M/s Ishwar Rice Mills Bhikhi Road, Budhlada v. Punjab State Civil Supplies Corporation Limited & Ors.
Case at a glance
- Decided
- 05 Dec 2012
Outcome
Set aside
impugned judgment is set aside and the appellant would deposit whole of
Provisions considered
- Arbitration and Conciliation Act, 1996 ss. 16(VI), 34
Judgment
Hon'ble Mr. Justice A.N. Jindal Present: Mr. Surinder Garg, Advocate for the appellant. Ms. Ritam Aggarwal, Advocate for the respondents. A.N. Jindal, J Assailed in this appeal is the order dated 4.3.2010 passed by the Additional District Judge, (Ad hoc), Fast Track Court, Mansa, dismissing the application filed by the petitioner-appellant under Section 34 read with Section 16 (VI) of the Arbitration and Conciliation Act, 1996 (herein referred as, 'the Act'). The learned counsel for the appellant undertakes to deposit the amount of Rs.5,67,521/- being the price difference. As regards the interest, the sole Arbitrator PUNSUP, has not mentioned as to from which date the interest is payable when the said arbitration award dated 1.12.2008 was challenged, the learned Additional District Judge, Mansa did not mention anything regarding interest in the judgment, however, dismissed the application. The petitioner had initially set up the claim for Rs.54, 12,175/-, then the Arbitrator while reducing the claim ordered award for a sum of Rs.5,67,521/-. The respondents did not challenge the said award before the District Judge, Mansa by filing any objection petition.
However, the objection petition filed by the appellant was dismissed. The relevant observations made by the Additional District Judge, Mansa, are reproduced as under :- “10. The challenge to the award by the petitioner is mainly only on the grounds of jurisdiction, limitation and that the F.A.O. No. 3638 of 2010 (O&M) -2- matter decided by the Arbitrator was not covered in the arbitration clause. The record of the Arbitrator is before the court. A perusal of the impugned award reveals that the respondents lodged claim of Rs.54,12,175/- with future interest. The petitioner appeared before the Arbitrator and contested the claim. Both the parties were afforded opportunity to produce evidence and after taking into consideration the evidence produced on record, the claim of the respondent for only Rs.5,67,521/- was accepted. The applicant was also ordered to pay interest at the bank rate till the date of realization.
The arbitral award cannot be declared illegal only for the reason that respondents have also challenged some of the findings of the Arbitrator. The respondents have questioned the findings qua claim of the respondents, which was not accepted by the Arbitrator. The respondents have not filed any counter claim. As such, the respondents also cannot be granted relief regarding the claim not accepted by the Arbitrator.” On examination of the arbitration award as well as the appellate court's judgment, it transpires that neither the arbitrator cleared as to from which date the appellant is bound to pay interest and at what rate, nor it is revealed from the judgment dated 4.3.2010 passed by the the Additional District Judge, Mansa. Though, sub-clause (iii) of Clause 6 of the agreement (Annx.P1), speaks that in the event of failure to supply the rice by the appellant within the stipulated period, he would be liable to pay interest @ 21% per annum, on the basis of the economic cost of left over quantity/stocks of paddy/ rice.
Operative part
The decision of the Managing Director in this behalf would be final. But, the Managing Director neither took any decision regarding payment of interest nor the arbitrator has decided about the interest. The clause was relaxed by the arbitrator while holding that the Miller was liable to pay interest at the bank rate. In any case, the award is not clear about the date of fault committed by the miller, as such I will have to treat the deemed date of fault as the date of passing of the award from which the Miller would be liable to pay interest. It is also F.A.O. No. 3638 of 2010 (O&M) -3- well known that the bank rate remain fluctuating from time to time, therefore, we will have to determine certain bank rate i.e. 12% per annum from the date of award within three months, failing which the Miller would have to pay interest @ 21% per annum. In these circumstances, this appeal is partly accepted, impugned judgment is set aside and the appellant would deposit whole of the award amount i.e. Rs.5,67,521/- along with interest @ 12% per annum from the date of award i.e. 1.12.2008, within three months from today, failing which the Miller would have to pay interest from the date the arbitration proceedings commenced. December 05, 2012 deepak (A.N. Jindal) Judge
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: impugned judgment is set aside and the appellant would deposit whole of
Which statutory provisions did this judgment involve?
Arbitration and Conciliation Act, 1996 — ss. 16(VI), 34.
Which court decided this case, and when?
Punjab & Haryana High Court, on 05 Dec 2012.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.