Fci v. M/S Kultar Singh & Brothers & Ors

NAVIN CHAWLA, J FEBRUARY 01, 2018/rv

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP 55/2015 Reserved on: 3rd January, 2018 Date of decision: 1st February, 2018 FCI ……Petitioner Through: Mr.Rajeev Sharma, Adv. Versus M/S KULTAR SINGH AND BROTHERS AND ORS ..... Respondents Through: None. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner challenging the Impugned Arbitral Award dated 12.09.2014 passed by the Sole Arbitrator appointed by the Indian Council of Arbitration in Arbitration Case No. 907/2010 titled Food Corporation of India v. M/s Kultar Singh & Brother and others. 2. The disputes between the parties relate to the claim of damages by the petitioner under the Agreement for 'Storage-Cum-Milling of FCI Paddy Stored in Millers Permises into Conventional Raw/Parboiled Rice' dated 21.02.1995 (hereinafter referred to as the 'said agreement'). Page 2 3. In terms of the said agreement, the petitioner had supplied 18,560 bags = 12064-00-000 quintal of paddy of super fine quality to the respondent no. 1 for the purpose of storage and milling of the rice. Some of the terms of the said agreement are reproduced herein below:- "4. The miller shall deliver to the corporation a quantity of whole rice equal to the various types of paddy lifted and shelled by him with 2% driage allowance on standard procurement weight with district wise out – turn given below:- District Rice Variety Rice Recovery Parboiled Raw ------- Common 70% 69% ------- Fine/Superfine 68% 67% The above rice recovery ratio and specifications shall be subject to amendment by FCI / Govt. of India. Paddy will be issued on DFSC pattern. Xxxxxx 7. The miller shall be responsible for the safe custody of paddy issued to him for milling and delivery of rice, as per agreed and recovery of out - turn ratio. Miller shall also make good the losses that may be incurred in paddy / rice during transit/storage at 1.5 times the economic cost of the variety of paddy/rice towards the shortfall. 8. i) The miller shall ensure that the resultant rice after milling of paddy is aerated for 72 hours before begging. ii The degrees of polish given to rice shall be 3 to 5% and shall not contravene the provisions of rice Milling Industries Page 3 (Regulation and Licensing) rules, 1959 as amended from time to time. iii In case there is shortfall in the recovery of rice. The miller shall pay to the corporation the cost of paddy equivalent to the shortfall at the rate of 1 & half times the economic cost of paddy. iv The byproducts viz ; broken rice , rice kani , nakoo , phak and rice bran etc obtained in the shelling of paddy shall be the property of the miller and the Corporation shall have no responsibility in regard to these. v The miller will be paid shalling and other charges at the milling operations are completed and the entire rice is delivered to FCI 9. i) The entire quantity of rice of all varieties delivered miller to the corporation shall confirm to the specifications as fixed by the Govt. of India as amended from time to time and in any other orders or NOTIFICATIONS issued by the Govt. of India from time to time. The stocks of rice not confirming to the specifications so laid down, shall be liable to be rejected in respect of such quantity of rice which is not found to be within specifications and the miller shall be liable to offer fresh stocks of rice confirming to the specifications to the corporation. In the event of his failure to supply rice within the prescribed specifications, he shall be liable to pay to the corporation for the quantity of rice short supplied at the penal rate of one and half times, the economic cost of the converted variety of paddy equivalent to the shortages. The decision of the Sr. Regional Manager, Food corporation of India Punjab (Hereinafter referred to as the SRM) in this behalf shall be final. ii) The stocks of rice shall also be subject to the inspections of the staff of the corp