9911796707
TMI Blog2007 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit 10% of the amount of the claim submitted by him as per Clause VIII of the contract agreement before entering into arbitration. 2. Brief facts of the case are that the petitioner, which is a registered company owned by the Government of India, is engaged, inter alia, in execution of construction projects of national importance. It has its registered office at New Delhi. The instant petition is filed through the General Manager (Law) Mrs. Meera Shankar, who has Power of Attorney in her favour (Annexure P-l). The State of Punjab, respondent No. 1, issued tenders for the erection, testing, commissioning, starting, stabilization and operation, monitoring and performance of 152 MLD STP based on USAB Technology at Balloke Zone C Ludhia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on 18-8-2006 called upon the petitioner to deposit the amount of 10% in pursuance to Clause 25 Sub-clauses VIII and XV of the agreement so as to enable him to proceed further in the matter (P-8). It was claimed by the petitioner that the requirement of 'deposit at call' amount at the rate of 10% of the claimed amount, as provided by Clause 25 Sub-clauses VIII and XV, were void and requested the Arbitrator to adjudicate upon the said claim without insisting on the requirement of 'deposit at call' amount at the rate of 10% (P-6). A reminder was sent on 7-6-2006 (P-7). The aforementioned clauses have now been challenged in this petition. It is appropriate to extract the aforementioned clauses, which reads as under: VIII. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. (2004) 3 SCC 553 . 5. We have given thoughtful consideration to the submissions made by the learned Counsel and are of the view that the instant petition is liable to be dismissed. The concept of unconscionable clauses in a contract would arise only in specified circumstances. In a standard form contract where the bargaining power of the parties is unequal to an extent that one party is virtually left without any freedom to contract then the Courts have come to the rescue of the weaker party. There is elaborate discussion in respect of those clauses including a large number of English cases in a judgment of Hon'ble the Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide what are probably the first examples. The terms of this kind of standard form of contract have not been the subject of negotiation between the parties to it, or approved by any organization representing the interests of the weaker party. They have been dictated by that party whose bargaining power, either exercised alone or in conjunction with others providing similar goods or services, enables him to say : 'If you want these goods or services at all, these are the only terms on which they are obtainable. Take it or leave it'. To be in a position to adopt this attitude towards a party desirous of entering into a contract to obtain goods or services provides a classic instance of superior bargaining power. (Emphasis supplied) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Contract. Therefore, we do not find any substance in the argument raised by the learned Counsel for the petitioner and we cannot be invited to examine the validity of the aforementioned impugned clauses on the ground of unconscionableness, unfairness or unreasonableness, which are in fact necessary attributes of Article 14 of the Constitution. The aforementioned view is supported by the judgment of Hon'ble the Supreme Court in the case of L.I.C. of India v. Consumer Education and Research Centre AIR 1995 SC 1811 . After citing various judgments from England and Legislative provisions in U.S.A., their Lordships' have observed in para 47 as under: 47. It is, therefore, the settled law that if a contract or a clause in a contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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