1. This is first appeal by the Controller of Stores, Punjab against Messrs. K. K. K. Mills of Ludhiana from the order of Shri Amir Chand Rampal, Sub Judge, 1st Class, Ludhiana, dated May 1, 1969, holding in a petition under Section 33 of the Arbitration Act, 1940 that the dispute was not referable to arbitration.
2. Facts leading to the appeal are as under:--
An order was placed on behalf of the appellant with the respondent for supply of certain goods specified therein. That order is marked as Exhibit P. 1. In that order, there are given special conditions on page 1 in type whereas there are given general conditions in print overleaf. The order was complied with and the goods were supplied by the respondent to the appellant. It is started that the amount due on the basis of the goods supplied was also paid to the respondent. On October 25, 1967, some audit objection was raised that there had been delay in the delivery of goods by the respondent according to the terms of the conditions for the supply of goods. This objection gave rise to a dispute between the parties. The matter in dispute was referred to arbitrator for settlement. A petition was filed on July 8, 1968, under Section 33 of the Arbitration Act by the respondent contending that there did not exist any arbitration agreement between the parties and that the matter could not be referred to the arbitrator. In reply the appellant opposed the petition and pleaded that condition No. 6 of the general conditions was an arbitration clause and the matter in dispute was determinable only by the arbitrator and not otherwise. Condition No. 6 runs as follows:-- 'All disputes between (parties) arising out of this contract or in relation thereto or with respect to the meaning or effect of any term of condition of the contract or the rights and liabilities of the parties under this contract shall be referred to the arbitration of the Controller of Stores, Punjab acting as such at the time of the reference, or if he shall be unable or unwilling to act to the arbitration of any other officer of the Punjab Government nominated by him and the award of the arbitration shall be conclusive and binding on the parties.'
3. The pleadings of the parties gave rise to the following issues:--
'(1) Was the impugned supply order not subject to all conditions printed and typed over it?
(2) Was there any dispute between the parties to be referred to the arbitration?'
4. On both the issues, the trial Court gave findings against the appellant and in favour of the respondent. Hence this appeal.
5. The counsel for the appellant has argued that the findings given on both the issues are unsustainable.
6. The trial court has taken the view that since the respondent appended his signature in token of the acceptance of the terms of contract of supply of goods only on the first page and did not sign on the next page, the respondent could not be aware of the general conditions printed on the second page of Exhibit P.1 and that the respondent could not have known about condition No. 6, in terms of which the disputes between the parties are referable to arbitration. The document of letter of supply, Exhibit P.1 is one consolidated document. The terms of contract exist on either side of it. It is very difficult to accept the view taken by the trial court that the general conditions mentioned overleaf had not been separately signed on behalf of the respondent and consequently are not binding the respondent. I have scrutinised the three special conditions on the first page in the Second column. Condition No. 1 provides the joint inspection will be carried out before the despatch. Condition No.2 provides that quantity along with sizes and despatching instructions will be intimated by some indenting officer. Condition No.3 provides that 10 percent of the value of the order should be deposited as security within a week. Conditions Nos.1 and 3 are altered conditions recast by alteration of the corresponding general conditions numbered as 3(i) and 4 on the back of the document, Exhibit P.1 whereas condition No.2 is entirely a different conditions and is in addition to the general conditions printer overleaf. It is not open to the respondent to contend that he was bound by the special conditions typed on the first page of the document but he had nothing to do with the general conditions printed on its back on the second page. Conditions on both sides of the document are binding on the respondent. He cannot wriggle out of his liability under the agreement for reference to arbitration as given in condition No. 6 existing in the general conditions given in that document. The trial court has thus not taken correct view in coming to the conclusion that Condition No.6 providing for reference of disputes whatsoever between the parties to arbitration is not binding on the respondent.
7. Shri D. N. Awasthy appearing on behalf of the respondent contended that the various terms of the contract having been performed and the contract of supply of goods having fully executed, no dispute survived between the parties and consequently under Condition No.6 of the general conditions, nothing could be referred to arbitration. Even if a contract has been executed, there may arise a dispute between the parties pertaining to the non-compliance with the terms of contract entered into between the parties. In the present case, the case of the appellant is that there was belated supply of goods ordered to be supplied by the respondent and consequently the appellant is entitled to claim damages. In a petition under Section 33, Court cannot enter into the realm of merits pertaining to the nature of a dispute and seek its determination. In the present case, it is being alleged by the appellant that there does not exist a dispute between the parties pertaining to the delayed supply of goods by the respondent to the appellant and that fact is being denied in reply by the respondent. Settlement of that dispute in the privilege and function of the arbitrator and Court has nothing to do with it. Thus, the point raised has force and the view taken by the trial Court under Issue No.2 is not sustainable.
8. For the foregoing reasons, I allow the appeal and set aside the order of the trial court dated May 1, 1969. There will, however, be no order as to costs.
9. Appeal allowed.