Dismissed¶21

The Managing Director, Rajasthan State Seeds Corporation Limited v. M/S Shree Gouri Shankar Jute Miles Limited

Rajasthan HC17 Mar 2026CMA/2823/2025

Case brief

AI extract

What is this about?

Arbitration and Conciliation Act 1996 - Section 34 challenge - Section 31(7)(b) - award of interest @ 8.5% (2012 to 25.07.2018) and @ 6% (from 26.07.2018) on delayed payment - gunny bags supply tender 2011-12 - 14 lakh bags supplied - supplier blacklisted and disqualified - Rajasthan State Seeds Corporation Limited v. Shree Gouri Shankar Jute Miles Limited - Commercial Court No.3, Jaipur Metropolitan II - D.B. Civil Miscellaneous Appeal dismissed - one month time to pay - Rajasthan High Court, Jaipur Bench, decided 17/03/2026.

What did the court decide?

One month time granted to make the payment; no other relief. ¶21

The Managing Director, Rajasthan State Seeds Corporation… — Arbitration | Rajasthan HC (2026)

What the court decided

AI extract

Outcome

One month time granted to make the payment; no other relief.

¶21

Issue for consideration

Whether the interest granted by the Arbitrator on the delayed payment for Gunny bags (8.5% up to 25.07.2018 and 6% thereafter) was illegal or unjustified so as to warrant interference under Section 34 of the Act of 1996.

¶19

Court's answer

The Division Bench found that the Arbitrator granted interest @ 8.5% for the period from 2012 to 25.07.2018 and interest @ 6% from 26.07.2018 till payment of the amount, on the basis of the documents placed before him.

¶20

Ratio / Principle

The interest granted cannot be said to be illegal or unjustified, being within the power available to the Arbitrator under Section 31(7)(b) of the Act of 1996; the amount imposed cannot be objected to, and the Division Bench concurs with the order passed by the Commercial Court rejecting the Section 34 application.

¶20

Detailed headnote1 paragraphs

D.B. Civil Miscellaneous Appeal No. 2823/2025, High Court of Judicature for Rajasthan, Jaipur Bench (Hon'ble the Acting Chief Justice Sanjeev Prakash Sharma and Hon'ble Mr. Justice Baljinder Singh Sandhu), decided 17/03/2026. Appeal by the Managing Director, Rajasthan State Seeds Corporation Limited against the order dated 08.04.2025 of Commercial Court No.3, Jaipur Metropolitan II rejecting its application under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral award dated 24.12.2022 directing payment of interest @ 8.5% on delayed payment for Gunny bags supplied by M/s Shree Gouri Shankar Jute Miles Limited pursuant to a 2011-12 tender (14 lakh bags supplied; the appellant contended the respondent was a blacklisted company and that the bag cost had already been released). Held: the Arbitrator granted interest @ 8.5% for the period 2012 to 25.07.2018 and @ 6% from 26.07.2018 till payment, based on documents placed before him; the interest is neither illegal nor unjustified and falls within the Arbitrator's power under Section 31(7)(b) of the Act of 1996; the amount imposed cannot be objected to. Concurring with the Commercial Court, the appeal was dismissed, with one month's time granted to make the payment.

¶1

[2026:RJ-JP:11351-DB]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Civil Miscellaneous Appeal No. 2823/2025

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The Managing Director, Rajasthan State Seeds Corporation Limited, Rajasthan State Seeds Corporation Limited, Pant Krishi Bhawan, 3Rd Floor, Janpath, Jaipur (Raj.)

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----Appellant

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Versus

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M/s Shree Gouri Shankar Jute Miles Limited, 16-A, Barbourme Road, 5Th Floor, Kolkata-700001 Through Its Managing Director.

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----Respondent

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For Appellant(s) : Mr. Dinesh Yadav For Respondent(s) : Mr. Anurag Agrawal with Mr. Satish Pareek

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HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE BALJINDER SINGH SANDHU

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Judgment

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17/03/2026

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This is an appeal filed against the order dated 08.04.2025 whereby the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (herein after referred to as ‘the Act of 1996’) was rejected by the Commercial Court No.3, Jaipur Metropolitan II and the award passed by the Arbitrator dated 24.12.2022 which directed payment of interest @ 8.5% on the delayed payment of Gunny bags supplied by the respondent.

¶14

Learned counsel for the appellant submits that the Rajasthan State Seeds Corporation Limited had invited tenders for supply of Gunny bags and other consumables for the year 2011-12. The respondent-company was declared successful in the financial bid and 14 lakh bags were supplied. However, it was later on found

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(2 of 2)

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[2026:RJ-JP:11351-DB]

¶17

[CMA-2823/2025]

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that the respondent-company was blacklisted company and was therefore, disqualified. In view thereto, a decision was taken not to make the payment. Later on the Arbitrator passed an award.

¶19

Learned counsel submits that while the amount for the bags has already been released, there was no occasion to impose interest on cost of the bags which have been received.

¶20

We find that the Arbitrator has granted interest @ 8.5% for the period from 2012-25.07.2018 and interest @ 6% from 26.07.2018 till payment of the amount on the basis of the documents which were placed before him. We notice that the interest amount as paid cannot be said to be illegal or unjustified in terms of the power available with the Arbitrator as per Section 31 (7)(b) of the Act of 1996. The amount so imposed cannot be objected and we concur with the order passed by the Commercial Court.

¶21

The appeal is accordingly dismissed. However, one month time is granted to make the payment.

¶22

(BALJINDER SINGH SANDHU),J (SANJEEV PRAKASH SHARMA),ACTING CJ

¶23

Simple Kumawat /199

The Managing Director, Rajasthan State Seeds Corporation Limited v. M/S Shree Gouri Shankar Jute Miles Limited

Case brief

What is this about?

What did the court decide?

The Managing Director, Rajasthan State Seeds Corporation Limited v. M/S Shree Gouri Shankar Jute Miles Limited

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

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