JUDGMENT :

PANKAJ MITHAL, J.

1. Leave granted.

2. The challenge in this Civil Appeal is to the judgment and order dated 10.01.2017 passed by the High Court of Punjab & Haryana at Chandigarh in exercise of powers under Section 37 of the Arbitration and Conciliation Act, 1996¹[hereinafter referred to as ‘the Act’] setting aside the order dated 07.04.2015 passed under Section 34 of the Act and also the arbitral order dated 08.11.2012.

FACTS:

3. The appellant - Punjab State Civil Supplies Corporation Ltd. ²[hereinafter referred to as ‘the Corporation’] entered into an agreement dated 06.10.2008 with M/s Sanman Rice Mills³[hereinafter referred to as ‘the Rice Mill’] whereunder the Corporation was to supply paddy to the Rice Mill for the purpose of milling that had to supply back the resultant rice to the Corporation.

4. A total of 2,02,850 bags of Grade ‘A’ variety of paddy weighing 70,997.50 quintals was supplied by the Corporation to the Rice Mill. However, after processing, the Rice Mill resupplied only a part of the same with a shortfall of 35110.39 quintals of rice. Thus, this shortage in quantity of rice equivalent to a total cost of Rs.7,16,15,716/- was recoverable from the Rice Mill.