Mohan Meakin Limited vs International Breweries (P) Ltd

(A) Amount recoverable from Respondent Company,

(i) On account of sale of goods by the Claimant to

the nominated parties of the Respondent Company","Rs.3,02,37,601.00

(ii) Cost of unused Packing materials,"Rs.32,23,747,71

(iii) Cost of unsold finished goods of IBPL Brands,"Rs.2,78,696.00

TOTAL,"Rs.3,37,40,044,71

(B) Less : Entitlement of Respondent Company,

(i) Entitlement due on sale of Beer to Nominated

customers in the States of

Uttar Pradesh

Rajasthan","Rs.1,54,09,930.00

Rs. 24,61,381.00

,"Rs.1,78,71,311.00

(ii) Security Deposit received,"Rs.20,00,000.00

Total entitlement of Respondent,"Rs.1,98,71,311.00

As per Agreement*,

(C) Net amount recoverable by Claimant Company

from the Respondent Company (A)-(B)=(C)","Rs.1,38,68,733.71

the affidavit, the said witness had referred to the Statement of Accounts, invoices, Indent, Dispatch Challan, Gate passes, etc., of various",

dealers/distributors of the respondent. He submits that this entire evidence has been completely ignored by the Arbitrator and brushed aside by a single,

sentence holding that the petitioner has been unable to prove sales made by it under the contract.,

Learned counsel for the respondent submits that as the invoice to the Indentors were raised by the petitioner in its own name, it is the petitioner who",

has to ensure receipt of payment against the same. In her submission, clause 3.5 of the agreement is merely to suggest that the respondent would",

render all assistance to the petitioner in receiving payments from the Indentors, however, in case full payments are not received against such invoices,",

the respondent cannot be saddled with the liability thereof. She further submits that it was for the petitioner to have proved from the evidence as,

against which invoice the payment was not received by it and having failed to do so, the claim of the petitioner has been rightly rejected by the",

Arbitrator.,

I have considered the submissions made by the learned senior counsel for the petitioner and the counsel for the respondent.,

A reading of the Award would show that the arbitrator has not discussed the liabilities and obligations inter se owed by the parties in terms of the,

agreement. Though both the parties have made submissions on the true purport of Clauses 3.5 and 4.4 of the agreement, I find that the Award is",

totally silent and, in fact, is oblivious of the existence of these clauses and effect thereof on the claims and counter claims of the parties. Mere",

reproduction of these clauses in the initial part of Award, would not suffice as consideration thereof by the Arbitrator. The arbitrator has, therefore,",

acted in complete ignorance of the terms of the agreement. It was for the arbitrator to have considered the effect of Clause 3.5, which expressly",

states that the respondent shall ensure the payment of agreed ex-factory prices to the petitioner. The respondent cannot brush aside this responsibility,

by contending that as the invoices on the INDENTORS were raised by the petitioner, the petitioner alone is responsible if full payment there against is",

not received.,

The arbitrator has also not considered the effect of clause 4.5 of the Agreement, which expressly states that the respondent agrees to pay after 20",

days from the date of production, by demand draft, the price of the beer as per clause 4.1.",

Section 28 (3) of the Act caste an obligation on the arbitrator to decide the disputes in accordance with the terms and conditions of the contract as,

agreed between the parties. However, as noted by me, the Arbitral Award in this case, does not indicate that the arbitrator was alive to the terms and",

conditions of the contract or considered the effect thereof on the claims or counter claims of the parties. This itself, in my view, is sufficient to set",

aside the arbitral award.,

Learned Senior counsel for the petitioner is also correct in his submission that the Arbitrator has not considered the evidence led before him by the,

parties. It is not as if the arbitrator has considered the evidence and found it to be unreliable or insufficient to prove the claim of the petitioner. In fact,",

a reading of the Award would show that there is absolutely no discussion in the entire Award on the evidence led by the parties. It is true that if the,

arbitrator, after consideration of the evidence, comes to a conclusion on facts, this Court in exercise of its power under Section 34 of the Act would",

not re-appreciate the same. However, the present is a case where there is absolutely no appreciation of evidence at all by the Arbitrator. In my",

opinion, therefore, the Award is liable to be set aside on this ground as well.",

As far as the allowance of the counter claim of the respondent is concerned, the Arbitrator has relied upon the above quoted table and the",

pleadings in the statement of claim to conclude that there was an admission of liability on part of the petitioner in this regard. In my opinion, this finding",

is also fallacious. An admission made by a party is to be read as a whole and cannot be bifurcated in parts, (Dudhnath Pandey vs. Suresh Chandra",

Bhattasalli (1986) 3 SCC 360).,

The petitioner had claimed the amounts owed by the respondent to the petitioner and as a settlement of account had also shown the corresponding,

amounts that the respondent would be entitled to upon payment of full amounts under the agreement. This was, therefore, a conditional admission of",

liability. The arbitrator, apart from relying on the alleged admission, does not go into the merit of the counter claim of the respondent to award the said",

amount. In my opinion, the counter claim could not have been granted merely on the above alleged admission of the petitioner.",

As far as the objection with respect to the disallowance of the claim for the amount of packing material and unsold stock is concerned, in my",

opinion, the arbitrator has rightly held that there is no evidence on record to substantiate the said claims of the petitioner.",

Learned senior counsel for the petitioner has drawn my reference to para 14 of the affidavit of evidence filed by Mr. S.C.Sahai, Sales Manager of",

the petitioner to contend that the same would amount to an evidence in support of this claim. The said para is quoted herein below:-,

“14) I say that the following amounts have become due and payable by the Respondent Company to the Claimant Company. The gross,

amount recoverable by the Claimant Company from the Respondent Company towards supply of goods to the nominated parties of the,

Respondent Company works out to Rs.3,02,37,601/- (Rupees Three Crores Two Lakhs Thirty Seven Thousand and Six Hundred One only).",

At the same time, the Claimant Company got the packing materials printed for packing of finished goods but, however, the Respondent",

Company had abruptly discontinued, without notice, placing the indents upon the Claimant Company without any advance notice and(or in",

violation of the terms of the Contract. The claim towards Packing Materials is Rs.32,23,747.71 (Rupees Thirty two lacs twenty three",

thousand and seven hundred forty seven and paise seventy one only). Further, at the same time, there were stocks of finished goods which",

the Claimant Company manufactured at the instance of the Respondent Company but later on, there were no instructions from the",

Respondent Company about its dispatched and hence finished goods under the brand name of Respondent Company worth Rs.2,78,696/-",

(Rupees Two Lacs Seventy Eight Thousand Six hundred Ninty Six Only) was lying with the Claimant Company. This stock is due to abrupt,

and sudden discontinuance of placing orders, in an illegal manner, by the Respondent Company upon the Claimant Company.â€​",

In my opinion, this would be a bald statement of the witness without any proof of the contents of the same. It was for the petitioner to prove the",

extent of packing material and unsold finished goods if any, lying with the petitioner at the time of termination of the agreement. Mere statement in this",

regard cannot take the place of proof of the same.,

Be that as it may, for the reasons recorded above, the impugned Award cannot be sustained and is liable to be set aside with no order as to costs,",

leaving the parties open to initiate fresh proceedings in accordance with law, wherein the parties would be entitled to claim the benefit of Section 43(4)",

of the Act as far as the period of limitation is concerned.,

The petition is allowed in the above terms, with no orders as to costs.",