New Haryana Transport Company vs Hindustan Copper Complex

Atul Kumar Jain, J.—This civil misc. appeal under Section 39(1)(vi) read with Section 51 of the Arbitration Act, 1940 (for short the Act of 1940) read with Section 151 of CPC was filed against the judgment dated 5.12.2000 passed by Addl. District Judge, Khetri, District, Jhunjhunu in Arbitration Case No. 14/1995 by the appellant M/s. New Haryana Transport Company through its agent/attorney Rattan Sharma. The court below had dismissed the objections of the appellant filed under Section 30 of the Act of 1940 and had also dismissed its applications filed under Order 1 Rule 10 CPC and under Order 6 Rule 17 CPC and it affirmed the award dated 28.7.1995 passed by the Sole Arbitrator.

A contract for transportation of finished copper products from Khetri to various godowns of Hindustan Copper Ltd. (for short HCL) situated at different places in the country was entered into between HCL and the appellant Firm on 3.8.1992. In furtherance of that contract on 15.12.1992, appellant was asked to carry 176 Bags of copper dust from Khetri Copper Complex, Khetri Nagar (Raj.) to Ghatsila (Bihar). It was alleged by the respondent that when the consignment reached Ghatsila a difference in weight of 500 Kg. Less was noted at ICC at Ghatsila and on examination, it was discovered that out of 176 Bags, 46 Bags weighing 1760 Metric Tonnes were filled with sand instead of copper dust. Allegedly, it resulted into a loss of Rs. 1,33,843.74 being cost of 46 Bags of copper dust.

Another dispute relates to another transaction dated 2.3.1993. On 2.3.1993 Copper Cathodes weighing 9.133 Metric Tonnes were despatched from Khetri Copper Complex to Taloja vide Gate Pass No. 587 dated 2.3.1993 and allegedly during transit, original Gate Pass was misplaced by the appellant and so allegedly a modvat claim of Rs. 1,50,695/- was denied by the Excise Authority to the respondent and so respondent suffered a loss of Rs. 1,50,695/- on this count also.

The Sole Arbitrator, who was an employee of the respondent company passed the award on 28.7.1995 and it was held by the Arbitrator that a sum of Rs. 1,33,843.74 was with-held by the respondent from claimant on account of missing copper dust of 46 Bags and the shortage was attributable to both the parties and as such 50% of the with-held amount to be released by the respondent to the claimant, but no interest will be payable by the respondent to the claimant.

It was further ordered by the Arbitrator that a sum of Rs. 1,50,695/- was with-held by the respondent from the claimant''s freight bills as claimant failed to deliver the original Gate Pass No. 587 dated 2.3.1993 to the consignee as was expected from him. So respondent HCL was justified in with-holding the payment of M/s. New Haryana Transport Company and so no amount is payable by the respondent to the claimant on this count.

Respondent before us has argued that finding of the Arbitrator as well as of Additional District Judge is a finding of fact based on evidence and material on record and so it cannot be disturbed in this appeal. It has further been argued by the respondent that the appellant itself lodged an fir through its representative at Police Station, Khetri Nagar on 15.2.1993, wherein it was stated that the goods have been stolen. Further, when the shortage was detected, the respondent company informed to the Transport Company about shortage and at that time also appellant could not prove that the consignment was delivered by it without any manipulation.

Learned counsel for the respondent has relied upon following rulings:--

"(1) Uttar Pradesh Co-operative Federation Ltd. Vs. Sunder Brothers of Delhi, AIR 1967 SC 249 : (1966) SCR 215 Supp

(2) M/s. Arosan Enterprises Ltd. Vs. Union of India and Another, AIR 1999 SC 3804 : (1999) 7 JT 122 : (1999) 6 SCALE 46 : (1999) 9 SCC 449 : (1999) 2 SCR 621 Supp : (1999) AIRSCW 3872 : (1999) 9 Supreme 427

(3) G.D. Engineering Construction Vs. Union of India (UOI), (2004) 1 ARBLR 448

(4) Raipur Development Authority and Others Vs. Chokhamal Contractors and Others, AIR 1990 SC 1426 : (1989) 2 JT 285 : (1989) 1 SCALE 1279

(5) M/s. Kundale and Associates Vs. M/s. Konkan Hotels (P) Ltd., AIR 1999 SC 2010 : (1999) 2 ARBLR 119 : (1999) 2 JT 556 : (1999) 2 SCALE 433 : (1999) 3 SCC 533 : (1999) 2 UJ 812 : (1999) AIRSCW 1715 : (1999) 3 Supreme 428

(6) Trustees of The Port of Madras Vs. Engineering Constructions Corporation Limited, AIR 1995 SC 2423 : (1995) 2 ARBLR 331 : (1995) 2 CTC 299 : (1995) 6 JT 48 : (1995) 4 SCALE 742 : (1995) 5 SCC 531 : (1995) 2 SCR 672 Supp "

On the other hand, it has been argued on behalf of the appellant that 176 Bags were loaded by the staff/contractors of respondent and the truck was fully covered with Tarpaulin and the same was sealed by the respondent''s staff at 32 places, 176 Bags of the material handed over to the appellant were filled in Bags by the officials of the respondent and contents of the Bags were not shown to the staff of the appellant as they were already dully stitched/sealed. It was further argued on behalf of the appellant that the consignment had been carried by it at Owner''s Risk because HCL had not got the material in short and so the consignment of 176 Bags was delivered never by the appellant at Ghatsila (Bihar) on 25.12.1992 and on back of the lorry receipt form, it has been mentioned by the consignee regarding receipt of net weight 8620 Kg. No doubt weight of the goods was 9120 Kg. at the time of loading, but appellant claims that looking to the moisture content in the copper dust, which is derived through blowing which separates the copper particles from other matter and the particles of copper dust are derived through the use of process of dipping it into the water. The copper particles thus derived wet are dried and then filled in the bags for transportation. It has been argued on behalf of the appellant that 176 Bags filled at refinery plant are bound to contain moisture contents and thus, looking to this aspect shortage of 500 Kg. was naturally possible..

It was further argued on behalf of the appellant that after a lapse of 35 days on 29.1.1993, respondent company through its letter dated 29.1.1993 wrote to the appellant regarding its complaint of loss. Respondent alleged that copper dust contents were removed from some bags and those bags were refilled with sand to enroute.

Learned counsel for the appellant has relied upon the following rulings:--

"(1) Associated Engineering Co. Vs. Government of Andhra Pradesh and another, AIR 1992 SC 232 : (1991) 2 ARBLR 182 : (1991) 2 BC 375 : (1991) 3 CompLJ 86 : (1991) 3 JT 123 : (1991) 2 SCALE 50 : (1991) 4 SCC 93 : (1991) 2 SCR 924 : (1991) 2 UJ 347

(2) Premier Fabricators, Allahabad Vs. Heavy Engineering Corpn. Ltd., Ranchi, (1997) 1 ARBLR 517 : (1997) 4 JT 220 : (1997) 3 SCALE 208 : (1997) 4 SCC 319 : (1997) AIRSCW 1710 : (1997) 3 Supreme 409

(3) Government of Kerala and Another Vs. V.P. Jolly, AIR 1992 Ker 187 : (1992) 1 ILR (Ker) 113

(4) State of Kerala and Another Vs. E.A. Cheriyan Kunju, AIR 1997 Ker 1 : (1997) 1 ILR (Ker) 14

(5) R.S. Avtar Singh and Co. Vs. National Projects Construction Corporation Ltd., AIR 1993 Delhi 230 : (1992) 47 DLT 599 : (1992) 23 DRJ 184

(6) Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd., AIR 2003 SC 2629 : (2003) 2 ARBLR 5 : (2003) 3 CompLJ 1 : (2003) 4 JT 171 : (2003) 4 SCALE 92 : (2003) 5 SCC 705 : (2003) 44 SCL 89 : (2003) 3 SCR 691 : (2003) 2 UJ 1035

After hearing arguments of learned counsel for both the parties and after perusal of the impugned order dated 5.12.2000 of Addl. District Judge, Khetri and after perusal of the Award, I have also perused the statements of C.W.1 Ummed Singh, C.W.2 Bharat Singh and R.W.1 S.K. Agarwal, R.W.2 N.A. Narang and R.W.3 R.K. Thakkar. The court below has properly appreciated the evidence and has appropriately upheld the finding of the Arbitrator in this regard that 50% negligence was of the transporter and 50% negligence was of the consignee and so on first count 50% of the with-held amount was rightly asked to be released by the respondent to the claimant though no interest was to be payable by the respondent to the claimant. This finding does not suffer from any legal or factual infirmity and award dated 28.7.1995 and impugned order dated 5.12.2000 of adj, Khetri does not deserve any interference in this appeal.

Second point of dispute between the parties was regarding loss of original Gate Pass by the appellant making respondent to suffer a loss of Rs. 1,50,695/- towards payment of excise duty.

After hearing learned counsel for both the parties, after perusal of the record /and after going through written arguments of the parties also, this Court is of the opinion that when benefit of modvat credit was disallowed to the respondent as per circular issued by Central Board of Excise and Custom as amended by that time, the respondent was lawfully entitled for indemnification of loss suffered by it from the appellant because it was necessary to produce the original Gate Pass for availing the benefit of modvat credit. Thus, the appellant was rightly asked by the Arbitrator to bear the loss of Rs. 1,50,695 on this count and the respondent Company was rightly indemnified by the Arbitrator.

Thus, we find no factual or legal infirmity in the award of the Arbitrator nor in the impugned order dated 5.12.2000 passed by adj, Khetri in this regard. No doubt evidence was not discussed in details by the Arbitrator, but still the Arbitrator does not appear to be guilty of any misconduct on any count.

Hence, this appeal filed by appellant M/s. New Haryana Transport Company deserves dismissal, which is hereby dismissed. The stay petition also stands disposed of accordingly. Copy of this Judgment be sent to the court below along with its record immediately.