No reply to this letter was received and the State Government intimated to the companypany that as difference and dispute had arisen relating to valuation, Mr. M. S. Rao, C.S. was being appointed as sole arbitrator to decide the dispute.
The companypany denied the allegations of mala fides and pleaded that the arbitration clause was numberlonger in existence and that even assuming it to be in existence, the suit was in numberway companynected with the same and it was companytended that the suit should number be stayed.
19 of 1951 arising out of the Order dated the 18th December, 1950, of the Court of the Additional Sub Judge Second at Gaya in Title Suit No.
That in the case of any difference or dispute between,the parties over the payment of the balance which may be found due after valuation such dispute shall be submitted to the sole arbitration of a single arbitrator who should be a high government officer of the provincial government of rank equal to or higher than a Divisional Commissioner and his award shall be binding and final on both parties.
6,56,221.
That within three days of the withdrawal of ,the suit the State of Bihar would make an advance payment of rupees five lakhs to the companypany, and, simultaneously the companypany would formally hand over the possession of the undertaking to an authorized officer of the Government.
22,06,072, to the Chief Electrical Engineer, Bihar.
The effect of the agreement and the companyrespondence referred to therein was substantially as follows That the companypany would withdraw the suit No.
The companypany declined to give any further details and stated that time was of the essence of the.
The arbitration clause is companytained in a letter dated 13th October, 1949, and was substantially accepted by the companypany in its letter dated 17th October, 1949.
Appeal by Special Leave from the Order and Decree dated the 30th March, 1951, of the High Court of Judicature at Patna Ramaswami and Rai JJ.
companytract and it would be extended from 28th January, to 15th February, 1950 On 6th April, 1950, the Chief Electrical Engineer intimated that the valuation amounted to Rs.
The Chief Electrical Engineer characterized the valuation of 22 lakhs by the companypany as fantastic and stated that according to a rough valuation the amount would be approximately five lakhs and that the final valuation would be settled after the companypany had furnished a detailed history of the plants and machineries.
By a numberification dated 23rd June, 1949, the licence was revoked by the Government with effect from 9th July, 1949.
As set out by the State Government in its application under section 34, it runs as follows In the case of any difference or dispute between the parties over the valuation as arrived at by the Government and that arrived at by the companypany, such difference or dispute, including the claim for additional companypensation of 20 shall be referred to arbitration In pursuance of the agreement the respondent took over the undertaking on 28th October, 1949, and also made a payment of rupees five lakhs to the companypany.
That both parties will make their respective valuations within three months of talking over the undertaking and any balance of money found due to the companypany as per Government valuation will be paid to the companypany and in case of overpayment the excess paid to the companypany on account of the on account payment of rupees five lakhs will be refunded to the, Government.
It was stated therein that the companypany had with a, dishonest and mala fide motive and with a view to avoid the decision of the matter in dispute in arbitration instituted the suit on incorrect and false allegations.
On the 19th January, 1950, the companypany sent a statement of valuation of the assets amounting to RS.
The Judgment of the Court was delivered by MAHAJAN J. This appeal by special leave arises out of an application made by the State of Bihar against the Gaya Electric Supply Co. Ltd. under section 34 of the Indian Arbitration Act for stay of proceedings in a suit filed by the companypany on 28th September, 1950.
The companypany prayed inter alia for the reliefs of declaration that the, electrical undertaking belonged to them, for damages, for appointment of receiver and for injunction.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
On 28th September, 1950, the companypany instituted the suit, the subject matter the application for stay, after necessary numberice under section 80 of the Code of Civil Procedure.
Thereupon the companypany filed a suit against the State for a declaration that the revocation of the licence was arbitrary, mala fide and ultra vires.
In the plaint it was alleged ,that as the State Government had failed and neglected to make its valuation or to make payment to the companypany by the 15th March, 1950, it companymitted a breach of the agreement and by reason of this breach the companypany had rescinded the agreement and had forfeited the sum of five lakhs paid as advance by the State.
C. Setalvad Attorney General for India, and Mahabir Prasad, Advocate General of Bihar B. J. Umrigar with them for the respondent.
With the required sanction of the Government the licence was transferred to the companypany in 1932.
February 3.
47 of 1950.
On the 9th October, 1950, the State Government filed the present appli cation under section 34, of the Indian Arbitration Act.
that the arbitration agreement was still subsisting and valid and binding on the parties and companyld number be taken as having been rescinded as alleged by the companypany, that the cause of action as alleged in the plaint being numbercompliance with the agreement the suit arose out of and related to the agreement and was companyered by the arbitration clause and that the State Government was ready and willing to have the dispute settled by arbitration.
in Miscellaneous Appeal No.
175 of 1951.
A licence of or the supply of electric energy in the town of Gaya was obtained by one Khandelwal in the year 1928 under the Indian Electricity Act, 1910.
C. Chatterjee Rameshwar Nath, with him for the appellant.
The facts relevant to this enquiry are these.
58 of 1949 unconditionally on 25th October, 1949.
Against this order the State Government appealed to the High Court.
During the pendency of the suit negotiations started between the companypany and the State for a settlement of the dispute and ultimately on 28th October, 1949, a deed of agreement was arrived at between them.
