GURU RICE MILLS Vs. PUNJAB STATE

JUDGEMENT

(1.) This order shall dispose of FAO Nos. 5769 of 2009 and 1569 of 2010, as common questions of law and facts are involved in both the appeals being filed against a common judgment. For reference, facts are taken from FAO No. 5769 of 2009. The Arbitrator, while settling the dispute in terms of the agreement executed between the parties for custom milling of paddy crop of the year 1998-99, passed an Award dated 28.07.2004 in the sum of Rs. 1,15,63,655/- as on 31.12.1999 along with interest with effect from the date of reference i.e. 01.08.2000 to 31.07.2004 i.e. for four years at the rate of 18% per annum on the aforesaid amount, which comes to Rs. 83,25,832/- and future interest at the rate of 15% per annum on Rs. 1,15,63,655/- from 01.08.2004 onwards till realization of the amount along with costs of Rs. 10,000/-. Against the aforesaid Award, both the parties filed objections before the District Judge, Ferozepur. The main objection raised by M/s. Guru Rice Mills appellant (hereinafter referred as 'the appellant') was that the claim of the respondent No. 1-corporation (hereinafter referred as 'respondent No. 1') was barred by the law of limitation. It was further alleged that the claim set up by respondent No. 1 was absolutely hypothetical and was fabricated by showing the paddy entrusted against securities, whereas no shortage of paddy was found for the termination of the contract. It was further submitted that the arbitration agreement is a false document and it does not bear the signatures of Malook Singh and many columns of the agreement were left blank, from where it could be inferred that no such agreement was executed between the parties. The arbitrator has exceeded jurisdiction in adjudicating the dispute. It was further averred that the appellant had already supplied due rice to the Food Corporation of India in the account of respondent No. 1 pertaining to the crop year 1998-99, as such, there was nothing due against the appellant. No proper opportunity was given to the appellant to prove its case, therefore, it has been seriously prejudiced. It was alleged that the Arbitrator took wrong view while holding that the Managing Director was the final authority to decide the rate of interest only, whereas, as per Clause 9 of the alleged agreement, the Managing Director was the final authority to decide all other clauses i.e. quality or short supply of rice and penalty at the custom milling rate fixed by the Food Corporation of India.

(2.) The respondent No. 1-Corporation refuted all the allegations levelled by the appellant.

(3.) Both the parties led evidence. Ultimately, the District Judge, Ferozepur, vide judgment dated 05.05.2009, dismissed both the objection petitions filed by the parties.