Dismissed

Hindustan Zinc Limited v. C J Darcl Logistics Ltd.

Rajasthan HC9 Oct 2018CMA/2703/2018

Case brief

AI extract

What is this about?

The High Court rejected an appeal challenging the trial court's refusal to set aside a sole arbitrator's award. The court held that the limitation period accrued when the claim was finally denied in 2015, not the contract end date in 2012. It affirmed that limited appellate jurisdiction precludes re-examination of the arbitrator's binding factual finding on limitation.

What did the court decide?

The appeal against the order maintaining the sole arbitrator's award on limitation was rejected/dismissed.

Hindustan Zinc Limited Vs C J Darcl Logistics Ltd. — Arbitration | Rajasthan HC (2018)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

¶2

S.B. Civil Misc. Appeal No. 2703/2018

¶3

Hindustan Zinc Limited, having its Registered Office At Yashad Bhawan, Swaroop Sagar, Udaipur, through Authorized Signatory Shri Vineet Bose, General Manager, Legal.

¶4

Hindustan Zinc Limited, Chanderiya Lead-Zinc Smelter, Putholi, Chittorgarh (Rajasthan), through its General Manager.

¶5

----Appellants

¶6

Versus

¶7

C J Darcl Logistics Ltd., having its Registered Officer at Plot No. 55, Sector 'P' 44, Institutional Area, Gurugram (Haryana), through Shri Surendra Sharma, Assistant General Manager.

¶8

Learned Sole Arbitrator Shri Goverdhan Singh Surana, Retired District Judge, Udaipur.

¶9

----Respondents

¶10

For Appellants : Dr. Sachin Acharya with Mr. Chayan Bothra

¶11

For Respondent No.1 : Mr. Pratap Singh Arya.

¶12

HON'BLE MR. JUSTICE P.K. LOHRA

¶13

Judgment

¶14

09/10/2018

¶15

Appellants have preferred this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) to assail order dated 2^nd of June 2018, passed by Addl. District Judge No.3, Udaipur (for short, ‘learned Court below’), whereby the learned Court below has declined to interfere with order dated 17^th of April, 2018, passed by sole Arbitrator in Case No.2/17.

¶16

(2 of 8)

¶17

[CMA-2703/2018]

¶18

The facts, apposite for the purpose of this appeal, are that appellant-Company is involved in mining and smelting of zinc, lead and manufacturing of ingots etc in its plants across the country and one of its plant is located at village Putholi, District Chittorgarh. The first respondent is a logistic Company engaged in the business of transporting goods from one place to another. It so happened that the appellant-Company in furtherance of its business, solicited requisite logistic services of first respondent for transporting various materials from its smelting plants to various depots situated all over the country. Thereupon, after due deliberations both the parties entered into contract incorporating the terms of contract in agreement. After execution of the agreement, appellant-Company issued work order to first respondent on 1^st of April, 2012 to carry out transportation of various materials from different units and locations/depots of the appellant-Company to various destinations. The details about the works to be undertaken by the first respondent were mentioned in Annex.1, accompanying the work order.

¶19

The term of the contract was for 7 months, i.e. from 1^st of March, 2012 to 30^th of September, 2012. In terms of the work order, appellant-Company got its goods insured by a marine insurance policy from Oriental Insurance Company Limited. During the subsistence of contract, some dispute cropped up between the rival parties, may be owing to negligence of the first respondent

¶20

(3 of 8)

¶21

[CMA-2703/2018]

¶22

and lack of its due supervision, or otherwise, inasmuch as, the trailer of respondent-Company bearing No.HR-39-C-3713 loaded with 22 packets of lead ingots at appellant-Company’s Pantnagar Rudrapur plant disappeared on its way to Kolkata Depot. At the behest of respondent-Company, though FIR was lodged but the efforts made by the efforts made by the police were in vain as the stolen goods not recovered and finally FR was submitted in the matter by Pantnagar Police Station. It is in these circumstances, appellant-Company, while estimating loss suffered by it to the tune of Rs.36,69,895 in terms of contract, repudiated payment due to the first respondent.

¶23

The revocation of the claim for payment, prompted the first respondent to file a claim petition before sole Arbitrator on 28^th of October 2017 which was contested by the appellant-Company. On the basis of version, put-forth by the rival parties, the sole Arbitrator settled various issues on 15^th of November, 2017 including issue No.4, which reads as under:

¶24

Whether the risk of loss of goods in transit was on the account of non claimants as per the terms of the contract/work order?

¶25

….Claimant

¶26

1. Whether the deduction of Rs.37,18,269/- by HZL from the account of the CJ DARCL Logistics Ltd. on account of thef of the 22 packets of lead ingots being carried by truck no.HR 39 C 3713 engaged by CJ DARCL Logistics Ltd from Pant Nagar Plant of the HZL to their Calcutta depot, was justified?

¶27

….Non claimants

¶28

1. Whether there was a willful default on the part of claimant due to which the insurance

¶29

(4 of 8)

¶30

[CMA-2703/2018]

¶31

Company had rejected the claim filed by the non claimant, thereby making the claimant liable for loss of goods in transit?

¶32

…. Non claimants

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1. Whether the claim filed by the claimant CJ DARCL Logistics Ltd. is time barred?

¶34

…. Non claimants

¶35

Relief?

¶36

Considering issue No.4 to be vital, which goes to the root of the dispute, at the behest of appellant-Company, an application was submitted before the sole Arbitrator for deciding the same at the threshold. The sole Arbitrator, after considering the request of appellant-Company, decided issue No.4 vide order dated 17^th of April, 2018 against the appellant-Company and in favour of first respondent. The sole Arbitrator concluded that the claim of first respondent is within limitation.

¶37

Feeling dismayed with the order of sole Arbitrator, appellantCompany approached learned Court below by laying application under Section 34 of the Act. In the application, it is inter-alia pleaded by the appellants that the contract between the contesting parties came to an end on 30^th of September 2012 and in the year 2012 itself appellant-Company decided to repudiate the claim of respondent on account of suffering huge loss amounting to Rs.36,69,895 due to total callous and negligence of the respondent, and therefore the claim laid by it in the year 2017 is barred by limitation. It is also averred in the application that the sole Arbitrator has not examined the issue relating to limitation in adherence of Article 137 of the Limitation. The

¶38

(5 of 8)

¶39

[CMA-2703/2018]

¶40

respondent contested the application and submitted in its reply that there was a protracted correspondence between rival parties and finally its claim was completely denied by the appellantCompany on 7^th of August, 2015 and 15^th of October, 2015 respectively, therefore, cause of action has accrued on these crucial dates. By relying on these dates, the respondent asserted that the claim is within limitation and the sole Arbitrator has therefore rightly decided issue No.4 in its favour.

¶41

The learned trial Court, after giving due consideration to the arguments advanced by rival parties and considering the communication of the appellant-Company dated 7^th of August, 2015, containing clear and unequivocal recitals “Now case closed at our end”, found no infirmity much less legal infirmity in the order passed by the sole Arbitrator. This conclusion of the learned Court below entailed rejection of the application of the appellants under Section 34 of the Act.

¶42

I have bestowed my considerations to the arguments advanced by the learned counsel for the parties, perused impugned order dated 17^th of April, 2018 passed by the sole Arbitrator and also gone through the materials available on record.

¶43

The solitary issue which requires judicial scrutiny in the instant appeal, is finding on issue No.4, recorded by sole Arbitrator and approved by the learned Court below.

¶44

(6 of 8)

¶45

[CMA-2703/2018]

¶46

There remains no quarrel that limitation in such claims is governed by the residuary clause envisaged under Article 137 of the Limitation Act, which prescribes limitation of three years commencing with the right to apply accrued. The factum of contract entered into between rival parties is not in dispute, therefore, the only question which requires consideration is the crucial date on which right to apply has accrued to the first respondent. While it is true that as per version of the appellant, at the threshold, claim of the respondent was revoked by the appellant-Company in the year 2012 adhering to the terms of the contract but then there was a protracted correspondence between the rival parties and the respondent continued its pursuit for the claim which was finally denied by the appellant-Company on 7^th of August, 2015.

¶47

The communication addressed by the appellant Company on 7^th of August, 2015 is clear and unequivocal with the recitals “Now case closed at our end”. Therefore, it is rather difficult to comprehend that the issue relating to claim of the respondent was not alive upto that crucial date. The sole Arbitrator, has accordingly taken note of that recital in the communication of the appellant-Company for deciding issue No.4 against it. The learned Court below, thereafter, made sincere endeavour to examine the issue relating to limitation threadbare on the basis of available material and, after considering objectively the facts in entirety, fully concurred with the finding of the sole Arbitrator. It is also noteworthy that for the goods lost in transit, appellant-

¶48

(7 of 8)

¶49

[CMA-2703/2018]

¶50

Company pursued its claim before the Oriental Insurance Company, and same was rejected by the insurer as “No Claim”, also finds mention in communication of the appellant-Company dated 7^th of August, 2015 to the respondent. Therefore, total repudiation of the claim of the respondent by the appellantCompany is per se discernible from communication dated 7^th of August, 2015 so as to concur with the finding of the learned Court below as well as sole Arbitrator that issue concerning the claim of the appellants was alive uptil communication dated 7^th of August, 2015.

¶51

In my considered opinion, the learned Court below as well as learned Arbitrator has not committed any error much less manifest error of law in deciding issue No.4 against the appellantCompany and in favour of first respondent. A finding of fact recorded by the sole Arbitrator and approved by the learned Court below cannot be made subject matter of judicial review in exercise of appellate jurisdiction by this Court inasmuch as scope of interference by the appellate Court is very much limited. As the sole Arbitrator and the learned Court below have relied on the said communication, unhesitatingly, in my view, aforesaid finding is based on available material and cannot be categorized as perverse requiring re-examination and re-appriasal of the available material/evidence.

¶52

The essence of arbitration is to avoid cumbersomeness of the Court procedure to facilitate fair settlement between parties,

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(8 of 8)

¶54

[CMA-2703/2018]

¶55

therefore, in arbitral proceedings Courts are expected to adopt pragmatic approach rather than taking pedantic and purely idealistic view. In the instant case, upon threadbare examination of the matter, I am constrained to observe that finding on issue No.4 by the sole Arbitrator is not suffering from any error much less apparent error on the face of record. Moreover, the said finding of the sole Arbitrator having been concurred and approved by the learned Court below by nixing the application of the appellants, no interference with the impugned order in exercise of appellate jurisdiction is warranted.

¶56

Resultantly, the appeal fails and same is hereby rejected.

¶57

(P.K. LOHRA),J

Hindustan Zinc Limited v. C J Darcl Logistics Ltd.

Case brief

What is this about?

What did the court decide?

Hindustan Zinc Limited v. C J Darcl Logistics Ltd.

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

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