Delhi High Court
Dlf Universal Ltd. vs International Marketing Services on 2 June, 1997
Equivalent citations: 1997IVAD(DELHI)305, 1997(2)ARBLR145(DELHI), 70(1997)DLT361, 1997(42)DRJ539
Author: J.B. Goel
Bench: J.B. Goel
JUDGMENT J.B. Goel, J.
(1) Suit No.1487-A/84 is an award dated 11.4.1984 in the matter of D.L.F. Universal Ltd. vs. International Marketing Services filed by Shri B.S. Sistani, Arbitrator whereas Ia No.7249/84 are the objections under Sections 30 and 33 of the Arbitration Act (hereinafter called the Act) filed by the aforesaid claimant.
(2) Briefly the facts are that M/s American Universal Electric (India) Ltd. (for short AUE) were inter alia manufacturing and selling "Cooler Pumps" and "Cooler Fans" under the Brand name of "Cool Home". It has appointed International Marketing Services (for Short IMS), the respondent as their selling agents vide agreement dated 3.8.1978 for the sale of these goods manufactured by the former in Delhi. This agreement was valid for one year but was later extended to 30.6.1981.
(3) In the meantime, by a scheme of amalgamation the said Aue was merged with M/s. Dlf Universal Ltd., the claimant with effect from 18.6.1980 and all its assess and liabilities stood transferred to the claimant/petitioner. This included the rights and obligations arising out of the aforesaid agreement dated 3.8.1978 with the respondent.
(4) It appears that contrary to the terms of the agreement of agency, the petitioner started selling these goods direct to the dealers. Being aggrieved from this, respondent had filed a suit in this Court against the petitioner for injunction. An interim injunction was granted by a learned Judge of this Court on 8.12.1980 restraining the petitioner from selling the aforesaid goods to any other person in the territory of Delhi. The claimant went in appeal (being FAO(OS) No.147/80) wherein the parties entered into a compromise on February 11, 1981 agreeing that the parties will try to resolve their disputes amicably and if not possible the matter shall be referred for arbitration to Shri B.S. Sistani, Chartered Accountant and the appeal was disposed of and in pursuance of this compromise the suit was also withdrawn.
(5) The disputes between the parties remained unresolved. Claimant vide their letter dated 24.3.1982 sent through their Advocate informed the aforesaid Shri B.S. Sistani that the disputes and differences had arisen between the parties which were agreed to be referred to him for arbitration. He was accordingly requested to enter upon the reference.
(6) Shri Sistani entered upon the reference and vide his letter dated 31.3.1982 called upon the parties to appear before him on 12.4.1982 and then called upon the parties to submit their claim and counter claims.
(7) The claimant submitted its statement of claim dated 7th May, 1982 claiming the following amounts:
1.Rs. 2, 40, 215.65 together with interest at the rate of 18% per annum on account of balance price of/dues against the goods supplied.
2.Rs. 7,68,196.46 on account of non-furnishing of Sales Tax Forms/declaration.
3.Rs. 71,453.82 on account of non return of floating stocks.
TOTAL: Rs. 10,79,860.78 with interest.
(8) The respondent submitted the Reply-Cum-Counter Claim dated 3.6.1982 disputing the claim of the petitioner and also made Counter Claims against the petitioner. Further reply was submitted by the claimant to this reply-cum-counter claim of the respondent denying the same, and the respondent again filed a further reply thereto reasserting its claims.
(9) During arbitration proceedings both the parties led documentary and oral evidence. On behalf of the petitioner Shri B.C. Chaudhary, an Accountant of the claimant was examined as CW.1 whereas on behalf of the respondent Shri S.C. Arora, a partner of the respondent was examined. Both the witnesses were cross-examined at length.
(10) Learned arbitrator vide detailed award (running into 19 pages with two annexures) dated 11.4.1984, partly allowed and partly disallowed the claims and counter claims and in the result awarded a sum of Rs. 3,41,397.51 in favour of the respondent and against the petitioner.
(11) On the award being filed in the Court (which was registered as Suit No.1487-A/84), notice of filing of the award were given to both the parties. Only the petitioner filed objections (IA No.7249/84) under Sections 30 & 33 of the Act whereas the respondent did not file any objection against the award.
(12) Following issues were framed of July 30, 1988:
1.Is the award liable to be set aside, modified or remitted back?
2.Has the arbitrator gone beyond the reference, if so, to what effect?
(13) Both the parties led evidence by way of affidavits. On behalf of the petitioner affidavit of Shri M.M. Karnik, its attorney and on behalf of the respondent affidavit of Shri S.C. Arora one of its partner were filed.
(14) The disputes regarding the claims of the petitioner pertained to debit notes and invoices as detailed below which was disputed by the respondent:
1.Debit Note No.64 Rs. 908.88
2.Debit Note No.65 Rs.1,51,320.95
3.Debit Note No.66 Rs. 66,276.32
4.Debit Note No.67 Rs. 52,356.68
5.Invoice No.M-39 Rs. 36,073.44
6.Invoice No.M-40 Rs. 35,980.38
7.Debit Note No.01/02 Rs. 4,333.10 (15) Learned Arbitrator has disallowed claim against Debit Notes No.65, and 66 and Invoices No.M-39, M-40 in whole, and sum of Rs. 8,646.19 against Debit Note No.67 but allowed the claims against Debit Notes No.64 and 01/02.
(16) Similarly, respondent had alleged that they had not been given credit in respect of various Debit Notes claimed by them. Claims in respect of Credit Notes No.220, 175, 177, 180, 182, 183, 184, 190 has been disallowed whereas other claims were allowed. Besides the respondent had made counter claims under 7 heads. Counter Claim No.1 and 5 were disallowed. Counter Claims No.2 & 4 were partly allowed and Counter Claims No.3 and 7 were allowed in full. Besides certain materials given for repairs to the petitioner were ordered to be returned within 6 weeks. Similarly, respondent was ordered to return floating stock within 6 weeks. It appears that sales tax forms in respect of purchases were supplied by the respondent and as such no award has been given against this claim.
(17) I have heard the learned counsel for the parties.
(18) Learned counsel for the petitioner/objector has challenged the award mainly on 5 grounds;
1.Arbitrator has exceeded his jurisdiction by either ignoring or giving wrong interpretation to terms of the contract;
2.The award is excessively high and disproportionate to the original claim.
3.The Arbitrator exceeded his jurisdiction by extending the scope of reference;
4.There is no evidence to support or reasonably capable of supporting the findings. and
5.Errors are apparent on the face of the award.
On behalf of the respondents it has been denied that the Arbitrator has acted beyond the agreement or beyond reference or there are any errors apparent on the face of the award or the award is liable to be set aside. It has been contended that scope of interference by the Court is very limited and as there is no error apparent on the face of the award, the objections are not sustainable and the award is liable to be made rule of the Court. Both the learned counsel have placed reliance on number of decided cases.
(19) The scope of power of the Court for interference with the award of an Arbitrator is very limited. The legal position regarding power of Court to interfere with an arbitrator's award was reiterated in recent judgment of State of Rajasthan Vs. M/s. Puri Construction Company Ltd. where it has been held as under: "26.The arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts. In Sudersan Trading Co. V. Govt. of Kerala it has been held by this Court that there is a distinction between disputes as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be a conflict as to the power of the arbitrator to grant a particular remedy. One has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid is a decision within the competency of the arbitrator. By purporting to construe the contract the Court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Where the reasons have been given by the arbitrator in making the award the Court cannot examine the reasonableness of the reasons. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. The arbitrator is the sole Judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the arbitrator."
It was further been held in this case that an award cannot be set aside merely on ground of misreading, misconstruction or misappreciation of material on record.
In Municipal Corporation of Delhi Vs. Jagan Nath Ashok Kumar it was held that where reasons germane and relevant for the Arbitrator to hold in the manner he did have been indicated, it cannot be said that the reasons are unreasonable. The word "reasonable" has in law prima-facie meaning of reasonable in regard to those circumstances of which the Actor, called on to act reasonably knows or ought know. It is also well settled that the Court does not sit in appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusions or if the award is based upon any legal proposition which is erroneous. [Indian Oil Corporation Ltd. Vs. Indian Carbon Ltd. .] Again in the State of Orissa Vs. Lal Bros. it has been held that an award is conclusive as a judgment between the parties and the Court is entitled to set aside an award only if the arbitrator has misconducted himself in the proceedings or when the award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35 of the Arbitration Act or where an award has been improperly procured or is otherwise invalid under Section 30 of the Act. An award may be set aside by the Court on the ground of error on the face of the award but an award is not invalid merely because by a process of inference and argument, it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. If an arbitrator in passing an award makes a mistake of law or fact, that is no ground for challenging the validity of the award. It is only when a proposition of law is stated in the award and which is the basis of the award and that is erroneous the award can be set aside or remitted on the ground of error of law apparent on the face of record. An error on the face of the award means that can be found in the award or document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment some legal proposition which is the basis of the award and which could be said to be erroneous. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out whether or not the arbitrator has committed an error of law. [N. Chilleppan Vs. Secretary, Kerala State Electricity Board & Anr. ].
(20) Learned counsel for the petitioner had relied on M/s. Associated Engineering Com. Vs. Government of Andhra Pradesh and Anr. ; Indian Aluminium Cable Vs. Haryana State Electricity Board and Ors. 1996(5) Scale 708 (SC).; State of U.P. Vs. M/s. Ram Nath International Construction Pvt. Ltd. 1995(6) Scale (2) (SC) and Orissa Mining Corporation Ltd. Vs. Pran Nath Wishwanath Rawalley . The principle in these authorities is that an Arbitrator derives his authority from the contract and is governed by the Arbitration Act, he cannot act either beyond the terms of the contract or beyond scope of the reference. This legal position is not disputed on behalf of the learned counsel for the respondent. The question that arises is as to whether the Arbitrator has travelled beyond the scope of the agreement and the reference. To that extent the facts have to be recapitulated. It is not disputed that the parties had entered into an agreement of agency dated 3.8.1978 whereby the respondent was appointed as Selling Agent for the sale in Delhi of the product of the petitioner, namely, "Cooler Pumps" and "Cooler Fans" under the brand name of "Cool Home". It is also not disputed that the agreement was initially valid for one year but it was extended up to 30th June, 1981. Clauses 3 and 11 of the agreement read as under:
3.AUE will allow 25% discount on the above products to Ims as total Selling Agent's discount including target discount for lifting the guaranteed off-take at the prevailing Aue list prices. The schedule of minimum guaranteed off-take is attached as per appendix I. Any shortfall in the minimum off-take during the month and or in the agreed period. 2/1-2% target discount would not be payable by AUE. Ims have pointed out that they expect sale of 15000 Nos. of Cooler Pumps 8000 Nos. of Cooler Motors with blades and 200 Nos. switches.
11.It has been agreed that Ims will give preferential treatment in the matter of pricing and deliveries to all Original Equipment Manufactures ever the trade so as to develop healthy and long lasting relationship with them for Aue Products, as existing already. Likewise, special attention will be paid to existing agents in this territory for these products.
(21) It appears that the petitioner sometime later on started selling these goods direct to some dealers. Being aggrieved from this, the respondent had filed a civil suit in this Court against the petitioner seeking injunction and an interim injunction was granted by a learned Judge of this Court on 8.12.1980 restraining the petitioner from selling the aforesaid goods to any other person in the territory of Delhi. The claimant went in appeal wherein the parties entered into a compromise and made statement in the Court agreeing to the following terms:
(1)The agreement between the parties was valid up to June, 1981.
(2)The parties agreed to the sale figures of 10500 cooler Pumps and 5500 cooler motors which would have been sold to the respondent during the period 1.8.1980 to June, 1981.
(3)The respondent had lifted 2526 pumps and 1877 cooler motors including cooler fans and against these quantities they had already received agreed discount and there was no dispute with regard to the same.
(4)For the balance quantities of 7976 Pumps (10500-2524) and 3623 fan motors (5500-1877) the petitioner had agreed to pay to the respondent commission at the rate of 5% of the invoice price exclusive of sales tax and excise etc. and the respondent had given up their claim for supply of this quantity of the goods.
(5)The respondent was to return the floating stock given to them by the petitioner during the course of the agency agreement within a period of 4 weeks.
6)The petitioner was to return the material received by them from the respondent, for repairs after repairing the same immediately.
(7)The dispute regarding outstanding amounts and relating to items of expenses etc. will be settled mutually within a period of 4 weeks.
(8)Sales Tax Declaration Forms and other documents required to be given by either of the parties to the other will also be furnished. And (9)If these disputes and connected matters were not so settled the parties would refer those differences and disputes to the sole arbitrator Mr. B.S. Sistani, a Chartered Accountant.
(10)The parties stood relieved of their respective obligations under the aforesaid agreement dated 3.8.1978.
(22) These disputes and differences between the parties remained unresolved and the petitioner through their advocate approached the aforesaid Shri B.S. Sistani vide letter dated 24.3.1982 requesting him to act as an arbitrator as agreed between the parties for the parties. The arbitrator called upon the parties to appear before him, entered upon reference and required them to file their claim and counter claim which was done by them.
(23) It will be seen that original agreement dated 3.8.1978 did not contain any arbitration clause for resolving disputes between the parties and it was subsequently by a compromise entered into before the Court in appeal on 11th February, 1981 that they had agreed that their outstanding disputes if not resolved amicably will be referred for arbitration of Shri B.S. Sistani and accordingly these disputes were referred to him. Both the parties submitted their claims and counter claims before the Arbitrator. No dispute appears to have been raised before the Arbitrator about the competence of the Arbitrator to go into and adjudicate any of the disputes raised by the parties.
(24) The Claims/disputes raised by the petitioner inter alia pertained to two debit notes No.65 and 66 both dated 30.9.1980. By Debit Note No.66 Rs. 66276.32 P. were debited by the petitioner in the account of respondent-disallowing off-take target discount @ 2-1/2% in respect of sales for the period 1.8.1978 to June, 1979 and by Debit note No.65, a sum of Rs. 1,51,320.95 was similarly debited in respect of sales for the period July, 1979 to June, 1980 as the agreed target in lifting the agreed quantity of goods had not been achieved by the respondent. The respondent disputed this claim. The case of the respondent was that they were the sole selling agents for the petitioner for the territory of Delhi in respect of Cooler Pumps and Cooler Fans and petitioner had no right to sell these goods directly to any one else in Delhi except to their Original Equipment Manufacturers, but they started selling the goods directly to other dealers secretly. This affected their sales against which respondent had raised protests and for this the petitioner had subsequently given 5% over-riding commission on such sales after the matter was taken to Court. Such direct sales to other dealers was not disputed before the arbitrator by the petitioner. The learned arbitrator considered the documentary and oral evidence produced by the parties and held that these debit notes were unjustified and were disallowed to the petitioner. He has given reasons for the same. This Court cannot go into the reasonableness of the reasons. This finding/part of award is based on the material available on record. There is no error apparent on the face of award on this. However, learned counsel for the petitioner has raised two contentions (1) by the award the Learned Arbitrator has allowed off-take target discount @ 2-1/2% contrary to the terms of agreement which specifically provided that the discount of 25% payable to the respondent included 2-1/2% target discount and as target in sales was not achieved so this discount was not payable. Secondly, this was beyond the scope of the reference. No doubt this 2-1/2% discount was on account of target-off take of the goods according to the agreement. By the agreement the respondent were appointed as the selling agents for the territory of Delhi which necessarily means that the petitioner would not make direct sales of this product to any other dealer in Delhi. The petitioner committed breach of this condition which is the material term of the agreement by making sales direct to other dealers in Delhi. The petitioner did not admit this fact earlier but admitted later on when the respondent had filed a suit for injunction in this Court. This necessarily affected the change in the rights and obligations contemplated under the terms of the agreement. No one can take benefit of his own wrong and thereby deprive the other of just right and benefit, by voluntarily creating situation to his own benefit in this case the admissibility or target discount by direct sales. Disputes arose between the parties. The agreement did not provide for resolving of such dispute. A compromise was arrived at between the parties in appeal on 11.2.1981 in the Court agreeing that disputes pertaining to "outstanding accounts between the parties", would be mutually resolved and if not so resolved, will be referred to the named arbitrator. The dispute about entitlement or otherwise of this target discount was outstanding between the parties whom the disputes were agreed to be referred to Arbitrator. In these circumstances it cannot be said that the award is either beyond the scope of reference or is contrary to the terms of the agreement. No such objection was also taken before the arbitrator.
(25) The benefit of this 2-1/2% target discount had been given to the respondent inspite of the fact that the requisite target had not been achieved for the period 1.8.1978 to 30.6.1979 and July, 1979 to June, 1980, and again for the period July 1980 to June, 1981. In the absence of specific provisio n in this respect in the agreement, the dispute had to be resolved according to the general law, and obviously the parties had agreed to refer all unresolved disputes to arbitrator. Both the parties had referred their disputes in their pleadings d the learned Arbitrator for the reasons given in the award has held that the claim made in two debit notes issued by the petitioner on the respondent is unjustified and he has disallowed this claim. The parties had referred the dispute to arbitration and after the claim is adjudicated, the petitioner cannot be allowed to dispute the jurisdiction of the arbitrator. In the circumstances it cannot be said that the Arbitrator has acted either contrary to the agreement between the parties or beyond the scope of reference made to him. The learned Arbitrator has acted within the scope of reference. This Court is not sitting as a Court of Appeal over the award of the arbitrator and cannot go into the question of reasonableness of the reasons given by him. There is no error apparent on the face of the award. As such no fault can be found with the award to this extent. The objection to this effect has no merits and is rejected.
(26) Regarding the debit Note No.67 the petitioner had claimed a sum of Rs. 52,356.68 being the 50% share of the respondent on account of publicity expenses incurred by them. The learned Arbitrator has found that expenses amounting to Rs. 12,680.63 P. did not pertain to the respondent and this fact was admitted on behalf of the petitioner before the Arbitrator. Besides a sum of Rs. 4,611.75 were found by the Arbitrator to be in excess on account of excessive rates charged for newspaper advertisements. This was also not disputed on behalf of the petitioner before the Arbitrator. The total amount of these two figures amounted to Rs. 17,292.38 P. Learned Arbitrator has allowed the claim of the petitioner reducing the claim to the extent of 50% on this amount of Rs. 17,292.38 P. Part of the claim has been disallowed for the aforesaid reasons and apparently on the admissions of the petitioner. There is no error apparent for this part of the award also and objection to this extent has no merits.
(27) Claims in respect of Credit Note Nos. 237, 201, 214, 221, 155, 170, 185, 189 and 191 raised by the respondent have been allowed. The objection of the petitioner is that these are beyond the scope of agreement and also the scope of reference.
(28) As already noticed the disputes and differences between the parties about outstanding accounts/expenses etc. were agreed to be referred to arbitration as per joint statement made in the High Court in appeal. All these debits notes pertain to the disputes and differences arising out of the dealings between the parties under the agreement. These are neither outside the contract nor they are beyond the reference. As such this objection has no merit.
(29) Regarding Credit Note No.237 of Rs. 1982.40. as appears from the findings of the learned Arbitrator the liability to pay 50% of publicity charges was not disputed by the petitioner and this claim pertains to only in respect of one bill remaining outstanding. The petitioner only wanted to verify from the bill/voucher. The receipt for this expenditure was produced by the respondent before the Arbitrator and learned Arbitrator was satisfied about the same. Correctness of this voucher does not appear to have been disputed before the Arbitrator. There is no error in awarding this amount in respect of this debit note for Rs. 1982.40.
(30) Credit Note No.201 for Rs. 205.63 P. This debit note pertains to difference in the rate of discount of the rate of 32-1/2% of the bill amount claimed and 7% less allowed from the 25% discounted amount of the bill. The respondent had produced two invoices where the petitioner had allowed the discount at the rate of 32-1/2% of the bill amount. The same has been allowed by the Arbitrator. Here also there is no infirmity or error on the face of the award.
(31) Credit Note No.214 for Rs. 312.00 . This pertains to packing charges of goods dispatched outstation. The respondent had claimed that Mr. B.K. Bansal of the petitioner had authorised them to incur this expenditure. The respondent had supported it by a letter dated 3.11.1978 of the petitioner which has been accepted as proof of admission of liability by the petitioner. Apparently this liability was not disputed. In any case the Learned Arbitrator has given valid reasons. This objection has also no merits.
(32) Credit Note No.221 for Rs. 842.50 - This amount was on account of debit claimed by the respondent for that amount charged by the petitioner on account of discounting charges in respect of the respondent's cheque drawn on Delhi Branch which was deposited in Faridabad. The case of the petitioner is that this expenditure was incurred with the consent of the respondent which was denied by the latter. The learned Arbitrator has disallowed the claim of the petitioner for want of any proof. Consequently, the debit note of the respondent has been allowed. There is no infirmity or error in this award also.
(33) Credit Note No.155 for Rs. 13,828.00 . This claim comprises of three heads (1) Rs. 8400.00 (2) Rs. 984.00 and (3) Rs. 4444.00 . First two heads have not been disputed before the Arbitrator. Claim against the third head was on account of special cash discount not allowed. It was claimed by the respondent that Mr. R. Dewan, General Manager of the petitioner had agreed to this special discount. The objection is that the explanation and the evidence given by the petitioner and on the record have been ignored. Appreciation of evidence is in the domain of the Arbitrator and this Court cannot interfere on this ground. This objection also has no merit.
(34) Credit Note No. 170 for Rs. 7000.00 - This pertains to cash discount claimed at the rate of 4% by the respondent on a sale made against a bill of exchange payable 30 days after. Before the arbitrator it was not disputed that in such cases 2% discount was being allowed. Learned Arbitrator has allowed only Rs. 3500.00 i.e. at the rate of 2% instead of 4% claimed on the material produced before the Arbitrator. This again involves appreciation of material on record by the Arbitrator and cannot be interfered with by this Court.
(35) Credit Note No.185 for Rs. 14,250.00 This claim was raised by the respondent towards service charges for sales made to Original Equipment Manufacturers for the year 1978-1979 at the rate of 1% of total sales of Rs. 14,25,000.00 . The respondent produced material to show that the petitioner had allowed 1% service charges on direct sales which was not disputed by the petitioner. The petitioner had denied this liability on the ground that there was no provision in the contract to make such payment. The agreement has also no provision to pay any service charges for sales made direct. The learned Arbitrator has not accepted the plea of the petitioner. This also involves appreciation of the material and inference drawn on such material brought before the Arbitrator. The Court cannot go into the reasonableness of the reasons based on relevant material on record. This objection also has no merit.
(36) Credit Note No.189 for Rs. 9,864.00. This claim appears to have been admitted by issuing a credit note by the petitioner which was not disputed before the Arbitrator. Here also there is no infirmity.
(37) Debit Note No.191 for Rs. 80,693.64 - This debit note was raised by the respondent on the ground that the rate of off season discount for purchases made between 1st August, 1979 to 30th September, 1980 which was agreed in the agreement was unilaterally decreased by the petitioner. The learned Arbitrator has found that off season discount was reduced unilaterally against the agreed contract and he has allowed this claim. Here also there is no infirmity in the award.
(38) Award of Rs. 45,000.00 towards publicity expenses. The respondent had claimed a sum of Rs. 90.831.92 towards cost of publicity campaign for the year 1979-80. It was claimed by the respondent that this expenditure was incurred in accordance with the agreement. Clause 8 of the agreement provided for sharing of such expenditure. The respondent relied on a letter of petitioner whereby the respondent could incur expenditure to the extent of Rs. 90,000.00 . It was also shown that a bill was raised to which no objection was raised by the petitioner. Learned Arbitrator has found that this expenditure was justifiably incurred for carrying out the publicity of the product of the petitioner and for this petitioner had also agreed. On the material placed before the learned Arbitrator only a sum of Rs. 45,000.00 as 50% of the maximum amount of Rs. 90,000.00 agreed to be incurred by the respondent has been allowed by the learned Arbitrator. This also involves appreciation of material available before the Arbitrator. This award also cannot be interfered with by the Court.
(39) Counter Claim No.2 for Rs. 76,339.84- This claim pertains to part of the period 1980-81 as 5% overriding commission on balance quantities of 3623 Cooler motors and fans and 7976 Pumps out of the assumed quantities which were to be sold to the respondent according to the agreement which amount the respondent would have been entitled to for the agreed period of agency had the contract continued up to June, 1981. The agreement was terminated mutually on Feb. 11, 1981 in pursuance of the agreement arrived at between the parties in the High Court. Entitlement of the respondent for such discount had not been disputed and the learned Arbitrator has computed the total discount to which the respondent would have been entitled had the agreement remained operative for the agreed period such discount had actually been allowed on the actual sales made till the termination of agreement. Against a claim of Rs. 76,339.84, the learned Arbitrator has allowed Rs. 72,185.99. This is a matter of computation based on the material on record. In the matter of computation based on material on record no fault can be found by the Court. There is no infirmity or error in this claim allowed by the learned Arbitrator.
(40) Counter Claim No.3 for Rs. 5,471.05 P. - This was on account of overriding commission at the rate of 5% of the sales made by the petitioner directly to their staff members. The petitioner had allowed discount at the rate of 2-1/2% against the respondent's claim at the rate of 5%. Such discount at the rate of 5% had been allowed in respect of direct sales made to dealers. On that principle this claim of respondent has been allowed by the learned Arbitrator. Here also no fault can be found with the reasonableness of the reasons given by the learned Arbitrator on the material and circumstances available before him and in the absence of specific agreement on this aspect between the parties. This objection has also no merits.
(41) Counter Claim No.4 for Rs. 87,830.70. This claim pertains to 5% overriding commission on goods sold directly by the petitioner prior to August, 1980. Such sales were not disputed by the petitioner. It was also admitted before the learned Arbitrator that overriding commission on direct sales to the dealers had been allowed at the rate of 5% and the admissibility of the claim on that basis to compensate the loss of business of respondent due to such sales was not disputed. The learned Arbitrator has on the basis of material produced before him found such sales of the value of Rs. 6,48,930.04 and has allowed overriding commission at the rate of 5% amounting to Rs. 32446.00 . Thus part of the claim has been allowed. The objection now taken is that the learned Arbitrator has formed a new contract not agreed between the parties and has also exceeded the limits of reference. The agreement did not provide for such eventuality and so it cannot be said that such a claim is contrary to the original agreement. In the absence of specific agreement the dispute has to be resolved according to general law and as already noticed it cannot be said that this claim is beyond the scope of the reference. The learned Arbitrator has computed the amount and allowed the claim on the basis of material brought before him. Here also there is no error in the award of the Arbitrator.
(42) Counter Claim No.7 for Rs. 995.50.00 . This claim pertains to one sale of material made by the respondent without charging the price on the authority of the Senior Marketing Officer of the petitioner company. The respondent had placed before the learned Arbitrator the written authority of the petitioner's said officer to so deliver the goods. The Arbitrator has allowed this claim. Here also there is no infirmity in the award.
(43) Claim of the petitioner for floating stock for Rs. 71,253.82ÿP. The petitioner had claimed this amount on account of floating stock supplied to the respondent. The details/quantities of such floating stocks given by the petitioner was not disputed by the respondent. The case of the respondent was that when a dealer comes with a defective part of the goods sold to them the same is replaced from the floating stocks and the defective part is obtained and sent for repairs to the petitioner. Such floating stock apparently were supplied to be used in replacement of defective material. The learned Arbitrator in Counter Claim No.6 has held that the petitioner had not returned some defective goods given by respondent after repairs. The petitioner has been directed to return such material as per details given in Annexure 5 to the Counter claim of the respondent within 6 weeks. Similarly, the learned Arbitrator has given direction to the respondent to return the floating stock to the petitioner within 6 weeks. Learned Arbitrator has held that the petitioner in the circumstances is not entitled to the price of such new material supplied as floating stock. Obviously, the respondent is liable to return the floating stock against return of defective material sent to the petitioner after they are repaired. Here also there is no error in this award of the learned Arbitrator in the circumstances and so no interference can be made.
(44) For the reasons given above, I do not find any merits in the objections raised by the petitioner against the award. Both the issues are accordingly decided against the petitioner/objector and the objection petition (IA No.7249/84) is dismissed. The award of the Arbitrator dated 11.4.1984 (being suit No.1487-A/84) is made a rule of the Court. Award shall form part of the decree.
(45) The respondent is also awarded interest at the rate of 12% per annum on the awarded amount of Rs. 3,41.397.51 from the date of decree till realisation.
(46) Suit No.1487-A/84 is accordingly disposed of. In the circumstances, the parties are left to bear their own costs.