ROYAL AIRWAYS LIMITED Vs. VARUNA AGRO PROTEINS LIMITED

JUDGEMENT

(1.) BY this petition under Section 34 of the Arbitration and Conciliation Act, 1996, the petitioner challenges the Award dated 26.2.2003 passed by the sole Arbitrator. The Award came to be passed on account of the disputes which arose between the parties in which the petitioner was the courier company and the respondent was the booking agent of the petitioner for parcels and cargo. By the impugned Award, the Arbitrator has awarded refund of the security deposit amount of the respondent lying with the petitioner after deducting therefrom the amounts which were payable by the respondent to the petitioner. The Arbitrator rejected the contention of the petitioner herein that the petitioner was entitled to adjust its claims of charges from the balance amount of the security deposit which security deposit amount has been held to be payable by the petitioner to the respondent.

(2.) THE facts of the case are that the respondent as the booking agent used to book parcels and cargo for the petitioner. This was done on the Air Consignment Notes (ACNs) which used to be issued by the petitioner to the respondent. Once the booking was done by the respondent, one copy of the ACNs used to be sent by it to the petitioner so that petitioner had the necessary record to make its claim for the charges which were collected by the respondent for and on behalf of the petitioner. The respondent used to send to the petitioner the monthly statements with respect to the charges it collected from the customers on the booking of the parcels/cargo. The petitioner used to issue the ACNs in booklet form every month after the old booklets were exhausted. The dispute which arose between the parties was on account of the fact that on the termination of the contractual relations pertaining to the parcels/cargo, the respondent sought the refund of the admitted amount of Rs. 10 lacs which was lying with the petitioner as security deposit alongwith contractual rate of interest of 18% which was payable on the said security deposit. The petitioner, however, sought to forfeit the security deposit on account of its claims.

(3.) THE Arbitrator, therefore, arrived at a conclusion directing the refund of the security deposit and denying the claim of forfeiture of the petitioner towards its alleged claim.