Punjab-Haryana High Court
Aggarwal Rice Mills vs The Punjab State Co-Op. Supply (Marked) ... on 19 July, 2006
Equivalent citations: (2006)144PLR798
Author: Uma Nath Singh
Bench: Uma Nath Singh
JUDGMENT Uma Nath Singh, J.
1. This F.A.O. arises out of an order dated 27.10.1988 passed by learned Sub Judge, First Class, Sangrur, in Arbitration Act Case No. 7 making the award dated 3.7.1985 rule of the court.
2. It appears that the respondents-Markfed had entered into an agreement dated 5.11.1981 with M/s Aggarwal Rice Mills, Dhuri, for milling of paddy and converting the same into rice. There was an arbitration clause in the agreement that in case of any dispute the matter was required to be referred to the sole arbitration of the Managing Director, Markfed, Chandigarh or any other person appointed by the State Authority. As a dispute arose between the parties regarding recover of price worth Rs. 6,28,678.75, the matter was referred to the Sole Arbitrator.
3. The award so also the impugned order is assailed mainly on the ground that the Arbitrator failed to give the award within the stipulated period of four months. He also failed to comply with the order of Apex Court dated 2.4.1985 directing him to give the award within two months from that date, whereas the award was given on 3.7.1985.
4. Learned Counsel also submitted that the Arbitrator gave the award for an amount of Rs. 7,74,320/- with a higher rate of interest i.e. 18% which was in excess of the dispute amount.
5. No one appears on behalf of the respondents, despite the fact that the matter has been listed for final hearing and the service is complete.
6. This is an old appeal of 1989 and learned Counsel for the appellant has submitted the relevant facts and the materials necessary for the disposal of the matter. Now the matter can be disposed of in the absence of appearance on behalf of respondents.
7. I have carefully considered the submission of learned Counsel for the appellant.
8. I do not notice any infirmity in the order and the delay in passing the award in itself would not make the award invalid. Even Hon'ble the Supreme Court had directed the arbitrator to render the award at an early date preferably within two months. The court, even at the appellate stage can extend the time in terms of Sub-section (1) of 28 of the Arbitration Act, 1940. I have also tried to find out parallel provisions, if any, in the Arbitration and Conciliation Act, 1996, but it contains none. Accordingly, it appears that the. statute expected the Arbitrator to render the award within a time frame of four months but the delay in itself would not invalidate the award.
9. With regard to the second submission of learned Counsel that the interest rate appears to be higher, being 18% looking at the delay on the part of the Arbitrator in tendering the award after prolonging the proceedings, the interest rate of 18% cannot be justified. Thus, it is reduced to 7% from the date as given in the impugned order.
10. Though, learned Counsel submitted that the award amount is in excess of the notice amount, but the claim laid by the respondent was to the tune of Rs. 9,06,000/-. Further out of the award amount of Rs. 7,74,320.35, a sum of Rs. 25,000/- was deducted on account of security charges and further amount of Rs. 1,45,643.60 was reduced towards Milling charges. Thus, the total award amount has come to Rs. 6,26,676.75 only.
11. As such, the appeal is allowed in part in terms of modification of the interest rate from 18% to 7%.