FAO No.5058 of 2009 (O&M) ***** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.5058 of 2009 (O&M) Date of decision:30.07.2009 M/s Khara Agro & Machinery Store and others …Appellants Versus M/s HMT Limited, Pinjore and another …Respondents CORAM : HON’BLE MR. JUSTICE RAKESH KUMAR JAIN Present: Mr. Surinder Sharma, Advocate, for the appellant. Mr. Anand Chhibbar, Advocate, for respondent No.1. ***** RAKESH KUMAR JAIN, J. The appellants have challenged order of the learned Court below dated 15.05.2009 by which objection filed by the appellants under Section 34 of the Arbitration and Conciliation Act, 1996 [for short “the Act”] against the arbitral award dated 12.02.2007 has been dismissed. Concisely, respondent No.1 was the claimant before the Arbitrator where the appellants failed to adduce any evidence as is evident from the order of the Arbitrator who has observed that: - “Despite three adjournments having been granted, the respondents failed to adduce any evidence. Final adjournment was thereafter granted and the case was fixed for 20th January, 2007 for evidence of respondents and it was 1 FAO No.5058 of 2009 (O&M) ***** made clear that it would be final and last adjournment. The respondents were also directed to pay the conditional costs of Rs.4,000/-. However, on 20.01.2007, the respondents absented and their counsel Shri S.K.Biriwal also did not appear. Even conditional costs of Rs.4,000/- were not tendered. Since none appeared on behalf of respondents, they were proceeded against ex-parte.” The Arbitrator then observed that although no evidence has been led by the respondents, yet he would deal with the points raised by them in their written statement and in pursuance thereof, after considering the pleadings and evidence led by the claimant, it was observed that: - “The fact remains that the respondents, in their letter dated 01.12.2004 had clearly admitted that they owed a sum of Rs.20,95,960/-. This is so mentioned in Ex.C32. They have, however, stated that they are unable to pay the amount of interest included in the above total amount and that they would compare this amount with their accounts and would pay the amount due within a month. However, the respondents failed to tally the above due amount with their books of accounts and admittedly they failed to pay the balance amount due.” 2 FAO No.5058 of 2009 (O&M) ***** On the basis of admission on the part of appellants, the Arbitrator passed the award for a sum of Rs.20,95,960/- as on 30.09.2005 and also awarded interest @ 18% per annum w.e.f. 01.10.2005 till 12.02.2007 and the award was announced. Aggrieved against the arbitral award, objection under Section 34 of the Act was filed by the appellants, whereas an application under Section 9 of the Act was filed by the respondent No.1/claimant. It was observed by the learned Court below that: - “to adjudicate upon both the petitions in question, only one point requires determination i.e. as to whether M/s HMT Limited is entitled to claim interest from the objector M/s Khera Agro and Machinery Store on the delayed payments or not. Therefore, this Court would confine its discussions only on the aforesaid point and as such, the detailed pleadings of the parties are not being reproduced hereinafter.” After taking into consideration the rival contentions of both the parties, learned Court below reduced the rate of interest from 18% to 9% observing thus: - “since for the last 10-12 years, the rate of interest of the nationalized banks on the fixed deposits of the citizens had remained around 9% approximately, so it would be in the interest of justice if the dealer is directed to pay simple interest at the rate of 9% per annum on the 3 FAO No.5058 of 2009 (O&M) ***** delayed payments from the date of accrual till its realization to the company.” It was also observed that: - “hence both the parties are directed to settle their accounts afresh in terms of the aforesaid directions relating to the payment of interest given to them by this court within three months from the date of this order.” Still aggrieved, only the appellants have preferred the present appeal in which learned counsel for the appellants has vehemently argued that there is nothing on record from which it could be ascertained as to how the amount of Rs.20,95,960/- has been assessed by the learned Arbitrator and the learned Court below and that in the absence of a covenant between the parties with respect to interest on the delayed payment the same could not have been granted. On the other hand, learned counsel for respondent No.1/claimant has argued that the learned Arbitrator as well as the learned Court below have awarded the amount of Rs.20,95,960/- on the basis of letter of the appellants dated 01.12.2004 (Ex.C32) in which they had admitted their liability and insofar as the interest part is concerned, it is submitted that there is no argument to the contrary that the respondent No.1/claimant would not be entitled to the amount of interest on the outstanding principal amount. I have heard both the counsels and perused the record with their assistance. In this case, the first question raised by learned counsel for the appellants is with regard to assessment of the arbitral amount of Rs.20,95,960/-. It is argued by him that there is nothing on 4 FAO No.5058 of 2009 (O&M) ***** record from which it could be deciphered as to how this amount has been arrived at, therefore, the Arbitrator has erred in awarding the said amount to respondent No.1/claimant. In my view, this argument is totally fallacious in view of the letter dated 01.12.2004 (Ex.C32) as per which the appellants themselves have admitted their liability of the amount of Rs.20,95,960/-. Insofar as the second contention with regard to the interest is concerned, the learned Court below has already slashed it down from 18% per annum (as awarded by the Arbitrator) to 9% per annum. In view of above discussion, I do not find any merit in the present appeal and as such the same is hereby dismissed. July 30, 2010. (RAKESH KUMAR JAIN) vinod* JUDGE 5