TaxTMI 
TaxTMI 
2009 (2) TMI 926
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....t office building in Sector 17, Chandigarh. On 4-3- 1992 an agreement was entered into between the parties, which incorporated Sub-clause (7) of Clause 25-A providing for arbitration in case of any dispute. Some differences between the parties regarding payment in respect of allotted work had arisen which resulted in referring the dispute to the three members Tribunal. The appellant filed his claim before the Tribunal. The respondent-State filed its objection to the claim by principally submitting that the contractor has to comply with the mandatory requirements of Sub-clause (7) of Clause 25-A of the agreement dated 4.3.1992 which obliged the appellant to deposit 7% of the total claim made. The amount so calculated comes to Rs. 1,81,14,845/-. The Tribunal sustained the objection and after placing reliance on a judgment of this Court in Municipal Corporation, Jabalpur v. Rajesh Construction Company JT 2007 (5) SC 450 has opined as follows: In view of the decision of the Supreme Court, referred to above, as suggested on behalf of the respondent, the claimant is directed to deposit Rs. 1,81,14,815/- i.e 7% of the amount claimed in the statement of claim with the respondent and furt....
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..... v. Hartford Fire Insurance Co. Ltd. AIR1965SC1288 it was observed at para 5 as follows: 5. The contention of the appellant is based on the interpretation of Clause 10. Now it is commonplace that it is the court's duty to give effect to the bargain of the parties according to their intention and when that bargain is in writing the intention is to be looked for in the words used unless they are such that one may suspect that they do not convey the intention correctly. If those words are clear, there is very little that the court has to do. The court must give effect to the plain meaning of the words however it may dislike the result. We have earlier set out Clause 10 and we find no difficulty or doubt as to the meaning of the language there used. Indeed the language is the plainest. The clause says "This Insurance may be terminated at any time at the request of the Insured", and "The Insurance may also at any time be terminated at the instance of the Company." These are all the words of the clause that matter for the present purpose. The words "at any time" can only mean "at any time the party concerned likes". Shortly put Clause 10 says "Either party may at its will terminat....
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....unqualified acceptance of the proposal. Acceptance may be expressed in writing or it may even be implied if the insurer accepts the premium and retains it. In the case of the assured, a positive act on his part by which he recognises or seeks to enforce the policy amounts to an affirmation of it. This position was clearly recognised by the assured himself, because he wrote, close upon the expiry of the time of the cover notes, that either a policy should be issued to him before that period had expired or the cover note extended in time. In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being. Sub-clause (7) of Clause 25-A of the agreement reads as follows: (7) It is also a term of this contract agreement that where the party invoking arbitration is the....
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....: Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter claim as the case may be. (3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be. 10. A bare perusal of the aforesaid provisions clearly shows that the provision is to operate in the absence of agreement with regard to cost. It cannot be pressed into service to get over Sub-clause (7) of Clause 25-A. 11. In addition to the various pleas, the stand taken by the appellant is squarely answered by what has been stated by this Court in Assistant Excise Commissioner and Ors. v. Issac Peter and Ors. [1994]2SCR67 it has been stated as follows: 26. Learned Counsel for respondents then submitted that doctrine of fairness and reasonableness must be read into contracts to which State is a party. It is submitted that the State cannot act unreasonably or unfairly even while acting under a ....
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....heir proposition. In Dwarkadas Marfatia v. Board of Trustees of the Port of Bombay [1989]2SCR751 it was held that where a public authority is exempted from the operation of a statute like Rent Control Act, it must be presumed that such exemption from the statute is coupled with the duty to act fairly and reasonably. The decision does not say that the terms and conditions of contract can be varied, added or altered by importing the said doctrine. It may be noted that though the said principle was affirmed, no relief was given to the appellant in that case. Shrilekha Vidyarthi v. State of U.P. AIR1991SC537 was a case of mass termination of District Government Counsel in the State of U.P. It was a case of termination from a post involving public element. It was a case of non-government servant holding a public office, on account of which it was held to be a matter within the public law field. This decision too does not affirm the principle now canvassed by the learned Counsel. We are, therefore, of the opinion that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party ....