FAO No. 2197 of 2007 1 In the Punjab and Haryana High Court,at Chandigarh. FAO No. 2197 of 2007 Decided on February 25,2009. M/s. Sant Ram Charna Dass --Appellant vs. The Punjab State Cooperative Supply and Marketing Federation Limited and another --Respondents CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.C.M.Munjal, Advocate, for the appellant Mr.Rajiv Malhotra,,Advocate,for respondent No.1. Rakesh Kumar Jain, J: Challenge in this appeal is to the order dated 14.9.2006, passed by learned District Judge, Chandigarh, whereby application filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (for short,'the Act'),for setting aside arbitration award dated 16.9.1999, passed by respondent No.2 has been dismissed. Briefly stated the facts of the case are that the appellant and respondent No.1. entered into contract No. 79 dated 19.12.1994 whereby the appellant was to supply 400 meteric tonnes of rice Bran Extraction @ Rs. 1450/- per meteric tonne to respondent No.1. The FAO No. 2197 of 2007 2 goods were to be supplied by the appellant to respondent No.1. between 25.12.1994 to 15.1.1995 which was further extended up to 07.2.1995, but the appellant could supply only 36.350 meteric tonnes of the commodity on 14.1.1995 vide bill Nos. 276,277 and 278. Balance quantity of 363.650 meteric tonnes was not supplied. As per condition No.4 of the contract, in case of non-supply of material by the appellant during the stipulated period, the contract was to be cancelled and if respondent No.1 had to buy balance quantity of the commodity from the market, difference if any, was to be paid by the appellant. In the present case, it was alleged by respondent No.1 that remaining commodity weighing 363.650 meteric tonnes was purchased from the open market on higher rate and had to pay additional cost of Rs.90,603/-. This amount was demanded by respondent No.1 from the appellant with interest @ 21% per annum from 8.2.1995 along-with compensation to the tune of Rs. 30,000/-. The matter was referred to the Arbitrator, who observed as under:- “I have gone through the background including the claim petition, written statement of the respondent, replication filed by the claimant as well as evidence and arguments. So far as the main point, as alleged by the respondent about the non-execution of agreement/contract is concerned, it is a matter of record that the respondent did make supplies of 36350 meteric tonnes of RB FAO No. 2197 of 2007 3 Extraction vide his bill dated 14.1.1995. Copies exhibited at C-4,C-5 and C-6. These bills bears the reference of the contract No.79 and after scrutiny by the office, these have been passed for release of payment. As the supply of this material has not been denied by the respondent, so the inference is drawn that a valid contract was there between the buyer and the seller. Even verbal arrangements between the parties would form the proper contract, but in this case, a written settlement of the terms by way of contract No.79 is there. In addition, statement of Sh.Raj Kumar made before MD Markfed on 18.3.1998 agreeing to contract No.79 dated 19.2.1994 and further amendment of clause 6 of the said contract would established that the contract was there between the parties. But as per practice, the same might not have the signatures of one of the parties. In this situation, I am inclined to hold that there was a valid contract between buyer and seller. Once the contract is there, the seller has to fulfill the obligations as contained therein. The total supply as indicated in the contract i.e. 400 meteric todnnes RB Extraction have not been denied as well as rate of the quantity to be supplied as indicated in the contract i.e. Rs. 1450/- per meteric tonne is not disputed as the seller has claimed the same rate for the supply made vide bill Nos. 276,277 and 278 dated 14.1.1995 for the quantity of 36.350 meteric tonnes. FAO No. 2197 of 2007 4 Once it is held that the regular contract is there, clause 4 of the contract becomes applicable and the non-supply of the material within the stipulated period amounts to cancellation of the same and the settlement of the difference of rate as per market rate. The respondent has not produced any document about his efforts to supply the balance RB Extraction of the quantity of 363.650 meteric tonnes. Extension given by the claimant upto 07.2.1995 for supply of the material has also not been disputed. After expiry of the extension, the claimant had the right to arrange supplies as per the requirement at the risk and cost of the respondent. The record produced by the claimant, copies exhibited at C-9 indicate that after the supplies received from 14.1.1995, the risk supplies were arranged on 13.2.1995 and 14.2.1995 from M/S. Saraswati Extraction Pvt. Ltd. @ Rs. 1750/- per meteric tonne. These documents and the supplies received by the claimant have not been disputed by the seller as these have been arranged after the expiry of the extended period i.e. 07.2.1995 and I am inclined to allow the settlement charges for the supplies received at the risk and cost of the seller respondent to the quantity which he failed to deliver as per stipulated period. In the abiove circumstances, I hold that the claimant has the right to cost from the seller and I allow an award of Rs.90,603/-. As regards the interest claim @ 21% from 31.3.1995, I FAO No. 2197 of 2007 5 allow the same at the prevalent bank rate than 21% from 31.3.1995 till its realisation. I order accordingly”. Aggrieved against the aforesaid award of the Arbitrator dated 16.9.1999, the appellant had filed an application under Section 34 of the Act, which has been dismissed by the learned District Judge, Chandigarh vide the impugned order dated 14.9.2006. Mr.C.M.Munjal, learned counsel appearing for the appellant could not point out any error in the impugned order of the learned District Judge,Chandigarh and has rather prayed that the appellant may be allowed to pay the amount determined by the Arbitrator in easy instalments @ 6% interest per annum. Learned counsel appearing for the respondent did not accept this proposal. Since no error has been pointed out by the learned counsel for the appellant either in the award or in the impugned order, I do not find any merit in the present appeal and the same is hereby dismissed. February 25,2009 (Rakesh Kumar Jain) RR Judge