m * INTHEHIGHCOURTOF DELHI + OMP No. 281/2004 % Dateofdecision:13.02.2006 M/S. P.K.GADODIATRADERS PEITTIONER through: Mr.KuideepPablay, Advocate . -VERSUS- PARAMSHUBHAMVANiJYALTD.& ORS RESPONDENTS through: Mr. T.K.Ganjuwith Mr. A.K.Thakur,Advocates forRespondentNo. 1. NoneforRespondentNo.2. CORAM: HON 'BLE MR. JUSTICESANJAYKISHAN KAUL 1.Whether theReportersoflocalpapers maybeallowedtoseethejudgment? 2.To bereferredtoReporter ornot? 3.Whether thejudgmentshould be reportedintheDigest? SANIAYKISHAN KAUL. I. (ORAL) (l)ThepetitionerhasfiledthepresentobjectionsunderSection34 oftheArbitration andConciliation Act, 1996(hereinaftertobe referredtoas,'thesaidAct ') forsettingasidetheAward dated 28.05.2004passedon aclaimfiled byrespondentNo.1. OMP No.281of2004 PageNo.lof5 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified (2)Thepetitioneris apurchaserofpaper. RespondentNo. 1 is a whoiesalerappointedbyrespondentNo.2. RespondentNo.2 is themanufacturerofpaper. (3)Thedisputesbetweenthepartiesrelatetothepapersupplied tothepetitionerandnotpaidfor. {4)RespondentNo. 1 invokedthearbitrationclausearisingfrom boththepetitionerandrespondentNo. 1 beingMembers ofthe PaperMerchants Association,which hasitsrulesandclauseXXX oftheRules providesforarbitration. Respondent No. 2 also invokedthearbitrationagainstthepetitionerforthesameclaim arisingfromaprintedclauseofarbitrationonthebackofthe invoiceforsupplyofthematerial. Thisarbitrationwas referred toJusticeN.N.Goswami (Retd.)whocametotheconclusionthat theclauseofarbitrationwould onlybindtheseller(respondent No. 2) andthewhoiesaler (respondentNo. 1) asitwas not signedbythepetitioner. Thepetitionerinteraliahadtakena standbeforethesaidArbitrator thattherewas no privityof contractbetweenthepetitionerandrespondentNo. 2 hereinin view of thefact thatail thetransactions were through respondentNo. 1andthearbitrationproceedingswerepending betweenthepetitionerandrespondentNo. 1. OMP No.281of2004 PageNo.2of5 (5)lnthearbitrationproceedingsinquestioninthepresentcase, theArbitrator specificaiiyposed aquestiontothepetitioner herein astowhether thepetitioner was wiiiing topay to respondent No. 2 herein insteadof respondentNo. 1 as respondentNo. 2 is themanufacturer. Theanswertothatwas V evasive. TheArbitratorcametotheconclusionthattherewas anarbitrationagreementbetweenthepartiesandthegoods weresuppliedthroughthewholesaler/agentbeingrespondent No. 1 hereinwho hadtobere-compensatedwith thecostof purchaseapartfrominterest(3)12%p.a. TheArbitrator also tooktheprecautionofcallingforanaffidavitofrespondentNo. 2 totheeffectthatrespondentNo. 1 was entitledtorecoverthe amountfromthepetitioner. This was doneonlysothatthe petitionerdid notfacethemultiplicity ofproceedingsinrespect ofthesamecauseofaction. (6)Learnedcounselforthepetitionerwasspecificaiiyaskedasto underwhich clauseofSection 34ofthesaidAct, would the objectionsfall.Learned counsel hasreferredto Section 34(2)(a) (iv) tocontend thatthedispute was not contemplatedfor arbitration. Thispleaisraisedonthebasisthattherewas no privityof contract between the petitioner and respondentNo. 1, OMPNo.281of2004 PageNo.3 of 5 ^ IlJ but the privityof contract was between the petitioner and respondentNo. 2asrespondentNo. 2wasthemanufacturerand supplierofthepaper. (7)LearnedcounseiforrespondentNo. 1 hasdrawntheattention ofthisCourt to thestandofthepetitionerintheproceedings beforeJustice N.N. Goswami (Retd.) wherein thepetitioner * pieadedasunder: "4. TheClaimantsuppliedthematerial /goods throughM/s. ParamShubhamVanijaya Ltd., the wholesaler, with whom the Claimant had contract/agreementandthepaymentwasbeing made undertheinstructionsfromthewholesaler andwith intimationtothem . 7. Since thesupplywas made throughthe wholesaler M/s. Param Shubham Vaniyaya Ltd., thedemandwas tobemade onlythroughthe wholesaler. Here theClaimantadmitsthatthey alsoaskedtheiragentPSVL. Butsincetheagent M/s. Param ShubhamVanijya Ltd. hadgonefor ^ arbitration proceedings and the same were * pending before Shri Jagannath Gupta, Sole Arbitrator, there was no reason for the Respondent to pay to the Claimant herein directly." (8)Areadingoftheaforesaidleavesnomannerofdoubtthatthe petitioner'sowncontentionwasthatthetransactiontookplace onlywith respondentNo. 1andthepaymentsweretobemade torespondentNo. 1. Now,thereversepositionissoughttobe taken. The petitionerdoesnotandcannotdisputethatthe goodshavebeenreceivedandpaymenthastobemade. The paymenthadtobe made eithertorespondentNo. 1 orto OMR No.281of2004 PageNo.4of5 t respondentNo. 2. The caseofthepetitionerwas thatthe paymenthadto bemade torespondentNo. 1. Thedispute betweenthepetitionerandrespondentNo. 1 was referredto arbitrationinpursuancetoboththepartiesbeingMembers of thePaperMerchants Association. Theplea,thus,beingsought toberaisedbythepetitionerispalpablyfalseandincomplete W contradictionto theplea raisedinthesecondarbitration proceedings. (9)lnviewoftheaforesaid,Iamoftheconsideredviewthatthe objectionsofthepetitionerreallydonotevenfallwithin the parametersofSection34ofthesaidAct asenunciatedbythe SupremeCourt inOil andNatural Gas Corporation Ltd. v.Saw Pipes Ltd.. AIR2003SC 2629. The objectionsbeingwithout ^ meritaredismissedwithcostsquantifiedatRs.5,000/-. + lANo. 4505/2005 (10)Thisapplicationfiled byrespondentNo. 1 underSection9 of thesaidAct forsecuringtheamountindisputedoesnotsurvive for consideration in view of theobjections having been dismissed . (11)Theapplicationstandsdisposedof. February13,2006 SANJAYKI^HANKAUL,J. madan OMP No.281of2004 PageNo.5of5