M/S Maruti Agencies vs M/S Adidas India Marketing ...
2009 Latest Caselaw 3921 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  OMP No.558 of 2009

%                                   Date of decision:23.09.2009

M/S MARUTI AGENCIES                                     ...Petitioner
                         Through:    Mr. S.C. Kalra,   Advocate    for     the
                                    Petitioner.

                                 Versus

M/S ADIDAS INDIA MARKETING PRIVATE LTD.
& ANR..                               .. Respondents
                         Through: None.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.      Whether reporters of Local papers may
        be allowed to see the judgment?                 No

2.      To be referred to the reporter or not?          No

3.      Whether the judgment should be reported         No
        in the Digest?


RAJIV SAHAI ENDLAW, J.

1. Petition under Section 34 of the Arbitration Act, 1996 is

preferred with respect to the arbitral award dated 25th June, 2009.

The respondent/claimant had made a claim against the petitioner for

recovery of Rs.42,67,495/- along with pendente lite and future

interest. The petitioner was the distributor for Delhi region for the

sports shoes, apparels & accessories etc. of the respondent and on

the terms & conditions contained in a Distribution Agreement dated

1st October, 2003 replaced by another agreement dated 14th March,

2005. The petitioner showed an inclination to terminate the said

arrangement and the aforesaid amounts were claimed by the

respondent as the amounts due from the petitioner on taking

complete accounts of the transactions between the parties. The

arbitrator has made an award of Rs.20,29,939/- in favour of the

respondent and against the petitioner. The respondent has not been

awarded any pendente lite interest or costs of arbitration. The

petitioner has been given two months' time to pay the awarded

amount failing which it has been held liable for future interest at

18% on the awarded amount.

2. On a perusal of the arbitral award and the grounds taken with

respect thereto in the OMP, no ground under Section 34 of the Act

was felt to have been made out. The findings of the arbitrator are

factual and on the basis of accounts between the parties and the

same do not permit any interference under Section 34 of the Act and

none of the findings can be said to be contrary to any substantive law

or to the agreement between the parties.

3. The counsel for the petitioner has been heard. He has made

submissions under three heads. Firstly, it is contended that the

arbitrator has not allowed credit to the petitioner of the amount

realized by the respondent on encashment of the bank guarantee for

Rs.5 lacs furnished by the petitioner in favour of the respondent.

Attention of the counsel has been drawn to the running Page 55 to

56 of the award where the arbitrator has dealt exhaustively with

respect to the said contention of the petitioner made before the

arbitrator also and has held that credit of the said sum of Rs.5 lacs

has been given. The only contention of the counsel for the petitioner

is that since the encashment of the bank guarantee was on a date

after the accounts had been prepared, the credit could not have been

given. However, the arbitrator on going through the accounts has

held that the respondent had while preparing the accounts given the

credit for the said amount. The counsel in spite of enquiry is unable

to show from any document or pleadings on record that the credit for

the said sum of Rs.5 lacs does not stand given.

4. The counsel for the petitioner then read out the findings in the

award under Issue No.3. The arbitrator has given credit to the

respondent in the sum of Rs.10,43,398/- towards goods returned by

the petitioner to the respondent. The counsel for the petitioner

contends that the claim of the petitioner on this account was in the

sum of approximately Rs.12 lacs. It is contended that the arbitrator

has while giving credit of the value of the goods, not given credit of

the Sales Tax paid on the earlier sale of the said goods by the

respondent to the petitioner.

5. Again, it is not as if the award is oblivious of the said

contention of the petitioner. The arbitrator has on running Page 51

of the award held the petitioner not entitled to claim Sales Tax paid

on the value of the returned goods for the reason of the transactions

having been completed and the subsequent return of the goods by

the petitioner to the respondent being allowed not because of any

terms of the contract but on account of the respondent having

waived the right not to accept the said goods and by its implied

conduct having agreed to accept back the said goods. The counsel

for the petitioner has contended that as per policy, the Sales Tax

paid on the said transaction ought to also have been refunded/given

credit to the petitioner. However, no policy in this regard is cited.

On enquiry, it is urged that the same is as per the Sales Tax laws.

Neither any law is shown nor am I willing to accept that there would

be any such provision. The claim if any of the petitioner would be for

refund of the tax if any paid by the petitioner and cannot be against

the respondent.

6. The counsel for the petitioner has lastly referred to the

findings of the arbitrator under Issue No.6. The same related to the

claim of the petitioner for credit adjustment of Rs.2,93,833/- on

behalf of business between the respondent and M/s Maruti Clothing

Company, in which name the proprietor of the petitioner is also

stated to be carrying on business. The arbitrator has on perusal of

the accounts between the parties held the said amount to be not due

to the petitioner or to M/s Maruti Clothing Company. The counsel for

the petitioner has contended that the reliance placed by the

arbitrator on the accounts as on 31st March, 2007, not including the

said amount, is wrong in as much as those accounts were of the

petitioner i.e. M/s Maruti Agencies and not of M/s Maruti Clothing

Company.

7. I am afraid such mistakes even if any in the award are not open

for interference by the court. The arbitrator is a private forum

chosen by the parties for settlement of their disputes and the parties

are bound by his findings whether right or wrong. The argument

raised is with respect to appreciation of evidence and it is settled law

that the court will not interfere in wrong appreciation of evidence by

the Arbitral Tribunal.

8. Resultantly, no ground for issuing notice of the petition is

made out.

The petition is dismissed.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE)

September 23rd, 2009 pp