MERCURY METAL CORPORATION PARTNER GRANDHI SUBBA RAO Vs. A P BACKWARD CLASSES CO-OPERATIVE FINANCE CORPORATION LIMITED

JUDGEMENT

(1.) These appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act, for brevity) are heard and considered together for the reason that all the appeals arise out of common judgment dated 14.03.2005 of the Court of XIV Additional Chief Judge (Fast Track Court), Hyderabad and also for the reason that all the original petitions filed by the appellants herein were against similar awards passed by the arbitral tribunal in the background of similar facts. By the said award, dated 11.03.2002, the arbitral tribunal, while rejecting the claim of two appellant (s) and partly allowing the claim of other appellants, allowed in two cases the counter claims of Andhra Pradesh Backward Classes Cooperative Finance Corporation Limited (hereafter called, the Corporation) with i@ 6% per annum from 07.06.2001 till the date of recovery. The particulars of the arbitration cases, the original petitions and appeals are as under. <FRM>JUDGEMENT_30_LAP_2010Html1.htm</FRM>

(2.) The Government of Andhra Pradesh launched ADARANA scheme. It envisages supply of tools to village artisans like black smiths, carpenters, dhobis etc. Under the scheme, Dhobis are to be supplied Iron boxes, buckets and banas (Rajaka tools). The Corporation was entrusted with procurement and supply of Rajaka tools to identified backward class beneficiaries.

(3.) In response to notice, the appellants, who are manufacturers/ dealers of Rajaka tools, participated in the exhibition at Vijayawada, Bhongir and other placed in 1998. Series of meetings were held thereafter and on invitation, the appellants gave their quotations in January, 1999 agreeing to supply Dawaleswaram variety iron boxes at Rs.244/- per kg, and buckets and banas at Rs.262/- per kg. The Corporation then entered into an agreement on 18.01.1999 or 19.01.1999 under which appellants were required to make supplies as per the indent placed by respective District Backward Class Cooperative Societies (District Society, for brevity). The supplies commenced on 18.02.1999. In the meanwhile, the negotiations were held between suppliers and committee of three District Collectors. The result was reduction of price to Rs.207/- per kg for iron boxes and Rs.216/- per kg for other items as agreed by the appellants. Again there were discussions with Managing Director and Chief Consultant/Special Officer of Corporation on 15.05.1999. There was a further reduction of brass vessels to Rs.174/- per kg exclusive of sales tax in respect of six coastal Districts, namely, Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari and Krishna and Rs.200/- per kg for other Districts exclusive of sales tax. There were further negotiations by Purchase Finalisation Committee (PFC) on 20.05.1999 when the appellants agreed to reduce the price of Rajaka tools to Rs.165/- per kg in six coastal Districts and Rs.190/- per kg in other Districts. The Corporation then issued a circular on 21.05.1999 fixing the rates accordingly. This was followed by another circular on 18.06.1999 directing Executive Directors of District Societies not to pay at a rate more than Rs.150/- per kg for six coastal Districts and Rs.175/- per kg for other Districts in respect of banas and buckets. Again on 03.09.1999, Corporation reduced the rate of Iron box to Rs.154.50/- per kg in all Districts exclusive of taxes, which was objected to by the suppliers. The request of the claimants was, however, rejected and the Corporation asked the appellants to stop supply in December, 1999.