Dismissed

M/S Saluja Rice Mills v. Pb State Civil Supply Corpn Ltd. and Ors.

Punjab & Haryana HC7 Apr 2011CWP/6175/2011

Case brief

AI extract

What is this about?

Petitioner challenged the appointment of a sole arbitrator and the subsequent award in a custom milling dispute. The Court dismissed the writ petition, holding the plea was an abuse of process and barred by res judicata as it was raised but rejected in prior litigation.

What did the court decide?

Writ petition dismissed. The appointment of the sole arbitrator and the award were upheld. The petition was barred by principles of res judicata.

M/S Saluja Rice Mills Vs Pb State Civil Supply Corpn… — Arbitration | Punjab & Haryana HC (2011)

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IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH

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Civil Writ Petition No.6175 of 2011

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Date of Decision : April 07, 2011.

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M/s Saluja Rice Mills, Guruhar Sahai

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..... Petitioner

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versus

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The Punjab State Civil Supply Corporation Ltd. & others

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..... Respondents

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CORAM : HON'BLE MR.JUSTICE SURYA KANT.

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Present : Mr.Deepak Aggarwal, Advocate for the petitioner.

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-.-

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1. Whether Reporters of Local papers may be allowed to see the judgment?

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2. To be referred to the Reporters or not?

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3. Whether the judgment should be reported in the Digest?

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(Oral) Surya Kant, J.

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The petitioner-rice mill seeks quashing of the order dated 7.4.1999 (Annexure P-6) whereby the respondent-Corporation had appointed the third respondent as the sole Arbitrator to adjudicate the dispute between the parties, as well as the award dated 16.4.2001 (Annexure P-9) passed by the sole Arbitrator which has been further upheld by the learned District Judge, Ferozepur vide judgment dated 4.1.2006 (Annexure P-12) as well as by this Court vide order dated 4.3.2008 in FAO No.4670 of 2006 (Annexure P-13).

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C.W.P.No .6175 of 2011 2

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An agreement dated 19.10.1995 (Annexure P-1) was entered into between the petitioner-rice mill and the respondent-Corporation for custom milling of the paddy. The petitioner-mill failed to deposit 130-65000 quintals of rice with the Food Corporation of India and the respondent-Corporation after milling the allocated paddy due to which a dispute arose and was referred to respondent No.3 as a sole Arbitrator for adjudication vide order dated 7.4.1999. The petitioner-rice mill submitted its reply to the statement of claim (Annexure P-7 colly.) as also its objections under Section 16 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the 1996 Act'), for termination of the proceedings. However, neither in its reply nor in the objections any disqualification which might be attached to the sole Arbitrator, was disclosed. The sole Arbitrator finally passed an award dated 16.4.2001 whereby the claim of the respondent-Corporation was accepted in part. The petitionerrice mill moved an application under Section 34 of the 1996 Act for setting aside the award but its application was dismissed by the learned District Judge, Ferozepur by passing a self-speaking judgment dated 4.1.2006 (Annexure P-12).

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Still aggrieved, the petitioner-rice mill approached this Court in FAO No.4670 of 2006 which was dismissed by a Co-ordinate Bench vide order dated 4.3.2008 (Annexure P-13), after holding as follows:-

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“...Now, the only contention of learned counsel for the appellant is that in fact, the dispute between the parties regarding non-delivery of the rice by the

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C.W.P.No .6175 of 2011 3

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appellant-Mill, within the stipulated period, could be decided only by the Civil Court and not by the Arbitrator. Thus, the award passed by respondent No.3 in the matter is without jurisdiction. In support of his this contention, he has relied upon Food Corporation of India versus Surendra, Devendra & Mahendra Transport Co. 2003 (1) PLR 843.

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I have given my thoughtful consideration on this aforesaid submission put-forth on behalf of the appellant and have also gone through the terms of the Agreement (Annexure A-1) and find that the dispute between the parties was fully covered under clause (iii) of the aforesaid agreement, which does not talk of deciding such dispute by the Civil Court, as is being now argued by learned counsel for the appellant. Rather, the aforesaid dispute was agreed to be decided by the Arbitrator or Managing Director of the respondent-Corporation. Moreover, learned counsel for the appellant could not make out any case to show, if the Arbitrator had misconducted the proceedings before announcing the award. In this view of the matter, the above cited ruling is not applicable to the case in hand, inasmuch as, in the aforesaid case, the matter in-dispute was also decided by the Arbitrator, which was specifically excluded from the purview of arbitration.....”

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The respondent-Corporation has now initiated the proceedings for the execution of the award which has already attained finality.

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In this second round of litigation, the petitioner-rice mill claims that its objections against the appointment of respondent No.3 as the sole Arbitrator were never decided by the Arbitrator and as such the

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C.W.P.No .6175 of 2011 4

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impugned award is null and void. It is also claimed that instead of referring for adjudication to respondent No.3, it was imperative upon the Managing Director of the respondent-Corporation to decide the dispute himself.

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Having heard learned counsel for the petitioner at some length and on perusal of the record, I am of the considered view that the writ petition is devoid of any merit and is clearly an abuse of the process of law. I say so for the reason that the petitioner-rice mill never attributed any personal disqualification to the sole Arbitrator, namely, respondent No.3 in its objections before the Arbitrator or at any subsequent stage, i.e., before the District Judge or this Court. Secondly, Clause-17 of the agreement between the parties expressly contemplates that the dispute could be referred “to the sole Arbitration of the Managing Director or any person appointed by him in this behalf”. The Managing Director was, thus, competent to appoint a person other than himself as the sole Arbitrator. It was rather in consonance with the principles of fair and just play that the Managing Director chose not to act as the sole Arbitrator and appointed respondent No.3.

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That apart, all these contentions were very much available to the petitioner-mill in the first round of litigation especially at the Appellate stage but no such plea was taken by it. The principle of constructive resjudicata squarely comes in the way of the petitioner. The only one contention raised before the Co-ordinate Bench has been elaborately dealt with and rejected. The writ petition on the same or similar issue is also

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C.W.P.No .6175 of 2011 5

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barred by the principle of akin to res-judicata.

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Dismissed. April 07, 2011 (SURYA KANT) Mohinder JUDGE

M/S Saluja Rice Mills v. Pb State Civil Supply Corpn Ltd. and Ors.

Case brief

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M/S Saluja Rice Mills v. Pb State Civil Supply Corpn Ltd. and Ors.

Case brief

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