Himachal Pradesh State Forest Development Corporation Ltd & Another v. Partap Singh
2019-12-16
AJAY MOHAN GOEL
body2019
DigiLaw.ai
JUDGMENT Ajay Mohan Goel, J. - This is an appeal filed under Section 37 of the Arbitration and Conciliation Act, 1965, by way of which the appellants herein have challenged the judgment passed by the Court of learned District Judge, Shimla, H.P., while deciding objections under Section 34 (3) of the Arbitration and Conciliation Act, so filed by the present appellants against the arbitral award dated 08.11.2009. 2. Brief facts necessary for the adjudication of the present appeal are that respondents herein were owners of certain forest produce. As the ''Beat'' in which said forest produce was situated, was open for felling, accordingly, an agreement was entered into by the owners of the forest produce with the respondent-corporation for the purpose of felling conversion and carriage of the said forest produce. The owners entered into this agreement with the forest corporation through their then Special Power of Attorney Shri Jagir Singh. 3. It is not in dispute that Shri Jagir Singh was also engaged by the H.P. State Forest corporation as a labour supply mate for the purpose of felling conversion and carriage of the same forest produce. 4. This, of course was an independent agreement so entered into between Forest Corporation with said Shri Jagir Singh and owners had nothing to do with it. 5. It appears that dispute arose between the Forest Corporation and Shri Jagir Singh, in their labour supply mate, which was referred to the Arbitration (Director South) of the Forest Corporation, who held the Forest Corporation entitled for an amount of Rs. 12,02,105/- from Shri Jagir Singh, the Labour Supply Mate. 6. This amount was deducted/withheld by the Forest Corporation out of the total sale produce amount, which was payable by the Corporation to the present respondents in their capacity as owners of the forest produce. 7. Feeling aggrieved, the forest produce owners initiated arbitration proceedings which culminated into an award being passed by Mr. Justice P.K. Palli(Retired). Learned Arbitrator in the said matter of arbitration pertaining to Lot No.1/97-99 (Renukaji) Private Lot (SPA Shri Jaagir Singh), vide his award dated 08.11.2009, held as under:- "The learned Arbitrator while examining these very issues in the award after deep scrutiny has found that fuel wood 1695 m-3 quantity of stacked fuel wood were short and the Labour Supply Mate deliberately caused loss to the tune of Rs. 12,02,105/-.
12,02,105/-. I have no reason to differ with that calculation which is based on the average sale rate of the final economics. It has further been found that the shortage happened due to the failure of Shri Jagir Singh in the execution of the entire carriage works. I, therefore, find that the claimants are entitled to the same amount i.e. Rs. 12,02,105/- against the respondent-Corporation, who is directed to pay this amount to them. In addition to the aforesaid amount, the claimants are further held entitled to interest as claimed by them in their claim @ 10% per annum with effect from the date of the last sale i.e. 16th October, 2003 till the date of payment to the claimants. There will however be no order as to costs". 8. This award was assailed by the appellants herein unsuccessfully under Section 34 of the Arbitration and Conciliation Act before the learned District Judge, Shimla, H.P. While dismissing the objections filed by the present appellants, learned District Judge rejected the contention of the Corporation that it was not borne out from the record that owners were entitled to an amount of Rs. 12,02,105/- by observing that there was no dispute viz-a-viz said amount as this was the loss which stood assessed in the arbitration proceedings by the Director South of the Forest Corporation in the Arbitration proceedings between the Forest Corporation and Jagir Singh. 9. Other contention of the Corporation qua non formulation of issues, was rejected by the learned District Judge who held that said objection was not taken at any stage by the Forest Corporation before the learned Arbitrator and the same was being raised for the first time under Section 34 of the Arbitration and Conciliation Act. Learned District Judge also held that as the objector had not lead evidence before the learned Arbitrator, the arguments which were raised qua non production of evidence could not be accepted. With regard to issue of limitation, learned District Judge held that as no such point was raised before the learned Arbitrator, the Corporation could not be permitted to be take these objections under Section 34 of the Act. On these grounds, learned District Judge dismissed the said objection petition. 10. Feeling aggrieved, the Forest Corporation has filed the present appeal. 11.
On these grounds, learned District Judge dismissed the said objection petition. 10. Feeling aggrieved, the Forest Corporation has filed the present appeal. 11. I have heard learned Senior Counsel for the parties and have also gone through the judgment passed by the learned District Judge as well as the award passed by the learned Arbitrator alongwith other contemporaneous record. 12. It is not in dispute that there was an arbitration proceeding decided by the Director, South, H.P. State Forest Corporation, which proceedings stood initiated by the Forest Corporation against Shri Jagir Singh. The Arbitration Proceedings stood initiated purportedly against certain shortages which were caused in the Lot which stood alloted to Shri Jagir Singh for the purpose of felling conversion and carriage as Labour Supply Mate. It is also not in dispute that said Lot is the same which was owned by present respondents and which was sold by the Forest Corporation incidently to Shri Jagir Singh in his capacity as their Special Power of Attorney at the relevant time. 13. Now, the moot issue is as to whether the Forest Corporation could have deducted/withheld the price of the forest produce payable to the respondents herein in the garb of the arbitration award which stood decided in their favour and against Shri Jagir Singh? 14. In my considered view, the answer to this but obvious has to be in the negative. This is for the reason that sale of forest produce by the owners thereof to the Forest Corporation may be through Shri Jagir Singh as their Special Power of Attorney is a totally independent act viz-a-viz engagement of H.P. State Forest Corporation of Shri Jagir Singh as Labour Supply mate for the purpose of felling conversion and carriage of timber in dispute. 15. If there is an award passed by the learned Arbitrator in favour of the Forest Corporation and against Shri Jagir Singh, then the Forest Corporation is at liberty to execute the same against Shri Jagir Singh. However, in the garb of said award, Forest Corporation cannot be permitted to withhold the payment which otherwise is due from it to the owners of the forest produce on account of the sale of their forest produce.
However, in the garb of said award, Forest Corporation cannot be permitted to withhold the payment which otherwise is due from it to the owners of the forest produce on account of the sale of their forest produce. This act of the respondent-corporation, in fact is not sustainable in the eyes of law because the agreement which was entered into between the parties at the time of sale of the forest produce i.e. Ext.C-1, does not contemplates any such provision. 16. A perusal of the award passed by the learned Arbitrator demonstrates that this is exactly what weighed with the learned Arbitrator while allowing the claim of the owners before it. Learned District Judge while dealing with the objections filed against the said award has also decided on the same line while dismissing the objections so filed by the Forest Corporation. The findings returned in the arbitration award are clearly borne out from the record of the case and so are the findings returned by the learned District Judge while deciding the objections so filed under Section 34 of the Arbitration and Conciliation Act. 17. Even otherwise, it is settled law that objections under Section 34 of the Act can be entertained by the Authority only in case the award is against the Public Policy of India. (See........ titled as State of Himachal Pradesh and another Versus M/S Ajay Kumar Sood, (2019) 2 ShimLC 824 titled as Sutlej Construction Limited Versus Union Territory of Chandigarh, (2018) 1 SCC 718 .. ) . Of course, other grounds are also available under Section 34 of the Act, but they relate to incapacity etc. of the learned Arbitrator, which is not the issue involved in the present appeal. 18. On the touch stone of the Public Policy of India, appellants could not demonstrate that the award so passed by the learned Arbitrator is against the same. In other words, in terms of the interpretation which has been given by Hon''ble Supreme Court as to what Public Policy of India means, it cannot be said that the findings returned by the learned Arbitrator are perverse, or not borne out from the record, or relevant record or the law of the land has not been taken care of, while deciding the arbitration proceedings. Further it is not the case of the appellants herein that due hearing was not given to them by the learned Arbitrator.
Further it is not the case of the appellants herein that due hearing was not given to them by the learned Arbitrator. Similarly, while deciding the objections, learned District Judge has passed a reasoned judgment after taking into consideration all the contentions which were raised before him. In this view of the matter, otherwise also the scope of this Court while deciding this appeal under Section 37 of the Arbitration and Conciliation Act becomes extremely narrow. 19. Be that as it may, as it stands established from the record that the amount which has been withheld by the Forest Corporation of the present respondents is in lieu of the award which has been passed by the Director South of the Forest Corporation in arbitration proceedings between the Forest Corporation and Jagir Singh in his capacity as Labour Supply Mate, learned Arbitrator in this case has rightly passed the award holding the claimants to be entitled for the said amount and learned District Judge has also rightly upheld the findings so returned by the learned Arbitrator. 20. It goes without saying that the Forest Corporation otherwise is free to initiate necessary steps for recovery of the award amount from Shri Jagir Singh in accordance with law and subject to all legal rights which otherwise are available to Jagir Singh. 21. At this stage, learned counsel appearing for the appellants while drawing the attention of the Court to clause 2 (b) of Ext.C-1 has submitted that there are certain deductions to which the Forrest Corporation is entitled to out of the gross sale amount of the forest produce. Learned Senior counsel appearing for the respondent-corporation submits that of course, the Forest Corporation is entitled to any such deduction, but in the garb of the same an amount of Rs. 12,02,105/- cannot be permitted to recover/ upheld from the forest produce. As far as contention of learned Senior Counsel for the respondents, with regard to clause 2 (b) of Ext.C-1 is concerned, the Forest Corporation can deal with the issue in terms of the agreement and in accordance with law. 22. In view of above findings, this appeal is dismissed without disturbing the findings returned by the learned Arbitrator as well as learned District Judge. 23. At this stage, learned Senior Counsel appearing for the respondents submits that the Forest Corporation be directed to reimburse the amount so illegally withheld by it.
22. In view of above findings, this appeal is dismissed without disturbing the findings returned by the learned Arbitrator as well as learned District Judge. 23. At this stage, learned Senior Counsel appearing for the respondents submits that the Forest Corporation be directed to reimburse the amount so illegally withheld by it. Learned Senior Counsel for the petitioners submits that the money already stands deposited before the learned District Judge. If that is so, then respondents shall be at liberty to move appropriate application before the learned District Judge, towards complete satisfaction of the award in issue. Pending miscellaneous applications if any, also stand disposed of.