Madras High Court
M/S. The Waterbase Ltd vs Mrs. Madumita Giri on 23 December, 2015
O.P.Nos.341 and 384 of 2016
THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
08~09~2021 24-09~2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
O.P. Nos.341 and 384 of 2016
O.P.No.341 of 2016
M/s. The Waterbase Ltd.,
Rep.by its duly constituted
Authorised Signatory
Mr.G. Venkatram
S/o Ganapathy Subramanian
Thapar House, No.37, Montieth Road,
Egmore, Chennai 600008. ... Petitioner / Claimant
-Vs-
1.Mrs. Madumita Giri
W/o Parasuram Giri
Proprietrix of M/s. Maa Durga Distributors,
Macheda Bye-pass Road,
Contai, East Midnapur,
West Bengal – 721401. ... 1st Respondent / Respondent
2.Sri.S.Somasundaram
Retired Judge – Arbitrator
B-2, S.S.Residency,
9, Chennakrishnapuram,
Salem 636007, Tamil Nadu. .. 2nd Respondent / Sole Arbitrator
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O.P.Nos.341 and 384 of 2016
O.P.No.384 of 2016
1.Mrs. Madumita Giri
W/o Parasuram Giri
Proprietrix of M/s. Maa Durga Distributors,
Macheda Bye-pass Road,
Contai, East Midnapur,
West Bengal – 721401. ... Petitioner / Respondent
-vs-
1. M/s. The Waterbase Ltd.,
Rep.by its duly constituted
Authorised Signatory and Power of Attorney
R. Chandramohan
No.22, Sadasivam Street,
Gopalapuram
Chennai 600086. ... 1st Respondent / Claimant
2.Sri.S.Somasundaram
Retired Judge – Arbitrator
B-2, S.S.Residency,
9, Chennakrishnapuram,
Salem 636007, Tamil Nadu. ... 2nd Respondent / Sole Arbitrator
Prayer in O.P.No.341 of 2016: Petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996, to set aside the Award dated 23.12.2015 and to pass
an order directing to pay the first Respondent Rs.76,70,953/- as Principal and
Rs.1,47,90,837/- as overdue interest as on 10.11.2014 [total Rs.2,24,61,790/-]
with further interest and cost.
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O.P.Nos.341 and 384 of 2016
Prayer in O.P.No.384 of 2016: Petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996,to set aside the Award dated 23.12.2015 and to dismiss
the claim petition preferred by the 1st Respondent.
For Petitioner : Mr.S.A. Rajan
in O.P.341/2016
and 1st Respondent
in O.P.384/2016
For 1st Respondent : Mr. Sunrit Deb
in O.P.341/2016 Senior Counsel for
and Petitioner Mr.T.Sai Krishnan
in O.P.384/2016 M/s. Sai Bharath
COMMON ORDER
1.Two Original Petitions are filed Challenging the Arbitral Award passed by the learned sole Arbitrator dated 23.12.2015.
1.a. O.P.No.341 of 2016 has been filed by the Claimant to set aside the Award and to pass an order directing the first Respondent to pay Rs.76,70,953/- as Principal and Rs.1,47,90,837/- as overdue interest as on 10.11.2014.
1.b. O.P.No.384 of 2016 has been filed by the Respondent before the Page 3 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 Arbitral proceedings to set aside the Award and dismiss the claim petition preferred by the Claimant.
1.c The parties are arrayed as per their own rankings before the Arbitral Tribunal. The Petitioner who filed O.P.No.341 of 2016 is referred as Claimant herein and the Petitioner who filed O.P.No.384 of 2016 is referred as Respondent for the convenience sake.
1.d. Since both the Petitions are arising out of the same Award, the same are disposed by way of this Common Order.
2. The brief facts leading to file these Original Petitions are as follows:
2.a. It is the case of the Claimant that under the Dealership Agreement dated 11.02.2002 entered into between the Claimant and the Respondent, the Claimant dispatched prawn feed materials to the Respondent on various dates under various invoices. The Claimant debited the invoice amounts in the account of the respondent. Whenever the Respondent paid, the amount was credited in the Page 4 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 account. The account was mutual, open and current account for both parties.
Though the Respondent was regular in the beginning, later she defaulted in making payments. As there was huge arrears, the Claimant sent a letter dated 10.11.2005 to the Respondent demanded Rs.82 lakhs. In response to this letter the Respondent replied on 18.11.2005 agreeing to clear Rs.60 lakhs in instalments before 15th May 2006. But she did not pay any amount. The cheques issued by the Respondent got dishonoured. Hence, the Claimant has issued notice dated 11.02.2008 invoking Arbitration. Hence, the Claimant Claimed Rs.76,70,953/- as Principal and Rs.1,47,90,837/- as overdue interest [total Rs.,24,61,790/-]as on 10.11.2014.
3. The Respondent filed a counter stating that the Dealership Agreement is a complete contract, binding on both the parties. It is his contention that the averments in the Claim Statment were not verified by the signatory. It is also agreed that the Claimant would extend the credit period. Therefore, the Claimant is not entitled to get any overdue interest. Nothing is mentioned about overdue interst in the agreement. It is also stated that the Respondent never agreed to have mutual, open and current account with the Claimant. A large part of the claim is Page 5 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 barred by limitation. The letter dated 18.11.2005 was not given by the Respondent. She never admitted any liability at any time. The Dealership Agreement was valid till 31.03.2003. It was never extended. All further transactions were independent transactions and they would not come under the Dealership Agreement. Hence, the transaction after 31.03.2003 is non-arbitrable and the Arbitrator has no jurisdiction to go into the same. All amounts due on 12.03.2005 are barred by limitation. The Respondent is not liable to pay any amount to the Claimant. Hence, the prayed for dismissal of the Claim Petition.
4. A Rejoinder also filed by the Claimant denying the averments in the Counter Statement and reiterated the facts mentioned in the Claim Statment. On the basis of the pleadings the following issues were framed:-
“1. Whether the transactions of business between the claimant and the Respondent are in the nature of mutual, current, open account between the parties?
2. Whether the transaction of business between the parties after 01.04.2003 were in pursance of the dealership Page 6 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 agreement dated 11.02.2002 or whether they were independent transactions between the claimant and the respondent?
3. What is the value of goods supplied to the Respondent from 01.05.2002 upto 31.03.2003, the payments made by the Respondent during that period and the final position on 31.03.2003?
4. What is the value of goods supplied to the Respondent from 01.04.2003 upto the end of 2006, the payments made by the Respondent during that period and the final posiion at the end of 2006?
5. What is the detailed calculation to show that an amount of Rs.76,70,953/- was due from the Respondent and on which date it was due?
6. What is the detailed calculation indicating the value of goods, date of despatch, grace period, rewards or benefits, if any, in respect of each transaction, due to the respondent, overdue interest from whcih date uptowhich date on each transaction?Page 7 / 32
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7. Whether the claim is barred by limitation?
8. Whether there was an agreement to pay overdue interest at 21% p.a.?
9. Whether this Arbitral Tribunal has no jurisdiction to go into the dipsute which arose between the Claimant and the Respondent?
10. What is the amount due today from the Respondent to the Claimant on account of the transactions between them?
11. Whether Claimant is entitled to recover any interest from the Respondent, if so, on what amount, at what rate and for which period?
12. To what relief the Claimant is entitled to?”
5. The Claimant and Respondent were examined as C.W.1 and R.W.1 respectively. On the side of the Claimant Exs.C.1 to C.29 marked. On the side of the Respondented Ex.R1 was marked. After considering the oral and documentary Page 8 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 evidence and other materials the learned Arbitrator passed Award directin the Respondent to pay Rs.22,01,079/- to the Claimant with interest at 12% per annum from 29.09.2006 till the date of full realisation.
6.a. It is the main contention of the learned counsel for the Petitioner/Respondent in O.P.No.384 of 2016 that the Award suffered from Patent Illegality and also violation of public policy of India. It is the further contention of the learned Counsel that the Claim Petition has not been verified properly and there is no Arbitratl Agreement existed after expiry of the Agreement dated 11.02.2002 and any transaction carried away after 31.3.2003 the agreement cannot be pressed into service to refer the dispute for Arbitration. Otherwise it is his contention that the business conducted between the parties after expiry of the agreement dated 11.2.2002, the terms and conditions of the transaction between the two parties were never the same. Hence it is his contention that there was no arbitration clause existing between the parties. Hence Award passed by the Leanred Arbitrator cannot be sustained in the eye of law.
6.b. It is his further contention that there was no mutual, open and Current Page 9 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 Accout maintained between the parties at any material point of time. Another contention of the learned counsel is that equitable set off made by the Respondent in respect of the 5 invoices have not been dealt properly. The reasoning given by the Arbitrator is againt law.The burden to establish the delivery of consignment has not been discharged by the Claimant. The further contention of the learned counsel is that there was no acknowledgement of liability made by or on behalf of the Responent for the amount claimed for the said alleged delivery under the five invoices in the Arbitration by letter dated 18.11.2005 and two other letters both dated 22.04.2006. Otherwise his contention is that the alleged letter dated 18.11.2005 signed by the husband of the Respondent. The husband is not an agent. Therefore, such letter dated cannot be considered as acknowledgement of liability. Similarly, the letter dated 22.4.2006 has been created for the purpose of the case. The very entry in the letter specifiying the mode of payment in the year 2005 itself indicate that the letter dated 22.4.2006 cannot be true and created one. These facts have not been taken note of by the learned Arbitrator. Leared Arbitrator has not even considered all the facts and just concluded that the business was continued in the same parttern or the same manner as agreeed in the agreement is nothing but patent illegality. Therefore his main contention is that the Page 10 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 entire award liable to be set aside on the ground of patent illegaligty and violation of public policy of India.
7. In support of his contention he relied upon the following judgments:
1. V.K. Abraham vs. N.K.Abraham [AIR 1978 MAD 56]
2. Govt. of NCT of Delhi vs. Khem Chand & Another [2003 (68) DRJ 518 Delhi High Court]
3. Uma Shankar vs. Gobind Narain [ILR (1924) 46 ALL 892]
4. Bhlipendra Bahadlir Singh vs. Bahadlir Singh [AIR 1952 SC 201]
5. Montosh Kumar Chatterje & Another vs. Central Calcutta Bank Ltd., [1952 SCC Online Cal 243]
6. A.E.G.Carapiet vs. A.Y.Derderian [AIR 1961 CAL 359] Page 11 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016
7. D. Guruswamiah vs. Ramakrishnan [AIR 1965 Mad 142]
8. Whereas the learned Counsel for the Claimant submitted that the learned Arbitrator in fact considered the entire document and analysed every document and passed the award meticulouly. Therefore it is his contention that no grounds have been made out to interfere the Award and the learned counsel has also fairly submitted that he has no case to interfere the Award passed by the learned Arbitrator and left it to the discretion of the Court to decide the O.P.No.341 of 2016.
9. In the light fo the above submissions, with regard to the submissions that the Claim Peltition has not been verified propertly, this Court is unable to countenance the submissions for the simple reason that the Arbitrator has not bound by the procedure contemplated in C.P.C., Evidence Act, etc., Therefore, the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, or the Indian Evidence Act as per Section 19 of the Arbitration and Conciliation Act. Therefore, the contention that the enitre Arbitration is vitiated merely on the basis of the non-
verification cannot be countenanced. In fact the parties have understood their case Page 12 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 on the basis of the Pleadings and adduced evidence. That being the position the first contention with regard to verification has to fail.
10. Now with regard to the other contentions that the contract between the parties expired on 31.3.2003. Therefore the Arbitration Clause contained in the above contract which has already expired cannot be invoked for the business carried out after expiry of Contract. It is to be noted that the agreement is not disputed. The very agreement dated 11.02.2002 was executed for the purpose of Dealership in dealing with the prawn feeds. Clause 7(b) of the Dealership Agreement indicate that the feed will be supplied to the dealer through a Letter of Credit on a nationalised Bank or through Demand Draft. The supplies will be against a purchase order.
11. Clause 12.1 provides for reference to the Arbitrator in the event of any dispute between the parties as to the operation of the agreement such dispute or difference shall be referred by either party. Though the agreement was entered for a period of one year and valid upto 31 st March 2003. Clause 13 of the Agreement makes it very clear that the agreement is renewable on 1st April, 2003 with mutual Page 13 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 consent and also the agreement is liable for termiantion by mutual consent or otherwise on a notice period of three months by them in writing. Admittedly the parites were not renewed their agreement in writing. However, they continued the business theafter also. The main contention of the Claimant is that since the Respondent has not renewed the agreement, the Arbitration Clause contained in the agreement cannot be invoked for the dispute which arose in respect of the supply made after expiry of the agreement period.
12. Much emphasis was made by the learned counsel for the Claimant that after expiry of the contract the Claimant has issued a letter dated 20.03.2004 in which the terms of business are indicated, wherein supply of feed will be given to the Respondent as per the agreed credit norms as against the terms agreed in the Original Agreement. Otherwise his contention is that C-4 letter dated 20.03.2004 is a new contract on the date of which further supply has been made. It is to be noted that the learned Arbitrator has compared all the accounts carefully from the beginning to end and found that the business was carried out on the same pattern as agreed in the agreement even after 01.04.2003. The factual findings recorded by the learned Arbitrator in this regard is as follows: Page 14 / 32
http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 “31. I went through the accounts and other records, produced by both parties, very carefully, practically comparing the relevant entries in respect of each transaction in the accounts of both parites. It was a tough and strenous job for me. I had to spend a lot of time in meticulously reading the entries. For the period oupto 31.03.2003, there were 13 transactions. The value of the supplies came to Rs.70,10,683.91p. The payments made by the respondent including the benefits, rewards, credits etc., earned by the respondent, came to Rs.78,46,728/-. Thus, on 31.03.2003, there was, in the account of the claimant, an excess credit of Rs.8,36,045.91p in favour of the respondent. In the account of the Respondent, in page 23 of Ex.R1, the excess credit of Rs.8,62,739.09 (there is some difference in calculation and it does not matter) was carried over by the Respondent to the account of the next year 2003-2004. This indivates that the business after 01.04.2003 was ablso in continuation of the business prior to 31.03.2003. If the business after 01.04.2003 had no co0nnection to previous business and it it had been a new, independent one, such carry Page 15 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 over to the account of the next year would not have been done. This alone is sufficient to indicate that, though the agreement, Ex.C-1 was not renewed in writing, the business after 01.04.2003 also continued in the same old manner in pursuance of Ex.C.1.
32. In addition to the above said clinching factor, there are some more circumstances to indicate that the business after 01.04.2003 was also incontinuation of the previous business in terms of Ex.C1. Ex.C4 is a copy of the letter dated 20.03.2004 sent by the claimant to the respondent, in which the terms of business ae specifically indicated. It is specifically stated therein that the supply of feed will be given to the respondent as per agreed credit terms of 90 days from the date of supply. In this letter, the prevfious pattern of business was slightly altered for the yea4 2004-2005. It is also indicated therein that the claimant will prefer to operate on cash and carry terms. It is also mentioned in the letter about the excellent support given by the respondent during the previous financial year. It is also mentioned therein that it is open to the respondent to establish a letter of credit, if she prefers to buy the Page 16 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 material on credit basis. It is not the case of the respondent that she sent any reply to this letter, but in her evidence as RW1 she has stated that she is not aware of the letter Ex.C4, as one Shyamal Das was attending to the affairs of the business. Admittedly, though an option was given to the respondent, she did not open a letter of credit to avail the pruchase on credit basis. It follows therefore that the same old pattern of business was continued in the subsequent years also. As indicated earlier, for all the subsequent years, subsequent to 01.04.2003, the respondent claimed the above said benefits, rewards, credits etc., as before and got them for subsequent years also. The entries regarding these benefits, rewards, credits, etc., in the account book of the respondent for the subsequent years also will indicate that the same old pattern of business was continued throughout. Even in the letter Ex.C9 dated 22.04.2006 the respondent has specifically mentioned about dealership agreement (Ex.C1). If really the said agreement had not been followed for the business in the subsequent years alos, there would not have been any necessity for the respondent to mention about the dealership agreement Page 17 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 in 2006. No doubt, the respondent denies in the course of her evidence having sent any such letter to the claimant. I will consider the truth or genuineness of this letter later. There was nothing to indicate that the pattern of business indicated in Ex.C1 was not followed in the subsequent years. Though the dealership agreement was not renewed in writing after 01.04.2003, on the basis of the ample materials placed before me, I have no hesitation in holding that the business after 01.04.2003 was also continued in terms of dealership agreeement (Ex.C1) and only in 2004 an option was given to the respondent in the letter Ex.C.4 to open a letter of credit, if she wanted to purchase material on credit basis. As indicated earlier, she did not avail that option and therefore, the business continued in the same old pattern and on the very same terms and condtions mentioned in dealership agreement Ex.C1.
By no stretch of imagination can it be said that the business after 01.04.2003 were independent transactions, without reference to Ex..C1. I answer this issue accoridngly.”
13. Learned Arbitrator has recorded the factual finding in fact R.W.1 has Page 18 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 admitted in the evidence that she was not aware of the letter Ex.C-4 and concluded that despite the option was given by the Claimant to the Respondent to open a Letter of Credit to purchase the material on credit basis, she did not avail that option and the entire business has been carried out as per the original terms of the Contract. Therefore, when the original agreement though expired and on the same conditions the business was carried out. Thereafter, it can be easily concluded that the agreement has been renewed, though not by expressly but impliedely. The conduct of the parties who carried the business till the dispute arose between them on the same condition agreed in the original agreement substantiated the fact that the agreement has been mutually renewed. Therefore, the contention of the learned counsel for the Respondent/Petitioner that there is no Arbitral Agreement cannot be countenanced at this stage.
14. In fact, Arbitrator was appointed by this Court after hearing both sides vide order dated 08.08.2014 and the Claimant and Respondents were parties to such proceedings. Even before the Arbitrator no objection wahtsoever taken under Section 16 of the Act, raising the issue of jurisdiction of the Arbitrator. It is also to be noted that the Arbitration Clause in agreement clause is a distinct and Page 19 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 independent contract from the substantive contract. Therefore, even if the contract is come to an end or it is terminated the Arbitration Clause will survive for the purpose of dispute resolution.
15. In this regard it is useful to refer Honourable Apex Court Judgment in Chairman and Managing Director, NTPC Ltd., vs. Reshmi Constructions, Builders & Contractors [(2004) 2 SCC 663] wherein it is held that in the event of new contract has come into being, has to be considered and determined in each individual case having regard to the fact situation obtaining therein.
16. In Krishna Bahgya Jala Nigam Ltd. vs. G. Harischandra Reddy and Another [(2007) 2 SCC 720)] the Honourable Apex Court has held that when the party is not raised any objection under Section 16 of the Act, they cannot be allowed to raise the contention that the contract did not constitute an arbitration agreement.
17. In Durga Charan Rautray vs. State of Orissa and Another [(2012) 12 SCC 513] it is held as follows:
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http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 “16. Thirdly, it was no longer open to the respondents to contest the claim of the appellant on the instant issue after the appellant had obtained the court order dated 15.5.1981 which referred the disputes raised by the appellant to an arbitral tribunal. The Court order dated 15.5.1981 referring the disputes raised by the appellant to arbitration, attained finality inasmuch as the same remained uncontested at the hands of the respondents. The respondents were, thereafter precluded from asserting that the claims raised by the appellant could not be adjudicated upon by way of arbitration. Once the disputes raised by the appellant were referred for arbitration and the rival parties submitted to the arbitration proceedings without any objection, it is no longer open to either of them to contend that arbitral proceedings were not maintainable.”
18. In National Agricultural Coop. Marketing Federation India Ltd., vs. Gains Trading Ltd., [(2007) 5 SCC 692] the Honourable Supreme Court has held as follows:
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http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 “6. Respondent contends that the contract was abrogated by mutual agreement; and when the contract came to an end, the arbitration agreement which forms part of the contract, also came to an end. Such a contention has never been accepted in law. An arbitration clause is a collateral term in the contract, which relates to resolution disputes, and not performance. Even if the performance of the contract comes to an end on account of repudiation, frustration or breach of contract, the arbitration agreement would survive for the purpose of resolution of disputes arising under or in connection with the contract. [Vide :
Heymen vs. Darwins Ltd ~ 1942 (1) All ER 337, Union of India vs. Kishori Lal Gupta & Bros. ~ AIR 1959 SC 1362 and The Naihati Jute Mills Ltd. vs. Khyaliram Jagannath ~ AIR 1968 SC 522]. This position is now statutorily recognized. Sub~section (1) of section 16 of the Act makes it clear that while considering any objection with respect to the existence or validity of the arbitration agreement, an arbitration clause which forms part of the contract, has to be treated as an agreement independent of the other terms of the contract; and a decision that the contract is null and Page 22 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 void shall not entail ipso jure the invalidity of the arbitration clause. The first contention is, therefore, liable to be rejected.”
19. In MSP Infrastructure Limited vs. Madhya Pradesh Road Development Corporation Limited [(2015) 13 SCC 713] the Honourable Apex Court in para 13 has held that A party is bound, by virtue of sub~section (2) of Section 16, to raise any objection it may have to the jurisdiction of the Tribunal before or at the time of submission of its statement of defence, and at any time thereafter it is expressly prohibited. Suddenly, he cannot raise the question after it has submitted to the jurisdiction of the Tribunal and invited an unfavourable award. It would be quite undesirable to allow arbitrations to proceed in the same manner as civil suits with all the well-known drawbacks of delay and endless objections even after the passing of a decree.
20. In para 14 the Honourable Apex Court further held that Parliament has the undoubted power to enact a special rule of law to deal with arbitrations and in fact, has done so. Parliament, in its wisdom, must be deemed to have had knowledge of the entire existing law on the subject and if it chose to enact a Page 23 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 provision contrary to the general law on the subject, its wisdom cannot be doubted. In the circumstances, we reject the submission on behalf of the Respondent.
21. The above judgment makes it very clear that in the absence of the objections raised under Section 16 of the Arbitration Conciliation Act, later the question of non-existence of the Contract cannot be raised under Section 34 of the Arbitration and Conciliation Act.
22. It is also relevant to note that Section 4(b) of the Arbitration and Conciliation Act shows that any requirement under the arbitration agreement, has not been complied with and yet party proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. Therefore, Section 4 also come into operation in this case. Otherwise, the learned Arbitrator found that the business was carried out in the same pattern as agreed in the Agreement that itself clearly indicate that the parties were mutually extended the contract by their conduct though not expressly. In such view of the matter the contention of the learned counsel for the Page 24 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 Claimant in this matter cannot be countenanced.
23. Now the other contentions raised by the learned counsel, with regard to Accounts, the learned Arbitrator has recorded the following factual aspects:
“21. Whenever supply was made to the respondent, in the account of the Claimant, a debit entry for the value of the invoice was made against the respondent.
22. Whenever the respondent made payment by bank draft, the respondent became eligible to get reimbursement of D.D. Commission from the claimant.
23. By reaching the sales target within a particular time and by marking payment on time, the respondent became eligible to get sales incentive from the claimant.
24. Whenever the respondent arranged Farmers Meeting for the propoganda of the product, the respondent becasme eligible to get the reimbursement of the expenses incurred in that regard from the claimant.Page 25 / 32
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25. Whenever the respondent sent back the unsold product (on account of its poor quality) to the claimant, he became eligible to get back the invoice amount.
26. Whenever the respondent sent to the Claimant C forms obtained from the sales tax deaprtment of West Bengal Govt., the respondent became eligible to get the reimbursement of the Central Sales Tax paid by the respondent.
27. These were called benefits, rewards, credits, etc. to which the respondent was entitled.” and recorded above facts have been admitted by both sides and the Respondent earned these benefits, rewards, credits, etc., and she claimed them periodically from the Claimant. After such Claim, the Claimant gave in its account credits in favour of the Respondent in respect of the said benefits, reward, credits, etc., and similar entries were also made in the account of the Respondent. Finally, the learned Arbitrator recorded the above finding and concluded factually that in the account of the Claimant there were element of mutuality is present. In respect of invoice value, the Claimant was the creditor and the Respondent was debtor, in Page 26 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 respect of the benefits, rewards, credits, etc., earned by the Respondent, the Respondent was the creditor and the Claimant was the Debtor. By holding so, it was also held that there were two sets of parallel, independent Claim against each other and all items were entered in the account of the Claimant. The element of mutuality is present in the accounts of the Claimant and concluded that the transaction is mutual, open and current account.
24. Therefore, when the learned Arbitrator compared all the accounts and meticulously seen every entries in the accounts, both side statements and recorded the factual finding. Therefore the judgments cited by the learned counsel in this regard will not be helpful for him in any manner when the factual findings recorded by the learned Arbitrator, keeping in mind the principles laid down in the judgments. Therefore, the contention of the learned counsel for the Claimant in this regard also not sustainable.
25. With regard to the other contention of the learned counsel for the Respondent that the learner Arbitrator has not considered the equitable set off pleaded by the Respondent. It is to be noted that though the amendment sought to Page 27 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 be introduced in the counter was rejected by the learned Arbitrator. Learned Arbitrator has in fact considered the contention with regard to the claiming set off, particularly, with regard to the non-delivery of the consignment of five invoices as raised by the Claimant. In paragraphs 43 and 44 of the Award, the learned Arbitrator factually found that the contention of the Respondent with regard to the non-delivery of the consignment and discussed and found that the contention is found to be false. In fact the Respondent having known the details of the 5 consignment in the year 2013 he never raised any dispute as to the non-delivery of the goods.
26. The learned Arbitrator also noted the ordinary course of human conduct, one would expect the respondent to send a letter or notice to the Claimant that she did not receive any such goods. Therefore, such set off has been pleaded only after the close of the arbitral sittings. Recording the factual finding, the learned Arbitrator found that the plea of set off is an afterthought by the Respondent. When the learned Arbitrator recorded the findings on appreciation of evidence, this Court cannot re-appreciate the entire evidence. Therefore the contention of the learned counsel that the learned Arbitrator has failed to decide the issue of set off is Page 28 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 also not correct and that ground also fails.
27. The other aspects of the learned counsel that the letter dated 18.11.2005 and 22.04.2006 one said to have signed by the husband of the Petitioner in O.P.No.384 of 2016 and letter dated 22.04.2006 said to have signed by the Petitioner in O.P.No.384 of 2016 was created in the relevant point of time. Though it is pointed out that the letter dated 22.04.2006 would not have been come into normal course, the entry is indicated that the mode of payment completed in the year 2015 itself. Though that contention has some force, this Court is of the view that such letter has no relevance at all in view of the other overwhelming materials available on record. The letter dated 18.11.2005 signed by the husband of the Respondent also discussed by the learned Arbitrator and concluded that the husband cannot act as an agent of wife without an express authority. Though such contention is well founded, this Court is of the view that even though the Arbitrator also discussed those letters, dehors those letters to sustain the arbitral award there are many materials available on record. Admittedly, the Arbitrator has recorded that the account was mutual, open and current account. It is admitted by both sides and the same was recorded by the Page 29 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 learned Arbitration in paragraph 39 of the Award that the last date of supply to the respondent was under FAQ 957 on 14.09.2006 and the last date of payment by the Respondent on 26.09.2016, other than cheques. Last supply was effected on 14.09.2006 and payment was made on 26.09.2006. The period of three years would commence from the last date of payment to recover the money. Arbitration reference was dated 11.02.2018 within the period three year of limitation thereafter Arbitration has been commenced. Therefore, this Court is of the view that though the learned Arbitrator has also discussed about the two letters said to be the acknowledgment of debt, even dehors those letters the claim of the claimant is well within the period of limitation. Learned Arbitrator has answered every issue and meticulously analysed each and every account and found that the Claimant is entitled to Rs.22,01,079/- as against the principal amount of Rs.76,70,953/- and interest Rs.1,47,90,837/- as on 10.11.2014.
28. Therefore, this Court, on perusal of the entire Award, is of the view that the learned Arbitrator has given a well reasoned Award with adequate reasons. This Court do not find any of the grounds made out under Section 34 of the Arbitration and Conciliation Act, to interfere the well reasoned Award. Page 30 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 Accordingly, both the Original Petitions are dismissed.
24.09.2021 Index : Yes Internet : Yes Speaking/Non-Speaking order ggs N. SATHISH KUMAR, J.
ggs Page 31 / 32 http://www.judis.nic.in O.P.Nos.341 and 384 of 2016 Pre-delivery Common Order in:
O.P. Nos.341 and 384 of 2016 24.09.2021 Page 32 / 32 http://www.judis.nic.in