The Empire Jute Co. Ltd. And Ors vs The Jute Corporation Of India Ltd. And ...

J U D G M E N T [Arising out of SLP(C) No. 862 OF 2007] WITH CIVIL APPEAL NO. 4878 OF 2007 [Arising out of SLP(C) No. 1343 of 2007 AND CIVIL APPEAL NO. 4879 OF 2007 [Arising out of SLP(C) No. 1602 of 2007 S.B. SINHA, J

3. First Appellant is owner of a jute mill. In exercise of power conferred upon it under Section 3 of the Essential Commodities Act, Government of India made an Order in the year 2000 known as Jute and Jute Textile Control Order, 2000. By reason 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 BTwill 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- Twill jute bags for the delivery in the month of December 2002 provisionally at Rs. 1712.77p per hundred bags. The price for the said bags was arrived at upon taking into account hundred percent JCI in raw jute linkage i.e. the mills should compulsorily purchase raw jutes only from the Jute Corporation of India.

(c) A writ of and/or order and / or direction in the nature of mandamus be issued commanding the respondents to allocate and supply consignment of raw jute as per productivity norms of Jute Manufacturers Development Council for manufacture of B-Twill Jute bags of 665 gms.

We, therefore, direct the parties to settle the amount through arbitration in terms of the agreement. The arbitration will adjust the amount that will be handed over to the appellant by the learned advocate for the writ petitioners by virtue of this order while assessing the actual amount payable by the writ petitioners to the appellant due to taking delayed delivery of the goods.

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.

Based on the settlement of claim for quality, condition and weight if the buyers are found to be entitled to recover any amount from the Corporation, payment should be made within 15 days from the date of receipt of the debit note.

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.

(c) The parties would be at liberty to approach the High Court for any other or further direction(s).

(d) The learned Arbitrator would make an Award within a period of four months from the date of entering into reference.

(e) All amount deposited by the appellant with the learned advocate on record towards the carrying charges should be paid to the second respondent, wherefor an appropriate receipt would be given.

(f) Such payment shall be without prejudice to the rights of the parties before the Arbitrator and shall be subject to any other or further order or direction that may be issued by the learned Arbitration in his Award.

26. These appeals are allowed to the aforementioned extent. In the facts and circumstances of this case, the parties shall pay and bear their own costs.