IMPORTANT POINT
When neither the civil court u/s 34 nor the High Court u/s 37 found anything wrong with determination of price by the Arbitrator, Supreme Court will not interfere u/Art 136.

Headnote:(a) Arbitration and Conciliation Act, 1996 – Section 34 and 37 r/w Article 136, Constitution of India – Price determined by Arbitral Tribunal – A question of fact – Neither the civil court u/s 34 nor High Court u/s 37 finding anything wrong with determination of price by the Arbitrator – Supreme Court will not interfere u/Art 136. (Para 20)
       (b) Arbitration and Conciliation Act, 1996 – Section 34 – Suppliers undertaking to supply goods at lowest rates – Rates charged found to be higher than rate charged elsewhere – Arbitrator determining correct rate – Well within its jurisdiction. (Para 22, 24)
       (c) Contract – Rates charged by suppliers higher than the price charged elsewhere – Suppliers undertaking that in such a case, they will be entitled to lesser price – No fraud committed by suppliers. (Para 23)
       Facts of the case:
       The Government of Andhra Pradesh had launched a scheme named ‘ADARANA’ under which certain tools of trade necessary for Blacksmiths, Carpenters, Dhobis etc. were to be supplied to the rural artisans. The Government was to purchase the tools through A.P. Backward Classes Cooperative Financial Corporation Limited.
       The Respondent-Corporation had invited quotations for supplying iron boxes, iron ring used for placing the iron; boxes, buckets and bannas required in the process of washing clothes etc.
       The present appellants, the suppliers, agreed to supply the tools at the rate of Rs.165 per kg in six coastal districts of Andhra Pradesh namely, Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari and Krishna, whereas for the other remaining districts, the rate had been fixed at Rs.189.75 per kg and the above rates were exclusive of sales tax.
       When the agreement had been entered into for supply of the tools by the appellants to the Respondent-Corporation, it was also agreed among the parties that the rate at which the tools were offered was the lowest rate at which the suppliers were selling the tools of the same specification in the State of Andhra Pradesh.
       Ultimately, the tools had been supplied by the suppliers to the respondent-Corporation but it was found that the rates which had been charged by the suppliers were neither reasonable nor were the lowest at which the suppliers had sold their products similar to the one which they had supplied to the Respondent-Corporation and therefore, a dispute had arisen among the parties and the dispute had been referred to an Arbitral Tribunal.
       The Arbitral Tribunal ultimately came to the conclusion that the amount charged by the suppliers was excessive and therefore, made an Award in favour of the Respondent-Corporation to the effect that the suppliers were entitled to only Rs.115 per kg towards price of the tools supplied by them and the claim exceeding the said amount had been rejected. It was also provided in the Award that the amount be paid with interest @ 6% per annum with effect from the date of claim petition i.e. 26th April, 2001 till the date of the payment.
       The suppliers challenged the validity of the Award under Section 34 of the Act.
       The said original petitions were dismissed.
       The Civil Miscellaneous Appeals filed in the High Court have also been dismissed.
       Finding of the court:
       There is no substance in these appeals.
       Result:
       Appeals dismissed.

JUDGMENT

ANIL R. DAVE, J.

1. Leave granted.

2. In all these appeals validity of a common judgment delivered in Civil Misc. Appeal Nos. 973-995 of 2005 and 539, 674 and 675 of 2006 dated 14th December, 2009 has been challenged.

3. The aforestated Civil Miscellaneous Appeals had been filed in the High Court of Judicature, Andhra Pradesh at Hyderabad under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) against a common order dated 14.03.2005 passed in different original petitions, by the XIV Additional Chief Judge, City Civil Court (FTC), Hyderabad, dismissing the original petitions. The High Court vide its common judgment dated 14.12.2009 dismissed the aforestated appeals.

4. Being aggrieved by the said common judgment, the appellants have approached this Court by way of these appeals.

5. The circumstances which gave rise to the present litigation in a nut-shell are as under:-

The Government of Andhra Pradesh had launched a scheme named ‘ADARANA’ under which certain tools of trade necessary for Blacksmiths, Carpenters, Dhobis etc. were to be supplied to the rural artisans. The Government was to purchase the tools through A.P. Backward Classes Cooperative Financial Corporation Limited, a corporation set up for welfare of the persons belonging to downtrodden classes, controlled by the Government and the ‘State’ within the meaning of Article 12 of the Constitution of India. The Respondent-Corporation had invited quotations for supplying iron boxes, iron ring used for placing the iron; boxes, buckets and bannas required in the process of washing clothes etc. The present appellants had agreed to supply the “Razaka tools” at a particular rate. We do not go into the details as to how the rates were finalized after several meetings held among the suppliers of the tools and the officers of the Respondent-Corporation. Suffice is to state at this stage that the suppliers, after several meetings and bargaining on both the sides had agreed to supply the tools at the rate of Rs.165 per kg in six coastal districts of Andhra Pradesh namely, Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari and Krishna, whereas for the other remaining districts, the rate had been fixed at Rs.189.75 per kg and the above rates were exclusive of sales tax.

6. It is pertinent to note that when the agreement had been entered into with regard to supply of the tools by the appellants to the Respondent-Corporation, it was also agreed among the parties that the rate at which the tools were offered was the lowest rate at which the suppliers were selling the tools of the same specification in the State of Andhra Pradesh.

7. Each appellant (who has been referred to hereinafter as ‘the supplier’) had also filed an undertaking stating that the prices quoted for supply of the tools were the lowest possible prices and that nowhere in Andhra Pradesh, the supplier was selling those products at prices lower than the price quoted. They had also undertaken to refund the difference of amount arising on account of any price difference in the price quoted by them and lower price offered by them in the open market in Andhra Pradesh in respect of the tools. One such undertaking dated 22.04.1999 given by one of the suppliers is reproduced herein below:

“UNDERTAKING

“…..I, Smt. CHEBROLU LAKSHMI SESHA KUMARI Proprietor of M/s. CHEBROLU ENTERPRISES, hereby declare that the prices quoted for the supply of our Products under ADARANA Project being implemented by Andhra Pradesh Backward Classes Cooperative Finance Corporation are the lowest possible prices and nowhere in Andhra Pradesh, we are selling our products with the same specifications at prices lower than the prices we have quoted under the said project.

I also undertake to refund/authorizes Andhra Pradesh Backward Classes Cooperative Finance Corporation to deduct excess amount paid to us on account of any price differential between higher prices quoted by us under ADARAN

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2015 Supreme(SC) 1029

IMPORTANT POINTWhen neither the civil court u/s 34 nor the High Court u/s 37 found anything wrong with determination of price by the Arbitrator, Supreme Court will not interfere u/Art 136.

IMPORTANT POINT
When neither the civil court u/s 34 nor the High Court u/s 37 found anything wrong with determination of price by the Arbitrator, Supreme Court will not interfere u/Art 136.