Ronix Polymer Pvt. Ltd. vs State of Tripura and Others

N.G. Das, J.—Both these writ petitions arise out of an agreement entered into between the parties for supply of UPVC pipes during the year 1996-97 and both these writ petitions having been heard analogously I proceed to dispose of both these writ petitions by this common order.

I have heard Mr. A. Choudhury, the learned senior counsel appearing on behalf of the Petitioner and Mr. U.B. Saha, the learned Government Advocate appearing on behalf of the Respondents.

To appreciate the contentions canvassed at the bar by the learned Counsel for the parties the facts material for the purpose may shortly be stated as under:

The Petitioner viz. Ronix Polymer Pvt. Ltd., which is a company within the meaning of Companies Act, 1956 entered into a works contract with the Government of Tripura for supply of UPVC pipes of different diamentions for the Public Health Engineering Works during the year 1996-97. The tender notice was issued on 16.10.96 being tender No. 4 EE/RD/96-97. The date of opening the tenders was specified as 22nd November, 1996. The tenders were duly opened and the tender submitted by the Petitioner was accepted. The supply of the UPVC pipes were also completed within the period starting from 28.3.97 and 30.3.97. The dispute arose as the UPVC pipes which were supplied by the Petitioner were rejected by the Respondent No. 3 i.e. Executive Engineer on the ground that most of the pipes which were supplied by the Petitioner had no DGS&D inspection mark on their bodies and that the pipes which were supplied were very old and discoloured.

The contract entered into between the parties contains various terms and conditions. The two conditions which are material for the purpose are that the materials shall be required to be inspected by the Inspection Wing of the DGS&D before the materials are actually despatched and the other condition is that all questions and disputes relating to the meaning of the specifications, design, drawings and instructions mentioned in the agreement and as to the quality of workmenship of materials used on the work or as to any other question claim, right, matter or thing whatsoever, in any way arising out of or relating to the contract, design, drawing specification etc. or otherwise failure to execute the same have to be referred to the sole arbitration viz. the Chief Engineer, Tripura Public Works Department and in case he is unable to act as an arbitrator to the sole arbitration of any person to be appointed by the Chief Engineer.

As already, stated, the case of the Petitioner is that he supplied the PVC pipes as per the terms and conditions and that before the PVC pipes were despatched to the Respondents, those were inspected by the Inspection Wing of the DGS&D and to that effect the DGS&D Inspection Wing also gave his stamp mark indicating that those were inspected. But it has been alleged by the Petitioner that even though the PVC pipes which were supplied by him were as per specification and also bore the stamp mark of DGS&D indicating its inspection, the Respondent No. 3, namely, the Executive Engineer most arbitrary rejected those pipes by his letter dated 24.5.1997 contained in Annexure-12.

It has also been stated that on receipt of a letter of the Executive Engineer dated 6.5.97 (Annexure-8) for inspection of the PVC pipes a joint tripartite meeting took place at the place of the Respondents-authority on 14.5.97 and in course of that joint meeting the DGS&D again examined the stamp marks given on the body of the pipes and confirmed that the stamp marks were same as put by them. It was however, pointed out that stamp marks given on those pipes might have been faded/removed during transit and hence it was agreed that the samples would be drawn and tested again in presence of the representatives of the consignee, Respondents and also DGS&D authority. The minutes that were prepared on the basis of those joint meetings also contain all these facts and pursuant to the minutes the Petitioner also wrote a letter to the Executive Engineer on 29.5.97 to inform him when the samples should be brought in Calcutta for re-testing. But the Petitioner was not favoured with any reply. On the other hand, most surprisingly the Respondent No. 3 rejected the PVC pipes by his aforesaid letter dated 24.5.97 (Annexure-12).

The Petitioner has, therefore, alleged that such act of rejection on the part of the Respondent No. 3 is arbitrary and mala fide and hence the Respondents should be directed to withdraw the aforesaid letter dated 24.5.97 and re-test the materials in terms of joint meeting held between the parties on 14.5.97 (Annexure-9).

Along with these writ petitions the Petitioner also filed petitions being numbered Civil Misc. Case 489/97 and Civil Misc. Case 490/97 for interim relief.

The Respondents resisted this petition by filing an affidavit-in-opposition wherein it has been contended, inter alia, that UPVC pipes which were supplied by the Petitioner did not bear the DGS&D stamp marks and that during joint inspection the same observation was also recorded in the minutes of the meeting. Moreover, the Petitioner proposed for re-testing only three samples which the Respondents could not agree. That apart the minutes which were prepared were subject to the approval of the Government of Tripura. It has been further contended that even as per the minutes the Petitioner did not produce the required number of UPVC pipes for re-testing and hence these applications are not maintainable.

Mr. U.B. Saha, the learned Government Advocate has taken a preliminary objection as to the maintainability of these writ petitions mainly on the ground that there is a specific Clause in the agreement that in case any dispute arises between the parties then the same has to be referred to the sole arbitration of the Chief Engineer, Tripura Public Works Department and in case he is unable to act as arbitrator to the sole arbitration of any person to be appointed by the Chief Engineer. There is no dispute that the agreement contains such a Clause. Relevant portion of the Clause 25 may however be extracted as under:

Except where otherwise provided in the contract, all questions and disputes relating to the meaning of specification, design, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatever in any way arising out or relating to the contract, design, drawings, specification, estimates, instructions...the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Chief Engineer, Tripura'' Public Works Department and in case he is unable to Act as an arbitrator to the sold arbitration of any person to be appointed by the Chief Engineer.... In all cases where the total amount of the claim in dispute is Rs. 50,000/- only or above the arbitrator shall give reason for the award.

The Clause as quoted above clearly shows that the contract in question contained this Clause for settlement of disputes by reference to arbitration. Mr. Saha has argued that the Respondents did not accept the PVC pipes which the Petitioner supplied not only because that those did not bear the stamp marks of DGS&D but those were also not as per specification and hence it is nothing of a dispute which as per the aforesaid Clause has to be settled by a reference to the arbitration. In support of his contention Mr. Saha has placed reliance upon a decision of the Supreme Court rendered in the case of State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., Mr. Saha has drawn my attention to the observation made by the Supreme Court under para 21 of its judgment which reads as under:

There is yet another substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration (Clause 67 of the Contract). The Arbitrators can decide both questions of fact as well as question of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 225. This existence of an effective alternative remedy-in this case, provided in the contract itself - is a good ground for the Court to decline to exercise its extraordinary jurisdiction under Article 226. The said Article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognised situation. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the Respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the Appellants. Indeed, the very resort to Article 226 - whether for issuance of mandamus or any other writ, order or direction - was misconceived for the reasons mentioned supra.

Mr. Choudhury, the learned senior counsel appearing on behalf of the Petitioner has, however, contended that the decision referred to above by the learned Govt. Advocate is not applicable to the present case as there is no dispute between the parties which needs to be referred to Arbitrator. Mr. Choudhury has quite emphatically laid stress upon the minutes that were prepared after the tripartite inspection of the pipes (Annexure-9) and submitted that in view of the minutes there is no scope for writing such a letter (Annexure-12) as has been written by the Respondent No. 3. It has also been submitted by Mr. Choudhury that in view of the minutes it cannot be said that a dispute arose between the parties calling for settlement by reference to arbitration. The minutes as recorded under Anenxure-9 may, therefore, be quoted as under.-

Name of work:- Supply of different dia UPVC pipes 6 kg/cm2 working pressure/observation on the materials supplied by M/s Ronix Polymers (P) Ltd. Calcutta.

Supply order No. EE/RD/CS/l(Pt-IV)/4767-77, dated 17.12.97.

In response to Executive Engineer, Resource Division letter No. EE/RD/CS/l(Pt- IV)/426-29, dated 6.5.97 Shri Rajendor Prasad, Dy. Director (QA) and Shri S.N. Das, A.D. (QA) called on the Executive Engineer. Consignee place was also visited and the pipes were checked. Following are the observation on the letter dt. 6.5.97.

Specification IS:4985/1988, the relevant specification for U.P.V.C. pipes does not specify any normal or approved colour. The colour of pipes were lighter grey comparing to other manufacturers and as for DGS&D representatives is acceptable.

Pipes were examined and only a small number of pipes were having DGS&D inspection mark.

As pointed out in the letter the stamp mark wherever available very faint and easily removable by rubbing. The stamp marks were examined by Shri S.N. Das, A.D. (QA) and it was confirmed by him that stamp marks were the same as put up by him. The possibility that the stamp marks came off during transit can not thereof be ruled out.

Since in most of the pipes stamp mark is not there, to be sure that the pipes supplied the same as inspected and released by D(QA), re-testing will be required.

As in case of pipes only a small number of couplers were having stamp mark. Regarding solvent cement, the polyetheline bags in which the jars were packed and sealed were missing. However, the details given by AD(QA) and pasted on the jars before sealing were still intact. However to be sure that the couplers and solvent cement confirm to specification these should also be re-tested.

To sort out the issue it was decided that

(i) Dimensions be checked for pipes and couplers as per sampling plan for all sizes at site jointly.

(ii) Three samples each for hydraulic, reversion, and impact test will be drawn jointly and tested in presence of the representatives of consignee and D(QA) in firms lab.

(iii) Samples of coupler and solvent cement will also be drawn jointly and tested in firms lab.

Firm whose representative also joined the meeting agreed to bear charges of transportation of samples to Calcutta, and arrange for testing in their lab. They also agreed to bear the expenditure for travelling and other charges for the representative of consignee deputed for testing. Material will be accepted if found in order after carrying out above mentioned tests/checkes.

The above proposal is subject to the approval of competent authority of Govt. of Tripura.

Sd/- Sd/- Rajender Prasad S.N. Das Dy. Director (QA) Asst. Director (QA) Sd/- Sd/- S.B. Debnath R.K. Saraogi

Resorce sub-divn. No. 1 Firm representative

A perusal of the minutes will clearly show that the UPVC pipes which were supplied did not specify the normal and approved colour and that most of the pipes (clause-4) did not bear the stamp marks. It was also noted that materials will be accepted if found in order after carrying out the above mentioned tests/checks.

Mr. Choudhury contends that in view of this minutes which were very much prepared in presence of the Respondent No. 3 there is no scope for the latter to reject the UPVC pipes so far supplied by the Petitioner without re-testing. But learned Government Advocate has submitted that the minutes do not indicates in any manner that the Executive Engineer was also present at the time of inspection. Mr. Choudhury''s reply, in this context, is that the letter dated 16.5.97 addressed to the Executive Engineer by the Assistant Engineer will clearly indicate that the Executive Engineer was very much present at the time of inspection. It is true that this letter indicates that the Assistant Engineer mentioned it in his letter that Executive Engineer was present. But this letter clearly states that Executive Engineer was present in the office. The UPVC pipes which according to the minutes were inspected do not appear to have been brought in the notice. At least the letter does not indicate that the UPVC pipes were brought in the office premises. Moreover, the minutes clearly stipulate that what were mentioned in the minutes were nothing but proposals and those were subject to the approval of the competent authority of the Government of Tripura. It is not denied that approval of the Government of Tripura was not taken. Records as made available before this Court do not indicate in any manner that the Petitioner made any sort of endeavour to get the approval of the authority of the Government of Tripura. Therefore, no reliance can be placed upon the proposals recorded in the minutes unless and until it is shown that those were approved by the competent authority of the Govt. of Tripura. It has been specifically averred that the UPVC pipes so far supplied by the Petitioner were not as per the specification. The claim of the Petitioner, on the other hand, was that those were very much as per specification.

In view of these rival contentions, I am of the view that it is very much a dispute coming within the purview of Clause 25 (supra) and this Clause cannot be superseded by the minutes Annexure-9.

Mr. Choudhury has at last contended that the Petitioner did not claim any money and as such the arbitration Clause is not attracted. But under para 25 of the writ petition (C.R. 490/97) it has been clearly stated that an amount to the extent of Rs. 50,23,618/- has been withheld which is payable to the Petitioner.

Therefore, in view of the facts discussed above and particularly in view of the Arbitration Clause I am of the considered view that the Petitioner ought to have approached arbitrator for settlement of the dispute by reference to arbitration.

For the reasons mentioned hereinabove, both the writ petitions are dismissed. It is however, open to the Petitioner, if it so chooses, to raise a dispute and ask for reference of the dispute to the Arbitration as provided under Clause 25 of the Agreement. Under the circumstances, there shall be no order as to costs.