CHANDHA JEWELLERS Vs. MMTC LIMITED

JUDGEMENT

(1.) This order will dispose of objections filed under Section 34 of Arbitration and Conciliation Act, 1996 (for short "the Act") against the award dated 13th October, 1998.

(2.) In pursuance of the arbitration agreement dated 21th May, 1993, MMTC Ltd. (respondent No.1) appointed Justice K.S.Sidhu (Retd.); and petitioner M/s.Chadha Jewellers appointed Mr.Nirmal Singh, Advocate as the arbitrators. The two arbitrators acting in accordance with the provisions of Section 11(3) of the Act, appointed Justice N.C.Kochhar (Retd.) as the third arbitrator to decide their disputes and make the arbitral award, in respect of disputes arising under and out of or relating to the contract dated 21st May, 1993. The tribunal, required the parties to enter appearance and submit their respective statement of claims with supportive documents. MMTC Ltd.-respondent No.1 appeared and filed statement of claim duly supported with documents. Petitioner was duly served but did not file the statement of defence despite several hearings. On the basis of statement of claim, the Tribunal framed the following issues:-

(3.) The claimant filed copies of documents in support of its claim and also filed affidavit by way of evidence. On 28th April, 1998, the claimant brought original documents for admission/denial but the objector (petitioner), who was present in person refused to admit or deny the documents on the ground that his counsel had advised him not to admit or deny any document in his absence. The Tribunal acting under Section 24 of the Act formally decided that the proceedings shall be conducted on the basis of documents and other materials, on hearing oral arguments of both sides. On the application of MMTC Ltd. statement of claim was permitted to be amended. Notice of amendment application of the statement of claim was sent to the petitioner, who avoided receiving the notice. The Tribunal felt satisfied and for the reasons recorded in the order dated 25.8.1998 held that petitioner. was duly served. The petitioner was proceeded ex parte. Amended statement of claim with supportive documents and materials filed by claimant was taken on record. Notice for appearance was sent again to the objector by speed post with copies of amended statement of claim and the documents. The petitioner M/s.Chadha Jewellers avoided to receive the same. The Tribunal after considering the pleadings of the parties and other documents and material on record held that pursuant to the contract between the parties the claimant lent to the petitioner 4 kg. of gold on 21.5.1993. The petitioner agreed to repay the loan in gold by repurchasing equivalent quantity from the claimant at a later date at a price prevailing at the time of repurchase plus foreign suppliers commission at the rate of U.S. Dollar 0.25 and delivery charges at the rate of 1.20 within a period of 90 days. He also agreed to pay interest at actuals as paid by the claimant to the suppliers at the rate of 2.75% on the quarterly average London fixing price for the borrowing period plus two days. He also agreed to pay to the claimant income tax payable at the applicable rate form time to time in advance and service charges at the rate of 0.8% on CIF value. The Tribunal held that in addition to the aforementioned loan of 4 kgs. of gold, the claimant delivered another 2 kgs. of gold to the objector's agent on 8.6.1993 on the same terms and conditions. Thus the total quantity of gold loaned to the respondent was alleged to be 6 kgs. of gold. The respondent converted 2 kgs. of gold, out of 4 kgs. borrowed by him on 21.5.1993 and exported it on 8.6.1993 vide invoice No.CHA/02/93-94 dated 31.5.1993. The claimant, in whose name the export had been made, had to call the consignment back because the foreign buyer refused to retire the documents by making payment to the bankers of the claimant and for that reason, the claimant did not seek the recovery of the price of 2 kgs. of gold which it had received back in February, 1994. The claimant sought recovery of Rs.54,15,570/- as per the details given in the statement of claim along with interest as per terms and conditions contained in the contract between the parties along with interest for the remaining quantity of 4 Kgs. of gold, actually delivered to the respondent and not exported by him, the claimant sought recovery of the price of the gold at the rate prevailing at the material time and other charges, in accordance with the agreement between the parties.