The absence of a liability clause for the lessor in the Custom Milling Policy for KMS 2000-2001 and the lack of any undertaking by the lessor regarding the lessee's liabilities absolved the lessor from financial responsibility.

JUDGMENT :

Jagmohan Bansal, J.

1. By this common order, CWP No. 26049 of 2022, CWP No. 25565 of 2022 and CWP No. 29929 of 2022 are hereby adjudicated as common questions of law and facts are involved. With the consent of both sides, facts are borrowed from CWP No. 26049 of 2022.

2. The petitioner through instant petition under Article 226 of the Constitution of India is seeking setting aside of notices dated 31.10.2022 (Annexure P-1) and 10.11.2022 (Annexure P-2) whereby petitioner has been called upon to deposit a sum of Rs.12,98,858/- awarded by Arbitrator in favour of respondent-MARKFED.

3. The petitioner, a proprietorship concern, is engaged in the business of milling rice. The petitioner during 2000-2001 leased out its premises to M/s Swami Traders, Sirhind (in short “lessee”). The said firm applied for allotment of paddy to State Government. The Paddy was allotted to lessee and delivery of paddy was made by MARKFED i.e. State agency. The lessee delivered resultant product i.e. rice to FCI. A dispute arose between lessee and MARKFED with respect to cost of gunny bags. The respondent-MARKFED referred the matter to an Arbitrator who vide award dated 05.08.2022 accepted claim of MARKFED and held that lessee is liable to pay a sum of Rs.12,98,858/-. The relevant extracts of the award dated 05.08.2022 passed by Arbitrator read as:-

“7. According to the statement of District Manager, the miller has made payment of the provisional cost of bardana retained by the miller. However, the Director Food and Supplies vide letter Ex.P-3 conveyed the final rate of bardana for the crop year 2000-2001 and the miller is required to pay cost of bardana at the rate of Rs.14.87. According the statement of recovery produced Ex. P-4 it is evident that, a sum of Rs.1298858/- is the amount to be recovered on account of difference of cost of gunny bags numbering 57595. As the payment of the amount has not been made by the miller, claimant has claimed interest at bank rate which ranges from 9.10 % to 10.30% as calculated and Ex.P-5 contains the details of interest claimed by the claimant from the respondent. Senior Accounts Officer Mr. Narinder Kumar has fully proved the calculations made regarding the recovery of principal and interest and there is no reason to disbelieve the same. The respondent did not come to contest the claim petition for the amount claimed by the claimant from the respondent and therefore there is no alternative except to pass an award for a total sum of Rs.1298858/- on account of principal and interest.

8. In view of the above discussion, the claim of the claimant is accepted and the claimant is entitled to recover a total sum of Rs.1298858/-(Rupees 204405/- being Principal amount and Rs.1094453/- being interest at bank rate till 31.03.2022) up to 31.03.2022. The claimant will also be entitled to get interest on this amount at the rate of 8% per annum from 01.04.2022 till payment is made. The award on a stamp paper of rupees 120 has been got typed, signed by me and announced and published.

9. A copy of this award be sent to both the parties under registered cover and the original award alongwith file be deposited in the Arbitration Branch of the Markfed.”

4. On the basis of aforesaid award, the respondent vide impugned notices has called upon the petitioner to pay the aforesaid awarded amount. It is apt to mention here that MARKFED has issued notice to the petitioner as well as lessee.

5. Mr. Daman Dhir, Advocate, submits that petitioner had let out its premises to lessee and a dispute arose between the lessee and MARKFED. A reference to Arbitrator was made against lessee and proceedings before the Arbitrator concluded between MARKFED and lessee. The petitioner was not part of proceedings before the Arbitrator. The petitioner had not furnished any undertaking at the time of allotment of paddy, thus, the petitioner cannot be held responsible for any dispute between MARKFED and lessee or liability arising against lessee.

6. Per contra, Mr