Delhi District Court
Food Corporation Of India vs M/S. Ram Chander Kanshi Ram on 12 July, 2011
IN THE COURT OF SH. ARUN GOEL, CIVIL JUDGE,WEST
TIS HAZARI COURTS, DELHI
SUIT NO. 664/06
Date of Institution : 24.09.1984
Date of reservation of order : 12.07.2011
Date of pronouncement of order : 12.07.2011
PARTIES IN THE PRESENT SUIT ARE:
Food Corporation of India,
Regional Office (Haryana)
SCO, 120122, Sector 17C,
Chandigarh.
.................Petitioner
Versus
M/s. Ram Chander Kanshi Ram,
New Anaj Mandim Hissar
through:
1. Sh. Ram Narain (Partner
S/o Sh. kanshi Ram,
C/o Seth Kanshi Ram Chemical India,
Dabra Road, Hissar.
2. Sh. Om Prakash (Partner).
S/o Sh. kanshi Ram,
C/o Seth Kanshi Ram Chemical India,
Dabra Road, Hissar. ..................respondents
ORDER : Suit No. 664/06 Page No. 1 Present is the award filed to make it a rule of court under Arbitration Act, 1940.
1. The brief facts which are necessary for the present case are that an application U/S 20 of the Arbitration Act 1940 (herein after referred to as 'Arbitration Act') was filed by the plaintiff for referring the dispute between the petitioner i.e. Food Corporation of India (FCI) and the respondents i.e. Sh. Ram Chander to the arbitrator. The said application was allowed vide order dt.26/05/1975. The parties were directed to appoint sole arbitrator as per the agreement between the parties.
2. The arbitrator was appointed between the parties and the arbitrator gave its findings and the award was filed and the court notice of the award were issued to both the parties, however, only petitioner i.e. FCI appeared and the respondents failed to appear. The objections were also filed to the award by the FCI. As the respondents remained unserved, an application U/O 5 R.20 CPC was filed on 05/04/1991 and the same was allowed by the Hon'ble High Court. The publication was done in the newspaper 'Tribune' on 24/03/1994 but despite publication none had appeared on behalf of respondents.
3. The case of the petitioner is that an agreement was entered into between the petitioner and the respondents, wherein the respondents has to prepare Gramdal from Gramwhole. The petitioner had to supply the total quantity of 174 M.T. of Gramwhole to the respondents. The petitioner has stated that Suit No. 664/06 Page No. 2 the whole quantity was to be lifted by the respondents, however, the respondents instead of lifting the total quantity of 174 M.T. of Gramwhole, had only lifted a quantity of 87.226.200 quintal of Gramwhole against the contracted quantity of 174 MT. As per the agreement between the parties 85% of 174 MT was to be supplied as Gramdal. The respondents had only lifted the quantity of 872.26.200 so he was liable to supply 741.42.270 quintals of Gramdal.
4. The petitioner has further alleged that the respondents stated that they had dispatched 712.50.000 quintals of Gramdal, however, the Army Purchase Organisation had received only 701.72.000 quintals of Gramdal. Thus there was a short supply of 10.78.000 quintals of Gramdal. Also the respondents failed to supply 28.92.270 quintals of Gramdal. Thus, the total amount of 39.20.270 quintals of Gramdal was not supplied by the respondents to the petitioner. The petitioner had lodged claim of following amounts before the arbitrator which are as under : Sl. Refrence Brief Amount Claims No. to Para 6(i) Recovery towards short supply of 39.70.270 1 quintals gramdal 7964.11
(ii) Quality allowance 269.97
(iii) Gunny allowance 96.52
(iv) Weighment charges 41.26
(v) Fumigation charges 47.08 Suit No. 664/06 Page No. 3 Sl. Refrence Brief Amount Claims No. to Para (vi) Sorting out charges 175 (vii) Removal of lumps charges 125 (viii) Liquidated damages imposed by APO 893
(ix) Liquidated damages for nonsupply of 777.28 quintals gramdal 3298.57
(x) Cost of 819 bags B.T. Which the party had to supply for the shortage of 777.28 quintals gramdal @Rs.5.60/ per bag 4586.4 2 7 Storage charges 98952 3 8 Interest charges 52051 4 9 Risk and cost arrangements 47740 Total 2,16,240.37
5. The arbitrator vide order dt.07/12/1983 had given the award. In the said award he had only allowed an amount of Rs.9,611/ i.e. from Sl. No.6(i) to 6(Viii) of the claim made by the petitioner. The amount mentioned in Para6(ix) and (x) was disallowed. The amount mentioned in Para7,8 & 9 were also disallowed.
6. The objection has been filed to the award made by the Ld. Arbitrator U/S 16 and 30 of the Arbitration Act for remitting the award of the Arbitrator. The petitioner has stated that the amount mentioned in Sl. No.6(ix) have wrongly been disallowed by the Ld. Arbitrator. The amount mentioned at Para7 was for the storage charges which were to be recovered from the respondents due to nonlifting of the remaining amount of Gram whole. The amount mentioned at Para8 was Suit No. 664/06 Page No. 4 interest on the said amount and amount mentioned at Para9 was the risk and cost suffered by the petitioner due to breach of contract by the respondents in nonlifting the whole amount of Gram whole. The petitioner has stated that he is also entitled to the recovery of amount mentioned in Para6(ix) mentioned in his claim as per the ClauseXVIII of the arbitration agreement and that amount is also to be paid to the petitioner. Accordingly, he has prayed that the arbitration award be remitted back to the Arbitrator.
7. None has appeared on behalf of respondents neither any objection has been filed by him.
8. I have heard the counsel for petitioner and perused the record carefully.
9. Admittedly, it is not disputed that the contract was entered into between petitioner and respondents for converting 174 MT of Gram whole into Gram dal and there was a breach of contract by the respondents as he failed to lift the whole amount. This fact has also been stated by the Ld. Arbitrator in his order dated 07/12/1983. The petitioner has challenged the findings given by the Ld. Arbitrator declining the claim of the petitioner mentioned in Para6(ix),7,8 & 9 of his claim petition.
10.I have gone through the agreement between the parties. In Para6(ix) of his claim the petition the amount of Rs.3, 298.57 has been claimed by the petitioner as liquidated damages for nonsupply of 777.28 quintals of Gram dal. The petitioner has Suit No. 664/06 Page No. 5 stated that as the Gram dal was not supplied to him as per the contract between the parties, he is entitled to that amount. Further the contention raised by the petitioner is that out of the total quantity of 174 MT only 872.26 quintals of Gram whole was lifted by the respondents and he had instead of 741.42.270 quintals supplied 701.42 quintals of Gram dal. There was short supply of 39.20.270 quintals and regarding that short supply the claim of the plaintiff has been allowed as mentioned in the claim petition from Para6(i) to Para6(viii). As the respondents had failed to lift whole of the Gram whole, in such the non supply of the Gram dal against the nonlifting of the Gram whole does not arise. The respondents cannot supply the total quantity of the Gram dal if he has not lifted the total Gram whole from the petitioner. Accordingly, the prayer that the petitioner be granted the claim mentioned in Para6(ix) cannot be allowed.
11.The petitioner has further claimed storage charges as well as interest in Para7 & 8 of his claim before the arbitrator. The said claim has been declined by the Ld. Arbitrator stating that in case of default by the respondents, the FCI can float a new tender and can get Gram whole converted into Gram dal at the risk and cost of the contractor.
12.The Gram whole has been unlifted for a period of 1140 days on which storage charges as well as interest has been charged. Further an amount of Rs.47,740/ has been claimed as risk and Suit No. 664/06 Page No. 6 cost arrangement for the loss suffered for the sale of Gram whole after a period of three years. However, Ld. Arbitrator has not given its findings whether as per Clause11 and Clause12 of the arbitration agreement, the acceptance of the tender of the respondents and thereafter issuance of release order amounted to the delivery of the Gram whole to the respondents and if it amounted to delivery to the respondents, in that case the whether petitioner was entitled to storage charges and interest on the said amount of Gram whole which remained unlifted by the petitioner.
13.The Ld. Arbitrtor has stated that the Gramwhole has been sold after the period of three years but as there was delay on the part of the petitioner. He has disallowed the claim for risk and cost demanded by the petitioner, however, by disallowing the claim of the petitioner claimed for risk and cost the Ld. Arbitrator has not kept into account the principles regarding compensation to be given to the applicant in case of breach of contract as mentioned in the Indian Contract Act. The Ld. Arbitrator has also suggested that the remedy available to the FCI was to float a new tender and convert the Gramwhole into Gramdal at the risk of contractor. He should have given findings as to whether by accepting the tender the Gramwhole stands delivered to the petitioner and in case of nonlifting of Gramwhole the petitioner was entitled to storage charges as well as interest and also risk and cost on the nonlifting of Gramwhole.
Suit No. 664/06 Page No. 714.Accordingly, in view of above said discussions the present case is remanded back to the Ld. Arbitrator with the directions to give findings on the following points :
1. As to whether the acceptance of tender by the FCI and subsequent release order amounted to delivery of Gramwhole to the respondents or not. If Yes. In such case whether the petitioner was entitled to storage and interest on the unlifted Gramwhole.
2. The Ld. Arbitrator should also give its findings as to whether the petitioner is entitled to any compensation for the breach of contract done by the respondents keeping in view the provisions of Chapter6 of the Indian Contract Act 1872.
15.Accordingly, the matter is remanded back to the Ld. Arbitrator with the directions to give findings on the above said issues. It is further specified that if the same Arbitrator is not available for any reason whatsoever, the parties are at liberty to appoint a fresh Arbitrator and as per the agreement between the parties, who shall give findings upon the above said issues.
16.The documents annexed in the file be returned to the said Arbitrator as per rules, on application. No order as to costs. Decree sheet be prepared accordingly.
File be consigned to record room after completing the necessary formalities.
Announced in the Open Court (ARUN GOEL)
th
on 12 July , 2011 CIVIL JUDGE WEST
All Pages Signed DELHI
Suit No. 664/06 Page No. 8