The 'as is where is' clause does not absolve the seller from delivering goods fit for consumption, especially when quality issues arise.

JUDGMENT :

HARISH VAIDYANATHAN SHANKAR, J.

CM APPL. 44315/2025 (for delay)

1. By way of the present application filed under Section 5 of the Limitation Act, 1963, the Applicant/Appellant seeks condonation of delay of 81 days in filing the present appeal.

2. For the sufficient reasons stated in the application, the delay is condoned.

3. Accordingly, the present application stands disposed of.

CM APPL. 44316/2025 (for exemption)

1. Allowed, subject to all just exceptions.

2. The application shall stand disposed of.

FAO (COMM) 192/2025 & CM APPL. 44314/2025 (for stay)

1. The present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996, [1A&C Act]and Section 13 of the Commercial Courts Act, 2015 raises a challenge to the impugned Judgment dated 01.02.2025 passed by learned District Judge (Commercial Court-01), Patiala House Courts, New Delhi in ARBTN 3047/2018 titled as PEC Limited v. M/s Badri Singh Vinimay Pvt. Ltd. & Anr, wherein the Arbitral Award dated 02.04.2018, [The Award] has been upheld by the learned District Judge.

PLEADINGS

2. Shorn of unnecessary details, the crux of the present Appeal relates to Tender bearing No.PEC/PUL/DOM/TDR/XCVII/11, [The tender] which was floated by the Appellant on 27.08.2011 herein for the purpose of lifting of various kinds of crops and lentils, including 100 Metric Tons, [M.T.] of Canadian-origin Red Lentils, on the specific terms of “as is where is basis”. It is the stated case of the Appellant that the said tender provided for lifting of the lentils on “as is where is basis” for the original quantity of 100 M.T., which was subsequently raised to 300 M.T. vide Approval Letter dated 09.09.2011.

3. Respondent No. 1 emerged as the highest bidder at a rate of Rs.25,500/- per M.T. As per the Tender terms, the material was to be lifted from the Appellant’s godown at Kolkata on an “as is where is basis” within a stipulated period of 30 days. only “sound and good condition” cargo would be accepted.

4. Pursuant thereto, Respondent No. 1 deposited a sum of Rs.36,45,844/– with the Appellant, inclusive of Rs.2,50,000/– as Earnest Money Deposit, [5EMD], sufficient for purchasing 110 M.T. of cargo.

5. Disputes arose after Respondent No. 1 lifted approximately 83.94 M.T. of the lentils and alleged that the consignment was mixed and partially damaged. A formal complaint with respect to the quality was lodged on 02.12.2011 by the Respondent No. 1, notifying the Appellant of their inability to take delivery of the damaged cargo and seeking a refund of the excess amount paid. The Appellant rejected the request, citing the “as is where is” clause in the Tender.

6. Following failed negotiations, a joint Third-Party Survey for the inspection of the cargo, in the presence of both parties, was conducted on 13.02.2012. As per the survey report dated 23.03.2012, approximately 70% of the total stock was found to be in “damaged condition”. Thereafter, Respondent No. 1 proceeded to lift only that portion of the cargo which was found to be in “sound condition” and eventually took delivery of 111.28 M.T., which is not disputed by either party.

7. Respondent No. 1 thereafter raised a claim of Rs. 7,58,854/-, which was rejected by the Appellant, who forfeited the EMD and withheld the excess amount.

8. The matter was referred to arbitration under the terms of the Contract. Vide Arbitral Award dated 02.04.2018, the learned Sole Arbitrator allowed the claim of the Respondent in part, directing the Appellant to refund Rs. 5,67,864/- along with 10% interest per annum from 25.03.2012 till 15.07.2014.

9. Being aggrieved with the Arbitral Award, the Appellant filed an application under Section 34 of the A&C Act before the learned District Judge. Vide the Impugned Judgement, the learned District Judge upheld the Arbitral Award, stating that the conclusion drawn by the learned Sole Arbitrator is well-reasoned as per the terms and conditions of the a