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2022 Supreme(P&H) 600

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Lisa Gill, J.
M/s G.d. Agro Foods – Appellant
Versus
Punjab State Warehousing Corporation & Anr. – Respondents
CR No.3232 of 2021 (O&M)
Decided On : 21-04-2022

Advocates Appeared:
Mr. Aditya Grover, Advocate; for the Petitioner.; Mr. Jastej Singh, Advocate; for Respondent No.1.

The amended procedural provisions of the Arbitration Act are applicable retrospectively to pending arbitral proceedings, and interference by the court is limited to cases of exceptional rarity or clear bad faith.

Headnote:

Arbitration Act - Civil Revision - Section 29-A

Fact of the Case:

Dispute arose between the petitioner and Punjab State Warehousing Corporation (PSWC) regarding a milling agreement. The respondent filed a claim for recovery, and the petitioner sought termination of the mandate of the sole Arbitrator under Section 29-A of the Arbitration Act.

Finding of the Court:

The court found that the amended provisions of the Arbitration Act, which are procedural in nature, are applicable retrospectively to all pending arbitral proceedings. The court declined to interfere in the arbitration proceedings, as no exceptional rarity or bad faith was demonstrated.

Issues: The issues revolved around the termination of the mandate of the Arbitrator, the applicability of the amended provisions of the Arbitration Act, and the petitioner's attempt to delay the disposal of the claim petition.

Ratio Decidendi: The court's decision was based on the retrospective applicability of the amended provisions of the Arbitration Act and the lack of exceptional rarity or bad faith to warrant interference in the arbitration proceedings.

Final Decision: The revision petition was dismissed for being devoid of merit, and the parties were allowed to raise legally permissible pleas before the competent authority.

JUDGMENT

Lisa Gill, J. - This civil revision has been filed by the petitioner for setting aside order dated 29.11.2021 (Annexure P-24), passed by respondent no.2-the Sole Arbitrator, wherein cross-examination was closed by order and application under Section 29-A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Arbitration Act) filed by the respondent with regard to termination of mandate of the learned sole Arbitrator, was directed to be disposed of along with the main case at the time of award and matter listed for arguments.

2. Brief facts necessary for adjudication of this matter as pleaded in this petition are that petitioner and respondent no.l i.e. the Punjab State Warehousing Corporation (for short PSWC) entered into a milling agreement on 21.10.2017 for custom milling of the central pool paddystocks pertaining to crop year 2017-18 and delivery of rice to FCI, as per various clauses of Punjab Rice Procurement, (Levy) Order, 1983 as amended from time to time. Allotment of paddy was made to the petitioner, however, dispute arose between the parties. FIR under Section 323, 324, 325 IPC was registered against the petitioner at Police Station Badhni Kalan and when the petitioner was under arrest, it is alleged that the rice mill was illegally taken over by the respondent-Corporation.

3. Sole Arbitrator was appointed by respondent no.l on 10th of July, 2018 and claim for recovery of Rs. 1,99,69,774/- was filed by respondent no.l, which included the component of interest calculated up to 15.06.2018 with a claim of further interest at the rate applicable till recovery of the claim amount. It is further stated that respondent no.l filed an application under Section 17 of the Arbitration Act, which was allowed on 13.08.2018. An application under Section 12 of the Arbitration Act (Annexure P-4) was filed on 31.08.2018 by the petitioner to which reply (Annexure P-5) was filed by respondent no.l. Said application was rejected on 18.03.2019 (Annexure P-7) by the learned Arbitrator. An application under Section 16 of the Arbitration Act (Annexure P-8) is also stated to have been filed by the petitioner on 31.08.2018. Reply to the same was filed by respondent no.l with written submissions stated to have been submitted by the petitioner on 28.01.2019. Application under Section 16 of the Arbitration Act was dismissed by the learned Arbitrator on 18.03.2019 (Annexure P-ll). It is further stated that petitioner on 14.01.2019 filed an application under Section 19 of the Arbitration Act with regard to venue and timings of the arbitration proceedings (Annexure P-12), which was dismissed by the learned Arbitrator on 18.03.2019 (Annexure P-14).Ultimately, petitioner is stated to have filed its reply to the claim on 15.04.2019. Replication thereto was filed by respondent no.l on 08.07.2019. Subsequently, petitioner filed its counter claim on 15.03.2021 inter alia seeking recovery of Rs.3,45,86,016/- along with interest. Reply thereto was filed by the Corporation with a rejoinder also being submitted by the petitioner. The matter was thereafter listed for claimant's evidence. Averments have been made in the petition regarding certain adjournments being given by the learned Arbitrator to facilitate the officials of respondent no.l but not for once facilitating the petitioner. Convenience of the officials of the claimant-Corporation, it is stated, was taken into account looking to the paddy season. Ultimately, petitioner, it is stated, filed an application dated 29.11.2021 seeking termination of the mandate of the learned Arbitrator on the grounds that the Arbitrator seems to be bent upon obliging the claimant-Corporation as he was granting adjournments at their asking without even seeking concurrence from the petitioner leading to a reasonable apprehension in the mind of the petitioner regarding absence of impartiality of the learned Arbitrator. It is further stated that as the learned Arbitrator had entered reference in

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