CR No.7310 of 2009 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Civil Revision No.7310 of 2009 Date of Decision: 10 - 8 - 2011 M/s Madan Rice Mills, Malerkotla and others ....Petitioners v. Punjab State Cooperative Society and ....Respondents Marketing Federation Ltd. and another CORAM: HON'BLE MR.JUSTICE KANWALJIT SINGH AHLUWALIA *** Present: Mr.Mukand Gupta, Advocate for the petitioners. Mr.Vikas Chatrath, Advocate for respondent No.1. None for respondents No.2. *** KANWALJIT SINGH AHLUWALIA, J. (ORAL) The present revision petition has been filed under Article 227 of the Constitution of India praying for quashing of order dated 12.8.2009, Annexure P5, passed by the Court of District Judge, Sangrur. The main argument advanced by counsel for the petitioners is that this order is not in consonance with the orders passed by this Court in F.A.O.No.607 of 2007, decided on 30.9.2008. Briefly stated the petitioners had entered into a milling agreement with the Markfed on 15.10.1994 and the paddy was entrusted to CR No.7310 of 2009 [2] it for milling. It is also admitted that the petitioners after doing the milling, had delivered the due rice but there was some dispute regarding the balance paddy. Same was sold by the Markfed as instructed by the Food Corporation of India through open sale at the rate of ` 422/- per quintal. A dispute arose between the parties regarding performance of agreement dated 15.10.1994. This agreement contained a clause of arbitration. The Arbitrator gave the award and held that the dispute between the parties is not covered by the arbitration clause contained in agreement dated 15.10.1994. As the sole contract under the agreement was got modified into a new contract in the form of `Open Sale Policy' and, therefore, the dispute is to be decided according to the modified contract. The award given by the Arbitrator was challenged by the Markfed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred as, `the Act'). The District Judge vide order dated 29.6.2006 had set aside the award dated 25.6.2004 and held that Arbitrator could not refuse to decide the matter on the ground that there has been a modified contract between the parties regarding the Open Sale Policy, therefore, the matter was remanded back to the Arbitrator to decide the same afresh. That order was challenged by filing F.A.O.No.607 of 2007 which was decided on 30.9.2008. The order passed in the above-said F.A.O. reveals that a contention was raised that District Judge should accept or reject the application filed under Section 34 of the Act but the District Judge could not remand the matter to the Arbitrator. Therefore, in the above-said F.A.O., order dated 26.9.2006 passed by the District Judge was set aside and the District Judge was directed to decide the application within three months. About 7-8 cases were pending before the District Judge. The CR No.7310 of 2009 [3] Punjab State Co-operative Supplies and Marketing Federation Ltd. filed an application under Section 34(4) of the Act with a prayer that Arbitrator be directed to decide the reference on merits. A perusal of the award earlier given by the Arbitrator reveals that the Arbitrator had not decided the reference on the ground that the new agreement has been arrived at between the parties. It will be apposite here to reproduce the following relevant portion of the award dated 25.6.2004, annexed as Annexure P1 with another connected revision petition viz. Civil Revision No.858 of 2009:- “6-A. Dispute resolution mechanism In this context a crucial point involved deserves specific notice – the dispute resolution mechanism. Under the old contract (Agreement) the specific Arbitration Clause provided a limited scope to the present Arbitrator under the “non excepted matters” clause while the “excepted matters” lay within the exclusive domain of the Managing Director, Markfed – as already noted earlier in detail in para 4 above. However, when the modified or new contract got enforced w.e.f. 21.3.1995 (Open Sale Policy), then the corresponding the dispute resolution mechanism got entirely changed because of which any dispute arising out of acceptance of tender and deposit of advance sale price by any successful bidder (Miller) could be referred only to the Indian Council of Arbitration, New Delhi. In other words, then the Arbitration Clause under the old agreement became redundant. Hence, any dispute arising after 21.3.1995 under the new contract is obviously beyond the jurisdiction of the present Arbitrator as well as the Managing Director, Markfed – if the same Miller is found entitled to lifting of purchased paddy under Open Sale Policy from the previous “balance stock” relating to the old Agreement. Any such dispute, therefore, can be looked into only by the Arbitrator at New Delhi.” CR No.7310 of 2009 [4] The District Judge while deciding the application under Section 34(4) of the Act held that the dispute is to be decided by the Arbitrator in light of the agreement dated 15.10.1994, which was subsisting between the parties at the time when consignment of paddy was delivered. The District Judge further held that the miller had not submitted any counter claim before the Arbitrator, therefore, the entire dispute is to be governed by the provisions of the agreement dated 15.10.1994. Mr.Mukand Gupta, learned counsel appearing for the petitioners has assailed the order of the District Judge on the ground that the District Judge could not remand the case to the Arbitrator, as this Court in the order passed in the above-said F.A.O. had directed the District Judge to decide the matter himself within a period of three months. This argument cannot sustain because an application was filed under Section 34(4) of the Act. The District Judge had not decided the application on the ground that new agreement is existing between the parties. Therefore, it was incumbent upon the District Judge to decide the application. The District Judge held that the parties are bound by the old agreement dated 15.10.1994. A perusal of order dated 30.9.2008, Annexure P2, passed by this Court in F.A.O.No.607 of 2007 reveals that the District Judge was directed to decide the application, which indeed he has decided i.e. the application under Section 34(4) of the Act. Secondly, it is stated by the learned counsel that the same District Judge in the case of Markfed v. Mangla Solvex had dismissed the application under Section 34 of the Act. This Court, at this stage, will not be in a position to comment as to whether in the case of Mangla Solvex, the dispute was to be governed by CR No.7310 of 2009 [5] the old agreement or the new agreement. That case has been decided on its own facts. Therefore, I find no merit in the contention raised by the learned counsel. Hence, no infirmity can be found with the impugned order and the present revision petition is hereby dismissed. ( KANWALJIT SINGH AHLUWALIA ) August 10, 2011. JUDGE RC