TaxTMI 
TaxTMI 
TaxTMI 
1989 (3) TMI 373
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....y dispute, and the present claim of the plaintiff is not covered by the agreement in question or its arbitration clause A learned single Judge of the High Court allowed the prayer for reference to the dispute described in the respondent's application, and further granted an interim relief. This judgment is under challenge before this Court by the defendant Corporation. Special leave is granted. 2. As stated in the affidavit of the plaintiff-contractor, the Corporation was created under the Jammu & Kashmir Forest Corporation Act, 1978 and its main functions are: (i) to undertake research programmes and to render technical advice to the State Government on the matters relating to forestry, (ii) to manage, maintain and develop forests transferred or entrusted to it by the Government, and (iii) to undertake removal and disposal of trees and exploitation of forest resources entrusted to it by the Government. In February 1986 the Corporation invited tenders for extraction of timber from an area described as Compartment No. 59-Marwa which included the work of felling and removal of trees. The plaintiff submitted his tender and was ultimately granted the work contract with reference to 4 ....
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.... cft. was obtained by him, and which says that the terms and conditions of the tender notice issued by the Corporation will be terms and conditions of the agreement. The 15th paragraph of the tender notice reads thus: 15. Extension for the additional volume available in the coupe will not be claimed as matter of right. But may be considered by the Management where the achievement is 100%." The arbitration clause being Clause 42 of the agreement states thus: "42. Any dispute, difference or question which may at any time arise between the parties in respect of the work to be executed by the second party under this agreement shall be referred for arbitration to the Managing Director, J & K. State Forest Corporation, whose decision shall be final and binding on both the parties." As it appears from the plaintiff's application before the High Court, his claim was rounded on "procedure", "practice," "custom", and "assurances extended to the petitioner to that effect by the respondent Corporation through its functionaries from time to time." Although it has been co....
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.... 15 of the tender notice, quoted earlier, which must be treated as a part of the agreement, the respondent has a right to be considered for allottment of the additional work since his past performance has been excellent. We are afraid, the impugned judgment of the High Court cannot be defended on this basis and the prayer of the respondent for reference of the dispute, as mentioned in his application before the High Court, cannot be granted under the 15th paragraph of the tender notice aforementioned. The language of the said term is explicit in declaring that the contractor would not be allowed to claim as a matter of right additional volume of work. His right extends only to a consideration of his case by the management when the question of allotment of additional work is taken up. But by the application filed before the High Court the respondent did not ask for reference of a dispute as to whether he is entitled to consideration or not; the prayer is for reference of a higher claim of immediately getting the additional work, and this prayer has been allowed. This issue cannot be said to have any connection with the 15th term of the tender notice or any other provision thereof or....
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....destruction of the katcha bricks was the failure of the department to lift the monthly quota of the bricks in accordance with the written agreement; and, Clause 6 of the agreement referred only to such cases where the department had no control, and would not cover a case of its own default. The Supreme Court did not agree with him and set aside the award, inter alia observing, that if he chose to contract in the terms including Clause 6 of the written agreement he could not go back on his agreement when it did not suit him to abide by it. In the case before us, the plaintiff contractor is trying to connect the allotment of future work by a reference to paragraph 15 of the tender notice which specifically says that additional work could not be claimed as a matter of right. The High Court, therefore, was not correct in interpreting the aforementioned Clause 15 in the following words: "There was clause 15 in the tender notice according to which extension of additional volume available in the coupe would not have to be claimed by the contractor as a matter of fight but he would have to be considered by the management where his achievement was 100%. In the present case the achievement o....
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....riefly indicate the scope of Court's power to issue interim orders at the time of reference of a dispute to arbitration, and point out how in the present case the High Court was in grave error in granting the interim relief. The relevant provision in the Jammu & Kashmir Arbitration Act, 2002 (Smvt.) is in s. 41(b) which is quoted below: "41. ,Procedure and powers of Court.--Subject to the main provisions of this Act and of rules made thereunder- (a)........................................ ........ (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any such matters." S. 18 deals with the power of Court to. pass interim orders after award is actually filed in Court. So far as clause (a) of s. 41 is concerned, it makes only the procedural rules of the Civil Procedure Code applicable. The source of power to grant....
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.... available to the respondent for the purpose of felling the trees, are examined, there is no escape .from the conclusion that the respondent had felled the trees or majority of them after service of the stay order passed by this Court. We do not think it necessary to examine and decide this controversy as in our view the respondent, in the facts and circumstances of this case, cannot take any advantage from or claim compensation for the hurried steps he alleges to have taken under the strength of the illegal order interim in nature, which we are setting aside. 7. In the result, the appeal is allowed. The impugned judgment the High Court is set aside and the respondent's application filed before the High Court for reference is dismissed. The respondent shall pay the costs of this Court and of the High Court to the appellantCorporation. SABYASACHI MUKHARJI, J. I have read the judgment proposed to he delivered by L.M. Sharma, J. with which the learned Chief Justice has agreed. With great respect, I am unable to agree with them on the view that there was no arbitration agreement subsisting covering the dispute in question between the parties. It is, therefore, necessary to refer to ce....
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....t No. 59. As regards sale, it is suggested that as the compartment is situated in one of the remotest area of Jammu province where making arrangements for extraction of timber including cartage/carriage of foodgrains, saws, tools and implements is very difficult, it was never intended that the balance work remaining in the compartment for extraction would be given to any other contractor. The case of the respondent is that acting upon the assurances and representations of the appellant Corporation that the entire work in the aforesaid compartment would be handed over to him, the respondent had made adequate arrangement after investing Rs.5 lacs by way of provision for rations, saws, tools and implements etc. All these arrangements at that scale were necessary and were made just to extract entire marked timber from the compartment in question and not just initially tendered quantity. That would have been wholly uneconomical. It was further asserted that there was also the practice in the Corporation that once a compartment was handed over to the contractor for work, it was taken back from him only after the entire available work in the said compartment stood concluded. The contracto....
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....er. The learned Judge by his impugned judgment and order deprecated the conduct of the authorities concerned. He proceeded on the basis that inasmuch as the remaining timber had to be extracted one day or the other, the entire work should have been given to the respondent. In the present case, the learned Judge noted that the performance of the respondent contractor as 300%. The respondent was entitled to the grant of this contract even if his performance had merely been 100%. The learned Judge found that there were two different points to be examined. He found that there existed a dispute between the parties touching the agreement executed between them. The matter in dispute was referred to the named arbitrator, namely, the Managing Director of the State Forest Corporation, who was directed to adjudicate upon the same and submit his award within the statutory period of four months. The learned Judge went further and as an interim measure directed that the petitioner before him, namely, the respondent herein be allowed to do the remaining work of extraction of timber of standing marked trees in compartment No. 59 Marwah and the rates were to be determined by the arbitrator, after....
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....g: "Any dispute, difference, question which may at any time arise between the parties in respect of the works to be executed by the contractor(s) shall be referred for arbitration to the Managing Director J&K SFC whose decision shall be final and binding on both the parties." In respect of the second contract that similar terms were there, was not disputed before us. Therefore, even though where the achievement of the contractor was 100% the contractor had a right only to be considered for grant of the additional work. In this case it was contended on behalf of the appellant-Corporation that the Corporation could not be compelled by the process of an application under Section 20 of the Arbitration Act to grant additional work to the contractor. On the other hand, the contractor had pleaded that where the achievement of the contractor in respect of the subsisting contract was 100% the contractor had a right to be considered for grant of the additional work, while in this case his performance was 300%. Additional volume available in the coupe was liable to be granted to him or, at least, he was entitled to be considered i....
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....t, that is to say, the parties had been ad idem. The agreement was in writing. It was not a contingent or a future contract. It was a contract at present time to refer the dispute arising out of the present contract entered into by the parties as a result of which the contractor got a right or a privilege to ask for consideration of grant of the further work. It was not as sought to be argued a mere right to get the additional work. Hence, in my opinion, it could not be contended that there was no agreement. Endeavour should always be to find out the intention of the parties, and that intention has to be found out by reading the terms broadly, clearly, without being circumscribed. This contention of the appellant cannot, therefore, be accepted. In the light in which I have read the facts, I am unable to accept the position that the claim raised by the plaintiff in this application before the High Court was not covered by the arbitration clause. The amplitude of the arbitration clause, in my opinion, was wide enough and should be so read for the reasons mentioned hereinbefore. If that is the position then the order of reference by the High Court was not bad and cannot be set aside.....
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.... any property--the subject matter of the reference for preservation or inspection of any property or thing--the subject-matter of the reference or as to which any question may arise therein for taking of samples and making observations and experiments; for securing the amount in difference in the reference; for granting an interim injunction and appointing a receiver as the Court has in relation to any proceeding before it. But though under Section 41(b) the Court has power to pass an interim order of injunction or appointment of receiver, in my opinion, the Section does not empower the Court to direct execution of the contract, the extent of which is in dispute and is a matter referable to be adjudicated by the arbitrator. If the Court does so then the decision of the dispute becomes academic because the contract is executed. Where the question is whether the contract was to be executed by the respondent, if the contract is in fact executed by the respondent by virtue of the order of the Court, then nothing remains of the dispute. There is nothing arbitrable anymore and proceedings before the arbitrator cannot, in my opinion, be forestalled by interim order by ordering execution o....