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2009 Supreme(AP) 895
2010 (3) ALD 290
IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD
V.V.S. RAO, B.N.RAO NALLA
M/s. The Mercury Metal Corporation, represented by its Partner, Grandhi Subba Rao … Appellant
Versus
A.P. Backward Classes Co-operative Finance Corporation Limited, Represented by its Chairman and Managing Director, Telugu Samkshema Bhavan, VI Floor, Masab Tank, Hyderabad And others …Respondents
CIVIL MISCELLANEOUS APPEAL Nos.973, 999 OF 2005 AND 539, 674 AND 675 OF 2006
Decided On : 14.12.2009
Sri Vedula Venkataramana
Sri N.Subba Reddy
Headnote:
Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Backward class – Beneficiaries - Non-payment of the amounts - Repudiation – Limitation – Award – Set aside the award - Government of Andhra Pradesh launched ‘ADARANA’ scheme. It envisages supply of tools to village artisans like black smiths, carpenters, dhobis etc. Under the scheme, Dhobis are to be supplied Iron boxes, buckets and banas (Rajaka tools). The Corporation was entrusted with procurement and supply of Rajaka tools to identified backward class beneficiaries – Held, A non-payment may arise by reason of ones inability to pay while not disputing liability thereof. A non-payment, on other hand, may be result of repudiation or denial of its liability to pay - Thirdly, a non-payment of price may mean failure to fulfill ones obligation under contract to pay within time stipulated - When there is no repudiation or denial of liability a simpliciter non-payment or default in payment may not give rise to a dispute which can be referred to arbitration - When there is non-payment of the amounts by reason of repudiation, it is certainly a matter for arbitration and it is an incidental aspect that the arbitral tribunal has to decide actual amount due and payable by the defaulting party to the other party - Having regard to the evidence, arbitral tribunal has arrived at price of Rs.115/- per kg and this cannot be reviewed by the Court acting under Section 34 of Arbitration Act – Appeals dismissed.
V.V.S.Rao
Introduction
1. These appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act, for brevity) are heard and considered together for the reason that all the appeals arise out of common judgment dated 14.03.2005 of the Court of XIV Additional Chief Judge (Fast Track Court), Hyderabad and also for the reason that all the original petitions filed by the appellants herein were against similar awards passed by the arbitral tribunal in the background of similar facts. By the said award, dated 11.03.2002, the arbitral tribunal, while rejecting the claim of two appellant (s) and partly allowing the claim of other appellants, allowed in two cases the counter claims of Andhra Pradesh Backward Classes Cooperative Finance Corporation Limited (hereafter called, the Corporation) with interest @ 6% per annum from 07.06.2001 till the date of recovery. The particulars of the arbitration cases, the original petitions and appeals are as under.
Sl.
No. Arbitration Application No. O.P.
No. C.M.A.
No. Name of the appellant Amount Claimed/
Amount awarded
Rs. Counter Claim/
Amount awarded
Rs.
2 of 2001 1297 of 2002 973 of 2005 M/s.Mercury Metal Corporation
(Partnership firm) 65,56,675/
--- 24,28,177/
2,51,029
4 of 2001 980 of 2002 999 of 2005 M/s.Sri Satya Sai Metal Industries
(Partnership firm) 98,64,667/
7,75,729 17,18,072/
---
8 of 2001 1045 of 2002 539 of 2006 M/s.Ramakrishna Engineering Enterprises
(Partnership firm) 36,45,982/
6,84,463 ---
1 of 2001 1729 of 2002 674 of 2006 M/s.Chebrolu Enterprises 1,17,42,655/
18,94,531 23,82,004/
----
3 of 2001 913 of 2003 675 of 2006 M/s.Sri Ramakrishna
Metal Industries
(Partnership firm) 96,259/
--- 38,609/
24,554
Background facts
2. The Government of Andhra Pradesh launched ‘ADARANA’ scheme. It envisages supply of tools to village artisans like black smiths, carpenters, dhobis etc. Under the scheme, Dhobis are to be supplied Iron boxes, buckets and banas (Rajaka tools). The Corporation was entrusted with procurement and supply of Rajaka tools to identified backward class beneficiaries.
3. In response to notice, the appellants, who are manufacturers/ dealers of Rajaka tools, participated in the exhibition at Vijayawada, Bhongir and other placed in 1998. Series of meetings were held thereafter and on invitation, the appellants gave their quotations in January, 1999 agreeing to supply Dawaleswaram variety iron boxes at Rs.244/- per kg, and buckets and banas at Rs.262/- per kg. The Corporation then entered into an agreement on 18.01.1999 or 19.01.1999 under which appellants were required to make supplies as per the indent placed by respective District Backward Class Cooperative Societies (District Society, for brevity). The supplies commenced on 18.02.1999. In the meanwhile, the negotiations were held between suppliers and committee of three District Collectors. The result was reduction of price to Rs.207/- per kg for iron boxes and Rs.216/- per kg for other items as agreed by the appellants. Again there were discussions with Managing Director and Chief Consultant/Special Officer of Corporation on 15.05.1999. There was a further reduction of brass vessels to Rs.174/- per kg exclusive of sales tax in respect of six coastal Districts, namely, Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari and Krishna and Rs.200/- per kg for other Districts exclusive of sales tax. There were further negotiations by Purchase Finalisation Committee (PFC) on 20.05.1999 when the appellants agreed to reduce the price of Rajaka tools to Rs.165/- per kg in six coastal Districts and Rs.190/- per kg in other Districts. The Corporation then issued a circular on 21.05.1999 fixing the rates accordingly. This was followed by another circular on 18.06.1999 directing Executive Directors of District Societies not to pay at a rate more than Rs.150/- per kg for six coastal Districts and Rs.175/- per kg for other Districts in respect of banas and buckets. Again on 03.09.1999, Corporation reduced the rate of Iron bo
