DISTRICT FOOD AND SUPPLIES Vs. AGGARWAL RICE MILLS

JUDGEMENT

(1.) VIDE this order, all 16 connected aforementioned appeals shall stand disposed of, as common question of law and facts are involved and also that these appeal have arisen from the common order dated 22.02.2007 passed by the Additional District Judge, Moga. However, for the sake of reference, the facts are being taken from FAO No. 3521 of 2007.

(2.) THE respondent herein entered into an agreement with the appellant- District Food and Supplies Controller (hereinafter to be referred as 'DFSC'). The respondent-Rice Miller had agreed to mill the paddy supplied by the appellant DFSC, as per the terms and conditions contained in the agreement. The Rice Miller was required to deliver the stock of the rice within the stipulated time, as provided in the agreement. A dispute arose between the parties qua shortage as well as late delivery of the rice by the respondent- Rice Miller. The appellant appointed a sole Arbitrator, who ordered the recovery of an amount of Rs. 12,21,290/-, along with interest at the rate of 12% per annum from 01.09.1997 till its realisation, vide Award dated 21.12.2001. Dissatisfied with the aforesaid award passed by the Arbitrator, the respondent filed petition under Section 34 of the Arbitration and Conciliation Act, 1996, which was accepted and the award was set aside, leaving the parties to seek any other remedy if permissible under the law. Further liberty was also granted to the Director to receive back the record of the Arbitration proceedings on moving application before the Court and decide the dispute, as per agreement. Dissatisfied with the order, the appellant- State has, therefore, challenged the order dated 22.02.2007 passed by the Additional District Judge, Moga, setting aside the Award.

(3.) LEARNED counsel for the respondent, on the other hand submitted that procedure as laid down in Section 4 of the Act had not been followed and that Arbitrator was having no jurisdiction to entertain the claim because it was covered under excepted matter regarding which the remedy has been provided in the agreements, itself, and any dispute qua the subject matter regarding recovery as claimed by DFSC was to be decided by as agreed and decision of the Director was to be final. But the Director has not decided the claim of the petitioners and had abdicated his powers as he had referred the matters to the Arbitrator who had passed decision on the excepted matters.