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2002 DIGILAW 766 (BOM)

MMTC Ltd. v. Sterlite Industries (India) Ltd.

2002-08-05

D.Y.CHANDRACHUD

body2002
JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---Admit. The respondents waive service. By consent taken up for hearing and final disposal. 2. In these proceedings under section 34 of the Arbitration and Conciliation Act, 1996, the validity of an Award dated 27th June, 2001 is sought to be called in question. By the view taken by a majority consisting of two learned Arbitrators (Mr. Justice M.H. Kania and Mr. Justice M.N. Chandurkar) the claim preferred by the respondent has been allowed to the extent as would be set out hereinafter. One of the learned Arbitrators (Mr. Justice S.N. Sapra) has delivered a dissenting Award. The Facts. The agreement between the parties: 3. An agreement was entered into on 14th December, 1993 between the petitioner and the respondent by which the respondent appointed the petitioner as a consignment agent for the storage, handling and marketing of continuous cast copper rods manufactured by the respondent. The agreement provided, in so far as is material, that the petitioner will store, handle and market these copper rods produced by the respondent and received at various godowns of the petitioner from the respondent. Clause (I) A(iv) provided that the petitioner shall sell the aforesaid material belonging to the respondent on consignment basis "as per the policy and prices" of the respondent on the basis of the marked weight in the coils supplied by the respondent. By sub-clause (viii) of Clause (I)A, it was provided that the petitioner would collect the sale proceeds and the amount will be remitted on the following working day to the respondent after withholding the sales tax. Turnover tax and any other statutory cess, levy or tax. Besides the aforesaid deductions the petitioner would be entitled to deduct its service charges at the rate of Rs. 500/- per metric tonne. Rs. 500 per metric tonne then, was the remuneration to which the petitioner was entitled. Under sub-clause (xi) of Clause (I)A, the petitioner was to provide for a copy of a statement of sales tax deposited with the sales tax authorities along with an F Form in original and copies of challans and returns. Sub-clause (xiv) stipulated that the petitioner shall sell only against "100% advance financial arrangement to be made by the customer". Under sub-clause (xi) of Clause (I)A, the petitioner was to provide for a copy of a statement of sales tax deposited with the sales tax authorities along with an F Form in original and copies of challans and returns. Sub-clause (xiv) stipulated that the petitioner shall sell only against "100% advance financial arrangement to be made by the customer". The obligations of the respondent were specified in Clause (I)B of the Contract and these obligations included an obligation in sub-clause (i) to arrange for delivery of continuous cast copper rods to the godowns of the petitioner as intimated by the petitioner from time to time; an obligation under sub-clause (vii) to ensure quality and to redress customer complaints and under sub-clause (xi) not to appoint any selling agents or commission agents for sale in States agreed to with the petitioner. Under Clause (III) of the contract, it is provided that the products shall be of standard quality and the petitioner shall not give a guarantee or warranty save to the extent as mentioned by the respondent. Provision was also made therein for the rectification and redressal of the customer grievances. Clause V provided that the agreement shall be deemed to have commenced on 14th December, 1993 and shall be valid for an initial period of three years. Either party could terminate the agreement by giving one months notice in writing. There is no dispute about the fact that the agreement was not terminated. The contract between the parties contains a provision for arbitration and Clause VII provides in that regard that in the event of any question or dispute arising under or out of or relating to the construction, meaning and operation or effect of the agreement or breach thereof, the matter in dispute shall be referred to arbitration. Modified Payment Terms: 4. The contract between the parties was initially varied on 6th January, 1994 in terms of a Memorandum of Understanding (MOU) which was arrived at between the parties. The MOU provided for a modification of the payment terms and the relevant part thereof was thus: "1) In view of customer requests Sterlite is agreeable to provide following two facilities to customers and the same can be agreed by MMTC: A) Acceptance of usance L/Cs with a maximum credit period of 90 days with interest and all bank charges to be borne by the purchaser. B) Supply of material against stand by L/Cs where payment is made for the material lifted after a maximum period of 3 weeks with interest being borne by the customer from the date of despatch to the date of payment. The sight L/C which is established by the customer serves as a security for the transaction. Interest amount for the credit period of 21 days maximum is to be paid in advance at the time of liftment of material. This facility to be provided selectively and after confirmation on case to case basis with M/s. Sterlite. 2) In both the above cases it is the total responsibility of MMTC to ensure that the L/C which is established on them is bona fide in all respects and that payment for the principal along with the interest would be made on the due date for supplies made against the particular L/C. Similarly in the case of stand by L/Cs it is the responsibility of MMTC to ensure that in case of failure of customer to make the payment on the due date, the stand by L/C would be negotiated timely and the proceeds credited to STERLITE for the principal and the interest. 3) Interest will be charged at the prevailing bank rate. The current interest rate is 18.25% per annum." Consequently, it was agreed between the parties that it will be open to the petitioner to grant credit facilities to customers subject to the condition that it would be against a usance letter of credit with a maximum credit period of 90 days with interest. In the alternative, the material could be supplied against a stand by letter of credit, where payment is made for the material lifted after a maximum period of three weeks with interest. This facility was to be provided after confirmation on a case to case basis by the respondent. The MOU however, provided that it would be the "total responsibility" of the petitioner to ensure that the letters of credit which were established were bona fide in all respects and that payment for the principal along with interest would be made on the due date for supplies made against the particular letter of credit. The MOU however, provided that it would be the "total responsibility" of the petitioner to ensure that the letters of credit which were established were bona fide in all respects and that payment for the principal along with interest would be made on the due date for supplies made against the particular letter of credit. Similarly, in the case of a stand by letter of credit, it was provided that it would be the responsibility of the petitioner to ensure that in case of the failure of the customer to make the payment on the due date, the letter of credit would be negotiated timely and the proceeds credited to the respondent both for the principal and the interest. Interest was to be charged at the prevailing bank rate and the M.O.U. provided that the prevailing rate was 18.25% per annum. 5. After the M.O.U. dated 5th January, 1994, a meeting took place between the parties on 20th January, 1994 and the minutes of the meeting contain a further revision of the agreed payment terms that were to govern the contractual relationship. Para 1(c) of the minutes stipulates that the petitioner could extend credit to customers of CC rods on its own terms and responsibility but, payment to the respondent would have to be effected upon the delivery of CC rods to the customer. The Dispute: 6. The dispute in the present case arises out of supplies which were admittedly effected by the respondent to the petitioner at the godowns of the petitioner. These goods came to be sold by the petitioner as consignment agent on behalf of the respondent. The claim relates to the period after April 1995. The case of the respondent is that payments have not been made over to the respondent by the petitioner in respect of the consignments of continuous cast copper rods which were supplied by the respondent to the petitioner and which were admittedly sold by the petitioner to various purchasers. Admittedly, and on this there is no dispute between the parties, in respect of these consignments which were sold, the petitioner has charged its service charges at the rate of Rs. 500/- per metric tonne. Admittedly, and on this there is no dispute between the parties, in respect of these consignments which were sold, the petitioner has charged its service charges at the rate of Rs. 500/- per metric tonne. Similarly, there is no dispute between the parties and, there was none before the arbitrators, that letters of credit as required by the agreement between the parties were duly opened in favour of the petitioner by the purchasers. The case of the respondent in the arbitration proceeding was that under the original agreement dated 14th December, 1993, the petitioner was to make delivery to the purchaser only against a 100% advance payment. This clause was amended subsequently so as to permit the grant of credit by the petitioner to purchasers subject to the purchaser opening a letter of credit as specified in the memorandum of understanding dated 5th January, 1994. The contention of the respondent is that the petitioner was responsible under the contract to ensure that the letter of credit was bona fide and that payment was made. The petitioner has admittedly received supplies from the respondent and sold them but payment has not been made to the respondent. The Arbitral Award: 7. The dispute between the parties came to be referred to the arbitration of three arbitrators Mr. Justice M.H. Kania, Mr. Justice M.N. Chandurkar and Mr. Justice S.N. Sapra. The parties led evidence before the arbitrators. By the Arbitral Award made on 27th June, 2001 two of the arbitrators, Mr. Justice M.H. Kania and Mr. Justice M.N. Chandurkar concerned in holding that the petitioner shall pay to the respondent a sum of Rs. 15,73,77,296/- with interest thereon at 14% per annum from 5th February, 1997 till the date of the Award and at 18% per annum thereafter; that the petitioner shall pay to the respondent an amount of Rs. 2.25 crores as interest on overdue payments upto 5th February, 1997. Besides these two operative directions of the learned arbitrators, the petitioner has been directed to furnish to the respondent, within a period of four weeks of the date of the Award, F Forms which are required for the purposes of sales tax and which the petitioner has failed to furnish to the respondent. Besides these two operative directions of the learned arbitrators, the petitioner has been directed to furnish to the respondent, within a period of four weeks of the date of the Award, F Forms which are required for the purposes of sales tax and which the petitioner has failed to furnish to the respondent. The arbitrators directed that in the event of the petitioner failing to do so, and the respondent being subjected to any liability on account of sales tax, the petitioner shall make good to the respondent the said liability with interest thereon at 18% per annum from the date such liability is discharged by the respondent till payment or realization. Costs of the arbitration were awarded to the respondent. Mr. Justice S.N. Sapra has delivered a dissenting Award. The Challenge under section 34: 8. Three submissions have been urged on behalf of the petitioner to challenge the Arbitral Award. The learned Counsel urged that: (i) The obligation of the petitioner to pay off the outstandings which the respondent is seeking to enforce in respect of one particular purchaser Hindustan Transmission Products Ltd. ("H.T.P."), arises out of an independent contract entered into between the petitioner and the respondent and it is, therefore, not covered by the terms of the arbitration agreement contained in the contractual document dated 14th December, 1993. Consequently, the arbitrators did not have the jurisdiction to entertain the dispute and acted outside the field of their jurisdiction. This ground of challenge is under section 34(2)(a)(iv). (ii) The Award is contrary to the public policy of India, in that H.T.P., the third party purchaser, has instituted a civil suit against both the petitioner and the respondent in this Court, which is pending. Reliance was sought to be placed on the provisions of Order 21, Rule 29 of the Code of Civil Procedure, 1908 and on the decision of the Supreme Court in (Krishna Singh v. Mathura Ahir)1, A.I.R. 1982 S.C. 686. The learned Counsel urged that the petitioner would be entitled to take out a third party notice in the suit which has been instituted by H.T.P. and to invoke an indemnity against the respondent. (iii) The dispute in respect of F forms, which the award has directed the petitioner to furnish to the respondent, was not within the terms of reference to arbitration. Each of the three submissions can now be considered. (iii) The dispute in respect of F forms, which the award has directed the petitioner to furnish to the respondent, was not within the terms of reference to arbitration. Each of the three submissions can now be considered. The submissions which have been made for and on behalf of the respondent will be duly noted while considering and assessing the correctness of the submissions which are raised on behalf of the petitioner. The First Ground of Challenge---The Arbitrability of the Dispute: 9. The respondent had in the claim lodged in the arbitral proceedings sought relief on the basis of the agreement that was entered into between the parties. Initially, the parties agreed on 14th December, 1993 that in acting as consignment agent, the petitioner shall effect delivery of goods sold against a 100% advance payment by the purchaser. This provision came to be amended subsequently on 5th January, 1994 so as to provide for a modification of the payment terms and thereafter again on 20th January, 1994. As a result, the petitioner was duly empowered to extend credit subject to the opening of a letter of credit as stipulated in the M.O.U. dated 6th January, 1994. The M.O.U. however, stipulated in unmistakable terms, that it was the "total responsibility" of the petitioner to ensure that the letter of credit established on it is "bona fide" in all respects and that payment for the principal along with the interest would be made on the due date". In the case of a stand by letter of credit, it was the responsibility of the petitioner to ensure that if the customer failed to pay on the due date, the letter of credit is negotiated timely and proceeds credited to the respondent for principal and interest. The minutes of 20th January, 1994 record that while the petitioner would extend credit to customers on its own terms and responsibility, payment to the respondent would have to be made upon the delivery of CC rods to the customer. 10. The case of the respondent was that in certain specific individual cases, it had been agreed with the petitioner that payment could be made to the respondent only upon the receipt by the petitioner from the individual customer. 10. The case of the respondent was that in certain specific individual cases, it had been agreed with the petitioner that payment could be made to the respondent only upon the receipt by the petitioner from the individual customer. However, the case of the respondent was that this was agreed upon only in specific cases and in all those cases, as a matter of fact, payments have been received. 11. The dispute in the arbitral proceedings related to supplies which were delivered to Hindustan Transmission Products Ltd. (H.T.P.). The case of the petitioner in the reply which was filed in the arbitral proceeding was that there were two types of customers, the first being customers, properly so called, of the petitioner in whose case it was agreed that the petitioner would extend credit to a customer as its own terms and responsibility and that payment to the respondent would be effected upon delivery of CC rods to the customer in the event of credit being extended. However, according to the petitioner, there was a second category of customers who according to the petitioner were essentially brought by the respondent. In their case, according to the petitioner, there was an understanding between the parties. The alleged understanding is spelt out in para 11 of the written statement filed in arbitration proceedings which reads thus: "It was understood and agreed expressly/impliedly that in relation to the credit extended to such customers of Sterlite, the sale would be in terms agreed to and/or settled and/or approved by Sterlite and payment of the principal amount and the interest would be made upon realisation of the amounts from such customers of Sterlite." This submission in the written statement was sought to be buttressed before the arbitrators by relying on a letter addressed by H.T.P. to the respondent on 14th July, 1994. The letter, in so far as is material, sets out the terms of an offer for the purchase of copper rods of the respondent by H.T.P. After setting out terms and conditions proposed, H.T.P. suggested that the interest rate should be 16% as against 17.25% which was charged by the respondent and that it should be allowed a special discount over and above a concessional rate of interest. The letter recorded that H.T.P. had started marketing the products of the respondent at Indore and had already lifted a substantial quantity. The letter recorded that H.T.P. had started marketing the products of the respondent at Indore and had already lifted a substantial quantity. H.T.P. also recorded that it had appointed an agent at Indore to whom it was paying Rs. 400/- per metric tonne. On 19th July, 1994, a communication was addressed by the respondent to H.T.P. setting out the terms and conditions which it was offering which the respondent requested H.T.P. to keep confidential. The respondent inter alia offered a reduction in the rate of interest to 16.25%. The respondent addressed a communication dated 28th July, 1994 communicating its terms and conditions to H.T.P. In the said letter, the respondent stated that payment would be by demand draft or, in the alternative, against a confirmed irrevocable letter of credit to be established for the entire value of the liftment. The letter provided for usance credit for 180 days with interest at the rate of 16.25% p.a. 12. Relying on the aforesaid documentary material, it was sought to be urged in the arbitral proceedings that the supplies which were effected by the petitioner to H.T.P. were effected in terms of an understanding which was arrived at between the petitioner and the respondent which was to the effect that in respect of the customers such as H.T.P. who were brought by the respondent, payment would be made to the respondent only after moneys had been realised by the petitioner from the purchaser. Consequently, the submission before the arbitrators was that there was an independent contract which was entered into between the petitioner and the respondent which distinguished between the customers of the petitioner on one hand and customers introduced to the petitioner by the respondent and in respect of the latter class of customers, payments were liable to be made only upon realisation of proceeds by the petitioner. Before the arbitral forum it was urged that there was no arbitration clause in so far as the independent contract between the petitioner and the respondent was concerned and that therefore, there was an absence of jurisdiction in the arbitrators. 13. Before dealing with the Arbitral Award, it would at the outset be necessary to emphasize that in the written contract entered into between the parties there was absolutely no distinction in regard to the class of purchasers, as submitted by the petitioner. 13. Before dealing with the Arbitral Award, it would at the outset be necessary to emphasize that in the written contract entered into between the parties there was absolutely no distinction in regard to the class of purchasers, as submitted by the petitioner. The payment terms contained in the agreement between the parties of 14th December, 1993 were modified by the Memorandum of Understanding dated 5th January, 1994 and by the minures dated 20th January, 1994 and neither of the two documents contains any such distinction. The entire case, therefore, of the petitioner rested on an oral understanding which was attempted to be established in the course of the arbitral proceedings. The learned arbitrators by a majority held that there was in fact, no such independent agreement and none had been established. The Arbitral Award Revisited: (i) The issue of whether there was an independent agreement: 14. Of the issues which were framed by the arbitrators, Issues 5, 6 and 7 respectively will need to be adverted to at this stage. Those issues were as follows: "5. Whether the agreement between the claimant and the respondent distinguished between two categories of customers namely, customers of the respondent and the customers of the claimant, as alleged by the respondent in paragraphs 8 to 11 of the reply. 6. If answer to Issue No. 5 is in the affirmative, whether there was an agreement or understanding between the claimant and the respondent to the effect that the respondent would pay the price of goods supplied to customers of the claimant only upon receipt of the price by the respondent from such customers as alleged in paragraph 11 of the reply. 7. If answer to Issue No. 6 is in the affirmative, whether, in respect of supplies which are the subject matter of the present arbitration, H.T.P. was treated as a customer of the claimant as alleged by the respondent in paragraph 13 of is reply." (ii) The construction of the contract: 15. The Award of the majority of two learned Arbitrators deals, at the outset, with the terms of the contract that was arrived at between the parties. The discussion in the Award is to be found commencing from paragraph 66. The Award of the majority of two learned Arbitrators deals, at the outset, with the terms of the contract that was arrived at between the parties. The discussion in the Award is to be found commencing from paragraph 66. In so far as is material, the Award notes that in the agreement dated 14th December, 1993, it is specifically provided that the petitioner would sell the products of the respondent only against a 100% advance arrangement to be made by the customer. Subsequently, on 5th January, 1994 the respondent agreed in writing that the petitioner may provide for credit but only against the establishment of letters of credit. Thereafter, on 20th January, 1994, meeting took place between the parties in which it was agreed that the petitioner could extend credit to customers on its own terms and responsibility, but in such cases, payment for the copper rods of the respondent sold by the petitioner had to be effected upon delivery to the customer. In the light of the contractual stipulation, the Arbitral Award of the majority Award concluded thus: "Analyzing the said agreement and the amendments thereof, it is clear that if credit was extended by the respondent to customers on terms accepted by claimant, the respondent had to pay the price of goods on the due date after the credit period and the total responsibility for ensuring that the letters of credit were bona fide, was that of the respondent. Further, in case of stand-by letters of credit, the respondent was bound to take prompt steps to negotiate letters of credit in case the payment was not made on due dates and to credit the amount realised to the claimant. If credit was extended by respondent on its own terms, the respondent had to pay the price of the goods on the delivery of the goods to the customers." The arbitrators have construed the contract. The reviewing Court must defer to the construction placed by the arbitrators. The Court ought not to interfere on this aspect even if it were a possible view. This is quite apart from the fact that in the present case, the construction is correct. (iii) The obligation of MMTC to ensure payment: 16. The reviewing Court must defer to the construction placed by the arbitrators. The Court ought not to interfere on this aspect even if it were a possible view. This is quite apart from the fact that in the present case, the construction is correct. (iii) The obligation of MMTC to ensure payment: 16. The learned arbitrators thereafter dealt with the case of the respondent that there was an understanding between the parties under which, in so far as purchasers introduced by the respondent were concerned, the petitioner would be liable to make payment only upon the realisation of proceeds. Under the terms of the contract, the respondent had the right to fix the terms and conditions on which goods were sold by the petitioner, including terms relating to credit. Therefore, in respect of all customers without exception, it was open to the respondent to fix the terms and conditions under which the goods were to be sold by the petitioner. The learned Arbitrators held that it is clear that in certain cases terms were first negotiated between the respondent and customers and then communicated to the petitioner. However, even in such cases, it was the responsibility of the petitioner in terms of the amendment dated 5th January, 1994 to ensure that the payment was secured by issuance of bona fide letters of credit in terms of the contractual arrangement between the parties. It was always open to the petitioner to refuse to supply goods to the customer concerned if it found that the credit arrangement that had been arrived at was not to its satisfaction. 17. The Arbitral Award of the majority also adverts to certain specified instances in which it was agreed upon between the parties that payment would be made to the respondent only against actual realisation from the purchasing customers. The arbitrators, however, note that these instances were not material because in all such cases payments have in fact, been received from the customers and there was no subsisting claim of the respondent. In other words, there was not event a single instance where the respondent had agreed that the payment of the rods sold by the petitioner should be made by the petitioner to the respondent on the receipt of payment by the petitioner from the customer and such payment has not been received. In other words, there was not event a single instance where the respondent had agreed that the payment of the rods sold by the petitioner should be made by the petitioner to the respondent on the receipt of payment by the petitioner from the customer and such payment has not been received. (iv) The oral evidence on whether an independent agreement was in existence: 18. Before the arbitrators reliance was placed on the evidence adduced on behalf of the petitioner of one of its witnesses Mr. Goyal. According to the witness, in the course of certain discussions with the respondent, there was an understanding that the price of goods to be paid to the respondent would be remitted in respect of the customers brought by the respondent only upon realisation fro the customer. The Award of the majority considers the nature of the evidence of this witness. The witness was unable to specify the month when these conversations took place. The Award of the majority holds that it is inconceivable that if such an arrangement was arrived at, it would not have been recorded in writing. The Award also notes that the witness was unable to identify any such transactions on the basis of the oral understanding even though he had time to verify the record. 19. The Award of the majority also deals with evidence of Harbans Singh, Deputy General Manager (Finance and Accounts) of the petitioner who sought to depose that wherever the petitioner had effected deliveries in pursuance of sales contracted/confirmed by the respondent, the payment was made only upon realisation of the amount. The Award of the majority notes that the witness however had absolutely no personal knowledge of any such transactions. The Award then adverts to the circumstance that even in such cases where the terms of sale were settled by the respondent, the respondent always gave instructions either to sell on advance financial arrangement or against letters of credit or demand draft which were all issued in favour of the petitioner. Moreover, what is significant is also that even in respect of the said transactions, the petitioner had charged its full commission at the rate of Rs. 500/- per metric tonne. Moreover, what is significant is also that even in respect of the said transactions, the petitioner had charged its full commission at the rate of Rs. 500/- per metric tonne. The learned Arbitrators, therefore, concluded that it was inconceivable that the commission would have been paid by the respondent if the responsibility of the petitioner was merely to effect physical deliveries pursuant to the instructions of the respondent and to remit the sale proceeds to the respondent only when received. Again, the circumstance that, even in such cases where sales were on terms settled by the respondent and credit was given, letters of credit of demand drafts were issued in favour of the petitioner clearly suggests that these transactions were included within the scope of the agreement. 20. Apart from these circumstances, the award of the majority relies upon the circumstance that it is beyond dispute that commission or remuneration at the rate of Rs. 500/- per metric tonne could have been claimed by the petitioner only pursuant to some agreement. The petitioner has not produced or proved any other agreement between the petitioner and the respondent under which the aforesaid remuneration of Rs. 500/- per metric tonne had to be paid. Consequently, the only necessary conclusion which had to be drawn was that the remuneration paid to the petitioner in respect of supplies effected was in pursuance of the agreement dated 14th January, 1993. 21. The Award of the two arbitrators also adverted to the admitted circumstance that in all cases where supplies came to be effected by the respondent to the petitioner and where sales were thereafter effected by the petitioner to purchasers, letters of credit as provided by the agreement between parties had been opened. As already noted earlier, parties had agreed on 6th January, 1994 that if credit had to be given, it will be extended only against usance letters of credit or stand-by letters of credit. There was no evidence at all as to what steps were taken by the petitioner to realise the amounts under the letters of credit. One of the witnesses, Mr. Mathpal who deposed in favour of the petitioner, was unable to state as to why no amount was realised by the petitioner on negotiation of the letters of credit. There was no evidence at all as to what steps were taken by the petitioner to realise the amounts under the letters of credit. One of the witnesses, Mr. Mathpal who deposed in favour of the petitioner, was unable to state as to why no amount was realised by the petitioner on negotiation of the letters of credit. He only stated that it was the duty of certain other officers of the petitioner in the finance department to negotiate letters of credit. Similarly, the other witness, Mr. Harbans Singh, studiously avoided saying anything about what steps were taken by the petitioner for ensuring that the letters of credit were honoured. The witness stated that he had not noticed any correspondence between the petitioner and the banks relating to the letters of credit which were not honoured, and he did not know why the letters of credit were not honoured. In the circumstances, the two learned Arbitrators have concluded that it was the petitioner and its officers who were guilty of gross negligence and were responsible in not taking any care to ensure that payments were duly realised against the letters of credit. 22. The award of a majority consisting of two arbitrators has been adverted to in some detail by me. That Award considers the evidence in significant detail before arriving at the finding that all the sales which took place were in pursuance of the agreement dated 14th December, 1993 as modified on 6th and 20th January, 1984 and not in pursuance of any independent agreement between the petitioner and the respondent. The respondent on the basis of the evidence adduced, was clearly unable to establish the existence of any independent agreement. 23. The respondent on the basis of the evidence adduced, was clearly unable to establish the existence of any independent agreement. 23. In order to evaluate whether a case has been made out for the exercise of the jurisdiction of this Court to interfere with the Arbitral Award under section 34 of the Arbitration and Conciliation Act, 1996, it would, in my view, be necessary to recapitulate the position as it emerges: (i) The petitioner, under the terms of the contract between the parties acted as a consignment agent; (ii) Under the terms of the contract, it was open to the respondent to fix the terms and policy under which sales of its continuous cast copper rods would be effected by the petitioner; (iii) The petitioner could extend credit subject to the opening of letters of credit; (iv) The realisation of the letters of credit was the sole, or as the parties called it, the "total" responsibility of the petitioner; (v) The petitioner was entitled to receive an amount of Rs. 500/- per metric tonne as service charges and this amount would be received whoever was the customer; (vi) The outstanding dues of H.T.P. were covered by letters of credit opened in favour of the petitioner and these outstandings are for the period after April 1995; (vii) The alleged arrangement between the respondent and H.T.P. was stated to be in operation only until February 1995 whereas the claim in arbitration relates to a subsequent period; (viii) Absolutely no correspondence was produced by the petitioner of the exchange, if any, between the petitioner and the banks opening the letters of credit in respect of a demand by the petitioner for the honouring of the letters of credit; (ix) The petitioner has received a commission of Rs. 500/- per metric tonne on all the sales of continuous cast copper rods, including those sold to H.T.P; (x) The commission that was payable was under the written agreement dated 14th December, 1993 and no other agreement for providing such payment has been established; (xi) The contract continued to subsist and was at no stage terminated by the petitioner; (xii) There was no counterclaim by the petitioner against the respondent, either in damages or otherwise. 24. 24. Apart from the aforesaid circumstances, it would, in my view, be necessary to refer to two documents upon which the learned Counsel appearing on behalf of the respondent has relied in the course of oral submissions in order to substantiate the Award of the majority of the learned arbitrators. The first document is a communication dated 6th December, 1995 addressed by the respondent to the petitioner. The aforesaid document adverts to the terms and conditions of the contract between the parties and refers to the fact that in respect of sales which were effected to H.T.P. during the period April, May, June and July 1995, an amount of Rs. 9.2 crores together with interest of Rs. 14.74 lakhs was still to be received. A reply to the aforesaid letter was addressed on behalf of the petitioner by its Director Shri R. Khosla, on 8th December, 1995 in which he stated that the petitioner had taken "steps to set the matter right". The communication recorded that the petitioner had certain "internal difficulties" which had since been resolved and the respondent would have no grounds to complain hereinafter". Thereafter, on 24th January, 1996, the petitioner addressed a letter to the respondent recording that one of the customers introduced by the respondent, H.T.P., had raised a dispute as to the quality of the material supplied and to the fact that H.T.P. had filed a suit for damages. This information was furnished in terms of the agreement dated 14th December, 1993. (see Clause III). Finally, a reference may be made to the minutes of a meeting which took place on 15th December, 1995 in which it was stated on behalf of the petitioner that the delay in remittance of funds to the respondent was discussed and an amount of Rs. 11.5 crores was overdue. The representative of the petitioner stated that he would look into the matter and revert back on 18th December, 1995 and assured that all outstanding overdues would be clear by the petitioner immediately. 25. The aforesaid circumstances and material are, in my view, sufficient to indicate that the view which has been formed by the learned Arbitrators in the Award of the majority does not warrant the interference of this Court. The view of the majority cannot by any means be regarded as a view which is perverse. 25. The aforesaid circumstances and material are, in my view, sufficient to indicate that the view which has been formed by the learned Arbitrators in the Award of the majority does not warrant the interference of this Court. The view of the majority cannot by any means be regarded as a view which is perverse. The learned Counsel for the respondent has urged, and in my view with justification, that there was sufficient material before the learned Arbitrators to come to the conclusion that (i) Even in respect of customers who were introduced by the respondent, payments were made by the petitioner even though at that stage the petitioner had not received the same from the customers; (ii) The petitioner received service charges even in respect of the transaction with H.T.P., (iii) Though the witnesses of the petitioner had sought to rely upon an oral understanding, there were absolutely no particulars or details forthcoming in respect thereof; (iv) One of the witnesses, Mr. Goyal, who sought to refer to an oral understanding, had no authority to enter into a separate or independent agreement; (v) Another witness, Mr. Mathpal, was unable to identify which transaction was based on the oral agreement; and (vi) The transactions with H.T.P. were covered by letters of credit and the petitioner had been unable to explain as to why moneys were not realised thereunder. 26. The learned Counsel appearing on behalf of the petitioner has sought to place reliance on the Award of the dissenting Aard. With the assistance of the learned Counsel, I have perused the Award of the dissenting arbitrator. In my view, it would not be open to the Court while considering the challenge under section 34 of the Arbitration and Conciliation Act, 1996, to reappreciate the evidence which was adduced before the learned Arbitrators. It is no part of the function of the reviewing Court to determine whether the Award of the dissenting arbitrator is more plausible than that of the majority. If the view which is taken by the majority is a possible view on the basis of the evidence adduced, the view of the majority must pass muster. However, having regard to the nature of controversy, I have with the assistance of the learned Counsel, perused the two Awards of the majority and of the dissenting arbitrator, and the underlying documentary material. However, having regard to the nature of controversy, I have with the assistance of the learned Counsel, perused the two Awards of the majority and of the dissenting arbitrator, and the underlying documentary material. I am of the view that the Award of the majority which fairly and correctly construes the terms of the contract and the oral and documentary material does not warrant interference. The Second Submission: The defence of public policy. 27. That leaves the Court with two subsidiary submissions which came to be urged before the Court in these proceedings. The first submission which was urged is that the Award is contrary to public policy. That submission was made on the basis of the provisions of Order 21, Rule 29 of the Code of Civil Procedure, 1908 and it was urged that it would be open to the petitioner to take out a third party notice in the suit which has been instituted by H.T.P. against the petitioner and the respondent. It is impossible to come to the conclusion that the material on the basis of which the submission is urged would involve an issue of public policy. The reliance which has been placed on Order 21, Rule 29 of the Code of Civil Procedure, 1908 is clearly without any basis. Order 21, Rule 29 envisages a situation where a suit is pending in any Court against the holder of a decree of such Court or of a decree which is being executed by such Court, on the part of the person against whom the decree was passed. In such a case, a Court is empowered on such terms as it thinks fit to stay the execution of the decree until the pending suit has been decided. The pending suit in this case is not a suit instituted by either of the parties to these proceedings. Order 21, Rule 29, has no application. The decision of the Supreme Court in Krishna Singh v. Mathura Ahir, A.I.R. 1982 S.C. 686, which is delivered in the context of the provisions of Order 21, Rule 29 has, therefore, no application to the facts here. The third submission: The issue relating to F forms: 28. Finally, it was sought to be urged that the directions of the learned Arbitrators in regard to the issuance of F forms is without jurisdiction. The third submission: The issue relating to F forms: 28. Finally, it was sought to be urged that the directions of the learned Arbitrators in regard to the issuance of F forms is without jurisdiction. The learned Counsel urged that what was referred to arbitration on 19th January, 1996 was a dispute regarding outstanding payments. The learned Counsel urged that the dispute in regard to F forms is not a dispute with regard to outstanding payments. There is no merit in the aforesaid submission. The arbitration clause (Clause VII) of the agreement dated 14th December, 1993, is wide and covers any question or dispute arising under or out of or relating to the construction, meaning and operation or effect of the agreement or breach thereof. The providing of the F form is specifically an obligation of the petitioner under Clause IA(xi) of the Contract. The dispute in regard to the provision of F forms was clearly in issue between the parties prior to the reference to arbitration, and the attention of the Court was drawn to the minutes of meetings held on 22nd April, 1994, 11th September, 1995 and 15th December, 1995. The Award of the majority adverts to these minutes. The Award notes that the reference to arbitration would cover all the outstanding payments of whatsoever amount. In the present case, the petitioner in its reply to the claim in the arbitration proceedings has sought to contend in para 45 thereof that the F forms in relation to the godowns at Faridabad, Ludhiana and Jaipur had since been furnished to the respondent, while those in respect of the godowns at Delhi, Bombay and Indore are being processed. The F forms were required to be furnished by the petitioner to the respondent so as to establish before the sales tax authorities that there was no sale transaction in the supplies made to the petitioner by the respondent. There is no reason why the F forms have not been supplied by the petitioner to the respondent. The learned Counsel for the petitioner does not dispute the liability of the petitioner to supply the F forms. There is no reason why the F forms have not been supplied by the petitioner to the respondent. The learned Counsel for the petitioner does not dispute the liability of the petitioner to supply the F forms. The arbitrators directed that the F forms should be supplied within four weeks of the date of the Award and in the event of the petitioner failing to do so, and the respondent being subjected to any liability on account of sales tax, the petitioner would have to make good the liability together with interest. The dispute in regard to F forms was in my view, clearly within the purview of the arbitration agreement and the submission to arbitration. 29. In the circumstances, in my view, the considered decision of the arbitral forum does not call for interference by this Court in the jurisdiction under section 34 of the Arbitration and Conciliation Act, 1996. The respondent has clearly failed to establish that the arbitral forum was lacking in jurisdiction or that the Award in any manner contravenes public policy. There is no merit in the arbitration petition which is accordingly dismissed. Arbitration petition dismissed. -----