IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Date of Decision:29.01.2026 The Punjab State Co-operative Supply and Marketing Federation Ltd.

versus ......applicant M/s S.S. Gumber Rice Mills and another ......Respondents

2 RA-CR-41-CII-2017 in FAO-5427-2009 The Punjab State Co-operative Supply and Marketing Federation Ltd.

Versus ......applicant M/s M.L.Rice Mills Jalalabad (West), Tehsil Jalalabad (West), District Ferozepur and another ......Respondents CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI Present:- Mr. Sumit Jain, Advocate and Mr. Abhishek Arora, Advocate, for the applicant-appellant.

Mr. Akhil Kashyap, Advocate for respondent No.1.

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JASGURPREET SINGH PURI J.(Oral)

1. Both the above-mentioned cases are being taken up together for final disposal with the consent of learned counsel for the parties as the issues involved are inter-connected and therefore are being disposed of by this common order.

2. For the purpose of narrating the facts of the case, reference is made to RA-CR-66-CII-2017 in FAO-5426-2009

3. The present is a review application filed by the applicant- appellant seeking review of the judgment dated 16.10.2015 passed by a Coordinate Bench of this Court

4. Learned counsel appearing on behalf of the applicant- MARKFED submitted that in the award passed by learned Arbitrator, interest at the rate of only 18% has been granted, whereas, as per the terms of the contract, interest was required to be granted @ 21%. He submitted that because of the aforesaid reason, that the award was against the terms of the contract, the present application has been filed seeking review of the judgment passed by a Coordinate Bench of this Court whereby the first appeal under Section 37 of the Arbitration and Conciliation Act (hereinafter referred to as the ‘Act’) was dismissed.

5. While making submissions, learned counsel for the applicant- MARKFED, referred to Clause No.6(iii) of the agreement which provides that in the event of respondents’ failure to supply rice within the stipulated period, they shall be liable to pay interest @ 21% on the basis of economic cost of left over quantity/stocks of paddy/rice. The decision of MARKFED Managing Director in this behalf shall be final.

6. Learned counsel further submitted that since it has specifically been provided in the terms of the agreement that where the miller has supplied rice beyond the stipulated period, he shall be liable to pay interest @ 21% on the basis of the economic cost, whereas learned Arbitrator has granted interest @ 18% and therefore the aforesaid award is contrary to the terms and conditions of the contract. Therefore, that part of the award is liable to be set aside.

7. On the other hand, learned counsel appearing on behalf of respondent No.1 submitted that no ground is made out for review in the present case in view of the fact that earlier the applicant–MARKFED had filed a claim before learned Arbitrator and thereafter a revised claim was also filed wherein interest at the bank rate was demanded. The learned Arbitrator thereupon awarded interest @ 18% per annum. However, the applicant was not entitled to the grant of interest @ 21% in pursuance of the aforesaid clause, inasmuch as under the said clause such interest falls within the “excepted category” since it specifically provides that the decision of the Managing Director of MARKFED in this behalf shall be final. Where the decision of the Managing Director is final, the same falls outside the purview of the arbitration process and becomes non-arbitrable in view of Clause 18 of the aforesaid agreement which provides for arbitration. This was the precise reason that learned Arbitrator also refused to grant interest @ 21%, holding the same to be outside the scope of learned Arbitrator. In this regard, he referred to paragraph No. 6 of the award, wherein it was observed by learned Arbitral Tribunal that it did not have jurisdiction to rule upon the aforesaid claim with regard to interest @21%, since the