NATIONAL AGRICULTURAL COOPERATIVE MARKETING FEDERATION OF INDIA LTD. Vs. VIRAT EXPORTS PVT. LTD. AND ANR.

JUDGEMENT

(1.) The petitioner entered into two agreements with respondent, the first dated 20th September 2004 and the second dated 2nd February 2005, for financing agricultural commodities like Black Pepper, Pudina Ka Tel and Tulsi Oil (Basil Oil), Piperita Old, Mentha Oil, Spearmint Oil, Clove, Ajwoin etc. for the purpose of export and domestic sale. Under the agreements, petitioner furnished finances to the respondent to the tune of Rs. 8.64 crore. This amount was to be utilized by respondent for procurement of above mentioned commodities/articles and to be paid back by respondent on sale/export of these commodities. Respondent failed to pay part of the amount back to the petitioner under the agreements and in order to meet this liability of unpaid amount of Rs. 3.5 crore, respondent issued 7 post -dated cheques of Rs. 50 lac each. However, these cheques got dishonoured. It is stated that the amount recoverable from respondent was around Rs. 4 crore inclusive of accrued interest thereon as per the agreements. Since the cheques issued by respondent, when presented got dishonoured, the petitioner informed respondent about dishonoring of the cheques and also sought to invoke the arbitration Clause contained in the agreements for settlement of disputes.

(2.) It is submitted by counsel for respondent that since respondent had failed to discharge its liability, the petitioner has a right to sell the stocks of goods procured from the funds of petitioner by respondent and recover this amount in terms of the agreement. The petitioner also submitted that the articles/commodities involved were agricultural products and had an expiry period and are perishable in nature and if the good are not immediately disposed of in the open market, chances of their loosing strength and crossing expiry limit would be more. The petitioner also sought to protect its interest by seeking security for the amount due from respondent.

(3.) In reply to this petition, it is submitted by counsel for respondent that an arbitrator in this matter has already been appointed and he was hearing the claims and counter -claims of the parties and thus the petition filed by petitioner was not maintainable. It is also submitted that the petitioner vide letter dated 25th March 2009 asked respondent to give their concrete proposals for settlement of the matter under one -time -settlement -policy adopted by NAFED and respondent vide their letter dated NIL had given their proposal and showed willingness in the matter and there was likelihood of the matter being settled between the parties. It is further submitted that it was the petitioner who failed to honour the terms as contained in the agreements and the petitioner failed to release further finances of Rs. 122.70 lac as agreed between the parties against stocks lying in the godown of the petitioner. The claim of the petitioner that it was to recover Rs. 4 crore was also not supported by any statement of accounts or evidence. The petitioner had filed a claim before the arbitrator to the tune of Rs. 4.41 crore while respondent had filed counter -claim to the tune of Rs. 6,29,62,600/ -. It is submitted that under the agreement dated 2nd February 2005, the petitioner had agreed to make available the finances to respondent to the tune of Rs. 25 crore for purchase and stock of the mint products and spices. However, petitioner failed to provide the finances as requested by respondent with the result that respondent could not meet out its supply/export commitments and in the meantime there was steep hike in the prices resulting into heavy losses incurred by respondent.