FAO No.1526 of 2009 -1- ****** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1526 of 2009 Date of decision:04.10.2010. Grewal Rice & General Mills and another ...Appellants Versus Punjab State Warehousing Corporation and another ...Respondents CORAM: HON’B LE MR. JUSTICE RAKESH KUMAR JAIN Present: Mr. Naresh Prabhakar, Advocate, for the appellants. Mr. S.C.Pathela, Advocate, for the respondents. ***** RAKESH KUMAR JAIN, J. The appellants have challenged order passed by learned Additional District Judge, Chandigarh dated 11.02.2008 by which objection filed by the appellants under Section 34 of the Arbitration and Conciliation Act, 1996 [for short “the Act”] for setting aside the arbitral award dated 31.01.2005, has been dismissed. Vide agreement dated 19.11.1996, the respondent Corporation was to supply paddy to the appellants who had to convert it into rice and deliver it to Food Corporation of India [for short “FCI”] in the account of the Corporation as per conditions of the agreement. Pursuant to the agreement, the appellants deposited security amount of `1,25,000/- and the Corporation supplied 1,04,635.04 quintals paddy in 1,60,997 gunny bags FAO No.1526 of 2009 -2- ****** to the appellants, who delivered 68,711.05 quintals rice of fine quality filled in 72,520 gunny bags and retained 88,457 surplus `B' class gunny bags, each costing `19.81/-, which comes to `17,52,333/-. The appellants were liable to pay the said amount along with sales tax @ 4.4% which comes to `77,103/-. The respondent Corporation had also claimed `3,01,225/- on account of quality cut and `25,670/- on account of TDS. In this way, the entire recoverable amount from the appellants was `21,56,331/- and the respondent Corporation was liable to pay `12,46,464/- to the appellants on account of milling charges etc. including the cost of excess rice and cash security. Thus, the net recoverable amount was `9,09,867/-. The appellants allegedly had deposited an amount of `3,50,000/- by way of cheques dated 28.02.1999, 12.06.2000 and 26.02.2001, therefore, the total claim put up before the Arbitrator was for recovery of `5,59,867/- including interest @ 21% per annum. The sole Arbitrator, vide his arbitral award dated 31.01.2005, accepted the claim of the Corporation for recovery of `5,59,867/- along with interest @ 12% per annum w.e.f. 26.06.2001 and further interest @ 21% per annum from the date of the award till the date of the receipt of the amount. The appellants had challenged the arbitral award before the Court on the ground that the Arbitrator had not afforded adequate opportunity to cross-examine the witnesses and the sales tax has been illegally included in the claim. The learned Court below had observed that so far as the sales tax on old gunny bags is concerned, the notification of the Government of Punjab, was taken into consideration by the Arbitrator which was admitted by the appellants. In view thereof, it was held that sales tax was recoverable on gunny bags and the Corporation had already paid it to the Sales Tax Department. On the point of public policy, the Court had discussed the award of the Arbitrator thoroughly and had found that the appellants had failed to establish any ground for the purpose of setting aside the arbitral award. In the present appeal, the appellants had tried to raise question of “excepted matter” which was not raised either before the Arbitrator or FAO No.1526 of 2009 -3- ****** before the Court below and hence, the appellants are not entitled to raise the said issue for the first time in appeal under Section 37 of the Act. It is further pertinent to mention that the appellants have miserably failed to raise any substantial argument in order to challenge the finding recorded by the Court below or even to indicate any error in the award. In view thereof, I do not find any merit in the present appeal and as such, the same is hereby dismissed. No costs. October 04, 2010. (RAKESH KUMAR JAIN) vinod* JUDGE