IN THE HIGH COURT OF DELHI AT NEW DELHI

ORIGINAL JURISDICTION

A.A. NO. OF 2007

IN THE MATTER OF :

M/s. Oswal Chemicals & Fertilizers Ltd. (OCFL) ... Petitioner/

Applicant.
Versus

1. The Managing Director,

The Haryana State Coop.
Supply & Mktg. Federation Ltd. (HAFED)
Hafed Corporate Office
Sector-5, Panchkula
Haryana-134 109.

2. The Managing Director,

Haryana Agro Industrial Corporation, (HAIC)
SCO 811-12,
Sector-22A,
Chandigarh

3. The Managing Director,

Haryana Land Reclamation Development Corp., (HLRDC)
SCO 32-34,
Sector-17C,
Chandigarh … Respondents

PETITION UNDER SECTION 11 OF THE

ARBITRATION AND CONCILIATION ACT
1996 ON BEHALF OF THE PETITIONER

To

The Hon’ble Chief Justice of Delhi High Court and

his Companion Justices

The humble Petition of the

Petitioner/Applicant above-named

MOST RESPECTFULLY SHOWETH:

1. That the Petitioner Company is a Public Limited Company

incorporated under the Companies Act, 1956 and having its

Registered Office at Village & Post Office Piprola, Shahjahanpur –

242 001 (U.P.) and also having their office at 7 th Floor, Antriksh

Bhawan, 22, Kasturba Gandhi Marg, New Delhi – 110 001. The

petition has been signed by Shri Lalit Paul, duly authorised

representative of the petitioner company who is also otherwise

competent and well conversant with the facts and circumstances of

the whole case. The true copy of the Board Resolution is attached

herewith and marked as ANNEXURE-P/1.

2. The petitioner company is a Public Limited Company and is

inter alia engaged in the manufacturing and supply of Di Ammonium

Phosphate (DAP) and is a leading producer of DAP and is

committed to fulfill the fertilizer needs of the nation. Since its

inception, the petitioner Company has been pursuing the objective of

making use of some of the best known global technologies and has

been safeguarding the environment.

3. The respondent No.1 is a nodal agency, which floats the

tender for the purchase of Indigenous/imported DAP, with authority

to enter into contract with The Haryana State Coop. Supply & Mktg.

Federation Ltd. (HAFED), i.e Respondent No.1, Haryana Agro

Industries Corp. (HAIC) i.e. Respondent No.2 and Haryana Land

Reclamation Development Corp. (HLRDC) i.e. Respondent No.3 on

the terms and conditions mentioned in the Tender document.

4. The Respondent No.2 & 3 are the indenting agencies of which

Respondent No.1 is a parent company which float the tender for the

purchase of indigenous/imported DAP with authority to enter into

contract with Respondent No.1, i.e HAFED itself, Respondent No.2,

i.e. HAIC and Respondent No.3, i.e. HLRDC.

5. In the year 2003-04, the Respondent No.1 floated a tender for

procuring the supply of DAP. The Petitioner Company, in the same

year were supposed to supply the desired quantity of materials as

per the order placed by Respondent No.1. The true copy of the

tender document for the year 2003-04 is annexed hereto as

ANNEXURE –P/2.

6. It is pertinent to mention here that the Petitioner Company had

sufficient raw materials in stock to meet the requirements of the

Respondent No.1, i.e. HAFED for the year 2003-04, but because of

the Embargo imposed by the Orissa State Government, eventually

the Petitioner Company could not supply the desired quantity of

materials placed by the Respondent No.1 herein. Although the

Petitioner Company managed the permission to operate their plant

at Paradeep, Orissa within a couple of days, but were again asked

to stop the operation.

7. It is submitted that in view of the aforementioned

circumstances the Clause 16(i) of the Tender Document (Force

Majeure), shall be applicable in the present case. The said Clause

16 (i) of the tender document is being reproduced hereunder for the

sake of convenience:-

“16. FORCE MAJEURE:

i) If any time during the existence of this contract

party is unable to perform the obligations under this
contract because of war, hostility, civil commotion’s,
sabotage, quarantine restrictions, acts of God and acts
of Government (including but not restricted to
prohibition of exports or imports), fires, floods,
explosions, epidemics, strikes, embargoes, then the
date of fulfillment of the obligations shall be postponed
 during the time when such circumstances are
operative.”

8. For the year 2004-05, the Respondent No.1 being the Nodal

agency issued a collective purchase order for purchase of

indigenous/imported DAP. The Petitioner herein put their tender for

supply of DAP for the year 2004-05. In fact the Respondent No.1

vide letter dated 02.09.2004 invited the Petitioner herein for

negotiation in respect of finalizing their Tender for the year 2004-05

before the High Power Purchase Committee to be held on 8 th

September, 2004. The true copies of the letter dated 02.09.2004

and the tender document for the year 2004-05 are annexed herewith

as ANNEXURE-P/ 3 (Colly).

9. Subsequently In a meeting held with the High Power Purchase

Committee under the Chairmanship of Hon’ble Chief Minister of

Haryana, on 8th September 2004, in which the Petitioner herein was

invited to settle the old issues and therefore the following points

were decided:-

(i) No Penal action will be taken against the Petitioner

herein i.e. M/s OCFL for short supply of materials for
the year 2003-04.

(ii) The petitioner herein will supply the left over quantity
i.e. 80000 MTs for the year 2003-04 plus another
quantity of 85000 MTs for the year 2004-05 together
with 1,65,000 MTs in the year 2004-05.

(iii) The petitioner herein will submit a bank guarantee of

Rs.2,17,20,000/- (Rupees two crores seventeen lacs
and twenty thousand only) for 80000 MTs plus bank
guarantee to the Respondents herein.

10. It is submitted that as per the decision taken in the aforesaid

High Power Purchase Committee, on 9.9.2004, the Petitioner herein

had submitted the bank guarantee of Rs.2,17,20,000/- (Rupees two

crores seventeen lacs and twenty thousand only) to Respondent

No.1 herein for the year 2003-04.

11. It is relevant to state here that the Respondent No.1 vide letter

dated 28.9.2004 had revised their order to the tune of 85,000 MTs,

for the supply of materials to all three Respondents herein, for the

year 2004-05. The true copy of the letter dated 28.9.2004 is

annexed herewith as ANNEXURE-P/ 4.

12. The petitioner herein had made available a quantity of 89000

MTs for all the three Respondents herein i.e. Institutional Agencies

as at the end of November, 2004. The petitioner herein had also

requested for further dispatch instructions from all the Respondents

herein but despite of Petitioner’s request, no further dispatch

instructions were received, due to which Petitioner herein was

unable to organize further rakes for Haryana destination for meeting

the requirements of the Respondents herein. In this respect letters

dated 30.11.3004, 2.12.2004 and 6.12.2004, may be referred in

which the Petitioner herein had requested the Respondents herein

for placing further indents but the same were not placed by the

Respondents herein. The true copies of the letters dated

30.11.2004, 2.12.2004 and 6.12.2004 are annexed herewith as

ANNEXURE-P/5 (Colly).

13. It is pertinent to state here that vide letter dated 15.12.2004,

the Petitioner herein had clarified that there was no decision nor

discussion relating to off-setting a part of payment against the

money due to the Petitioner herein for supplies during the “Rabi”

against the last year’s account. In fact it was decided by the High
Power Purchase Committee held on 8th September, 2004 under the

Chairmanship of the Hon’ble Chief Minister of Haryana that the

Petitioner herein should raise a Performance Guarantee, covering

the year 2003-04 indented quantity by Respondents i.e. Institutional

Agencies and submit the same within a day, which had been

promptly done by Petitioner herein.

14. It is also relevant to state here that the Petitioner herein had

supplied the total quantity of 80832.65 MTs of DAP out of the total

order placed by the Respondent No.1 herein i.e. 85,000 MTs for the

year 2004-05 as the Respondents herein were unable to accept any

further quantity. The Petitioner herein had also requested for the

release of the balance outstanding payments vide letter dated

15.12.2004. The true copy of the letter dated 15.12.2004 is annexed

herewith as ANNEXURE-P/6.

15. To the shock and surprise of the Petitioner herein the

Respondent No.3 herein i.e. the Haryana Land Reclamation

Development Corp. (HLRDC) issued a Notice of Recovery dated

8.3.2006 without taking into effect the material facts and protracted

correspondences exchanged between the Petitioner herein and the

Respondents. The true copy of the notice of recovery dated

8.3.2006 is annexed herewith as ANNEXURE-P/7.

16. The Petitioner herein after receiving the aforesaid notice of

recovery dated 8.3.2006 sent a detailed reply dated 18.3.2006 to the

Respondent No.3 herein stating all the relevant facts and

circumstances, but the same was not at all considered by the

Respondent No.3. The true copy of the Reply dated 18.3.2006 is

annexed herewith as ANNEXURE-P/8.

17. It is submitted that inspite of the aforesaid reply dated

18.3.2006 by the Petitioner herein stating all the relevant fact and

circumstances the Respondent No.3 without appreciating the same

and without taking into consideration the facts put forth, erroneously

passed an arbitrary one sided order dated 30.3.2006 against the

Petitioner herein and held that the Petitioner herein is liable for the

damages and subsequent losses suffered by the Respondent No.3

@ Rs.165/- P. MTs for 26471.35 MTs DAP short supplied by the

Petitioner herein during the year 2004-05 and hence,

Rs.43,67,772.75 (i.e. 26471.35 MTs @ Rs.165/- P. MTs) be

recovered by the Respondent Corporation from the Petitioner herein

for breach of contract made by the supplier. The true copy of the

order dated 30.3.2006 is annexed herewith as ANNEXURE-P/9.

18. It is relevant to point out here that the following amounts are

outstanding on all the three Respondents herein against the supply

of DAP made by the Petitioner herein for the year 2004-05.

The details of outstanding amount are as follows:-

Principal Interest @ 18% Grant Total

Amount p.a.

Respondent Rs.34,03,860/- Rs.12,87,498/- Rs.46,91,358/-

No.1 (From 24.12.2004
(i.e.HAFED) to 30.1.2007)

Respondent Rs.1,67,41,035/- Rs.60,35,028/- Rs.2,27,76,063/-

No.2 (From 29.1.2005 to
(i.e.HAIC) 30.1.2007)

Respondent Rs.44,51,630/- Rs.16,04,782/- Rs.60,56,412/-

No.3 (From 29.01.2005
(i.e. to 30.1.2007)
HLRDC)
 Therefore, all the three Respondents are liable to pay the aforesaid

outstanding amounts illegally withheld by them against the supply of materials

made by the Petitioner herein for the year 2004-05.

19. For the purpose of protection of interest of Petitioner herein and in

view of the dispute having arisen and in reference to the Arbitration clause 17

of the Tender Document floated by HAFED for the year 2004-05, which reads

as follows:-

Clause-17. ARBITRATION:
“In the event of any dispute arising under or out of or in
connection with or relating to the contract, the matter in
dispute shall be settled mutually between HAFED, HAIC &
HLRDC and the supplier, failing which the same will be
referred to the sole arbitrator i.e. Registrar Cooperative
Societies, Haryana or his nominee whose decision shall be
final and binding both the parties.”

The Petitioner herein decided to invoke the Arbitration clause as

envisaged in the Tender Document for the year 2004-2005 seeking to

appoint an Arbitrator and hence sent a notice for Arbitration dated

6.2.2007 calling upon the Respondents to convey their willingness to

accept the Sole Arbitrator within a period of 30 days from the receipt of the

notice. The true copy of the Notice for Arbitration dated 6.2.2007 is

annexed herewith as ANNEXURE-P/10.

20. The Respondents herein failed to reply to the aforesaid notice for

Arbitration dated 6.2.2007 duly served on them and therefore failed to

abide by the Arbitration clause contained in the tender document executed

between the Petitioner herein and the Respondents. It is further relevant

to point out here that the Respondent herein had also failed to pay the

outstanding amount illegally withheld by them against the supply made by

the Petitioner herein for the year 2004-05. The details of the outstanding

amount are already set out in aforesaid para 18.

21. Being aggrieved and as a result of such failure on the part of all the

three Respondents herein to convey their acceptance as to the

appointment of the Sole Arbitrator proposed by the Petitioner herein in the

notice for Arbitration dated 6.2.2007, the Petitioner herein is constrained to

approach this Hon’ble Court for the appointment of an Arbitrator under

Section 11 (6) of the Arbitration and Conciliation Act., 1996.

PRAYER

In view of the aforesaid circumstances, it is most respectfully

prayed that this Hon’ble Court may graciously be pleased to:

[a] appoint any or such other person as may be deemed

appropriate to be the Sole Arbitrator under Section 11 (6) of the
Arbitration and conciliation Act., 1996 pursuant to the Tender
Document (2004-2005) executed between parties to resolve the
disputes that have arisen between the Petitioner herein and the
Respondent as set;

[b] refer to the disputes as set out in detail herein above or such

other disputes or claim as this Hon’ble Court deem fit and

proper to the Sole Arbitrator for the adjudication;

[c] pass such other and further order or orders as this Hon’ble

Court may deem fit and proper in the facts and circumstances of

the present case.

FILED BY:

Namrata Chopra/Kumar Dushyant Singh

FOR INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI – 110001
Settled by:

[RAJIV DUTTA]
Senior Advocate

May 3rd, 2007

 IN THE HIGH COURT OF DELHI AT NEW DELHI

ORIGINAL JURISDICTION

A.A. NO. OF 2007

IN THE MATTER OF :

M/s. Oswal Chemicals & Fertilizers Ltd. (OCFL) ... Petitioner/

Applicant.
Versus

The Managing Director, HAFED, & Ors. … Respondents

AFFIDAVIT

I, Lalit Paul son of late Shri G.N. Paul, aged about 51 years,
authorized of the Petitioner Company having their office at 7 th Floor,
Antriksh Bhawan, 22, Kasturaba Gandhi Marg, New Delhi, do
hereby solemnly declare and state as under:

1. That I am the authorized representative of the Petitioner

Company and as such well aware of the facts and
circumstances of the present case from the records and am
competent to swear to this affidavit on behalf of the petitioner
firm.

2. That the contents of the above Petition under Section 11 of

the Arbitration and Conciliation Act. 1996 are true and correct
to my knowledge and as per the information received from the
records of the Petitioner Company and believed to be true.

DEPONENT
VERIFICATION:

Verified at New Delhi on this the th day of April, 2007 that the
contents of the above Affidavit are true and correct to the best of my
knowledge and belief and that nothing false has been stated therein
or material concealed therefrom.

D E P O N E NT
 IN THE HIGH COURT OF DELHI AT NEW DELHI

ORIGINAL JURISDICTION

A.A. NO. OF 2007

IN THE MATTER OF :

M/s. Oswal Chemicals & Fertilizers Ltd. (OCFL) ... Petitioner/

Applicant.
Versus

The Managing Director, HAFED, & Ors. …Respondents

INDEX

SL. PARTICULARS PAGES

NO.
1. Urgent Application A

1A. Demand draft No.015356 dated 24.5.2007 for a B

sum of Rs.1000/-

2. Memo of Parties C

3. Petition Under Section 11 of the Arbitration and

conciliation Act 1996 on behalf of the Petitioner 1 – 10
with Affidavit.

4. ANNEXURE-P/1
True copy of the Board Resolution. 11

5. ANNEXURE-P/2
True copy of the tender document for the year 12 – 31
2003-04.

6. ANNEXURE-P/3 (Colly)
True copies of the letter dated 02.09.2004 and 32 – 52
the tender document for the year 2004-05.

7. ANNEXURE-P/4
True copy of the letter dated 28.9.2004. 53

8. ANNEXURE-P/5 (Colly)
True copies of the letters dated 30.11.2004, 54 – 56
2.12.2004 and 6.12.2004.

9. ANNEXURE-P/6
True copy of the letter dated 15.12.2004. 57

10. ANNEXURE-P/7
True copy of the notice of recovery dated 58 – 59
8.3.2006.
11. ANNEXURE-P/8
True copy of the Reply dated 18.3.2006. 60 – 62

12. ANNEXURE-P/9
True copy of the order dated 30.3.2006. 63 – 65

13. ANNEXURE-P/10
True copy of the Notice for Arbitration dated 66 – 69
6.2.2007.

14. Vakalatnama D

FILED BY:

Namrata Chopra/Kumar Dushyant Singh

FOR INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI – 110001
Phone No.: 23310290

May , 2007
 IN THE HIGH COURT OF DELHI AT NEW DELHI

ORIGINAL JURISDICTION

A.A. NO. OF 2007

MEMO OF PARTIES

IN THE MATTER OF :

M/s. Oswal Chemicals & Fertilizers Ltd. (OCFL) ... Petitioner/

Applicant.
Versus

1. The Managing Director,

The Haryana State Coop.
Supply & Mktg. Federation Ltd. (HAFED)
Hafed Corporate Office
Sector-5, Panchkula
Haryana-134 109.

2. The Managing Director,

Haryana Agro Industrial Corporation, (HAIC)
SCO 811-12,
Sector-22A,
Chandigarh

3. The Managing Director,

Haryana Land Reclamation Development Corp., (HLRDC)
SCO 32-34,
Sector-17C,
Chandigarh … Respondents

FILED BY:

Namrata Chopra/Kumar Dushyant Singh

INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER/APPLICANT
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI - 110001

May 3rd, 2007

1. The Managing Director,
The Haryana State Coop.
Supply & Mktg. Federation Ltd. (HAFED)
Hafed Corporate Office
Sector-5, Panchkula
Haryana-134 109.

2. The Managing Director,

Haryana Agro Industrial Corporation, (HAIC)
SCO 811-12, Sector-22A,
Chandigarh

3. The Managing Director,

Haryana Land Reclamation
Development Corp., (HLRDC)
SCO 32-34, Sector-17C,
Chandigarh