In the High Court of Punjab and Haryana at Chandigarh ...... F.A.O. No.1363 of 2007 (O & M) ..... Date of decision:23.1.2008 Punjab State Civil Supplies Corporation Limited and another .....Appellants v. M/s Shree Durga Rice Traders, Sunam and others .....Respondents .... Present: Ms. Deepali Puri, Advocate for the appellants. Mr. Arun Jindal, Advocate for respondents No.1 to 5. ..... S.S. Saron, J. This appeal has been filed by the Punjab State Civil Supplies Corporation Limited (`Corporation' – for short), Chandigarh against the order dated 4.3.1006 passed by the learned District Judge, Sangrur. In terms of the impugned order, the application filed by both the parties under Section 34 of the Indian Arbitration and Conciliation Act, 1996 (`Act' – for short) for setting aside the arbitral award dated 2.9.2002 has been dismissed. Along with the appeal the appellant has filed CM No. 6601-C II of 2007 seeking condonation of 258 days in filing the appeal. The appellant-Corporation entered into an agreement with M/s Shree Durga Rice Traders, Sunam (`Miller' – for short) on 20.10.1994 for custom milling of paddy of the Corporation for the season 1994-95. On account of dispute having arisen between the parties with respect to the agreement, the matter was referred to the sole Arbitrator (respondent No.6) for arbitration. The claim made by the Corporation was that in terms of the F.A.O. No.1363 of 2007 [2] agreement, the Miller was given 64,926 bags of fine variety of paddy weighing 42,201.90 quintals. After allowing driage of 2% i.e. 844.03.800 quintals, the Miller was left with 41,357.86.200 quintals of paddy. The Miller was to deliver 27,709.76.200 quintals of rice to the Food Corporation of India (`FCI' – for short) in the account of the Corporation by 28.2.1995. The Miller, however, delivered only 7,117.61 quintals of rice upto the agreed date. Thereafter the date of supply was extended upto 31.1.1995. The Miller supplied total quantity of 9490.21 quintals of rice. In this manner, 18,219.55 quintals of rice was left with the Miller which when converted comes to 27,748.34 quintals of paddy. The Corporation claimed economic cost of paddy by 1.5 times of its rates along with cost of gunny bags, sales tax etc. In all, it filed claim for Rs.1,61,45,400.42 along with interest @ 21%. The Miller in its reply took the stand that due to space problem it did not supply the rice. Besides, paddy was purchased by it as per sale policy of the Government. The Corporation accepted Rs.92,54,079.50 from the Miller and nothing was due towards it. After considering the contentions of the parties, the Arbitrator ordered recovery towards the Miller amounting to Rs.2,65,145/-. The Corporation aggrieved against the award filed an application under Section 34 of the Act. The same having been declined by the impugned order the Corporation has filed this appeal seeking its modification. It is contended by Ms. Deepali Puri, Advocate, learned counsel appearing for the Corporation that the learned District Judge failed to take into consideration that the Arbitrator while passing the impugned award had erred in declining the claim with regard to 1.5 economic times of the cost of F.A.O. No.1363 of 2007 [3] paddy. It is submitted that as per guide-lines dated 6.6.2006 issued by the Punjab Government, the Corporation was entitled to recover 1.5 times of the economic cost of the paddy which was not milled by the Miller. The guide- lines dated 6.6.2006, it is submitted, are binding between the parties. In response, Mr. Arun Jindal, Advocate appearing for the respondents No.1 to 5 has submitted that the instructions dated 6.6.2006 are not, in any manner, binding on the parties and the contention raised by the learned counsel for the appellants is clearly misconceived, inasmuch as, only the agreement between the parties is binding. After giving my thoughtful consideration to the contentions of the learned counsel for the parties and perusing the record, it may appropriately be noticed that the matter in dispute is not res integra. This Court in the case of Shree Krishna Rice Mills v. Punjab State Cooperative Supply and Marketing Federation Limited, (2003-3) PLR 341 held that dispute regarding economic cost and award of interest is covered by Clauses 5 and 6 read with Clause 18 of the agreement and it was to be decided by the MD himself and there was no need to refer the same to the Arbitrator. Therefore, in terms of the agreement between the parties, the dispute regarding economic cost and award of interest in the present case is also covered by the clauses of the agreement and in terms thereof it is to be decided by the Managing Director of the Corporation himself. As such same was not to be referred to the Arbitrator. Keeping in view the aforesaid ratio of the judgment of this Court, there is no merit in this appeal. Accordingly, the appeal being devoid of any merit is dismissed. January 23, 2008. (S.S. Saron) Judge F.A.O. No.1363 of 2007 [4] *hsp*