FAO No.4216 of 2009 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.4216 of 2009 (O&M) Date of Decision: 9.7.2010 M/s Parshotam Rice Mills ..Appellant. Vs. The Punjab State Co-op.Supply and Marketing Federation Ltd. and another ..Respondents. CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Mukand Gupta, Advocate for the appellant. RAKESH KUMAR JAIN, J. This appeal is directed against the arbitral award dated 1.4.2005 and order passed by Additional District Judge, Sangrur dated 4.6.2005 on an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short `the Act') by the miller, by which the Objections have been dismissed. Counsel for the appellant, inter alia, contends that as per clause 8 of the agreement, in case of short fall in delivery of rice within the stipulated period, the decision with regard to imposition of interest @ 21% for the first year of default and @ 30% for the subsequent period on the custom milled rice would be fixed by Government of India from the date it becomes payable till the date of actual realisation towards the stocks of paddy. The decision of the Managing Director of the Corporation shall be final between the parties. FAO No.4216 of 2009 (O&M) -2- Learned counsel for the appellant has submitted that the learned Court below has erred in dismissing the objection by observing as under : “The ld. Counsel for the applicant has further argued that the matter was not within the jurisdiction of arbitrator. He has contended that as per clause 8 of the agreement, in cases of shortage in the quantity of the rice supplied by the miller, the penalty at the custom milling fixed by the government plus 21% interest is recoverable from the miller and decision of the Managing Director in this regard is final. But the instant case is not the case of late delivery of rice, rather the applicant has failed to deliver the rice in proportion to the paddy supplied to it. The matter in dispute relates to the years 2001-02 but the applicant has not been able to show till today that he has supplied the remaining rice after the expiry of schedule period and therefore, it is case of late delivery of rice only. Therefore, it cannot be said that the matter in question was excepted mater.” In reply, learned counsel for the respondents has submitted that the matter could be remanded back to the Managing Director of the Corporation to take a decision in accordance with Clause 8 of the agreement. This arrangement satisfies the counsel for the appellant as well. Since both the parties are ad idem for remand of the case to the Managing Director of the Corporation, therefore, the present appeal is allowed. Orders of the Arbitrator as well as of the Additional District Judge, Sangrur are hereby set aside and the matter is remanded back to the Managing Director of Punjab State Co-op.Supply and Marketing Federation Ltd. (for short `Markfed') to take a decision after affording an opportunity of hearing to the miller in terms of Clause 8 of the agreement. The parties are FAO No.4216 of 2009 (O&M) -3- directed to appear before Managing Director, Markfed on 9.8.2010 at 10 A.M. (Rakesh Kumar Jain) 9.7.2010 Judge Meenu