Judgment:
1. Whether reporters of local papers may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? Yes.
3. Whether the judgment should be reported in the Digest? Yes.
1. The present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') is directed against the judgment and order dated 1st September, 2005 passed by the learned Single Judge in OMP No.310/2003 dismissing the petition under Section 34 of the Act filed by the Appellant for setting aside the Award dated 9th May, 2003 passed by the sole Arbitrator Mr. Justice P.K. Bahri(Retd.). 2. The brief facts as are necessary for adjudication of the present Appeal are that:
(a) The Appellant is a Government Company duly incorporated under the Companies Act, 1956 and is engaged in the business of import, export and trading of various commodities.
(b) In its business of exporting gold jewellery, the Appellant enters into agreements and arrangements with interested parties dealing in manufacture and export of the same. The Appellant provides financial assistance to parties, in the instant case the Respondent, in the shape of packing credit limit and also lending gold on loan basis for manufacture of gold jewellery, subject to the condition that the entire gold jewellery would be exported within a stipulated period in the name of the Appellant only and in turn the Appellant would levy service and administrative charges.
(c) The Appellant had entered into an agreement dated 25th October, 1991 for manufacture and export of gold jewellery with the Respondent. The agreement specified that gold was to be given on loan by the Appellant to the Respondent for the purpose of manufacture and export of gold jewellery. Various export documents and invoices for export of the jewellery to the foreign buyer were to be prepared by the Respondent in the name of the Appellant. The aforesaid loan was to be repaid to the Appellant through the export remittances received from the export of gold jewellery to a foreign buyer.
(d) It is the case of the Appellant that under the terms of the agreement the Respondent was granted packing credit to the extent of `25,00,000/- equivalent to the value of gold loan limit of 8 KG. The Appellant was to recover its dues in the packing credit from the sale proceeds received from the exports of the goods by the Respondent.
(e) Certain disputes arose between the parties with respect to four consignments of export under the agreement dated 25th October, 1991. The Appellant claims that in lieu of the export made by the Respondent from time to time, US $19517.90 still remained to be received as balance remittances. The Appellant, therefore, claimed a total sum of `17,09,839/-, interest and other charges added, to be due on 31st February, 2000 from the Respondent.
(f) The Respondent in his counter claim admitted to the signing of the agreement dated 25th October, 1991 but pleaded that they were signed by him under coercion and undue influence. Other liabilities and claims of the Appellant were denied by the Respondent.
(g) The learned sole Arbitrator rejected claims of the Appellant as well as the counter claims filed on behalf of the Respondent.
(h) Against the award dated 9th May, 2003 the Appellant MMTC preferred an Appeal under Section 34(2) of the Act contending the Award to be contrary to public policy. The Single Judge dismissed the petition of the Appellant under Section 34 vide the impugned order dated 1st September, 2005. Aggrieved by the said rejection the Appellant has preferred the present Appeal.
3. On behalf of the Appellant, it was first urged that the Award suffered from patent illegality and was contrary to public policy inasmuch as the agreement transaction had been wrongly interpreted by the Arbitrator. The second contention urged on behalf of the Appellant was that the conclusions arrived at by the learned Arbitrator were contrary to the facts on record and the pleadings of the parties. In this behalf, it is seen that with regard to the first contention the categorical finding of the Arbitrator was that the Appellant was to recover all its dues from the remittances to be received from the foreign buyer and only in case of any shortfall the Respondent was to be liable. Since the Appellant had failed to prove as to any shortfall in remittances received in respect of the export transactions in question, the Appellant was not entitled to recover any amount from the Respondent. In this behalf, it was noticed in the Award that the Appellant had produced a certificate dated 6th April, 1995 issued by the State Bank of India indicating that Saroia Jewellers U.A.E. had remitted US $4,93,170 favouring the Appellant. This payment included payment for shipment through Swiss Air under Air Way Bill Nos. which included the Air Way Bill Nos. of the four consignments in question as well. Thus, it is observed that the amount received by the Appellant related not only to those four consignments but also to a large number of other consignments as well and, therefore, it was not possible to hold as to what amount pertained to the four transactions in question. Therefore, the Award rejected the claim of the Appellant upon their failure to prove that in fact remittances in respect of the four transactions in question had not been received by the Appellant. This, as was observed by the learned Single Judge, was a pure appreciation of fact and did not constitute a cogent ground for setting aside of the arbitral Award.
4. The second contention made on behalf of the Appellant also does not hold water for the reason that it deals with the appreciation of the records and pleadings of the parties. The Appellant has not been able to demonstrate either before the Single Judge or before us as to how the view taken in the arbitral Award is contrary to the material on record. Even otherwise, it is not permissible for the Court to reappraise the evidence or to go into the questions of quality and quantity of evidence.
5. In the circumstances, we find that there is no merit in the present Appeal and the same is hereby dismissed with no order as to costs.