Supreme Court - Daily Orders
M/S. Brawn Pharmaceuticals Ltd. vs M/S. Hukum Singh & Sons . on 24 July, 2014
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ITEM NO.101 COURT NO.3 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 6683/2002
M/S. BRAWN PHARMACEUTICALS LTD. Appellant(s)
VERSUS
M/S. HUKUM SINGH & SONS & ORS. Respondent(s)
Date : 24/07/2014 This appeal was called on for hearing today.
CORAM :
HON’BLE MR. JUSTICE T.S. THAKUR
HON’BLE MR. JUSTICE C. NAGAPPAN
HON’BLE MR. JUSTICE ADARSH KUMAR GOEL
For Appellant(s)
Mr. Rajesh Aggarwal ,Adv.
Mrs. Mridul Aggarwal,Adv.
Mr. Biswaranjan Paramguru,Adv.
For Respondent(s) Mr. S.K. Dubey,Sr.Adv.
Mr. A.P. Dhamija,Adv.
Ms. Pratibha Jain ,Adv.
UPON hearing the counsel the Court made the following
O R D E R
In terms of the signed order, the appeal is disposed of leaving the parties to bear their own cost.
[O.P. SHARMA] [VEENA KHERA]
COURT MASTER COURT MASTER
(Signed order is placed on the file)
Signature Not Verified
Digitally signed by
Om Parkash Sharma
Date: 2014.08.06
17:00:38 IST
Reason:
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6683 OF 2002
M/S. BRAWN PHARMACEUTICALS LTD. APPELLANT(S)
VERSUS
M/S. HUKUM SINGH & SONS & ORS. RESPONDENT(S)
O R D E R
1. This appeal arises out of a judgment and order dated 23.7.2002 passed by a Single Judge of the High Court of Delhi whereby FOA No.285/1998 filed by the appellant company has been dismissed and the judgment and order passed by the Court of Additional District Judge, Delhi making the arbitral award a rule of the court, affirmed.
2. Certain disputes between the appellant on the one hand and respondent No.1 on the other concerning certain supplies made to the appellant were referred to Paper Merchant Association for arbitration in terms of an arbitration clause contained in the Bill under which such supplies were made. Before the Arbitrator, the appellant company appeared and raised a contention that he had no jurisdiction in the matter as no valid arbitration agreement existed between the parties for reference of the disputes to arbitration. The appellant did not, however, participate in the further proceedings before the Arbitrator who recorded ex-parte 3 evidence adduced before him by the claimant and eventually made an Award dated 10.4.1996 determining a sum of Rs.2,93,918.50 to be recoverable from the appellant with interest at the rate of 24% per annum pendente lite and future. In addition, a sum of Rs.18,282.40 was also held recoverable from the appellant towards Sales Tax (S.T.-1) Form).
3. Aggrieved by the Award, the appellant company appears to have approached the Additional District Judge, Delhi in an application under Section 30 read with Section 33 of the Arbitration Act, 1940. The claimant-respondent on the other hand sought a direction for making the award a rule of the Court in terms of Sections 14 and 17 of the said Act. Additional District Judge, Delhi however dismissed the objections filed by the appellant company and made the award a rule of the Court. The appellant company then preferred FOA No.285/1998 before the High Court of Delhi which has been dismissed by the High Court in terms of its order dated 23.7.2002 as already noticed earlier.
4. When the matter came up before a two-Judge Bench of this Court on 27.11.2008, one of the issues that appears to have been urged at the Bar was whether a valid arbitration agreement existed between the appellant on the one hand and the respondent-claimant on the other. The Court felt that the contention was substantial and accordingly referred the matter to be placed before a Larger Bench. That is precisely how this appeal has been listed before us 4 for final hearing.
5. We have heard learned counsel for the parties at some length. The material facts are not in dispute. It is not in dispute that there were business transactions between the appellant company on the one hand and the respondent-claimant on the other. It is also not in dispute that these transactions involved supply of paper to appellant company for purposes of printing of vouchers and other material by respondents 2 and 3, printers engaged by the appellant company for that purpose. It is also common ground that supply of paper made before the year 1993 was not in dispute between the parties. The claim in question was based on a supply allegdly made in the year 1993.
6. The appellant company’s version was that no such supply had been made and that in the absence of supplies there was no question of any dispute arising between the parties nor was there any question of such dispute being referred for arbitration. That contention raised before the arbitrator initially was not pursued since the appellant company absented from the proceedings before the Arbitrator, leaving the Arbitrator with no choice but to conclude the proceedings ex-parte. In the course of the proceedings, the claimant adduced evidence to substantiate its plea that the supplies had been made at the instance of the appellant company and that the same were received by respondents 2 and 3 and utilised for the former’s benefit. The arbitrator recorded a 5 finding that the supplies were indeed made and accepted on behalf of the company and that the Bill under which such supplies were made contained an arbitration clause for adjudication of any dispute relating to such supplies. That finding of fact, in our opinion, is unexpectionable as the arbitrator was left with no choice except to record a finding based on the evidence adduced before him which remained uncontroverted in the absence of any evidence to the contrary or challenge in cross-examination of the witnesses produced before the arbitrator. Once that finding attains finality as it did in this case, there was no escape from the conclusion that the supplies had been made under a Bill which contained a clause providing for arbitration before the Paper Merchant Association or its nominee. The Arbitrator, as also the Civil Court and the High Court in appeal were therefore perfectly justified in holding that there was an arbitration clause which provided for settlement of the disputes by arbitration. We see no difficulty in upholding the view expressed on that aspect by the courts below nor do we see any reason to interfere with the determination of the principal amount by the Arbitrator against the appellant.
7. Having said that, the award needs a slight modification as to the rate of interest awarded by the Arbitrator at 24% p.a. and upheld by the courts below. The nature of the transaction and the fact that there was no agreement between the parties as to the rate of interest, no matter the transaction was commercial does not 6 in our opinion justify award of such a high rate of interest. The prevalent rate of interest offered by the Banks on term Deposits, in our opinion, makes out a case for reducing the rate of interest from 24% p.a. to 9% per annum. Besides that modification we see no other reason to interfere with the award made by the Arbitrator.
8. We are told that 50% of the award amount with interest calculated at 24% p.a. has already been deposited by the appellant company before the High Court. That amount shall therefore be released to the respondent alongwith the maturity value of the term deposit where the amount was invested. For the balance amount we leave the parties free to calculate amicably or through the medium of execution proceedings before the competent court, the balance, if any, recoverable from the appellant in accordance with law.
With the above modification, the appeal is disposed of leaving the parties to bear their own cost.
.......................J.
[ T.S. THAKUR ]
.......................J.
[ C. NAGAPPAN ]
NEW DELHI .......................J.
JULY 24, 2014 [ ADARSH KUMAR GOEL ]
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