COSMO FERRITES LTD. Vs. PRAGYA ELECTRONICS PVT. LTD.

JUDGEMENT

(1.) The petitioner (hereafter 'CFL') has filed the present petition under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') challenging the arbitral award dated 13.04.2016 (hereafter 'the impugned award') made by the arbitral tribunal constituted by the sole arbitrator, Justice V.P. Bhatnagar (Retired). CFL's challenge to the impugned award is limited to the extent that the arbitral tribunal has not awarded pre-award interest (pre-reference and pendente lite) on the amounts awarded in favour of CFL for Soft Ferrites (hereafter 'the goods') supplied by CFL to the respondent No. 1 (hereafter 'PEPL').

(2.) CFL is stated to be a leading manufacturer of Manganese Zinc Soft Ferrites in India. CFL entered into a non-exclusive distributorship agreement dated 01.04.2005 (hereafter 'the Agreement') with PEPL. Subsequently, the parties entered into annual agreements for the years 2007, 2008 and 2009. In terms of the Agreement, PEPL placed purchase orders on CFL for supply of goods, which in turn were sold by PEPL to its customers.

(3.) It is CFL's case that it supplied goods to PEPL against various purchase orders and raised invoices accordingly. CFL claimed that PEPL had failed and neglected to make payments against the invoices for sums aggregating Rs. 54,14,934.00, which became due and payable. PEPL had issued nine cheques - four cheques dated 30.06.2009 and the remaining five dated 07.07.2009 - aggregating Rs. 33,19,514.00 as part payment for goods supplied; however, the said cheques were dishonoured on presentation. Whilst, CFL claimed that the said cheques were issued by PEPL in discharge of its liability, PEPL had disputed the same. According to PEPL, the said cheques were issued at the instance of CFL only as a security for any payment that may become due. In addition to the claim for unpaid invoices, CFL also raised claims for non-supply of 'C' Forms and the consequent liability of sales tax. However, other disputes are not relevant for deciding the controversy raised in the present petition.