212 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-3249-2016 (O&M)

Date of decision: 27.10.2025 M/S GANPATI POLYMERS ...Appellant(s)

VERSUS THE PUNJAB STATE COOPERATIVE SUPPLY AND MARKETING FEDERATION LIMITED AND ANOTHER ...Respondent(s)

CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI Present:- Mr. D. K. Singal, Advocate for the appellant.

Mr. Vikas Singh, Senior Advocate with Ms. Anamika Sheoran, Advocate for respondent No.1.

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JASGURPREET SINGH PURI, J. (Oral)

1. The present appeal has been filed challenging the judgment dated 08.01.2016 passed by the learned Additional District Judge, Chandigarh, whereby the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) was dismissed.

2. While narrating the facts of the present case, Mr. D. K. Singal, learned counsel for the appellant submitted that respondent No.1-claimant had invited tenders through a newspaper advertisement dated 29.06.2012 for the purchase of polypack bags and the appellant-firm having quoted the lowest rates was awarded the contract pursuant to an agreement executed between the parties. The total order was for the supply of 5 lakh PP bags, which was placed with the appellant-firm. He further submitted that these PP bags are used for packaging cattle feed and out of the total quantity ordered, the appellant-firm supplied 10300 PP bags of different sizes to respondent No.1-Federation. He further submitted that the remaining PP bags were yet to be supplied but in the meantime, respondent No.1-Federation revoked the contract, although no order in this regard was placed on record before the learned Arbitrator and rather respondent No.1 purchased the remaining PP bags from some other firm and on the pretext of risk and purchase costs, Clause 7 of the agreement was invoked and thereafter, a claim petition was filed by respondent No.1 before the learned Arbitrator seeking recovery of an amount of approximately Rs.5,50,000/-.

3. Learned counsel for the appellant further submitted that when respondent No.1 filed the claim petition before the learned Arbitrator, the same was contested by the appellant. He further submitted that the appellant also filed a counterclaim, which is attached with the present appeal as Annexure A-3 and the said counterclaim comprised four components i.e. pending payment for the supply of material amounting to Rs.1,21,717/-, earnest money amounting to Rs.50,000/- not released, interest from the date of accrual up to date of payment @ 18% per annum and costs amounting to Rs.2,00,000/- and in this way, the total counterclaim amounted to approximately Rs.4,00,000/- along with interest. He further submitted that the fact that the appellant also filed a counterclaim before the learned Arbitrator is not in dispute and the same rather reflects in the award passed by the learned Arbitrator and also in the judgment passed by the learned Additional District Judge, Chandigarh, while deciding the objections under Section 34 of the Act. He further submitted that even after noticing that the counterclaim had been filed, the learned Arbitrator made no observation at all and did not adjudicate upon the same and rather remained totally silent on the fate of the counterclaim admittedly filed by the appellant, whereas on the other hand, the claim of respondent No.1-claimant to the tune of approximately Rs.5,50,000/- was allowed without even considering the fate of the counterclaim.

4. Mr. Singal further submitted that when the appellant filed objections under Section 34 of the Act before the learned Additional District Judge, Chandigarh, the learned Court noted down the aforesaid aspect pertaining to non-adjudication of the counterclaim but failed to consider and decide as to what would be the fate of non-adjudication of the counterclaim, whereas on the other hand, it was so observed by the learned Additional District Judge, Chandigarh that the counterclaim made by the appellant was taken into conside