M/S. Navbharat Dal Mills Vs. Food Corporation of India and Another - Court Judgment

Excerpt:
arbitration act - section 20--court has no jurisdiction to decide if claim is time barred-only arbitrator has jurisdiction to decide. section 20--question whether there was discharge of the contract by accord and satisfaction can be decided by arbitrator alone. - section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained behind in india. the husband thereupon started procededings before the high court of justice, family division. u.k. praying for an order that the minor child be made a ward of the court and for a direction upon the wife to return the minor child to the jurisdiction of the said court. a further direction was given for the passport and other international travel documents of the minor child to be handed over to the solicitors of the husband. a petition seeking protection of minor child was thereupon filed by father of the husband before delhi high court. a direction for handing over custody of child to father of husband was also sought. the high court considering fact that the u.k. court was already in seisin of matter and had passed an interim order and by relying on principle of comity of nations and comity of judgments of the courts of two different countries in deciding the matter directed the wife to take the child of her own to u.k.or hand it over to father of husband to be taken to u.k. as measure of interim custody and that it would be for the u.k. court to decide the question of custody - order was challenged by wife - held, the order of high court was not liable to be interfered with. although, on first impression, it would appear that the interests of the minor child would best be served if she is allowed to remain with the wife, the order of u.k. court cannot be lost sight of., the order of u.k. court except for insisiting that the minor be returned to its jurisdiction, the english court did not intend to separate the child from the mother until a final decision was taken with regard to the custody of the child. the ultimate decision in that regard has to be left to the english court having regard to the nationality of the child and the fact that both the parents had worked for gain in the u.k. and had also acquired permanent resident status in the u.k. english court has not directed that the custody of the child should be handed over to the father but that the child should be returned to the jurisdiction of the courts in the u.k. which would then proceed to determine as to who would be best suited to have the custody of the child. the high court has taken into consideration both the questions relating to the comity of courts as well as the interest of the minor child, which, no doubt, is one of the most important considerations in matters relating to custody of a minor child. - 7. as noticed at the outset, a division bench of this court in jai chand bhasin's case (supra), clearly held that when an application is made to court under s. it was clearly answered that it was for the arbitrator to decide the question and s. 's case (supra) clearly held that the question whether or not, there was discharge of the contract by accord and satisfaction should have been referred to the arbitration. ' in the aforesaid decision, it was clearly held that it was not for the court to decide the matter and the matter should have been referred to the arbitrator who will first determine the question whether there was accord and satisfaction between the parties and/or whether the contract was discharged.ordergokal chand mital, c. j. 1. twoquestions of law arise for our consideration in this appeal :--(1) is it for the court or the arbitrator to decide whether the claim is made within the time specified in the agreement or not? (2) is it for the court or the arbitrator to decide whether there was accord and satisfaction between the parties or not? 2. we are of the opinion that both the questions stand answered -- first by the two decisions of this court in jai chand bhasin v. union of india, : air1983delhi508 and ved prakash mittal v. the union of india, : air1984delhi325 and second by the decision of the supreme court in m/s. bharat heavy electricals limited, ranipur v. m/s. amar nath bhan prakash, : (1982)1scc625 .3. briefly adverting to the facts of the case, there was a contract between the parties under which the respondent was to supply 2600 metric tonnes of gram whole to the appellant and the appellant was to convert that gram whole into gram-dal and return gram-dal to the respondent. there was a time schedule for lifting of gram whole and after grinding for supply of gram-dal. it appears that the appellant did not lift gram whole with expedition and as a result demand was made from it on account of demurrage, wharfage and storage charges and interest. when on the aforesaid three counts, total sum of rs. 62,586.47 was sought to be deducted from other contracts, the appellant made payment of the aforesaid sum. ultimately, the appellant made delivery of gram-dal by 4th january, 1973.4. on 16th april, 1975 the appellant made an application under s. 20 of the arbitration act, 1940, to recover payment of rupees 62,586.47, which it was made to pay on account of demurrage, wharfage, storage charges and interest and since the full amount of charges for converting gram whole into gram-dal was not paid, rs. 5,320/- was claimed on this count. an amount of rs. 59,000/- was also sought to be demanded, details of which are not available on record.5. the respondent took the stand that the claim of rs. 5,320/ - is barred by time as under the agreement the same had to be made within one year and since the supply was made on 4th january, 1973, the petition filed on 16th april, 1975 was beyond one year and, thereforee, should be dismissed. regarding other claim of rs. 62,586.47, the stand was that it did not arise out of the contract and in any case the amount having been paid, there was no dispute liable to be referred to arbitration.6. the learned single judge agreed with both the contentions of the respondent and dismissed the application vide order dated 3rd october, 1978. this is contractor's appeal against the aforesaid order.7. as noticed at the outset, a division bench of this court in jai chand bhasin's case (supra), clearly held that when an application is made to court under s. 20 of the act by the contractor for making reference to arbitration as per agreement, this is not for the court making the reference to decide the question whether the demand for arbitration had been made by the contractor within the stipulated time and whether his claim should be deemed to have been waived in terms of the clause in the agreement. it was clearly answered that it was for the arbitrator to decide the question and s. 37(4) of the act has no applicability. this decision was approved by a full bench of this court in ved prakash mittal's case (supra). accordingly, following the aforesaid decision, we hold that the claim with regard to rs. 5,320/ - could not be held to be barred by time by the court deciding the application under s. 20 of the act and it was for the arbitrator to decide as per the dictum of the aforesaid cases. the decision of thelearned single judge is contrary to the aforesaid decisions and is hereby reversed.8. referring to the other question, the supreme court in bharat heavy electricals ltd.'s case (supra) clearly held that the question whether or not, there was discharge of the contract by accord and satisfaction should have been referred to the arbitration. we may refer with advantage the following words from the aforesaid decision :'hence the application of the respondent under s. 20 of the indian arbitration act should have been allowed and the matters in dispute between the parties, including the question whether or not there was discharge of the contract by accord and satisfaction should have been referred to arbitration.' in the aforesaid decision, it was clearly held that it was not for the court to decide the matter and the matter should have been referred to the arbitrator who will first determine the question whether there was accord and satisfaction between the parties and/or whether the contract was discharged. accordingly, we reverse the decision of the learned single judge in this behalf also.9. accordingly, the appeal is allowed and after setting aside the order of the learned single judge, we grant the application of the contractor filed under s. 20 of the act and direct the managing director, respondent no. 2, to appoint an arbitrator within a period of two months from the receipt of our order. the arbitrator will first decide whether the claims made are within time or not and whether the claim should be deemed to have been waived as per the clause of the agreement. the arbitrator would also decide whether or not there was discharge of the contract by accord and satisfaction and in case one of these points are decided in favor of the contractor, then he will proceed to determine the other claims made in the application under s. 20 of the act. it would also be open to the respondent-food corporation of india to raise its counter-claim, if any, before the arbitrator, which would also be decided, in case the arbitrator proceeds to determinethe claims of the contractor on merits.10. no costs.11. appeal allowed

Judgment:
ORDER

Gokal Chand Mital, C. J.

1. Twoquestions of law arise for our consideration in this appeal :--

(1) Is it for the Court or the arbitrator to decide whether the claim is made within the time specified in the agreement or not?

(2) Is it for the Court or the arbitrator to decide whether there was accord and satisfaction between the parties or not?

2. We are of the opinion that both the questions stand answered -- first by the two decisions of this Court in Jai Chand Bhasin v. Union of India, : AIR1983Delhi508 and Ved Prakash Mittal v. The Union of India, : AIR1984Delhi325 and second by the decision of the Supreme Court in M/s. Bharat Heavy Electricals Limited, Ranipur v. M/s. Amar Nath Bhan Prakash, : (1982)1SCC625 .

3. Briefly adverting to the facts of the case, there was a contract between the parties under which the respondent was to supply 2600 metric tonnes of gram whole to the appellant and the appellant was to convert that gram whole into gram-dal and return gram-dal to the respondent. There was a time schedule for lifting of gram whole and after grinding for supply of gram-dal. It appears that the appellant did not lift gram whole with expedition and as a result demand was made from it on account of demurrage, wharfage and storage charges and interest. When on the aforesaid three counts, total sum of Rs. 62,586.47 was sought to be deducted from other contracts, the appellant made payment of the aforesaid sum. Ultimately, the appellant made delivery of gram-dal by 4th January, 1973.

4. On 16th April, 1975 the appellant made an application under S. 20 of the Arbitration Act, 1940, to recover payment of Rupees 62,586.47, which it was made to pay on account of demurrage, wharfage, storage charges and interest and since the full amount of charges for converting gram whole into gram-dal was not paid, Rs. 5,320/- was claimed on this count. An amount of Rs. 59,000/- was also sought to be demanded, details of which are not available on record.

5. The respondent took the stand that the claim of Rs. 5,320/ - is barred by time as under the agreement the same had to be made within one year and since the supply was made on 4th January, 1973, the petition filed on 16th April, 1975 was beyond one year and, thereforee, should be dismissed. Regarding other claim of Rs. 62,586.47, the stand was that it did not arise out of the contract and in any case the amount having been paid, there was no dispute liable to be referred to arbitration.

6. The learned single Judge agreed with both the contentions of the respondent and dismissed the application vide order dated 3rd October, 1978. This is contractor's appeal against the aforesaid order.

7. As noticed at the outset, a Division Bench of this Court in Jai Chand Bhasin's case (supra), clearly held that when an application is made to Court under S. 20 of the Act by the contractor for making reference to arbitration as per agreement, this is not for the Court making the reference to decide the question whether the demand for arbitration had been made by the contractor within the stipulated time and whether his claim should be deemed to have been waived in terms of the clause in the agreement. It was clearly answered that it was for the Arbitrator to decide the question and S. 37(4) of the Act has no applicability. This decision was approved by a Full Bench of this Court in Ved Prakash Mittal's case (supra). Accordingly, following the aforesaid decision, we hold that the claim with regard to Rs. 5,320/ - could not be held to be barred by time by the Court deciding the application under S. 20 of the Act and it was for the Arbitrator to decide as per the dictum of the aforesaid cases. The decision of thelearned single Judge is contrary to the aforesaid decisions and is hereby reversed.

8. Referring to the other question, the Supreme Court in Bharat Heavy Electricals Ltd.'s case (supra) clearly held that the question whether or not, there was discharge of the contract by accord and satisfaction should have been referred to the arbitration. We may refer with advantage the following words from the aforesaid decision :

'hence the application of the respondent under S. 20 of the Indian Arbitration Act should have been allowed and the matters in dispute between the parties, including the question whether or not there was discharge of the contract by accord and satisfaction should have been referred to arbitration.'

In the aforesaid decision, it was clearly held that it was not for the Court to decide the matter and the matter should have been referred to the Arbitrator who will first determine the question whether there was accord and satisfaction between the parties and/or whether the contract was discharged. Accordingly, we reverse the decision of the learned single Judge in this behalf also.

9. Accordingly, the appeal is allowed and after setting aside the order of the learned single Judge, we grant the application of the contractor filed under S. 20 of the Act and direct the Managing Director, respondent No. 2, to appoint an Arbitrator within a period of two months from the receipt of our order. The Arbitrator will first decide whether the claims made are within time or not and whether the claim should be deemed to have been waived as per the clause of the agreement. The Arbitrator would also decide whether or not there was discharge of the contract by accord and satisfaction and in case one of these points are decided in favor of the contractor, then he will proceed to determine the other claims made in the application under S. 20 of the Act. It would also be open to the respondent-Food Corporation of India to raise its counter-claim, if any, before the Arbitrator, which would also be decided, in case the Arbitrator proceeds to determinethe claims of the contractor on merits.

10. No costs.

11. Appeal allowed