Delhi District Court
National Seeds Corporation Ltd vs Uttam Rice And Seeds Pvt Ltd on 17 December, 2025
IN THE COURT OF SH. PULASTYA PRAMACHALA
DISTRICT JUDGE, (COMMERCIAL COURT)-01,
PATIALA HOUSE COURT, NEW DELHI
INDEX
Sl. HEADINGS Page Nos.
No.
1. Memo of Parties 2
2. Description of case 2
3. Brief Facts of the case 2-4
4. Grounds of objection/challenge 4-5
5. Reply of respondent 5-6
6. Arguments of the parties 6-8
7. Appreciation of Arguments, Facts & Law 8-15
8. Decision 15
Digitally
signed by
PULASTYA
PULASTYA PRAMACHALA
PRAMACHALA Date:
2025.12.17
16:01:36
+0530
OMP (COMM.) No. 85/2023 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.1 of 15 Patiala House Court, New Delhi
OMP (COMM) No.85/2023
In the matter of: -
NATIONAL SEEDS CORPORATION LIMITED
Having its Registered office at:
Beej Bhawan, Pusa complex, New Delhi-110012
...Petitioner
Versus
UTTAM RICE & SEEDS PVT. LTD
Having its registered office at:
B-9, Housing Society NDE Part-1,
New Delhi-110001
Through its Director
Mr. Vinay Goyal.
...Respondent
Date of Institution : 06.06.2023
Arguments heard on : 19.11.2025
Decided on : 17.12.2025
Decision : Petition is dismissed.
JUDGMENT
DESCRIPTION OF THE CASE
1. Present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") has been filed by petitioner, National Seeds Corporation Ltd, seeking setting aside of the Arbitral Award dated 03.03.2023 passed by Ld. Sole Arbitrator, Sh. Amar Nath (District & Sessions Judge (Retd.).
BRIEF FACTS OF THE CASE
2. Briefly stated, the case of the petitioner is that it is a company registered under the Companies Act, whereas the respondent is engaged in the business of manufacture and sale of seeds, rice and other agricultural products. The regional office of the OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.2 of 15 Patiala House Court, New Delhi petitioner at Sheikhpura, Patna issued an Expression of Interest (EOI) dated 09.12.2015, bearing reference No. Prodn 20/EOI/SP/NSC/PTA/2015-2016, inviting a "two-bid system" in sealed cover for organizing production of certified wheat and lentil seeds from reputed seed organizers/producers for the Rabi season 2015-2016. In response to the said EOI, the respondent submitted its offer, and after negotiations and deliberations, consented to custom production charges @ Rs.217/- per quintal for the wheat seed production programme.
3. It is further averred that respondent, vide letter dated 27.09.2016, claimed that the procurement price of wheat seed was Rs.1880/- per quintal. Between 24.10.2016 and 05.12.2016, respondent dispatched total quantity of 11,934 quintals of wheat certified seeds of different varieties to the petitioner and repeatedly requested the petitioner to lift the balance quantity of 2,585.20 quintals. The petitioner states that procurement price @ Rs.1810/- per quintal was paid to respondent, being the applicable procurement price.
4. It is further the case of the petitioner that as per the terms of the contract, respondent was required to supply the entire quantity by the first week of November 2016, and that no seeds were to be accepted thereafter. However, despite the clear contractual stipulation, respondent failed to keep ready the stock within the agreed delivery schedule. Petitioner alleges that respondent was solely responsible for the seeds not being lifted as they were not properly packed or ready by the first week of November 2016, which was essential to ensure sowing by farmers by 15 OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.3 of 15 Patiala House Court, New Delhi November 2016. It is further asserted that respondent failed to collect packaging materials in time for dispatch, despite knowing that delivery to the government corporation had to be completed by the first week of November 2016. According to the petitioner, due to respondent's own breach of contractual obligations, petitioner could not lift the entire quantity, even though full payment was made as per agreed terms.
5. Subsequently, disputes arose, and Mr. J.S. Jangra, Additional District & Sessions Judge (Retd.), was appointed as the Sole Arbitrator. However, on a petition filed by respondent before the Hon'ble Delhi High Court, Mr. Amar Nath was appointed in place of Mr. J.S. Jangra as the learned Sole Arbitrator. Learned Arbitrator passed the impugned Award dated 03.03.2023 allowing the claims of respondent and awarding a sum of Rs.24,06,655/-.
GROUNDS OF CHALLENGE
6. Aggrieved by the impugned Award, petitioner has filed the present objections mainly on the following grounds: -
i. The impugned Award is contrary to the fundamental policy of Indian law, settled judicial principles, and therefore, suffers from illegality and is liable to be set aside. ii. The impugned Award has been passed without proper application of judicial mind to the factual and legal position. It is perverse and suffers from manifest errors apparent on the face of the record, amounting to violation of public policy. iii. Learned Arbitrator erred in allowing respondent's claim for losses allegedly suffered on account of non-lifting of seeds by the petitioner, despite there being no document or evidence on record establishing such losses.
OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.4 of 15 Patiala House Court, New Delhi iv. Learned Arbitrator committed error both on facts and law in holding that the petitioner was liable for payment of the un-lifted quantity of 2,585.20 quintals.
v. Learned Arbitrator erroneously concluded that the procurement price of Rs.1880/- per quintal was duly communicated to respondent.
vi. Learned Arbitrator failed to appreciate the legal principles governing burden of proof and the degree to which respondent was required to discharge the same.
vii. Learned Arbitrator failed to consider that due to demonetization, the very object of the contract-i.e., the timely supply of quality seeds to farmers-became impracticable, as farmers lacked liquidity to purchase seeds, and therefore respondent stood discharged from its obligations under the contract.
REPLY FILED BY RESPONDENT
7. In response to the present petition, respondent has filed reply contending that the impugned Award suffers from no infirmity, factual or legal. It is pleaded that learned Sole Arbitrator has passed the Award after examining each document placed on record and after appreciating the evidence in its proper perspective. Learned Arbitrator has reasonably interpreted the terms of the tender documents/EOI and has rendered findings on facts, which cannot be termed as perverse or unreasonable so as to warrant interference under Section 34 of the Act.
8. It is further averred that the present petition is essentially an attempt by the petitioner to seek re-examination and re- appreciation of the evidence already considered by learned Arbitrator and to re-agitate the very same defences raised before the Arbitral Tribunal. Such re-appreciation is impermissible in OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.5 of 15 Patiala House Court, New Delhi proceedings under Section 34. On these grounds, respondent prays for dismissal of the petition.
ARGUMENTS OF PARTIES
9. Written submissions were filed on behalf of the petitioner, reiterating the grounds taken in the petition. It is argued that the impugned Award is unreasonable and contrary to the public policy of India, besides contravening well-established legal principles and judicial precedents, thereby rendering it unsustainable in law.
10. It is contended that learned Arbitrator ignored material evidence on record and failed to adhere to the principles of natural justice, including the requirement of rendering a fair, impartial and reasoned decision. The findings, according to the petitioner, are perverse and arbitrary, particularly in allowing respondent's claims in the absence of any documentary or substantive evidence proving losses allegedly suffered due to non-lifting of seeds by the petitioner. It is further submitted that learned Arbitrator failed to appreciate that respondent had not kept the seeds ready within the stipulated delivery period, i.e., the first week of November 2016, despite clear contractual terms. Petitioner argues that it was solely due to respondent's default that the remaining quantity could not be lifted. Petitioner also challenges the finding regarding the procurement rate of Rs.1880/- per quintal, asserting that there was no discussion or agreement between the parties to this effect and that the Arbitrator has allowed such rate without any basis. It is further argued that respondent led no evidence of actual loss suffered, particularly as respondent could have mitigated its losses by OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.6 of 15 Patiala House Court, New Delhi selling the seeds in the open market. Claims No. II and III, too, have allegedly been allowed without any supporting evidence. To substantiate its submissions, the petitioner has relied upon the following judicial precedents: -
i. Murlidhar Chiranjilal v. Harish Chandra Dwarkadas [(1962) 1 SCR 653] ii. Satyabrata Ghose v. Mugneeram Bangur & Co. [4 SCR 310] iii. Haryana Tourism Corporation Ltd. v. P.K. Himatsingka & Col.
[2012 SCC OnLine Del 993] iv. Food Corpn. of India v. Chandu Construction [(2007) 4 SCC 697] v. DDA v. R.S Sharma and Co. [(2008) 13 SCC 80] vi. Sharma & Associates contract (P) Ltd v. Progressive Constructions Ltd. [(2017) 5 SCC 743] vii. India Yamaha Motor (P) ltd. v. Divya Ashish Jamwal [(2019) SCC OnLine Del 6912] viii. Indian Oil Corp. Ltd v. Shree Ganesh Petroleum [(2022) 4 SCC 463].
11. Written submissions were also filed on behalf of respondent, wherein respondent reiterated the defences raised in its reply to the petition. In support of its contentions and to buttress the limited scope of interference under Section 34 of the Act, respondent has placed reliance upon the following judicial pronouncements: -
i. Associate Builders v. Delhi Development Authority [(2015 3 SCC 49] ii. McDermott International Inc v. Burn Standard Co. Ltd. [(2006 11 SCC 181] iii. Pure Helium India (P) Ltd. v. Oil and Natural Gas Commission [(2003) 8 SCC 593] OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.7 of 15 Patiala House Court, New Delhi iv. D.D. Sharma v. Union of India [(2004) 5 SCC 325] v. AP Nirman v. Sindhu Trade Links [(2019:DHC:3527] vi. Shwetadri Specialty Papers Pvt. Ltd. v. National Research Development Corp. [(2019 SCC OnLine Del 9345]
12. I have examined the rival contentions and the record of the case.
APPRECIATION OF ARGUMENTS, FACTS & LAW
13. The general guiding principles for invoking S. 34 of the Act, are that Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the Award which makes it unsustainable, is not to be set aside by the Court, even if the Court could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the Award can be set aside are mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the Award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the Award passed by the Arbitrator.
14. The first objection of the petitioner concerns the procurement price. The petitioner claimed that the applicable rate was Rs.1802/- per quintal, whereas respondent claimed entitlement to OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.8 of 15 Patiala House Court, New Delhi Rs.1880/- per quintal in terms of Clause 23 of the EOI. Learned Arbitrator, after examining the contractual clauses and evidence, recorded the following findings: -
"51. though the price can be increased or decreased as per the market mentioned in the other terms of the EOI is concerned, I am to state that no such document has either been placed or proved on record that the market price of the wheat seeds was Rs.1802/- per quintal at the relevant time. Oral assertions are not enough to contradict the clause 23 of the agreement wherein complete formula had been mentioned to calculate the procurement price. No independent witness has been examined to prove the fact that Rs.1750/- per quintal was the rate of wheat seed prevalent in the market and Rs.1802/- per qunintal was fixed with a view to benefit all the suppliers including the claimant. The procurement price @Rs.1802/- per quintals was fixed vide email dated 27.12.2016 (Ex.RW-1/2, page no. 30 of SoD) unilaterally which dehors the terms of contract
57. In the nutshell, respondent had no right to reduce the procurement price from Rs.1880/- per quintal to Rs.1802/- per quintal contrary to clause 23 of EOI and thus, the act of respondent to unilaterally reduce the contractual price on the pretext of the price paid to the other tenders seems to be unjustified."
15. Having perused the record and the reasoning of Learned Arbitrator, I find no perversity or patent illegality in the conclusion that Rs.1880/- per quintal was the contractually applicable rate. Clause 23 clearly provides a formula for determining procurement price and does not permit unilateral reduction. The petitioner failed to produce any contemporaneous evidence to show that Rs.1802/- was the correct rate. The Arbitrator's finding is firmly tethered to the terms of the contract and cannot be faulted.
OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.9 of 15 Patiala House Court, New Delhi
16. The next contention of the petitioner is that respondent (contractor) failed to keep the seeds properly packed and ready within the stipulated time, due to which the petitioner could not lift the balance quantity of 2585.20 quintals. The Arbitrator considered this argument in detail and held as under: -
"68. The plea of respondent that the quantity beyond 9348.80 quintals were not ready and packed at the relevant time stands falsified from the aforesaid chart forming part of Ex.PW-1/11 (Page no. 103). That respondent did not lift the certified quantity of the seeds ordered which amounts to breach of terms of EOI and agreement and hence, it makes respondent liable for the payment of the balance un-lifted quantity 2585.20 quintals which were duly certified, packed and ready at the contractual price"
17. I find no ground to take a different view. The Arbitrator assessed the packing records, certification documents, and correspondence exchanged between the parties. The Arbitrator's factual finding that the seeds were duly graded, packed, and ready for lifting cannot be interfered. No material has been shown to suggest that the award is based on no evidence or on an incorrect appreciation of evidence. The conclusion that the petitioner was contractually liable for the un-lifted quantity is a possible and reasonable view.
18. Petitioner has been unable to demonstrate that the award suffers from perversity, patent illegality, or violation of natural justice. The Arbitrator's reasoning is grounded to the contractual terms and supported by the record. Even if an alternative interpretation were possible, Section 34 does not permit this court to reassess the factual matrix or re-weigh evidence merely because another view may seem preferable.
OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.10 of 15 Patiala House Court, New Delhi
19. Hon'ble Supreme Court in the matter of PSA SICAL Terminals Pvt. Ltd. vs. Board of Trustees of V.O Chidambranar Port Trust Tuticorin, 2021 SCC OnLine SC 508, reiterated its view as taken in MMTC Limited Vs. Vedanta Limited reported as (2019) 4 SCC 163, and held as follows: -
"12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)
(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts."
20. Hon'ble Delhi High Court in the case of National Highway Authority of India vs. Unitech-NCC (JV) [2025 SCC OnLine Del 4280], after referring to various judgments passed by Hon'ble Supreme Court, summarized the legal principles dealing with requirements to challenge an arbitral award under Section 34 of Arbitration and Conciliation Act, 1996, in the following manner:-
"12. I proceed, therefore, to distil some of the relevant principles that emerge from the decisions cited supra.
13. The principles that emerge From the decisions cited earlier, the following principles emerge:
(i) An arbitral award cannot be interfered with on grounds not envisaged by Section 34(2) or (3) of the 1996 Act.
(ii) Section 34 jurisdiction is not appellate. Interference with arbitral awards is generally proscribed, and is to be limited to rare and exceptional cases.
(iii) Interference on the ground that another, more OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.11 of 15 Patiala House Court, New Delhi appropriate and perhaps better, view, different from that adopted by the arbitrator, is possible, is impermissible
(iv) There can be no interference with factual findings of an arbitral tribunal, unless they are perverse. A possible view by the arbitrator, on the facts, has to be respected. The arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon.
(v) "Perversity" exists where-
(a) the arbitral tribunal ignores or excludes relevant material, or
(b) the arbitral tribunal takes into consideration irrelevant material, or
(c) the finding is so outrageously in defiance of logic as to suffer from the vice of irrationality.
(vi) If there is no evidence, or the evidence is thoroughly unreliable in the sense that no reasonable person would act on it, there is perversity. Where there is some acceptable evidence on record, on which the arbitral tribunal relies, the conclusion would not be perverse.
(vii) The Section 34 Court cannot look into the merits of the dispute.
(viii) An award is in conflict with the public policy of India if it
(a) is patently violative of a statutory provision, or
(b) reflects an approach by the arbitral tribunal which is not judicial, or
(c) has been passed in violation of the principles of natural justice, or
(d) is patently illegal, which would include a case in which
(i) the award is in patent contravention of applicable substantive law, or
(ii) the award patently breaches the 1996 Act, or
(iii) the award militates against the interests of the nation, or
(iv) the award is shocking to the judicial conscience, or OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.12 of 15 Patiala House Court, New Delhi
(v) the award ignores the specific terms of the contract, which would not include a case of mere erroneous contractual interpretation, unless the error of interpretation was fundamental, as in Ssangyong Engineering, which resulted in the award being contrary to the "most basic notions of justice", which shocked the judicial conscience, in which the arbitral tribunal substituted a clause in the contract with another.
(ix) The Court cannot interfere with an arbitral award on the ground that it does not do justice, in the opinion of the Court, as that would require examination of the merits of the dispute, which is proscribed.
(x) Infraction of fundamental policy of Indian law includes a law meant to serve public interest or public good. Mere Page 26 of 56 O.M.P. (COMM) 23/2017 infraction of the municipal laws of India does not render the award violative of the fundamental policy of Indian law.
(xi) An arbitral award infracts the fundamental policy of Indian law if it contravenes all or any of the fundamental principles which provide a basis for administration of justice and enforcement of law in the country. This would include, for example,
(a)violation of the principles of natural justice,
(b) disregarding orders of precedentially superior Courts, or their binding effect, or
(c) violating laws linked to public good or public interest.
(xii) "Justice" is nothing more or less than exact conformity to some obligatory law.
(xiii) "Morality" includes agreements which cannot be enforced given the prevailing mores of the day. That said, an arbitral award can be set aside on the ground that it is contrary to the most basic concepts of morality only if it shocks the judicial conscience of the Court.
(xiv) An unreasoned award is patently illegal.
(xv) In the matter of interpretation of contractual covenants by the arbitral tribunal, the following principles apply:
OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.13 of 15 Patiala House Court, New Delhi
(a) An interpretation which is completely unacceptable, in that it is one which no fair-minded or reasonable person would take, merits interference. If the arbitrator adopts a view which is not a possible view, it merits interference. An impossible view is one which no reasonable body of persons could possibly have taken.
(b) The arbitral tribunal, being a creature of the contract, cannot travel beyond it. (c) An arbitral tribunal cannot rewrite the contract, or substitute one clause with another.
(d) An arbitral tribunal cannot foist, on a party, a covenant which is not to be found in the contract and is not binding on it.
(e) An arbitral tribunal cannot proceed ex debito justitiae, de hors the contract.
(f) The arbitral tribunal must also take into account the usages of trade applicable to the transaction, while interpreting the contract.
(g) An arbitrator has the jurisdiction to interpret a contract having regards to its terms and conditions, conduct of the parties including correspondences exchanged, circumstances of the case, the manner in which the parties worked out the contract, and pleadings of the parties. Thus viewed, if the interpretation accorded by the arbitrator to the contract is based on a possible view, the Court would not interfere.
(h) An unexpressed term can also be read into an agreement if such a term was always and obviously intended by the parties thereto. It must be a term which goes without saying, which is necessary to give business efficacy to the contract and which, although tacit, forms part of the contract. It must, however,
(a) be just and equitable,
(b) be necessary to give business efficacy to the contract, in that, if the contract is effective without it, the term will not be implied,
(c) be obvious, in that it "goes without saying", OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.14 of 15 Patiala House Court, New Delhi
(d) be capable of clear expression, and
(e)not contradict any term of the contract."
21. Applying these principles in the present case, I do not find any such material or finding in the Award in question, which can have the effect of shaking the conscience of the court. I have already explained to bely the contentions that ld. Arbitrator gave findings dehors the evidence. Thus, I find that none of the grounds available u/s 34 of the Act is satisfied in the present case. The legal principles explained in the case laws relied upon by the petitioner cannot be doubted, but same do not help the case of petitioner, because factually the plea of petitioner are different and not sustainable. Facts and circumstances of the case in hand are not covered by the ratio of these case laws.
DECISION
22. In view of foregoing discussions, observations and findings, present petition is dismissed.
Digitally signed by PULASTYAPULASTYA PRAMACHALA PRAMACHALA Date:
2025.12.17 16:01:45 +0530 Pronounced in the (PULASTYA PRAMACHALA) Open Court on this District Judge (Commercial Court)-01, th 17 Day of December, 2025 Patiala House Court, New Delhi OMP (COMM.) No. 85/2023 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.15 of 15 Patiala House Court, New Delhi