PROPRIETOR MAHAVEER TRADING COMPANY Vs. MANAGING DIRECTOR

JUDGEMENT

(1.) The legality and correctness of the judgment passed in Arbitration Suit No.3/2013 dated 30.07.2015 on the file of Prl. District Judge, Belagavi, is challenged in this appeal filed under Section 37 (1) of the Arbitration and Conciliation Act, 1996 (for short 'the Act').

(2.) The appellant is carrying on the business of supply and transportation of food grains in the State of Karnataka. The Karnataka Food and Civil Supplies Corporation Ltd., herein being the instrumentality of the State, vide Notification dated 29.05.2009 had invited the tenders for supply of Toor Daal in the State of Karnataka. The appellant had submitted the tender application for the supply of Toor Daal in the district of Belagavi. The tender application of the appellant for supply of Toor Daal for the Belagavi district during the month of August and September, 2009 was accepted and the same was qualified. The respondents had executed an agreement on 20.07.2009. Thereafter, appellant had supplied required quantity of Toor Daal to all the ten points as specified by the respondent No.2 and delivered the same as required by respondent No. It transpires that office of respondent No.2 has collected the samples of Toor Daal supplied by the appellant from all the ten depots and sent the same on 108.2009 and 27.08.2009 for scientific verification to the Public Health Institute, Bengaluru. It is the case of the appellant that the Public Health Institute, Bengaluru, on scientific verification of the same, has, opined that the samples sent for analysis confirm the standards of Toor Daal as per the Prevention of Food Adulteration Rules, 1955. Appellant issued legal notice on 05.10.2009 calling upon the respondent No.2 to make the payment towards the bill dated 01.09.2009 for Rs.2,03,44,800/-. However, respondent No.2 issued notice/letter dated 06.10.2009 rejecting the Toor Daal supplied by the appellant. Being aggrieved by the same, Writ Petition No.65696/2009 was preferred before this Court which came to be disposed of by quashing the notice/letter dated 06.10.2009 insofar as the initiation of criminal proceedings against the appellant, blacklisting the appellant firm and in respect of forfeiture of the EMD for and thereby reserved the liberty to the appellant to avail the alternative remedy by keeping all contentions open before the Arbitrator against which W.A.No.1809/2010 was preferred by the appellant which came to be disposed of confirming the order of the learned Single Judge in W.P.No.65696/2009 reserving liberty to the appellant to avail the alternative remedy as observed by the learned Single Judge. In pursuance to the said order, the appellant challenged the notice/letter dated 06.10.2009 before the Arbitrator by filing an Arbitration Application. The Arbitrator by order dated 15.04.2013 quashed the notice/letter dated 06.10.2009 issued by respondent No.2 rejecting the Toor Daal supplied by the appellant and consequently, directed to make payment of the bill dated 01.09.2009 for Rs.2,03,44,800/- to the appellant for the supply of the aforesaid Toor Daal, as per the tender specifications and the agreement dated 20.07.2009. Further, respondent No.2 was directed to make the payment of interest at the rate of 16% p.a. and damages for non-payment of the bill dated 01.09.2009. Respondent No.2 challenged the said award before the Court of Prl. District Judge, Belagavi, at Belagavi, in Arbitration Suit No.3/2013. The learned District Judge has set aside the arbitral award and remanded the matter to the Arbitrator with a direction to reconsider the same afresh after giving proper opportunity to both the parties in accordance with law. Being aggrieved by the same, the appellant is in appeal.

(3.) The main ground urged by the appellant is that Court has no power under Section 34 (4) of the Act to remand the matter to Arbitral Tribunal after setting aside Arbitral award. Learned counsel Shri Sanket M.Yenagi, appearing for the appellant submitted that the Court below grossly erred in setting aside the arbitral award and remanding the matter to the Arbitrator for reconsideration without analyzing the scope of Section 34 of the Act. It was contended that no power of remand is conferred on the Court to remit the matter to the Arbitral Tribunal except to adjourn the proceedings as provided under sub Section (4) of Section 34 of the Act. In support of his submission, learned counsel placed reliance on the co-ordinate bench decision of this Court in Bhaskar Industrial Development Limited Vs. South Western Railway in M.F.A.No.103528/2015 disposed of on 21.02016.