SARASWATHI CHEMICALS Vs. BALMER LAWRIE AND COMPANY LTD

JUDGEMENT

(1.) CHALLENGE in this appeal is the order dated 12.04.2006 in O.P.No.197 of 2001 dismissing the Petition filed under Sec.34 of Arbitration Act, 1996 and declining to interfere with the Award passed by the Arbitrator.

(2.) FIRST Respondent -Balmer Lawrie and Company Limited is a Government of India Enterprise having interalia Leather Chemicals Division situate at Manali, Chennai producing Leather Chemicals required by the Tanneries. For selling those products, 1st Respondent appoints stockists and consignment stock Agents throughout India. In order to market the products in Northern India, 1st Respondent entered into three Agreements with the Appellant - (i) Stockist Agreement dated 01.8.1995 effective from 01.4.1995; (ii) Consignment Stockist Agreement dated 20.03.1996; and (iii) Consignment Stockist Agreement dated 12.07.1997 effective from 01.04.1997 for a period of five years. Under the Consignment Stockist Agreement, Appellant had been appointed as Consignment Stock Agent in Punjab, Haryana, Himachal Pradesh, Uttar Pradesh, Rajasthan, Union Territory of Delhi and Jammu and Kashmir to sell directly or indirectly to persons or firms located in those Territories. Consignment Stock Agent was required to send the account sale accompanied by Demand Draft for the sale amount after deducting 20% commission and admissible expenses. If it fails to remit the amount, it has to pay interest at 20% per annum. Consignment Stockist Agreement dated 12.07.1997 contains Arbitration clause that is if any dispute arises between the parties, by the Managing Director of the 1st Respondent's Company or his nominee. 1st Respondent has been consigning its Leather Chemicals to the Appellant for sale as per the agreement. Inspite of supply of goods to the Appellant which in turn has been sold by the Appellant, the amounts due and payable to the 1st Respondent has not been paid. There were also certain unsold stocks at Delhi and Kanpur which have not been returned to the 1st Respondent nor their value remitted. The said default committed by the Appellant gave rise . dispute between the parties. Dispute having thus arisen, the 1st Respondent invoked clause 22 of the agreement providing for Arbitration by the Managing Director or his nominee. The Managing Director had nominated Justice G.Ramanujam,J (retired) as an Arbitrator to decide the said dispute by letter dated 09.12.1999. 2nd Respondent -Arbitrator entered on the reference on 11.12.1999 and held the first sitting on 22.12.1999 after notice to the parties. 2nd Respondent -Arbitrator held the sittings on 22.12.1999, 01.02.2000, 03.03.2000, 29.04.2000, 20.05.2000, 03.06.2000, 24.06.2000. On 29.04.2000, Appellant and his counsel were not present and hence, Appellant was set exparte and matter was adjourned to 20.05.2000. On 20.05.2000, Appellant gave letter dated 19.05.2000 stating that he would negotiate for settlement; but Appellant did not attend the hearing on 20.05.2000 and the matter was adjourned to 03.06.2000. In the hearing on 03.06.2000, 1st Respondent took time for adducing evidence and 2nd Respondent -Arbitrator adjourned the hearing to 24.06.2000. On 24.06.2000 evidence of 1st Respondent was recorded and documents were marked. After reserving the matter, 2nd Respondent -Arbitrator passed the Award on 24.07.2000.

(3.) 1st Respondent has made the claim as under: -