w w w . L a w y e r S e r v i c e s . i n



Kailash Verma v/s Punjab Agro Industries Corporation & Another


Company & Directors' Information:- PUNJAB AGRO INDUSTRIES CORPORATION LIMITED [Active] CIN = U51219CH1966SGC002630

Company & Directors' Information:- K. N. C. AGRO LIMITED [Active] CIN = U01500WB2005PLC102657

Company & Directors' Information:- F AND K AGRO PRIVATE LIMITED [Active] CIN = U01111PN1980PTC014563

Company & Directors' Information:- KAILASH INDUSTRIES LIMITED [Active] CIN = U26941UP1990PLC012240

Company & Directors' Information:- R K B AGRO INDUSTRIES LIMITED [Active] CIN = L17100KA1979PLC003492

Company & Directors' Information:- R T AGRO PRIVATE LIMITED [Active] CIN = U15400MH1988PTC122934

Company & Directors' Information:- T L VERMA AND CO PVT LTD [Active] CIN = U45201CH1982PTC004829

Company & Directors' Information:- N M AGRO PRIVATE LIMITED [Active] CIN = U15209DL2000PTC103461

Company & Directors' Information:- K F AGRO PRIVATE LIMITED [Active] CIN = U01132PB1998PTC021937

Company & Directors' Information:- T K M AGRO LIMITED [Active] CIN = U01119TZ2000PLC009159

Company & Directors' Information:- KAILASH AGRO PRIVATE LIMITED [Active] CIN = U01403HR2013PTC048773

Company & Directors' Information:- J R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15342UP1982PTC005792

Company & Directors' Information:- B M AGRO INDUSTRIES LIMITED [Active] CIN = U74899DL1992PLC049988

Company & Directors' Information:- R S AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15319DL1998PTC097025

Company & Directors' Information:- S N T AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U01122DL1997PTC086925

Company & Directors' Information:- M S AGRO PRIVATE LIMITED [Active] CIN = U01403WB2011PTC163653

Company & Directors' Information:- S K K AGRO PRIVATE LIMITED [Active] CIN = U01110DL2007PTC163157

Company & Directors' Information:- D D AGRO INDUSTRIES LIMITED [Active] CIN = U24219PB1999PLC022487

Company & Directors' Information:- P N AGRO PVT LTD [Active] CIN = U01401WB1992PTC056261

Company & Directors' Information:- B R V AGRO PRIVATE LIMITED [Strike Off] CIN = U15139UP2007PTC034299

Company & Directors' Information:- A A AND A AGRO LIMITED [Converted to LLP] CIN = U01111DL1986PLC025101

Company & Directors' Information:- S S D AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100MH1998PTC113744

Company & Directors' Information:- B. P AGRO INDIA PRIVATE LIMITED [Active] CIN = U15132DL2019PTC357421

Company & Directors' Information:- M Y AGRO PRIVATE LIMITED [Active] CIN = U51221DL2011PTC215043

Company & Directors' Information:- S. A. B. INDIA AGRO INDUSTRIES LIMITED [Active] CIN = U01403UP2009PLC038365

Company & Directors' Information:- U K AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15114UP2003PTC028107

Company & Directors' Information:- H R D AGRO PRIVATE LIMITED [Active] CIN = U15490PB2006PTC030412

Company & Directors' Information:- R. K. AGRO INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U15410WB2012PTC180269

Company & Directors' Information:- C F L AGRO PRIVATE LIMITED [Strike Off] CIN = U01409KA2001PTC028797

Company & Directors' Information:- R J AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15311KA2005PTC035485

Company & Directors' Information:- S O I AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15310GJ2010PTC059966

Company & Directors' Information:- L K AGRO PRIVATE LIMITED [Active] CIN = U15140MH1998PTC115185

Company & Directors' Information:- H D AGRO PRIVATE LIMITED [Strike Off] CIN = U01111MH1996PTC097451

Company & Directors' Information:- P C L AGRO PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049537

Company & Directors' Information:- A S AGRO PRIVATE LIMITED [Active] CIN = U74899DL1989PTC040467

Company & Directors' Information:- S N N AGRO PRIVATE LIMITED [Active] CIN = U01114JH2016PTC008919

Company & Directors' Information:- R R S AGRO PRIVATE LIMITED [Strike Off] CIN = U15139DL2010PTC209756

Company & Directors' Information:- S I P AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01403WB2012PLC188362

Company & Directors' Information:- AGRO PRIVATE LIMITED [Strike Off] CIN = U51101KA1962PTC001475

Company & Directors' Information:- S. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15490PN2013PTC146574

Company & Directors' Information:- D. J. AGRO PRIVATE LIMITED [Strike Off] CIN = U01112DL1994PTC057414

Company & Directors' Information:- G A AGRO PRIVATE LIMITED [Active] CIN = U01229KL2002PTC015736

Company & Directors' Information:- M K B AGRO PRIVATE LIMITED [Active] CIN = U01100MH1996PTC101802

Company & Directors' Information:- T D K AGRO PRIVATE LIMITED [Active] CIN = U29190BR1991PTC004486

Company & Directors' Information:- S G AGRO PRIVATE LIMITED [Active] CIN = U01122KA1995PTC017091

Company & Directors' Information:- J J AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15130MH1980PTC023302

Company & Directors' Information:- A R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC050526

Company & Directors' Information:- AGRO INDIA PRIVATE LIMITED [Active] CIN = U01407AR2013PTC008381

Company & Directors' Information:- U & V AGRO PRIVATE LIMITED [Active] CIN = U01403TZ2015PTC021823

Company & Directors' Information:- B A B AGRO LTD [Strike Off] CIN = U24231MH1993PLC073114

Company & Directors' Information:- G S AGRO INDUSTRIES PVT LTD [Active] CIN = U01132WB1990PTC049960

Company & Directors' Information:- D V AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC051892

Company & Directors' Information:- B A B AGRO LTD [Active] CIN = U24233WB1987PLC043179

Company & Directors' Information:- B C M AGRO PRIVATE LIMITED [Active] CIN = U01119WB1999PTC090308

Company & Directors' Information:- K. K. AGRO PVT. LTD. [Strike Off] CIN = U51420WB1987PTC042090

Company & Directors' Information:- H & W AGRO PRIVATE LIMITED [Strike Off] CIN = U01400MH2012PTC238144

Company & Directors' Information:- K D AGRO PRIVATE LIMITED [Converted to LLP] CIN = U15312DL2005PTC131996

Company & Directors' Information:- C T P VERMA PRIVATE LIMITED [Active] CIN = U50400JH2020PTC015643

Company & Directors' Information:- H R AGRO PRIVATE LIMITED [Active] CIN = U01119PB1995PTC016403

Company & Directors' Information:- C K N AGRO PRIVATE LIMITED [Active] CIN = U01300KL2020PTC064742

Company & Directors' Information:- P AND G AGRO INDUSTRIES P LTD [Strike Off] CIN = U99999UP1985PTC007509

Company & Directors' Information:- R. K. G. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100UP2017PTC097391

Company & Directors' Information:- A Q AGRO PVT LTD [Under Process of Striking Off] CIN = U51209WB2006PTC109930

Company & Directors' Information:- S E AGRO PRIVATE LIMITED [Active] CIN = U52500AP2016PTC103446

Company & Directors' Information:- S U B AGRO PRIVATE LIMITED [Active] CIN = U24129PN2000PTC015404

Company & Directors' Information:- A S G AGRO LIMITED [Strike Off] CIN = U01119HR2004PLC035459

Company & Directors' Information:- VERMA INDUSTRIES PRIVATE LIMITED [Active] CIN = U23209DL2020PTC369631

Company & Directors' Information:- T & T AGRO PRIVATE LIMITED [Active] CIN = U01132WB1999PTC090368

Company & Directors' Information:- C L AGRO PRIVATE LIMITED [Strike Off] CIN = U74120UP2012PTC051898

Company & Directors' Information:- P M S AGRO PVT LTD [Strike Off] CIN = U29211PB1994PTC014448

Company & Directors' Information:- B R K AGRO PRIVATE LTD [Strike Off] CIN = U29211PB1994PTC014302

Company & Directors' Information:- R E I AGRO LTD. [Active] CIN = U01111WB1994PLC065082

Company & Directors' Information:- V G AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01400DL1993PLC051666

Company & Directors' Information:- P & S AGRO INDIA LIMITED [Strike Off] CIN = U01403MH2011PLC214782

Company & Directors' Information:- D N D AGRO (INDIA) LIMITED [Active] CIN = U01403PN2011PLC139235

Company & Directors' Information:- L C A AGRO PRIVATE LIMITED [Strike Off] CIN = U01112UP2005PTC029657

Company & Directors' Information:- V M G AGRO INDIA LIMITED [Active] CIN = U01100MP2011PLC026434

Company & Directors' Information:- R D VERMA AND COMPANY PRIVATE LIMITED [Active] CIN = U74899DL1968PTC004873

Company & Directors' Information:- G D AGRO PRIVATE LIMITED [Strike Off] CIN = U24122UP1993PTC015164

Company & Directors' Information:- P B AGRO PRIVATE LIMITED [Amalgamated] CIN = U26960MH1990PTC057137

Company & Directors' Information:- R A P AGRO INDIA PVT LTD [Strike Off] CIN = U14200WB2006PTC107514

Company & Directors' Information:- G T AGRO INDIA PRIVATE LIMITED [Strike Off] CIN = U74899DL2005PTC142577

Company & Directors' Information:- F AND K AGRO PVT LTD [Strike Off] CIN = U29248PN1980PTC022759

Company & Directors' Information:- T S AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U15209UP1987PTC008974

Company & Directors' Information:- E M AGRO (INDIA) PRIVATE LIMITED [Strike Off] CIN = U02001UP1997PTC022261

Company & Directors' Information:- J S AGRO PRIVATE LIMITED [Strike Off] CIN = U01300PB1993PTC013943

Company & Directors' Information:- KAILASH INDIA LIMITED [Strike Off] CIN = U01403DL1998PLC095512

Company & Directors' Information:- A N AGRO PRIVATE LIMITED [Strike Off] CIN = U01119DL1996PTC081855

Company & Directors' Information:- V R L AGRO PRIVATE LIMITED [Strike Off] CIN = U85110KA1999PTC024717

Company & Directors' Information:- B AND P AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U01110MH1972PTC015574

Company & Directors' Information:- P. S. R. AGRO PRIVATE LIMITED [Active] CIN = U24248UP1974PTC004017

Company & Directors' Information:- O N AGRO PRIVATE LIMITED [Active] CIN = U74899DL1988PTC031986

Company & Directors' Information:- P V R K AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U01119AP1988PTC008395

Company & Directors' Information:- K R S AGRO PRIVATE LIMITED [Strike Off] CIN = U01400PN2011PTC141711

Company & Directors' Information:- J K AGRO PRIVATE LIMITED [Strike Off] CIN = U74900PY2011PTC002548

Company & Directors' Information:- W B S AGRO PRIVATE LIMITED [Active] CIN = U01122PB2003PTC025879

Company & Directors' Information:- K R P AGRO INDUSTRIES PVT LTD [Active] CIN = U01110MH1991PTC062304

Company & Directors' Information:- G T M AGRO PRIVATE LIMITED [Strike Off] CIN = U01100MH2005PTC150816

Company & Directors' Information:- Y K AGRO PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U74999DL2013PTC250398

Company & Directors' Information:- N P M AGRO PRIVATE LIMITED [Strike Off] CIN = U15494DL2011PTC214942

Company & Directors' Information:- B L B AGRO PRIVATE LIMITED [Strike Off] CIN = U51200DL2012PTC244511

Company & Directors' Information:- D A AGRO PRIVATE LIMITED [Active] CIN = U74900DL2015PTC288168

Company & Directors' Information:- D. B. AGRO PRIVATE LIMITED [Active] CIN = U01100MP2010PTC025035

Company & Directors' Information:- B VERMA AND COMPANY PRIVATE LTD. [Strike Off] CIN = U74140DL1986PTC023027

Company & Directors' Information:- KAILASH PVT LTD [Strike Off] CIN = U51909WB1948PTC017273

    First Appeal from Order No. 1911 of 2006

    Decided On, 20 December 2019

    At, High Court of Punjab and Haryana

    By, THE HONOURABLE MS. JUSTICE JAISHREE THAKUR

    For the Appearing Parties: H.S. Saggu, Ritam Aggarwal, Advocates.



Judgment Text

1. This appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking to challenge the order dated 31.01.2006 passed by the District Judge, Sangrur whereby, the objections filed by the appellant under Section 34 of the Act for setting aside the award of the Arbitrator, has been dismissed.2. In brief, the facts of the case are that respondent No.1-Punjab Agro Industries Corporation (for short 'the PAIC') entered into an agreement dated 15.11.1999 with the appellant-Miller for the custom milling of paddy and the rice was to be delivered to the Food Corporation of India in the account of respondent No.1. As per respondent No.1-PAIC, 42399 bags of paddy weighing 27599.35 quintals were stored in the premises of the appellant-Miller and the appellant-Miller was to deliver 18280.11.685 quintals of rice to the FCI, but the appellant-Miller delivered only 1135.80 quintals of rice and the remaining 17,144.31.685 quintals of rice was still due and pending from the appellant-Miller. When the appellant failed to deliver the remaining rice, a committee of the officials of respondent No.1- PAIC made physical verification on 06.03.2000 of the stock of paddy lying in the rice sheller and on the basis of the inspection, submitted a report that no paddy was found. On account of a dispute that arose between the parties, an Arbitrator was appointed, who assessed the value of the paddy, as against the rice which was not supplied by the appellant as Rs. 1,62,34,125/- and by adding the price of gunny bags and other items, held that the appellant was to pay Rs. 1,86,52,688/- to respondent No.1-PAIC. Aggrieved against the said award, objections under Section 34 of the Act were filed by the appellant, taking an objection therein that the Arbitrator did not have the jurisdiction to decide the question of short supply of rice as it fell within the "excepted clause" matter. However, the objections were dismissed, leading to the instant appeal being filed by the appellant.3. Learned counsel appearing on behalf of the appellant contends that the judgment as rendered in Shree Krishna Rice Mills vs. The Punjab State Coop. Supply and Marketing Federation Ltd., (2003) 3 RCR(Civil) 254 has held that the matters falling within the "excepted clause" could not be decided by the Arbitrator, as the matter was within the purview of the M.D. It is argued that the Arbitrator has taken note of the argument raised that the matter regarding short supply of rice fell within the "excepted clause", but has gone ahead and decided the claim of respondent No.1-PAIC. It is also argued that the question of interest of 21% on the price of rice delivered short also could not be decided by the Arbitrator as it is again fell within the "excepted clause", however, once again while taking note of the aforesaid clause, has illegally decided the issue.4. Per contra, learned counsel appearing on behalf of respondent No.1-PAIC would submit that there was a short supply of rice, therefore, the Arbitrator correctly allowed the claim along with the claim for short supply of rice and bardana, etc. along with interest.5. I have heard learned counsel for the parties and with their assistance have gone through the pleadings of the case.6. Admittedly, the appellant herein was to mill the paddy and deposit the rice with the FCI in the account of respondent No.1-PAIC. The appellant failed to mill the paddy, which had been stored in the rice sheller of the appellant for custom milling and consequently, failed to deposit the rice. An inspection that was carried out showed that there was no paddy lying in the rice sheller and consequently, a claim petition was filed seeking payment against the rice due. As per the statement of account of the rice sheller M/s Sahara Rice Mill, net rice due was 17144.31.685 Qntls. Apart from the price towards the shortage of rice, amount recoverable was also towards Bardana, milling charges, stitching charges, refund of security, value of wooden crates, value of poly cover, value of poly sheets.7. Clause 9.1 of the agreement reads as under:-"9(i) The entire quantity of rice of all varieties delivered by the miller to the Government shall conform to the specifications laid down in the Punjab Rice Procurement (levy) Order, 1983, as amended from time to time or any order order or notification issued by the State Government from time to time. The stocks of rice not conforming to the specifications so laid down shall be liable to be rejected in respect of such quantity of rice which is not loud to be with in the specifications and the miller shall be liable to pay to the government or procuring agency for the quantity of rice short supplied, a penalty at the custom milling rate fixed by Govt. of India plus 21% interest from the date it becomes payable till the date of actual realization of the converted variety of rice. The decision of the Director Food and Supply (hereinafter referred to as the M.D. in this behalf shall be final)."The arbitrator was conscious of the argument raised that he could not decide the issue of short supply of rice as would be evident from the reading of the paragraph reproduced hereunder:"Clause 9(i) of the agreement lays down that the decision of the Managing Director shall be final regarding the recovery of rice short delivered at the custom milled rate fixed by the Govt. of India. Undisputedly, the Managing Director of the claimant has not taken any decision in this case to recover the price of the rice short delivered at the custom milled rate fixed by the Govt. of India. This dispute can only be decided by the Managing Director of the claimant and this dispute can neither be referred to arbitration nor the arbitrator has the jurisdiction to entertain this dispute and as such the claim of the claimant, to recover the price of the remaining resultant rice at the custom miller rate fixed by the Govt. cannot be allowed in arbitration. But it does not mean that the claimant is not entitled for the recovery of the price of the paddy, the resultant rice of which has not been delivered by the respondent FCI in the account of the claimant. The claimant is entitled for the recovery of the price of paddy, which remained with the miller unmilled as there is no provision in the agreement that the claimant cannot recover the price of the remaining paddy from the miller.".8. The reasoning of the Arbitrator in allowing the claim towards short delivery of rice is indeed a strange one, despite being aware of the "excepted clause" of the agreement, which clearly specifies that the Managing Director is to take a decision regarding the short supply of paddy and interest thereon. The Arbitrator has gone on to allow the claim of short supply of rice on a reasoning that the claimant is entitled to recover the amount. The Arbitrator has totally ignored the terms and conditions of the agreement.9. A reading of clause 9.1 of the agreement lays down that the decision of the Managing Director shall be final regarding the recovery of rice short delivered, and, therefore, this fell within the "excepted clause" of the agreement and could not have been referred to the Arbitrator. The judgment rendered in Shree Krishna Rice Mills vs. The Punjab State Coop. Supply and Marketing Federation Ltd.(supra) is fully applicable to the present case, and, therefore, in the view of this court, the dispute ought to have been adjudicated by the Managing Director himself regarding the claim of short delivery of rice. The award of the Arbitrator pertaining to recovery qua the short delivery of

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rice is hereby set aside. However, apart from the short supply of paddy, claim petition was also filed qua the other claims, as discussed by the Arbitrator in para 15 of its award, which could have been referred to the arbitration and a rightful decision has been taken thereon, which warrants no interference by this court.10. Therefore, the award of the Arbitrator is severed to the extent that the Arbitrator had no jurisdiction to decide the issue pertaining to short supply of rice and which fell within the "excepted clause" of the agreement and a decision should have been taken thereon by the Managing Director, while upholding the award of the Arbitrator qua the other claims.11. The appeal stands partly allowed accordingly, leaving it open to the parties to refer the matter to the Managing Director qua the shortfall of rice supplied.
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