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TMI Blog2007 (10) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the said order, powers were conferred on the Jute Commissioner to regulate stock of raw jute, fix price and control production thereof. In exercise of the power conferred upon him under the said Order, the Jute Commissioner issued Production Control Orders (PCO) to various jute mill owners directing them to manufacture will Gunny Bags of specified quality upon compulsory purchase of raw jute from the Corporation. Non-compliance of the directions was to result in application of penal provisions. 4. Indisputably, the Jute Commissioner sent the particulars of the said Production Control Order to the Jute Corporation of India Ltd. for the purpose of issuing necessary sale contract in order to enable the Jute manufacturers to take delivery of the requisite quantities of raw jute specified in the production control Order which the jute manufacturers were required to compulsorily purchase from the Corporation. 5. Indisputably, again the Commissioner in exercise of its power conferred under Section 3(3) of the Control Order fixed the price of 50 kg B-Tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevailing for the period/month as mentioned in the individual Production Control Orders and that prevailing for the period subsequent thereto in the event your petitioners are otherwise unable to supply B-Twill gunny bags within the period as mentioned in the individual purchase order. 8. Despite, making the aforementioned prayers, the appellant however, made an offer before a learned Single Judge of the High Court that the backlog would be cleared within six months in six equal installments after opening a letter of credit and if any payment is to be made by them, they will take necessary steps therefor. Pursuant to or in furtherance of the said interim order, the appellant deposited the amount, in question. On or about 6.7.2004, the Corporation issued a letter to the which reads as under : T.No. 212 of 2004 WP No. 962 & 966 to 973 of 2004 Dear Sirs, With reference to your letter nos. nil dated 30.06.2004 and 02.07.2004 on the above subject we would like to advise you to make payment arrangement of the 1/6 (one sixth) quantity of pending contracts along with the carrying cost within 7 (seven) days from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout opening any Letters of credit in favour of the appellant by contending that there was no defect in the Letters of Credit. We, thus, find that the learned Single judge erred in law in holding that the writ petitioners were under no obligation to pay the carrying cost and other charges mentioned in clause 5.0 of the agreement even if they do not lift the goods within the time stipulated therein or if they do not furnish any letters of Credit in favour of the appellant. We, therefore, set aside the order impugned and hold that the appellant is entitled to get the carrying costs and other charges mentioned in Clause 5.0 of the agreement for breach of the terms of the agreement at the instance of the writ petitioners and that in this case, there has been violation of that clause at the instance of the writ petitioners. We, accordingly, allow these appeals and direct the learned advocate for the writ petitioners to hand over the entire amount lying in the bank account pursuant to the interim order passed by the learned Single Judge inclusive of interest accrued thereon within a fortnight from today. 10. Having said so, the Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not liable to pay the carrying cost, clause 5.0 of the sale agreement being not applicable, they cannot be fastened with the said liability. Strong reliance in this behalf has been placed on Central Bank of India Ltd., Amritsar Vs. The Hartford Fire Insurance Co. Ltd. [AIR 1965 SC 1288]. 12. Mr. Bikash Bhattacharyya, learned senior counsel appearing on behalf of the first respondent, on the other hand, would submit that the appellant had filed a writ petition on the premise that the statutory order is not applicable. Such a prayer having been given a complete go-bye and the appellant having prayed for passing an interim order to its benefit, by undertaking to clear the backlog of purchases in six instalments, it was bound to pay the carrying charges. The Division Bench, Mr. Bikash Bhattacharyya, would submit has rightly opined that the carrying charges being payable, only quantum thereof would be subject matter of a dispute within the meaning of arbitration agreement entered into and by and between the parties. 13. Before embarking upon the respective contentions of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; XXX 8.0 Procedure for claim settlement : All claims on account of quality shall be settled according to Bye-Laws & Rules of EIJ&HE. The allowable moisture regain percentage shall be 18% for July, August, September and October and 16 % for the remaining 8 months, November to June. The buyers shall clearly indicate the extent of the claims (in terms of percentage) on quality and condition. No joint inspection shall be arranged and no claim shall be entertained by the Corporation unless the buyers clearly indicate the extent of claim in the manner mentioned herein above and within the time specified in the bye-laws and rules of the EIL&HE. In case of EX-GODOWN DELIVERY, the weight shall be determined at the point of delivery ex-godown based on weight recorded on lorry challan or the certificate of weighment signed by the authorized representative of the buyers and the Corporation. For this purpose the certificate to be given may be in the Form of Annexure-III. Based on the settlement of claim for quality, condition and weight if the buyers are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Construction of the contract entered into by and between the parties is in question before us. There exists an arbitration agreement. The Arbitration Agreement is of wide amplitude; by reason whereof not only the dispute relating to quality of the jute sought to be supplied by the respondent No.1 may be gone into, the construction, meaning and operation and effect of the contract or breach thereof, if any, would have also fallen for determination of an Arbitrator. 15. It is not correct to contend that clause 8.0 provides for procedure for claim settlement. The said provision in regard to the quality of jute supplied has in our opinion nothing to do with clause 9.0. The arbitration agreement entered into by and between the parties is independent of clause 8.0. It is now well settled that when there exists an arbitration agreement, the writ court ordinarily would not exercise its discretionary jurisdiction to enter into the dispute. 16. The learned Single Judge embarked upon the question of construction of the agreement. In a sense, the Division Bench overturne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be initially argued. The question in that event may not have been within the content of clause 23 of the agreement.But all questions of law, one of which may be interpretation of the agreement, need not necessarily be withdrawn from the domestic forum because the court has discretion under Section 34 of the Arbitration Act or under Article 226 of the Constitution and that the court is better posted to decide such questions. The arbitration clause 23 is a clause of wide amplitude taking in its sweep even interpretation of the agreement and necessarily, therefore, of clause 13 therein. We are therefore, unable to accede to the submission that we should exercise our discretion to withhold the matter from arbitration and deal with it ourselves. 20. A similar view was taken by this Court in Sanjana M. Wig (Ms) Vs.Hindustan Petroleum Corpn. Ltd. [(2005) 8 SCC 242 holding; 12. The principal question which arises for consideration is as to whether a discretionary jurisdiction would be refused to be exercised solely on the ground of existence of an alternative remedy which is more efficacious. Ordinarily, when a dispute between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been entertained subject of course to exercise of the courts jurisdiction under Section 21 thereof. Section 5 of 1996 Act takes away the jurisdiction of the Court. There cannot be any doubt whatsoever, the provision of the 1996 Act must be given effect to. 24. As the disputed facts as also the law are required to be determined by the Arbitrator, we are of the opinion that all disputes between the parties should be directed to be resolved upon taking recourse to the arbitration agreement contained in clause 9.0 of the Sale Order. 25. We therefore, direct; (a) In exercise of a jurisdiction under Article 142 of the Constitution, in the peculiar facts and circumstances of this case, all disputes and differences between the parties be referred to the arbitration in terms of clause 9.0 of the contract. (b) Reference to arbitration would be deemed to be one under the 1996 Act. (c) The parties would be at libert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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