IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. OMP(M) No. 5 of 2009. Reserved on: 27.05.2011. Decided on: 05.07.2011. _____________________________________________________ M/S Himachal Plywood Pvt. Ltd. … Claimant/Objector. Versus State of Himachal Pradesh & another. … Respondents/Defendants. Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 No. For the Claimant/Objector : Mr. Sunil Mohan Goel, Advocate. For the Respondents/ : Mr. R.P. Singh, Assistant Advocate Defendants. General Rajiv Sharma, Judge. Petitioner has filed objections under Section 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as “the Act”) against the award dated 20.2.2009 passed by Mr. P. Mitra, IAS (Arbitrator), Financial Commissioner (Appeals). 2. Material facts necessary for the adjudication of this petition are that an agreement was entered into between the petitioner-Company and respondent-State on 27.9.1977. Thereafter, supplementary agreement was executed between the 1 Whether the reporters of Local Papers may be allowed to see the judgment? No. - 2 - parties on 1.10.1983 vide Ex.RW-4/B. Plaintiff instituted a suit in this Court bearing Civil Suit No.88 of 1994. This Court was pleased to refer the matter to the Arbitrator on 17.4.1996 whereby the Financial Commissioner (Appeals), Himachal Pradesh was appointed as Arbitrator. He made the award on 31.10.2005. The award was assailed in this Court by way of Civil Suit No.68 of 2005 on 28.12.2007. The Court accepted the objections and remanded the matter on 28.12.2007. Thereafter again the award was passed by the learned Arbitrator on 10.2.2009. 3. The claimant/objector has now filed the present petition to assail the award dated 10.2.2009. The Court has framed the following issues on 15.03.2010:- 1. Whether the Arbitrator has mis-read and mis- construed the evidence and the agreement? OPO. 2. Whether the Arbitrator has mis-conducted the proceedings, as alleged? OPO. 3. Whether the objector is entitled to any amount, if so, to what extent? OPO. 4. Relief. 4. Mr. Sunil Mohan Goel, learned counsel for the objector has vehemently argued that the award made by the Arbitrator, dated 10.2.2009 is against public policy and is also a result of misreading, mis-appreciation, non consideration of material documents placed on record and non application of mind. 5. Mr. R.P. Singh, learned Assistant Advocate General has supported the award dated 10.2.2009. - 3 - 6. I have heard learned counsel for the parties and gone through the pleadings and record carefully. 7. Since all the issues are interconnected and interlinked, the same are taken up together for determination to avoid repetition of discussion of evidence. 8. It is not in dispute that earlier the agreement was entered into between the parties on 27.9.1977 whereby it was agreed to supply 20,000 cubic meters of Deodar, Kail, Fir and Spruce trees by the respondent-State to the claimant for the purpose of manufacturing plywood etc. The State Government had supplied 4403.83 cubic meter timber to the petitioner. The petitioner manufactured only 100 plywood out of the wood supplied. There was protracted correspondence between the parties and thereafter second agreement (Ex.RW-4/B) was entered into between the parties on 1.10.1983. The clause necessary for the adjudication of the petition read thus:- “Now it is hereby mutually agreed by and between the Seller and the Buyer that supply of wood shall be made when complete chain of machinery for the manufacture of plywood is installed and a certificate to that effect is furnished by the Director of Industries, Himachal Pradesh.” 9. The wood to be supplied to the petitioner-claimant was 12,000 cubic meter annually for the remaining years. According to the earlier agreement total wood to be supplied was 20,000 cubic meter annually for a period of 20 years and thereafter the agreement could be renewed for another 15 years. It appears from - 4 - the record that since the petitioner had not set up the complete chain of machinery, the wood was not supplied for manufacturing the plywood. This is the pivotal issue required to be decided between the parties. 10. According to Mr. Sunil Mohan Goel, the petitioner had set up the plant and has set up the Hot Press in 1983, but the same was returned when the wood was not supplied. The petitioner has not placed any tangible evidence on record to establish that the machinery, i.e. Hot Press was installed in the premises. In case the petitioner had purchased this machinery, he would have placed vouchers and other supporting material on record to substantiate this plea. The petitioner has also not established that it has purchased the Slicer. The clause, as noticed above, was in two parts. According to one part, the complete chain of machinery for the manufacture of plywood was to be arranged and secondly, a certificate to this effect was required to be furnished by the Director of Industries, Himachal Pradesh. Neither the petitioner has proved that the Company had set up the Hot Press and Slicer nor any certificate was issued by the Director of Industries, Himachal Pradesh to this effect. The joint inspection was also carried out twice, i.e. on 9.11.1990 and on 1.8.1994 to see whether complete chain of machinery was set up or not. There is no evidence on record to show that the complete chain of machinery was ever installed. The self-serving statement of the claimant that the complete chain of machinery was set up, cannot - 5 - be accepted in view of the statement made by Mahesh Sayal, CW-1. He has deposed that till 1994 the Hot Press and Slicer were not installed and till date the same were not installed. He has further stated that till 1993, this machinery had been brought, but not installed. The supply of timber was subject to installation of Hot Press and Slicer. According to clause 2 of the agreement RW-4/B the supply of the wood was to be made when complete chain of machinery for the manufacture of plywood was installed and certificate to that effect was furnished by the Director of Industries, Himachal Pradesh. 11. Thus, it is evident from the statement of one of the claimant’s witnesses that neither the Hot Press nor Slicer was installed. In view of this, it was not necessary for the respondent- State to supply the wood as per Ex.RW-4/B. 12. Mr. Sunil Mohan Goel has further argued that in fact platform was prepared for the purpose of installing the Hot Press and Slicer, but since the wood was not supplied, it could not be installed. Since the claimant has not done its part as per terms of the award and has not shown its readiness and willingness to do so, it could not be presumed that it has incurred any losses for non- supply of wood by the respondent-State. It could suffer losses only if the complete chain of machinery was installed at the spot and thereafter the State had not supplied the agreed wood. There is no merit in the contention of Mr. Sunil Mohan Goel that if his client had installed the Hot Press and Slicer, it would have incurred - 6 - further losses if the wood has not been supplied by the State. This contention being hypothetical cannot be taken cognizance of. The readiness and willingness was to be shown by both the parties as per Ex.RW-4/B. There is neither any mis-reading nor mis- construction of the evidence or the agreement by the learned Arbitrator. The claimant has failed to substantiate that the learned Arbitrator has in any manner mis-conducted the proceedings. Consequently, the claimant is not entitled to any amount. 13. Accordingly, in view of the observations and discussions made hereinabove, there is no merit in this petition and the same is dismissed, so also the pending application(s), if any. No costs. (Rajiv Sharma), Judge. July 05, 2011. (sck).