[Cites 12, Cited by 0]
Calcutta High Court
Agarpara Jute Mills Ltd vs The Jute Corporation Of India Ltd on 29 January, 2026
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION 2026:CHC-OS:23
ORIGINAL SIDE
(COMMERCIAL DIVISION)
RESERVED ON: 03.12.2025
DELIVERED ON: 29.01.2026
PRESENT:
HON'BLE JUSTICE GAURANG KANTH
AP-COM 105 OF 2024
AGARPARA JUTE MILLS LTD.
VERSUS
THE JUTE CORPORATION OF INDIA LTD.
Appearance:
Mr. Sakya Sen, Sr. Adv.
Mr. Sankarsan Sarkar, Adv.
Mr. Jaydeb Ghorai, Adv.
Mr. Diptesh Ghorai, Adv.
... for the petitioner
Mr. Aman Agarwal, Adv.
Mr. Debabrata Das, Adv.
Mr. Tirthankar Nandi, Adv. ... for the respondent
JUDGMENT
Gaurang Kanth, J.:-
1. The Petitioner preferred the present arbitration petition under Section 34 of
the Arbitration and Conciliation Act, 1996 challenging the award dated
07.12.2010 passed by the Sole Arbitrator, Mr. Sanjib Mishra.
2. The facts leading to the present Petition are as follows:
3. The Petitioner is a jute manufacturing company employing more than
2,000 workmen. Owing to financial constraints, the Petitioner engaged
M/s S.B. Overseas Ltd. for the purpose of financing and procurement of
raw jute of specified quality for its jute mill from various sellers. The said
entity was also acting on behalf of four other jute mills, namely Baranagar
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Jute Factory PLC, Loomtex Engineering Private Ltd., Premium Agro
Exports Ltd, and Empire Jute Corporation Ltd., all situated in the State of
West Bengal. M/s PEC Ltd., a Government of India enterprise, was
engaged for the purpose of opening letters of credit for and on behalf of the
Petitioner in favour of the Respondent.
4. The Respondent, The Jute Corporation of India Ltd., is a Government of
India undertaking established as a price support agency with the mandate
to procure raw jute from the jute growers at the Minimum Support Price
declared annually by the Government of India. The jute so procured is
thereafter sold by the Respondent through various channels such as B-
Twill Linkage and e-tender to different users of raw jute.
5. M/s S.B. Overseas Ltd., acting on behalf of the Petitioner and the four
other jute mills, by letter dated 07.09.2006, booked a total quantity of
40,000 quintals of raw jute and deposited an amount of Rs.35,00,000/- as
security deposit, pending furnishing of a bank guarantee or opening of a
letter of credit in favour of the Respondent.
6. Pursuant thereto, two agreements were entered into between the parties,
namely, (i) Agreement dated 08.09.2006 bearing No. JCI/223/2006-
07/FS-5 for procurement of raw jute from South Bengal and the Purnea
area; and (ii) Agreement dated 11.09.2006 bearing No. JCI/223/2006-
07/FS-6 for procurement of raw jute from Guwahati, Assam.
7. Under the said two agreements, the Respondent agreed to supply various
grades of raw jute aggregating to 2800 quintals each to the Petitioner,
subject to the terms and conditions contained therein.
8. In terms of the agreements, the Petitioner was required to deposit a
security amount equivalent to 5% of the contract value within five working
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days. By letter dated 03.11.2006, M/s S.B. Overseas Ltd., acting on behalf
of the Petitioner, informed the Respondent that the Petitioner was unable
to deposit the said security amount or make full payment at one time. It
was indicated therein that a sum of Rs.35,00,000/- had already been
deposited and that supply of raw jute may be made on a pro-rata basis,
with the balance quantity to be lifted in two instalments. As per the two
contracts as mentioned herein above, the total quantity to be supplied to
the Petitioner was 5,600 quintals. Pursuant thereto, the Respondent
supplied 448 quintals of raw jute, leaving a balance quantity of 5,152
quintals.
9. The record indicates that the Respondent procured and stored the requisite
quantity of raw jute for delivery under the said contracts. Subsequently, by
letter dated 22.11.2006, M/s S.B. Overseas Ltd. informed the Respondent
that the Petitioner would not be in a position to perform the contracts and
communicated cancellation thereof.
10. Thereafter, disputes arose between the parties in relation to the non-lifting
of the remaining quantity of raw jute. The Respondent invoked the
arbitration clause contained in the agreements and referred the disputes
to arbitration by way of a single reference before the learned Sole
Arbitrator, Shri Sanjib Misra.
11. Both parties appeared before the learned Sole Arbitrator and filed their
respective pleadings. Upon consideration of the same, six issues were
framed for adjudication. After conclusion of the arbitral proceedings, the
learned Sole Arbitrator passed an Award dated 07.12.2010, whereby a
sum of Rs.20,41,495/- was awarded in favour of the Respondent, with a
direction that the said amount be paid within three months from the date
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of the Award, failing which it would carry interest at the rate of 10% per
annum. The present petition under Section 34 of the Arbitration and
Conciliation Act, 1996 has been filed assailing the said Award.
Submission on behalf of the Petitioner
12. Learned Counsel for the Petitioner contends that the impugned Award is
contrary to the mandate of Section 28(3) of the Arbitration and
Conciliation Act, 1996, inasmuch as the learned Sole Arbitrator failed to
adjudicate the disputes in accordance with the terms of the contract.
13. Learned Counsel for the Petitioner further submits that the methodology
adopted by the learned Arbitral Tribunal in computing the alleged loss is
wholly untenable and contrary to settled principles of law. It is contended
that the alleged breach is stated to have occurred on 22.11.2006, when the
Petitioner cancelled the purchase orders for reasons recorded therein.
However, under Clauses 4.7 and 2.2 of the contract, the Petitioner was
required to lift the entire contracted quantity of jute within 60 days from
the opening of the Letter of Credit. Admittedly, no Letter of Credit was ever
opened. Consequently, the contract stood terminated by efflux of time on
08.11.2006, reckoned from the date of commencement of the contract.
Despite the termination of the contract, the Respondent unilaterally
treated the contract as subsisting and called upon the Petitioner to
perform its alleged obligations thereunder. It is submitted that, in law, the
Respondent could claim damages, if at all, only as on the date of
breach/termination, i.e., 08.11.2006, and such damages would necessarily
be confined to the difference between the contract price and the prevailing
market price on that date.
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14. Learned Counsel further submits that the evidence on record unequivocally
demonstrates that, on the date of termination, there was no difference
between the contract price and the prevailing market price of jute. In the
absence of any proven loss on the date of breach, the Arbitral Tribunal
could not have awarded damages for breach of contract. However, the
learned Arbitrator committed a patent illegality in determining the base
price of jute on the basis of market rates prevailing nearly four months
after the termination of the contract. Any assessment of loss, even
assuming it to be permissible, ought to have been undertaken strictly with
reference to the market rate prevailing on the date of
cancellation/termination and not on the basis of a subsequently fluctuated
market rate. The impugned award, therefore, runs directly contrary to
Section 73 of the Indian Contract Act, 1872, which mandates that
compensation must correspond to the loss actually suffered at the time of
breach. In support of the aforesaid submissions, reliance is placed upon
Muralidhar Chiranjilal v. Harishchandra Dwarakadas, reported as
1961 SCC OnLine SC 100; H.J. Baker & Brothers Inc. v. Minerals and
Metals Trading Corporation Ltd., reported as (2023) 9 SCC 424;
Sitaram Srigopal v. Smt. Daulati Devi, reported as (1979) 4 SCC 351;
and Sundareswaran v. M/s Sri Krishna Refineries, reported as 1976
SCC OnLine Mad 68.
15. It is next contended that the impugned Award is arbitrary, perverse, and
legally unsustainable as no actual loss or damage was suffered by the
Respondent.
16. It is further urged that the learned Arbitrator erred in computing the
alleged loss in the absence of any cogent evidence on record. No material
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or documentary evidence was produced by the Respondent to substantiate
the alleged carrying charges or other incidental expenses said to have been
incurred due to non-lifting of the jute by the Petitioner. It is submitted that
the Respondent also failed to take any reasonable steps to mitigate its
alleged losses, and as such, was not entitled to claim any damages.
Reliance is placed on Ssangyong Engineering & Construction Company
Ltd v. NHAI reported as 2019 (15) SCC 131.
Submission on behalf of the Respondent
17. Per contra, Learned Counsel for the Respondent has supported the
impugned Award and submitted that the same is reasoned, well
considered, and based upon the material placed on record. It is contended
that the Respondent had duly performed its contractual obligations and
had procured and stored the requisite quantity of raw jute for delivery to
the Petitioner. However, despite repeated assurances, the Petitioner,
through its agent M/s S.B. Overseas Ltd., failed to lift the balance quantity
of raw jute, thereby committing a clear breach of the contract.
18. It is further submitted that the learned Arbitrator, after due consideration
of the pleadings and evidence, assessed the loss suffered by the
Respondent in accordance with the terms of the contract and the
prevailing circumstances. The Respondent had incurred substantial
expenses towards procurement, storage, handling, and maintenance of the
unsold jute due to the Petitioner's failure to lift the same. The Award,
therefore, represents a fair and equitable determination of the losses
suffered and cannot be interfered with merely because another view is
possible.
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19. Learned Counsel for the Respondent thus submits that the findings
recorded by the learned Sole Arbitrator are based on due appreciation of
facts and evidence, and that the scope of interference by this Court under
Section 34 of the Arbitration and Conciliation Act, 1996, being limited, no
ground is made out for setting aside the Award. Reliance is placed on OPG
Power Generation Pvt Ltd v. Enexio Power cooling Solutions India Pvt
Ltd reported as 2025 (2) SCC 417, Reliance Infrastructure Ltd v. State
of Goa reported as 2024 (1) SCC 479, Delhi Airport Metro Express Pvt
Ltd v. DMRC reported as 2022 (1) SCC 131.
Legal Analysis
20. This Court heard the arguments advanced by both the parties and
examined the documents placed on record.
21. During the arbitral proceedings, the learned Sole Arbitrator framed six
issues and adjudicated the Respondent's claims on the basis of the
findings recorded thereon. Although the principal challenge in the present
proceedings is confined to Issue No. 6, this Court, for the sake of
completeness and continuity of reasoning, considers it appropriate to
examine the findings of the Arbitral Tribunal issue-wise.
Issue No.1: Whether the contract signed between the parties is a concluded
contract and is binding between the parties
22. The learned Sole Arbitrator decided this issue in the affirmative, upon
consideration of the following material aspects:
(i) That both the parties, with full knowledge and consent, executed
two written contracts dated 08.09.2006 bearing No. JCI/223/2006-
07/FS5 and 11.09.2006 bearing No. JCI/223/2006-07/FS6, under
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which the Respondent agreed to supply various grades of raw jute
aggregating 5600 quintals to the Petitioner.
(ii) That M/s S.B. Overseas Ltd., acting on behalf of the Petitioner, by its
letter dated 03.11.2006, informed the Respondent that due to
financial constraints, the Petitioner was unable to make full
payment or furnish the stipulated security deposit. It was, however,
stated that a sum of Rs. 35,00,000/- was being deposited and a
request was made to supply raw jute on a pro-rata basis, with an
assurance that the remaining quantity would be lifted in two
installments. Acting upon the said request, the Respondent supplied
448 quintals of raw jute to the Petitioner.
(iii) That the parties had duly signed and acted upon the written
contracts, clearly evincing their intention to be bound by the
contractual terms, and therefore, a concluded and enforceable
contract existed between them.
23. Upon consideration of the record, this Court finds no infirmity or
perversity in the finding of the learned Sole Arbitrator. The conclusion that
a concluded contract existed between the parties is supported by
documentary evidence as well as by the admitted conduct of the Petitioner
in accepting partial supply against payment. The correspondence and
performance clearly establish that the parties treated the agreement as
operative and binding. The view taken by the learned Arbitrator is a
plausible and reasonable interpretation of the contractual terms and
cannot be said to be perverse or contrary to law. In view of the above, this
Court finds no infirmity or perversity in the finding of the learned Sole
Arbitrator that a concluded contract existed between the parties. The said
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finding, being based on due appreciation of evidence and consistent with
the contractual record, warrants no interference and is accordingly
upheld.
Issue No. 2: Whether there has been a novation of the contract due to part
supply of jute and consequent adjustment of Rs. 35,00,000/- deposited by
the representatives of the jute mills, as per the written and oral requests
made by the said mills.
24. The learned Sole Arbitrator decided this issue in the negative, recording the
following reasons:
(i) That by letter dated 03.11.2006, M/s S.B. Overseas Ltd., acting as
the agent of the jute mills, requested the Respondent to adjust a
sum of Rs. 35,00,000/- as advance payment and to supply an
equivalent quantity of raw jute to the various jute mills. It was
further stated therein that the balance payment would be made in
two installments on 20.11.2006 and 04.12.2006, and that the entire
quantity of jute would be lifted accordingly. The Respondent
accepted the said proposal and, acting thereon, supplied jute to the
respective mills.
(ii) Although the clause relating to the security deposit was not adhered
to by either party, the main contract otherwise remained operative
and binding between them.
(iii) From the tenor of the letter dated 03.11.2006 and the subsequent
conduct of the parties, it was evident that both parties intended to
continue with and act upon the principal contract.
(iv) It was never the intention of the parties to substitute or supersede
the original contract, but rather to perform it with certain mutually
agreed deviations. The mere waiver or non-enforcement of one
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particular clause, by mutual consent, cannot be construed as
novation of the entire contract.
(v) Relying on Section 62 of the Indian Contract Act, 1872, the learned
Sole Arbitrator held that novation requires substitution of a new
contract in place of an existing one, which was not the case herein.
The correspondence and conduct of the parties demonstrated
continuity of the original contractual relationship rather than
substitution or extinguishment thereof. Accordingly, the learned
Arbitrator concluded that there was no novation of the main
contract, and that the written agreements dated 08.09.2006 and
11.09.2006 continued to remain valid, subsisting, and binding
between the parties.
25. This Court finds no infirmity in the view taken by the learned Sole
Arbitrator. The finding that there was no novation of the contract is based
on a correct appreciation of the facts and the law. The conduct of the
parties, including the acceptance of part supply and adjustment of
advance payment, clearly indicates continuation of the original contractual
arrangement rather than substitution thereof. The reasoning of the learned
Arbitrator is consistent with Section 62 of the Indian Contract Act, 1872,
and does not suffer from any perversity or illegality warranting
interference. Accordingly, the said finding is upheld.
Issue No. 3: What is the cumulative effect of Clauses 4.3, 4.6 and 4.7 of the
contract requiring payment of security deposit and the consequent recovery
of amounts therefrom by the claimant due to the failure of the respondent
to lift the goods.
26. The learned Sole Arbitrator, while deciding this issue, observed that
Clauses 4.3, 4.6, and 4.7 of the contract conferred upon the Respondent
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the right to forfeit the security deposit and/or to take such other remedial
measures as enumerated therein in the event of default by the buyer.
However, in the present case, since the Respondent, acting in good faith,
had adjusted the amount of Rs. 35,00,000/- deposited by the Petitioner
towards part supply of jute, the Respondent had effectively waived the
enforcement of these clauses. The learned Arbitrator noted that by
choosing to supply jute against the said advance payment instead of
insisting upon the security deposit, the Respondent voluntarily gave a go-
by to the stipulation regarding security deposit and thereby relinquished
its right to invoke or exercise the remedies contemplated under the said
clauses. Consequently, in the absence of any subsisting security deposit,
the question of recovering any amount or charge therefrom did not arise.
27. This Court finds no illegality or perversity in the above reasoning of the
learned Sole Arbitrator. The conclusion is based on a logical interpretation
of the contract and is supported by the conduct of the parties. The view
taken by the learned Sole Arbitrator is, therefore, just, equitable, and in
accordance with law, and the same is hereby upheld.
Issue no. 4: What is the effect of Clause 12.1 of the contract authorising the
claimant to take steps as enumerated therein in case the respondents
violate the contract thereby causing loss to the claimant
28. While examining and interpreting Clause 12.1 of the contract, the learned
Sole Arbitrator observed that the said clause operates independently of
other provisions of the agreement, including those relating to the security
deposit. The clause unequivocally empowers the Respondent to take such
measures as specified therein in the event of any breach or default by the
Petitioner causing loss or damage to the Respondent. The learned
Arbitrator, therefore, concluded that the Respondent is legally entitled to
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recover the loss, if any, occasioned by the Petitioner's failure to perform its
contractual obligations. Clause 12.1, being a comprehensive and enabling
provision, confers plenary authority upon the Respondent to take
appropriate action to safeguard its interests and recover any consequential
loss.
29. This Court finds no infirmity in the interpretation placed by the learned
Sole Arbitrator. The reasoning is consistent with the plain language and
intent of Clause 12.1, which was evidently inserted to provide the
Respondent with a contractual remedy independent of other stipulations.
The finding is neither perverse nor contrary to law and, therefore, merits
affirmation. Accordingly, the conclusion of the learned Sole Arbitrator on
this issue is upheld.
Issue No. 5: Whether the Claimant suffered loss by the action of the
respondent and the extent of such loss
30. The learned Sole Arbitrator, upon a detailed examination of the evidence
and contractual terms, held that the Respondent had procured raw jute in
accordance with the concluded contract entered into between the parties.
However, midway through the contractual performance, the Petitioner,
citing financial constraints, refused to lift the remaining quantity of jute
and thereby unilaterally terminated its obligation under the contract.
31. The learned Arbitrator observed that as a direct consequence of the
Petitioner's failure to lift the balance quantity, the Respondent incurred
substantial losses on several counts, including storage and godown
charges, carriage expenses, and additional handling costs. Further, the
Respondent also suffered loss on account of the fall in the market price of
raw jute during the relevant period. The learned Arbitrator, therefore,
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concluded that the losses sustained by the Respondent were a direct result
of the Petitioner's breach and that, under the principles embodied in the
Contract Act, the Petitioner was liable to compensate the Respondent for
such loss.
32. This Court finds no infirmity or perversity in the findings and reasoning of
the learned Sole Arbitrator. The conclusion is supported by the material on
record and is in consonance with the settled principles governing
contractual compensation. The assessment of loss and the consequent
award rendered by the learned Sole Arbitrator are thus held to be just,
reasonable, and in accordance with law. Accordingly, the finding and
award on this issue are upheld.
Issue No. 6: Whether the Claimant is entitled to relief and if so, to what
extent ?
33. While assessing the quantum of loss, the learned Sole Arbitrator took note
of the admitted position that the stock of raw jute procured by the
Respondent was not sold immediately upon cancellation of the contract.
Having regard to the nature of the Respondent as a government agency
and the attendant procedural and logistical constraints, the learned
Arbitrator reasonably inferred that a reasonable period would necessarily
elapse before the stock could be disposed of. Upon such appreciation of
the evidence, the learned Arbitrator assessed a period of four months as a
reasonable time for effecting sale and, accordingly, adopted the market
value of jute prevailing four months after the termination of the contract
for the purpose of quantifying loss.
34. The learned Arbitrator further relied upon the price list issued by the Jute
Balers Association and determined that the difference between the
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contractual rate and the prevailing market rate represented the actual
loss suffered per quintal On this basis, the learned Arbitrator computed a
loss of Rs.165 per quintal, resulting in Rs.3,88,468/- (Rs.165 × 2354.35
quintals) for Contract No. JCI/223/2006-07/FS5 and Rs.4,62,000/-
(Rs.165 × 2800 quintals) for Contract No. JCI/223/2006-07/FS6. The
learned Arbitrator also noted that a similar methodology had been
adopted and accepted in a prior arbitral award arising out of comparable
transactions, thereby ensuring consistency and uniformity in assessment.
35. In addition thereto, the learned Arbitrator considered Clause 4.6 of the
contract, which expressly provided for storage charges at the rate of Rs.25
per quintal per month. Applying the said contractual stipulation, the
carrying and storage losses were computed at Rs.2,35,435/- (2354.35
quintals × Rs.25 × 4 months) for FS5 and Rs.2,80,000/- (2800 quintals ×
Rs.25 × 4 months) for FS6.
36. Re-appreciation of evidence or substitution of the Arbitrator's view with
that of the Court is impermissible so long as the view adopted is a
plausible one. This principle stands authoritatively reiterated in Delhi
Airport Metro Express Pvt. Ltd. (Supra), wherein the Hon'ble Supreme
Court held that even an erroneous application of law or an alternative
interpretation of contractual terms does not warrant interference unless
the award is vitiated by perversity or patent illegality going to the root of
the matter.
37. The said position has been further reinforced in Reliance Infrastructure
Ltd. (supra), wherein the Hon'ble Supreme Court emphasised that Section
34 proceedings are supervisory in nature and that courts must refrain
from undertaking a merits based review or reassessing the sufficiency of
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evidence relied upon by the Arbitrator. Similarly, in OPG Power
Generation Pvt. Ltd. (supra), the Hon'ble Supreme Court reiterated that
once the Arbitrator has taken a possible view on the basis of the
contractual framework and evidence on record, the same cannot be
interdicted merely because another view is conceivable.
38. Viewed in this backdrop, the approach adopted by the learned Arbitrator
cannot be faulted on the strength of the decisions relied upon by the
Petitioner. Muralidhar Chiranjilal (supra) and Sitaram Srigopal
(supra) arose out of civil suits, where the Appellate Court exercises
plenary jurisdiction to re-appreciate evidence and substitute its own
conclusions. Those principles operate in a materially different context and
cannot be mechanically applied to arbitral proceedings. In the present
case, this Court is exercising limited jurisdiction under Section 34 of the
Arbitration and Conciliation Act, 1996, and does not sit in appeal over the
findings of the Arbitral Tribunal. Interference is confined to statutorily
recognised grounds such as patent illegality or conflict with the public
policy of India.
39. The contention that loss must invariably be assessed with reference to the
market price on the date of breach also cannot be accepted as an
inflexible rule. While Muralidhar Chiranjilal (supra) recognises the
general principle of valuation as on the date of breach, it equally
acknowledges the duty to mitigate loss and does not prohibit assessment
with reference to a later date where immediate resale is not reasonably
possible. In the present case, the learned Arbitrator has returned a
categorical finding of fact, based on evidence, that the stock of jute could
not have been sold immediately upon termination and that a period of
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four months constituted a reasonable time for disposal, particularly
having regard to the Respondent's status as a government agency. The
assessment of loss on the basis of contemporaneous market data after
such reasonable period is neither speculative nor remote, but a
commercially realistic view consistent with Section 73 of the Contract Act.
In view of the limited scope of interference under Section 34, as reiterated
in Delhi Airport Metro Express Pvt. Ltd. (supra), Reliance
Infrastructure Ltd.(supra), and OPG Power Generation Pvt. Ltd. b,
this Court cannot substitute its own view merely because an alternative
computation is possible.
40. The reliance on Sitaram Srigopal (supra) is also misconceived. There,
damages were awarded by the Trial Court on conjectural tabulation of
prices without reliable evidence of the market value of goods of
comparable quality. The Appellate Bench, upon reappraisal of evidence,
found that the goods were old and second hand, while the evidence relied
upon pertained to new goods, and consequently held that no actual loss
was proved, a conclusion affirmed by the Hon'ble Supreme Court. The
present case stands on an entirely different footing. Here, the learned
Arbitrator has recorded clear findings of fact, supported by
contemporaneous material, regarding the market value of the goods and
the reasonable period required for mitigation. There is neither absence of
evidence nor any mismatch in quality, and the quantification of loss is
reasoned and evidence based, warranting no interference under Section
34.
41. The decisions in H.J. Baker & Brothers Inc (supra). and
Sundareswaran (supra) also do not advance the Petitioner's case. Both
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turned on the absence of any contractual or evidentiary foundation for
adopting post-breach price variations. In contrast, the present case
involves express contractual provisions governing storage charges and
performance obligations, coupled with a clear factual finding that
immediate resale was not commercially feasible. The determination of loss
is thus grounded in evidence and contract, excluding any element of
speculation.
42. The reliance on Ssangyong Engineering & Construction Company Ltd.
(supra) is equally misplaced. In that case, the Hon'ble Supreme Court
interfered as the Tribunal had introduced a unilateral formula for price
adjustment, contrary to the contract, thereby rewriting its terms and
attracting patent illegality. In the present case, the learned Arbitrator has
acted strictly within the contractual framework and adopted a plausible
methodology based on contractual stipulations and contemporaneous
market data. The award neither rewrites the contract nor discloses any
perversity, patent illegality, or violation of public policy. Consequently, the
ratio of Ssangyong Engineering & Construction Company Ltd. (supra)
has no application to the facts of the present case.
Conclusion
43. In light of the foregoing discussion and upon a careful examination of the
arbitral record, this Court finds that the learned Sole Arbitrator has duly
appreciated the evidence, interpreted the contractual terms correctly, and
rendered findings based on a reasonable and cogent analysis of the
material placed before him. The learned Arbitrator has rightly held that the
Petitioner, having failed to lift the balance quantity of raw jute in terms of
the concluded contracts, was in breach of its contractual obligations, and
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that the Respondent, being a Government agency, had indeed suffered
quantifiable losses on account of storage, handling, and the decline in jute
prices. The computation of loss and the award of Rs.20,41,495/-, along
with interest, are supported by both factual and legal reasoning.
44. This Court is mindful of the settled legal position that under Section 34 of
the Arbitration and Conciliation Act, 1996, the scope of interference with
an arbitral award is narrow and circumscribed. The Court cannot act as
an appellate authority to reappreciate evidence or substitute its own
interpretation for that adopted by the Arbitrator. Where two possible
interpretations of a contract or factual inference exist, and the Arbitrator
has taken one which is plausible and not perverse, the Court must defer to
that view.
45. In the present case, the findings of the learned Sole Arbitrator neither
disclose any perversity nor any patent illegality apparent on the face of the
record. The award is not contrary to the public policy of India, nor does it
offend the fundamental principles of justice or morality. On the contrary, it
reflects a reasoned, fair, and judicious approach consistent with the intent
of the Arbitration and Conciliation Act, 1996.
46. Accordingly, this Court finds no merit in the present petition. The arbitral
award dated 07.12.2010 passed by the learned Sole Arbitrator, Shri Sanjib
Misra, is upheld in its entirety. The petition under Section 34 of the
Arbitration and Conciliation Act, 1996, is therefore dismissed.
(GAURANG KANTH, J.)
Sakil Amed P.A.
