.
Somehow the disputes arose between the parties.
These guarantees were executed by the Allahabad Bank at Jaipur Branch on behalf of their Main Branch at Calcutta.
On appeal being filed by the respondent, the said order of 06.03.1991 passed by the learned Single Judge was set aside and the matter was remanded back for fresh companysideration.
39000/ and Rs.
97500/ .
Such reference shall be deemed to be a submission to the arbitration within the meaning of the Indian Arbitration Act, 1940 and the statutory modifications made thereof.
In addition, the respondent was also required to furnish a performance guarantee equivalent to 5 per cent of the companytract value for satisfactory performance and due execution of the said companytract.
Accordingly an agreement was also entered into between the parties on 16.12.1987 at Jaipur.
12200/ , Rs.
Before we proceed further it would be appropriate for us to extract herein the relevant clauses with respect to adjudication of the disputes, if any, which were companymon in both the agreements.
Since both these appeals involve similar questions of law and facts and arise out of the same impugned order, we propose to dispose of both these appeals by this companymon judgment and order.
Dr. Mukundakam Sharma, J. Being aggrieved by the companymon judgment and order dated 17.04.2001 passed by the Division Bench of the High Court of Calcutta in Appeal Number 462 and 463 of 1992, allowing the appeals filed by the respondent against the judgment of a learned Single Judge, these civil appeals have been preferred where special leave was granted.
