Dismissed

Punjab State Civil Supplies Corp. v. R.S. Rice Mills & Anr.

Punjab & Haryana HC14 Sept 2009FAO/3392/2008

Case brief

AI extract

What is this about?

The Court condoned a 235-day delay in filing an appeal and dismissed the appeal setting aside an arbitral award. The award was upheld as it addressed the appellant's claims regarding rice supply, security deposit forfeiture, and interest adjustments.

What did the court decide?

Delay of 235 days in filing appeal condoned; appeal against the arbitral award dismissed.

Punjab State Civil Supplies Corp. Vs R.S. Rice Mills… — Arbitration | Punjab & Haryana HC (2009)

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FAO No. 3392 of 2008 (O&M) 1

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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FAO No. 3392 of 2008 (O&M) Date of decision: September 14, 2009

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Punjab State Civil Supplies Corporation Ltd.

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........ Appellant

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Versus

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R S Rice Mills and others .......Respondent(s)

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Coram: Hon'ble Ms Justice Nirmaljit Kaur

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-.-

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Present: Mr. J K Gurna, Advocate for the appellant

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Mr. M L Sarin, Senior Advocate with Ms Alka Sarin, Advocate for respondent Nos. 1 and 2

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-.-

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Whether Reporters of local papers may be allowed to see the judgment?

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To be referred to the Reporter or not?

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Whether the judgment should be reported in the Digest?

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Nirmaljit Kaur, J.

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C M No. 19462 CII of 2008

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This is an application under Section 5 of the Limitation Act, 1963, for condonation of delay of 235 days in filing the appeal.

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As per the reasons mentioned in the application, the delay has occurred on account of the fact that the file had to go before various officials of the appellant corporation i.e. at the Head Office level and then at the District level. It is also stated that the dealing assistant, namely, Balwinder Kaur posted at Head Office Chandigarh had suffered an acute paralytic attack

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FAO No. 3392 of 2008 (O&M) 2

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and she remained on leave with effect from 21.01.2008 to 15.02.2008 and 25.02.2008 to 20.03.2008. Due to her illness, the case file kept lying on her table as unattended. The averments made in the application is supported by an affidavit of Shri IPS Malhotra, Manager (Legal and Arbitration) Punjab State Civil Supplies Corporation Limited.

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Reply to the aforesaid application has been filed, vehemently opposing the same.

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There is no doubt that the aforesaid delay of each day has not been properly explained. However, taking into account that the delay is neither mala fide, nor on account of fraud, as also taking note of the fact that the same has occurred on account of the procedure involved, the delay of 235 days in filing the appeal is condoned.

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C.M. stands allowed.

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Appeal

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This is an appeal against the judgment dated 09.10.2007 passed by the Additional District Judge, Chandigarh, vide which the objection petition filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996, for setting aside the impugned Award dated 18.05.2001 has been dismissed.

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While challenging the aforesaid judgment, learned counsel for the appellant-corporation submitted that in the entire award, there is no mention about the claim raised by the appellant, whereas, they had raised a claim for recovery of the cost of the balance bags of rice amounting to Rs.3,97,135.55, detail of which was given in Annexure P-8 with the claim petition, sale tax @4.4% on bags lying with respondent millers, TDS @2.3% and quality cut etc. and the complete, details of which was duly given by

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FAO No. 3392 of 2008 (O&M) 3

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appellants vide its Annexure P-9 attached with claim petition before arbitrator, interest @ 21% per annum from 01.07.1996 to 31.03.199, amounting to Rs.30,534.61, detail of which was placed on record before arbitrator vide Annexure P-10, an amount of Rs.76120.20 also due towards respondents on account of late delivery of rice was submitted before Arbitrator vide Annexure P-11.

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After hearing learned counsel for the parties, I find no merit in the submissions made by the learned counsel for the appellant, inasmuch as, attention was invited by the learned counsel for the appellant to para 2 of the Award of the Arbitrator, wherein the entire claim dealt with has been duly mentioned. It reads as under:-

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“ On 14^th Oct. 1999, the claimant filed their claim along with fourteen Annexure from P-1 to P-12 (iii) for Rs.114640.82. Annexure P-9 gave the details of amount of Rs.114640/recoverable from the Defendants. The defendant filed their reply on 21^st Dec. 1996 where the extension of milling period up to 31^st Aug.1996 was mentioned in Annexure D/1.”

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Thus, the entire claim raised in Annexure P-8 to P-11 has ben duly mentioned in the award. Further, the area of the dispute was zeroed down by the Arbitrator, while making the award, as follows:-

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“Areas of Dispute

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After considering the claim filed by Punsup, reply of the claimants, replication of the defendants and statements of the witnesses and details coming to notice during cross examination of the witnesses produced by claimants and defendants, the area of disputes to be decided by the arbitrator are as under:-

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a) The claimants have claimed interest from 1^st July, 1996 whereas the defendants have argued that in view of extension

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FAO No. 3392 of 2008 (O&M) 4

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of milling period up to to 31^st August 1996 as per Punsup Endorsement dated 16^th Oct, 1996 (D/1) and as per proceedings of the District Managers held on 16/17 July 1996 (D/2), no interest should be charged for rice delivered up to 30^th Nov. 1996.

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b) The claimants have forfeited the security deposit of Rs.30000/- made by defendants whereas the contention of the defendants is that forfeiture is unjustified, illegal, unilateral and has been done without any prior notice to them.

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c) The interest should be paid to the defendants as Punsup has collected from defendants more than the due amount. d) The defendants stressed that as per Govt. Policy they having Rice Sheller of one Tone capacity could be allocated only 2000MT of paddy whereas they were allocated more than 3000 MT of paddy and therefore should be allowed extra time on proportionate basis.”

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Thus, the award has been passed by narrowing down the dispute raised in Annexure P8 to P-11 and after taking into consideration the claim of the Punsup, reply of the claimants, replication of the respondents, statements of the witnesses and other evidence. It cannot, therefore, be alleged that the Arbitrator did not take into account the claim filed by the appellant, which was detailed in Annexures P-8 to P-11 attached with the claim petition before the Arbitrator.

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Learned counsel for the appellant further argued that the Arbitrator had wrongly held that the appellant is not entitled for the interest with effect from 01.07.1996, whereas, the respondents had admitted and were prepared to pay interest, as per the terms of the contract.

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It may be noticed as pointed out that the fact of extension of the milling period up to 31.08.1996 was not disclosed by the claimants in their

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FAO No. 3392 of 2008 (O&M) 5

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claim. Once, it was found that the milling period was extended up to 31.08.1996, the interest was held to be payable by the respondents only with effect from 01.09.1996 on amounts outstanding against the respondents. The Arbitrator, after considerable deliberations found that an amount of Rs.22,013.89 has been received in excess by the respondents and after adjusting, the respondents were held liable to pay only Rs.8,475.09 as interest. Thus, the arguments raised by the learned counsel is rejected being without any basis.

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It is, therefore, apparent that the period to supply the entire milled paddy was extended up to 31.08.1996. It is not disputed that the respondents had deposited the security at the time of the execution of the agreement. It is also not denied that the paddy was duly supplied by the respondents up to the extended period i.e. 31.08.1996. The controversy, therefore, stood reduced to adjustment of the accounts. Thus, no fault can be found with the Award. Even otherwise, no ground as envisaged under Section 34 of the Act is made out, which may allow the court to set aside the Award. There is nothing on record to show that the award was contrary to the terms and conditions of the agreement or as to how the same was against the public policy.

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In view of the above, the appeal is hereby dismissed, being devoid of merits.

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(Nirmaljit Kaur) Judge

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September 14, 2009 mohan

Punjab State Civil Supplies Corp. v. R.S. Rice Mills & Anr.

Case brief

What is this about?

What did the court decide?

Punjab State Civil Supplies Corp. v. R.S. Rice Mills & Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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