JUDGMENT
Ajay Kumar Mittal, J.
1. This appeal has been filed by the appellants challenging the order dated 20.7.2006 passed by the Additional District Judge, Chandigarh whereby the objection petition filed by them against the award dated 19.7.2000 passed by the sole Arbitrator under Section 34 of the Arbitration and Conciliation Act, 1996, has been dismissed.
2. Briefly stated the facts of the case are that on 23.12.1995, Punjab State Civil Supplies Corporation Limited (for short “the PUNSUP”) entered into an agreement with M/s B.P. Rice Mills, Sarhall Road, Tarn Taran, District Amritsar (hereinafter referred to as the “the miller” for milling of paddy to be supplied to it by the Punjab and the rice so milled was to be supplied by the miller to the Food Corporation of India on behalf of the PUNSUP. It was provided in the agreement that in case the entire paddy was not milled within the stipulated period, the PLTNSUP would be entitled to recover 1.5 times the economic costs of left over paddy from the miller alongwith interest at the rate of 21% p.a. It was pleaded that as per the agreement, 8892.75 quintals of common variety of paddy in 13682 gunny bags and 3335.80 quintals of fine variety of paddy in 5136 gunny bags were entrusted to the miller for milling. The miller refused to receive common variety of rice and the PLTNSUP was made to shift common variety of paddy to some other place. It was further pleaded that the miller failed in honouring the time clause of the agreement as he had refused to receive and mill 13682 bags of common variety of paddy which caused financial loss to the PUNSUP. Accordingly, the PLTNSUP filed a claim petition for the recovery of Rs. 51,14,273/- from the miller as due upto 13.11.1998 along with interest at the rate of 21% per annum.
3. The stand of the PUNSUP was controverted by the miller by filing reply. It was pleaded that the agreement dated 23.12.1995 was not a final and concluded contract and it was only a draft agreement. The fact that the government had abolished levy on miller procurement was not in the knowledge of both the sides at the time of execution of the agreement and levy of 75% by the Government on miller procurement was the sine-qua-non of the agreement dated 23.12.1995. It was further pleaded that the paddy was stored in its premises w.e.f. 12.10.1995 for the purposes of storing only as the PUNSUP was short of space and no rice miller was ready to accept paddy from the PUNSUP or from any government agency on the previous terms and conditions. The miller never acted upon the agreement dated 23.12.1995 inasmuch as the deposit of security amount, the pre-condition of the agreement was never made and the PUNSUP had itself repudiated the agreement vide letter dated 4.10.1996. It was further pleaded that the miller was entitled to ground rent at the rate of Rs. 2,000/- per month and accordingly. It issued a legal notice dated 5.3.1996 in this regard. The other averment were denied and prayer for dismissal of the claim petition was made. The miller also filed counter-claim for recovery of Rs. 4,85,000/- from the PUNSUP on account of ground rent, watch and ward charges, maintenance and damages.
4. The Tribunal vide award dated 19.7.2000 allowed the claim of the PUNSUP to the extent of Rs. 99,360/- with future interest at the rate of 21% per annum from the date of award till realisation. The counter claim of the miller was dismissed.
5. Being aggrieved with the award dated 19.7.2000 passed by the Arbitrator, both the sides had filed their respective objections petitioners. The learned Additional District Judge, Chandigarh vide order dated 20.7.2006 dismissed the objection petitions filed by the parties.
Feeling dissatisfied with the order dated 20.7.2006 passed by the Additional District Judge, Chandigarh, the miller-appellants have approached this Court by way of instant appeal.
6. Learned Counsel for the appellants submitted that the Additional District Judge had framed the issues and the parties and started leading evidence, when in view of the judgment of the Apex Court in FCI v. Indian Council of Arbitration , and Sial Brothers v. SBEC System 2004(3) Arbitration Law Reporter 429 he proceeded to adjudicate the objection petition on the basis of the record off the arbitrator itself without looking into the evidence led or which was to be led by the parties concerned. The counsel urged that under Section 82 of the Act, the States of Punjab, Haryana and Union Territory have framed rules consistent with the Act and therefore, procedure laid down therein had to be followed while deciding objection petition filed by the appellant. Learned Counsel has placed reliance upon a judgment of this Court in the case of Amrit Singh v. Vadhan Properties and Investment Ltd. (2007-1)145 P.L.R. 294, on the other hand, learned Counsel for respondents No. 1 and 2 supported the impugned order.
7. I have heard counsel for the parties and find merjHh the contention of the learned Counsel for the appellants. A learned Single Judge pfthis Court in Amrik Singh’s case (supra) while deciding similar issue, in para-6, had held as under:
I have considered the arguments raised by the learned Counsel for the petitioners and find force in the same. Once by statutory rules a procedure has been laid down the same has to be followed. Rules applicable in the State of Punjab, Haryana and Union Territory require the leading of evidence on all the applications and therefore, there was no justification to efface the issues and evidence already led. I have also gone through the judgment passed by the Hon’ble Supreme Court in the case of Food Corporation of India (supra) and find that the same was with respect to the application moved under Section 11 of the Act which was treated to be an administrative order as per law then in existence though subsequently Hon’ble Supreme Court has held that the orders under Section 11 are also judicial orders.
8. Accordingly, the appeal is allowed. The order under challenge is set aside and the matter is remitted back to the trial court to decide the objection petition filed under Section 34 of the Act in accordance with law.
Parties to appear before the trial court on 24.03.2008.