[Cites 2, Cited by 0]
Calcutta High Court
M/S. Joy Maa Santoshi Saw Mill vs Hindustan Cables Limited on 1 April, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
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OCD-2
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
COMMERCIAL DIVISION
APOT/24/2026
IA No. GA-COM/1/2026
M/S. JOY MAA SANTOSHI SAW MILL
-Vs-
HINDUSTAN CABLES LIMITED
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
-AND-
The Hon'ble JUSTICE MD. SHABBAR RASHIDI
For the Appellant : Mr. Surojit Nath Mitra, Sr. Adv.
Mr. Ayan Banerjee, Adv.
Mr. Arijit Bhowmick, Adv.
Ms. Debasree Mukherjee, Adv.
For the Respondent : Mr. Tilak Kr. Bose, Sr. Adv.
Mr. Pranit Bag, Bar-at-law
Mr. Rohit Mukherji, Adv.
Mr. Debabrata Das, Adv.
Mr. Saptarshi Mukherjee, Adv.
Mr. Tirthankar Nandi, Adv.
HEARD ON : 01.04.2026
DELIVERED ON : 01.04.2026
DEBANGSU BASAK, J.:-
1. Appeal is under Section 37 of the Arbitration and Conciliation
Act, 1996 and directed against the judgment and order dated
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December 12, 2025 passed in AP-COM/183/2024 IA No.
GA/2/2023.
2. By the impugned judgment and order, learned Single Judge set
aside the award dated January 28, 2020 under Section 34 of the
Act of 1996.
3. Learned Senior Advocate appearing for the appellant submits
that, learned Single Judge, erred in allowing the application
under Section 34 of the Act of 1996 filed by the respondent. He
refers to the statement of claim as also various documents
submitted before the learned Arbitrator. In particular, without
prejudice to his other contentions, he draws the attention of the
Court to a letter dated October 7, 2010 issued by the
respondent. He submits that, such document was disclosed as
C/47 before the learned Arbitrator. Learned Arbitrator did not
deal with such letter in the award.
4. Learned Senior Advocate appearing for the appellant submits
that by the letter dated October 7, 2010, the respondent
acknowledged a sum of Rs.15,27,936.34 as due and payable by
the respondent to the appellant against goods/services as on
March 2010. The respondent acknowledged a sum of
Rs.40,000/- to be due and payable as against the security
deposit. On March 31, 2010, he submits that, the aggregate sum
of Rs.15,67,936.34, therefore, stood admitted by the respondent
as due and payable to the appellant as on March 31, 2010.
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5. Learned Senior Advocate appearing for the appellant refers to
the award and submits that, the learned Arbitrator initially held
that interest at the rate of 9% compounded yearly is payable by
the respondent on and from March 1, 2004. He submits that,
two paragraphs thereafter, learned Arbitrator reduced the rate of
interest to 7% without any reasons. He submits that, in all
fairness, the appellant is entitled interest at the rate of 9% per
annum compounded yearly as held by the learned Arbitrator on
and from March 1, 2004.
6. Learned Senior Advocate appearing for the appellant submits
that, although parties were directed to share the costs of
Arbitration, at least portion of the costs that the appellant
incurred in the arbitration proceeding should be awarded.
7. Learned Advocate appearing for the respondent submits that,
the letter dated October 7, 2010 being C/47, produced before
the learned Arbitrator, cannot be construed to be an admission.
He submits that, at best it was an offer made by the respondent
calling upon the appellant to accept such sum. Since the
appellant did not respond to the letter dated October 7, 2010,
such letter cannot be said to be binding upon the respondent or
quantify any liability on the part of the respondent.
8. Learned advocate appearing for the respondent refers to the
various paragraphs of the impugned judgment and order. He
submits that, learned Single Judge, acted within the parameter
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under Section 34 of the Act of 1996. Therefore, no interference is
called for.
9. Respondent issued three purchase orders to the appellant being
no. CC-10/2000, CC-19/2001 and CC-19/2002 for procurement
of wooden cable drums required by the respondent. Disputes
and differences arose between the parties with regard to such
contract. Disputes and differences were referred to arbitration.
Court is informed that initially departmental Arbitrators were
appointed. Subsequently, on an application made before the
High Court, a retired judge of this Hon'ble Court was appointed
by an order dated July 20, 2017 as an Arbitrator, who passed
the award.
10. Before the arbitrator, respective parties filed their statement of
claims, replies and rejoinders. Evidence was led in the
arbitration proceeding. Court is informed that 34 arbitration
sittings took place before the learned Arbitrator.
11. Mandate of the Arbitrator was extended by an order dated
September 23, 2019. Learned Arbitrator made and published the
award on January 28, 2020. Respondent challenged such award
by way of an application under Section 34 of the Act of 1996
resulting in the impugned judgment and order.
12. We find from the records that, by a letter dated October 7, 2010,
the respondent acknowledged a sum of Rs.15,67,936.34 as due
and payable on two heads as on March 31, 2010. Such letter in
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our view is unconditional acknowledgment of liability of the
respondent to the appellant, as on March 31, 2010. In fact, last
sentence of such letter states that in the event the appellant is
silent on such admission of liability, then, the sum admitted by
the respondent will be assumed to be correct and accepted by
the appellant.
13. As against the respondent, the letter dated October 7, 2010 is an
unconditional acknowledgment of liability. There is nothing on
record that the admitted sum was paid by the respondent.
14. This document was before the Arbitral Tribunal. Consequently,
such document was also before the Court passing the impugned
judgment and order. In the impugned judgment and order,
learned Single Judge, in paragraph 29 noted that the respondent
admitted its liabilities. However, learned Trial Judge was pleased
to set aside the entirety of the award, without allowing such
portion of the admitted liability.
15. Since, there exists unconditional acknowledgment of liability, in
our view, learned Trial Judge, exceeded jurisdiction under
Section 34 of the Act of 1996 in setting aside the entirety of the
award.
16. In view of the reasoning above, we deem it appropriate to modify
the award by directing that the respondent is liable to pay a
principal sum of Rs.15,67,936.34 to the appellant along with
interest at the rate of 9% per annum compounded yearly
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calculated on and from March 1, 2004 till actual payment. Rate
of interest awarded in the manner as noted herein is on the
basis of the finding of the Arbitral Tribunal with regard thereto.
17. As noted above, 34 arbitration sittings were held in the
arbitration. Court is informed that, appellant paid a sum of
Rs.10,000/- per sitting towards fees of the learned Arbitrator. In
all fairness, such cost be added to the claim of the appellant.
18. Appellant will, therefore, be entitled to a sum of Rs.3,40,000/-
as costs of the arbitration in addition to the principal amount
and the interest awarded.
19. IA No. GA-COM/1/2026 and APOT/24/2026 are disposed of
accordingly, without any order as to costs.
(DEBANGSU BASAK, J.)
20. I agree
(MD. SHABBAR RASHIDI, J.)
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