FAO No.3426 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** FAO No.3426 of 2008 DATE OF DECISION: 20.01.2010 **** The Punjab State Civil Supplies Corporation Ltd. Chandigarh . . . . Appellant VS. M/s Vohra Trading Company and others . . . . Respondents **** CORAM : HON’BLE MR.JUSTICE RAKESH KUMAR JAIN **** Present: Mr.K.S. Bhullar, Advocate for the appellant. M.S.K. Singla, Advocate for the respondents. **** RAKESH KUMAR JAIN J. (ORAL) This appeal is directed against the order of Additional District Judge, Chandigarh by which objection filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) was dismissed vide its order dated 04.10.2007. In brief, the facts of the case are that for the purpose of custom milling of paddy for the crop of year 1994-95, appellant entered into an agreement with the respondents on 18.10.1994. Pursuant to which, the respondents were entrusted with 13150 bags weighing 8552.05 quintals of type IR 8 paddy and 109306 bags weighing 71048.90 quintals of type PR 106 paddy for custom milling. The respondents delivered 17053.00 quintals of rice out of 53213.70 FAO No.3426 of 2008 -2- quintals till 30.6.1995 and rest 36150.70 quintals of rice remained undelivered. The matter was referred to the Arbitrator, who vide its order dated 19.3.2004 held that the Managing Director of the appellant has no authority to refer the dispute to the Arbitrator. Aggrieved against the Award, objections were filed, which have been dismissed on the ground that the matter falls within the excepted matter, which is covered by the decision of this Court in the case of “Shree Krishna Rice Mill Versus The Punjab State Co-op. Supply & Marketing Federation Ltd.” 2003 (3) PLJ 341. In view of this, the present appeal has been filed in which the solitary ground taken by the appellant is provided in para No.8 of the grounds of appeal. It is submitted that cost of detained gunny bags; value of bags recoverable on account of driage and sales tax on the gunny bags is out of the purview of the excepted matter. It is also submitted that TDS against the delivery of rice is out of the purview of excepted matter. Notice of motion was issued. Learned counsel for the appellant submits that the excepted matters are only with regard to economic cost and not with regard to the detained gunny bags. Learned counsel for the respondents, however, submits that clause 17 of arbitration under the agreement provides that all disputes and differences arising out of or in any manner touching or concerning this agreement whatsoever, except as to any matter the decision of which is expressly provided for in the agreement, shall be referred to the Sole Arbitrator of the Managing Director or any other person appointed by him in this behalf. Meaning thereby the matters which are not expressly provided in the agreement itself can be referred to the Arbitrator. Learned counsel for the respondents FAO No.3426 of 2008 -3- submits that so far as packing is concern, it is specifically mentioned in the agreement that the filling of the rice shall be detained by the millers and cost therefor shall be paid by the millers to the State. It is submitted that the decision with regard to the cost is with the State and can not be left to the jurisdiction of the Arbitrator, therefore, the question of gunny bags “whether it is the detention of surplus gunny bags or the sales tax to be paid thereon is a matter to be decided by the State?. Similarly, it is submitted that with regard to the quality cut, it is provided in Clause 6(ii) of the agreement that any quantity allowance determined at the time of inspection according to the specifications shall be recovered from the miller bills. It is submitted that since it is already provided in the agreement that it has to be paid by the miller, therefore, the matter is not required to be referred to the Arbitrator. In this regard, he relies upon a decision of this Court in the case of “M/s Kultar Singh and Brothers and others Versus Punjab State Civil Supplies Corporation Ltd. and others” in FAO No.1392 of 2007 decided on 20.10.2009, which squarely covers the present dispute. So far as TDS etc. is concerned that has to be paid by the miller. In view of the above, I do not find any merit in the present appeal and as such the same is hereby dismissed. (RAKESH KUMAR JAIN) January 20, 2010 JUDGE Vivek