FAO No.686 of 2010 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. FAO No.686 of 2010 (O&M) Decided on 25.11.2010. M/S.Lakhpat Rai Amarjit & Co.Rice Mills Owner, Talwandi Bhai Teh and Distt.Ferozepur --Appellant vs. Punjab State Civil Supplies Corporation Ltd. and others -- Respondents CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present : Mr.Sandeep Khunger,Advocate,for the appellant Mrs..Deepali Puri,Advocate,for the respondents. Rakesh Kumar Jain, J,(Oral) This appeal is directed against order dated 16.10.2009 passed by the learned District Judge, Ferozepur, by which objection filed by the appellant under Section 34 of the Arbitration & conciliation Act, 1996 (for short, 'the Act') against the arbitral award dated 19.5.2005 has been dismissed. The only argument raised by the learned counsel for the appellant is that the Arbitrator had no jurisdiction to decide the question of 1 ½ times of the economic cost and 21% interest in view of Clause 6(i) and (iii) of the agreement because Clause 17 of the agreement pertaining to the arbitration clause provides that “all the disputes and difference arising out or in any matter touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly FAO No.686 of 2010 (O&M) 2 provided in the contract) shall be referred to the sole arbitration of the Managing Director or any person appointed by him in this behalf except the matter which has been specifically provided in the contract”. It is submitted that as per Clause 6 (i) and (iii), in case of non-delivery / short-delivery of rice, the decision is to be taken by Managing Director of the Corporation with regard to the imposition of 1½ times economic cost and 21% interest. He further submits that the Arbitrator has committed error in rejecting the objection raised by the appellant-Miller about his jurisdiction to decide the excepted matter which falls within the domain of Managing Director of the Corporation and is not referable to Arbitrator. On the contrary, counsel for the respondents has submitted that there was a hue and cry in State of Punjab by the Millers with regard to crop year for Kharif, 1994-1995 marketing season, as a result of which, guidelines (Annexure A/1) were issued by the Director, Food and Supply, Punjab, in which, it was provided that “the cases in which partly the rice has been delivered and money deposit payment of the unauthorized conversion of paddy, the millers may deposit payment of the balance quantity of rice at custom milled rice rates along with interest at bank rate.” Counsel for respondents has submitted that in terms of the guidelines (Annexure A-1), the revised claim for the benefit of miller was submitted before the Arbitrator as per which the total amount recoverable in respect of paddy was Rs.44,97,780/- alongwith interest @ 21% from 1.10.2002 till the date of payment. It is submitted by counsel for respondent that question of jurisdiction of arbitrator would not involve in this case because excepted matter relates to the powers of Managing Director of the Corporation to decide 1 ½ times economic cost and 21% interest in terms of the Clause 6(i) and 6(iii) of the agreement but the Arbitrator has decided the liability of the millers on the basis of guidelines (Annexure A-1). Reacting to the arguments raised by learned counsel for the respondents, learned counsel for the appellant has submitted that appellant does not want the benefit of guidelines (Annexure A-1), FAO No.686 of 2010 (O&M) 3 therefore, his case may not be considered in the terms of guidelines (Annexure A-1) rather his case may be considered by the Managing Director of the Corporation in terms of Clause 6(i) and (iii). Counsel for the respondents has submitted that they have no objection if the matter is referred to the Managing Director of the Corporation to decide the claim of the respondent/Corporation in terms of Clause 6 (i) and (iii) dehors the guidelines (Annexure A-1). In view of the above circumstances, the present appeal is allowed. The arbitral award as well as the impugned order are set aside. The matter is remitted to the jurisdiction of the Managing Director of the Corporation as desired by the counsel for the appellant, who is directed to decide the question of the imposition of 1 ½ times cost as well as 21% interest in terms of Clause 6 (i) and (iii) of the agreement, within a period of six months after associating the appellant with due notice, from the date of receipt of the certified copy of this order. 25.11.2010 (Rakesh Kumar Jain) RR Judge