IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD.

THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE GADI PRAVEEN KUMAR C.M.A. No.715 of 2005 Date of Judgment: 04-05-2026 Between :

M/s.Ashok Kumar Rakesh Kumar …. Appellant And

1.M/s.Andhra Pradesh Foods, I.D.A. Nacharam, Hyderabad and three others .… Respondents.

JUDGMENT: (per Hon’ble Justice Gadi Praveen Kumar Heard Sri Surya Satish, learned counsel appearing for the appellant and Sri Cheruku Ravi Kumar, the learned Assistant Government Pleader representing the learned Advocate General appearing for the respondent No.1.

2. The present Appeal is filed by the appellant assailing the order dated 08.02.2005 passed by the XIV Additional Chief Judge, City Civil Court at Hyderabad (Fast Track Court) (for short ‘the Trial Court’), which is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the 1996 Act’) to set aside the Award dated 23.05.2001 passed by the learned Arbitrators in favour of the respondent No.1.

3. The respondent No.1 is the Andhra Pradesh Nutrition Council, a Society registered under the Telangana Area Public Societies Registration Act, 2001 (erstwhile united Andhra Pradesh) and fully owned by the Government. The respondent No.1 Society is a non-profit Organization established to provide nutritious food to school and pre-school children, pregnant women and lactating mothers and others by the Government.

4. On 30.09.1996, the respondent No.1 called tenders for supply of golden yellow coloured jaggery powder required for manufacturing the nutritious food to supply to the children etc. Initially, the said tender was allotted in favour of a third party, and on the appellant filing Writ Petition, the appellant’s case was also considered, and after negotiations, the tender of the appellant was accepted by proceedings dated 31.01.1997. The appellant and respondent No.1 have entered into an agreement on 04.01.1997 for supply of 4.200 Metric Tons (MTs) of jaggery powder. The appellant agreed to supply 420 MTs of jaggery powder in January, 1997 and thereafter at the rate of 378 MTs of jaggery powder each month upto November, 1997, but the appellant could not keep up the said promise and there was delay in supplying the jaggery powder from January, 1997 itself and as such, the respondent No.1 purchased sugar from the Nizam’s Sugar Factory. The appellant could supply 769.89 MTs of jaggery powder only between 22.01.1997 and 11.03.1997 and subsequently did not supply at all. The respondent No.1 initially issued notice dated 05.04.1997 calling upon the appellant to resume supply within three days and treating that otherwise, the agreement would be cancelled. The appellant did not resume the supply. As such, the agreement was terminated by letter dated

17.04.1997.

5. The respondent No.1 again purchased sugar for some time and later called for fresh tender and entrusted the work of supply of jaggery powder to two other Companies at a higher price. The respondent No.1 forfeited the Earnest Money Deposit (EMD) furnished by the appellant and encashed the Bank Guarantee and also demanded the appellant for payment of extra amount incurred towards purchase of sugar and payment of extra amounts to the new contractors. The appellant did not comply the same.

6. Ultimately, at the instance of both parties, the High Court appointed two Retired Judges i.e. (1) Sri Justice A.Venkatrami Reddy and (2) Sri Justice S.Dasaratharami Reddy as Arbitrators and Retired Chief Justice i.e., Sri Justice A.Lakshman Rao as the Presiding Arbitrator, before whom the both parties herein filed pleadings and adduced oral and documentary evidence.

7. The respondent No.1 claimed an amount of Rs.1,12,80,306.81 paise under different Heads upto 04.12.1999 and a sum of Rs.54,44,216.05 paise as interest upto 04.12.1999 and future interest 24% p.a. from 05.11.1999. The appellant herein denied the said claim and made a counter-claim for Rs.1,84,84,710.46 paise with interest at 24%