SABYASACHI MUKHARJI - (1.) SPECIAL leave granted.
(2.) THIS appeal arises from the decision of the High Court of Punjab and Haryana, dated 11th Dec. 1984 dismissing the Civil Revision filed by the appellant. It appears that there was a contract entered into by the parties on or about 15/05/1979 which provided that the appellant would give to the respondent paddy to convert these into rice after lifting paddy from the godown of the appellant. There was an agreement between the parties for shelling of paddy into rice, after lifting the paddy from the godown of the appellant, at the rate of 70 Per Cent of the paddy. The shelling charge was Rs. 2.20 per quintal. The learned Subordinate Judge, First Class, directed on or about 17/03/1980 appointment of an arbitrator on an application by the respondent. On 22/01/1982, the arbitrator gave his award. The arbitrator did not allow the claims of the appellant as claimed as per the terms of the agreement The arbitrator allowed certain claims. It is necessary, in view of the contentions that have been raised, to refer to the award of the arbitrator. After setting out the history the arbitrator dealt with the various contentions. It is not necessary to refer to all the contentions and point urged before arbitrator and upon which he has made his award. It is sufficient if the relevant portions are dealt with. The arbitrator, inter alia, dealt with a claim of Rs. 55,060.29 which was claimed as penalty at Rs. 2.00 per qtl. for not lifting the balance of the paddy weighing 2765-3093 mts. The arbitrator noted that he had held that there was justification for the millers, millers being respondent herein, not to lift the paddy. Assuming, however, the arbitrator noted, that if it was decided that the millers were at fault in not lifting this paddy, the arbitrator expressed the opinion that the appellant could not recover the amount claimed by way of penalty. He expressed the view that in order to enable the appellant to claim the amount it had to be shown that the actual losses were suffered by the Corporation; Otherwise, it could not be claimed as pre-estimated damages. Otherwise it would only be penalty which could not be recovered. No evidence had been led for how many days the bags of the paddy remained in the godowns of the Corporation the arbitrator noted, and what losses were incurred for getting it shelled from other quarters. The arbitrator referred to the affidavit of one Mr. M.S. Rawat, Asstt. Manager, that the Corporation had to get the unlifted paddy shelled by transporting to other centre as well as getting the same shelled at heavy additional expenditure. The arbitrator noted that there was not an iota of evidence on that point. So no actual losses stated to have been suffered by the Corporation and no proof thereof was there. The arbitrator further noted that an amount by way of penalty could be permitted if some losses were proved. He accordingly, dismissed the claim of the appellant for Rs. 55,090.19. The next claim dealt with by the arbitrator was the claim of Rs. 3,23,856.08 claimed by the Corporation as the cost of non-delivery of 137-39549 tonnes of rice at the rate of Rs. 165.00 per qtl. of paddy. The claim of the appellant was based on the basis that the appellant had converted the undelivered rice into paddy by multiplying it with 100/70 and it came to 123,87.11 tonnes. The arbitrator dealt with this question as follows :- "At the rate of Rs. 165.00 per qtl. its price works at Rs. 3,23,856.08. According to provisions of Cl. g(i) of the Contract, in the event of failure to supply rice within prescribed specification, the millers are liable to pay to the Corporation for the quantities of rice short supplied at the penal rate of 11/2 times the economic cost of the concerned variety of the paddy equivalent to the shortages. In the contract no definition of 'Economic Cost' is furnished nor is the expression anywhere defined in any law. However, Shri Pritam Singh in the statement attached to the affidavit work it out at Rs. 110.00 per qtl. The procurement price of paddy is Rs. 85.00 per qtl. as shown therein. He has added to it market fee and other charges including cost of gunny Rs. 2.00 and interest charges at Re. 1/-. Under the above clause of the contract, the Corporation has added 50 Per Cent penalty and thus has claimed the price at Rs. 165.00 per qtl." I do not think that the Corporation is entitled to such a fantastic rate particularly when the expression 'economic rate' has not been defined. Even if the statement of Shri Pritam Singh is accepted the maximum price of the rice at that time should be Rs. 100.00 per qtl. exclusive of gunny bag and interest charges to which in my opinion the Corporation is not entitled. The market rate did not exceed that amount at that time. So calculated at this rate the price of the undelivered rice will come to Rs. 1,96,277.00 to which the Corporation is entitled. I may add here that the above amount has been allowed to the Corporation besides from the evidence on the record I believe that the rice was short delivered. When the paddy had been accepted by the millers unconditionally and without any reservation, they were bound to give to the Corporation 70 Per Cent of the yield. As they did not do it, so they are liable to pay the price of the undelivered rice. I have already stated above that the rice after shelling to be delivered to the Corporation under Cl. g(i) of the Contract had to conform to the specification laid down by the Punjab Government under the Punjab Rice Procurement Price Control Order, 1968 issued on the 22nd Oct. 1968, as amended from time to time. The Corporation states that the rice accepted by them was done subject to the quality rice which was permissible under Cl. g(ii) of the Contract. This has been duly proved from the evidence placed on the record by the Corporation. Even Shri Anil Kumar, a partner of the millers firm admitted that they received an analysis report in respect of the rice which was accepted by the Corporation to continue that the Corporation was mentioned and that they did not appeal against the cut, though there was a provision in the said order to do so. It, therefore, means that the quality cut was admitted to have been correctly assessed under the said Punjab Rice Order and to that the millers submitted. This item is, therefore, allowed."
(3.) THE respondent filed an application under S. 14 of the ARBITRATION AND CONCILIATION ACT, 1940 (hereinafter referred to as 'the Act') for filing of the award and prayed for making the award the rule of the Court. THE appellant on 25/05/1982 filed objections under Ss. 30 and 33of the Act. THE learned Subordinate Judge. First Class, on 2nd Dec. 1982 found that the award was liable to be set aside and modified the award and passed a decree in favour of the appellant for the amount. On 2/03/1984, the Additional District Judge allowed the appeal by respondent and reversed the Subordinate Judge's order.;