M/S Jakki Mull & Sons v. Jagdish Thakral

NAVIN CHAWLA, J NOVEMBER 01, 2017 RN/sd

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP 30/2009 Reserved on:24th October, 2017 Date of decision : 1st November, 2017 M/S JAKKI MULL & SONS ..... Petitioner Through: Mr.Sachin Dutta, Sr. Adv. with Mr.Sushil Shukla, Ms.S.Jain and Mr.Suhael Buttan, Advs. versus JAGDISH THAKRAL ..... Respondent Through: Mr.Arvind Kumar Gupta, Mr.Prashant Bhardwaj, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) has been filed by the petitioner challenging the correctness and validity of the Award dated 22nd September, 2008 passed by the Sole Arbitrator in the arbitration proceedings between the parties. 2. The primary challenge to the Arbitration Award is on the ground that the Sole Arbitrator has committed a patent error in not considering the counter claim of the petitioner. 3. To answer the above contention, the following sequences of events are to be noted and appreciated. Page 2 4. The dispute between the parties had arisen out of an agreement dated 18th September, 1994 executed between M/s Child Shoppe through the respondent as 'Principal' and M/s Jakki Mull & Sons, the petitioner herein as the 'Agents'. 5. Clause -1 of the agreement provided that it shall come into force w.e.f. 1st October, 1994 and shall continue for a period of 3 years upto 30th September, 1997. Clause-2 of the agreement provided that the supply of goods by the Principal to the agents shall be on consignment basis only and the sale proceeds of the goods shall be remitted by the agents to the principles. Clause-10 entitled the agents to deduct 20% of net sales effected at the show-room as their commission excluding sales tax, except in the cases of clearance sales and bulk supplies to the schools and other institutions, on which a lesser commission was payable. Clause 22 of the agreement is important for the present adjudication and is therefore, reproduced hereunder:- "That in the event of termination of agreement or on the expiry of the stipulated time, agents shall surrender to the principles Furniture & Fixture provided by the principles at the said showroom and the principles shall remove the same at their cost together with unsold stocks." 6. Clause 23 of the agreement contains the arbitration agreement and provides that the disputes shall be referred for adjudication by a Sole Arbitrator. 7. It is the case of the petitioner that the agreement expired by efflux of time on 30th September, 1997 where after the petitioner had requested Page 3 the respondent to remove the goods as well as the furniture and fixtures. It is further contended that as the goods were not removed by the respondent from the showroom of the petitioner till August, 1998, the petitioner had no other option but to close down the showroom w.e.f. 1st September, 1998. The petitioner further alleges that by communications dated 22nd February, 2000, 11th April, 2000 and 22nd April, 2000, it had again reiterated its request to the respondent to remove its stock as well as the fixtures and fittings. 8. On the other hand, the respondent claimed that respondent had not been paid for the sales made by the petitioner after 21st June, 1997 till the closure of the shop on 1st September, 1998. The respondent further claimed damages for the closure of the shop w.e.f. 1st September, 1998. 9. Respondent invoked the arbitration agreement and filed Arbitration Application No.119/2000 before this Court seeking appointment of an Arbitrator. 10. The petitioner, who was the respondent in the above Arbitration Application, filed its Reply and Counter Claim in the above Arbitration Application. In the said Reply and Counter Claim, the petitioner herein claimed Rs.1.5 lacs per month from the respondent w.e.f. 1st October, 1997 till such time the respondent herein takes back the furniture and fixtures and unsold stock from the showroom. Such amount was claimed upto 30th September, 2000 and as a total