Traxpo Enterprises Private Ltd vs M/S P E C Limited
2017 Latest Caselaw 3561 Del

$~30
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+                  FAO(OS) (COMM) 148/2017
                                      Date of decision : 24th July, 2017
       TRAXPO ENTERPRISES PRIVATE LTD       ..... Appellant
                   Through: Mr.Kuljeet Rawal, Adv.


                          versus


       M/S P E C LIMITED                            ..... Respondent
                       Through:


       CORAM:
       HON'BLE MR. JUSTICE SANJIV KHANNA
       HON'BLE MR. JUSTICE NAVIN CHAWLA


       SANJIV KHANNA, J. (Oral)

This intra court appeal impugns the order dated 10th

April, 2017 whereby the learned Single Judge has dismissed

objections filed by the appellant under Section 34 of the

Arbitration and Conciliation Act, 1996 (hereinafter referred to

as Act), inter alia, challenging the arbitral award dated 20th

October, 2015.

2. The impugned order noticed the repetitive adjournments

and dilatory tactics adopted by the appellant before the Arbitral

FAO(OS) (COMM) 148/2017 Page 1 Tribunal. The appellant took more than 3 ½ months to re-file

objections in the High Court upon return under office

objections. Notwithstanding, the aforesaid unexplained delay,

the learned Single Judge in order to appreciate the controversy

and to be just and fair has referred to the objections to the award

on merits.

3. Learned counsel for the appellant submits that they had

challenged the authority of Mr.Jitender Singh Punia, General

Power of attorney holder of P.E.C. Ltd. to file the claim petition

before the Arbitrator. The aforesaid Company is a Government

Company engaged in the business of facilitating exports and

import of various commodities and guaranteeing payment of

exporters from India and granting financial facilities to

importers of India. This objection has been dealt with and

examined in the impugned order, which has observed that the

objection was legally untenable and unacceptable. The power

of attorney in favour of Mr.Jitender Singh Punia was executed

by the Chairman cum Managing Director of P.E.C. Ltd. The

submission that the Chairman cum Managing Director had no

FAO(OS) (COMM) 148/2017 Page 2 power to sub-delegate this Authority was rejected, relying upon

minutes of the 88th meeting held by the Board of Directors held

on 30th November, 1981. The minutes had authorized the

Chairman to sub-delegate the power on Heads of Division and

other Managers under him from time to time. The impugned

order observes that Mr.Jitender Singh Punias' designation as

Deputy Finance Manager does not detract from his role as a

Manager. The learned Single Judge also rightly relied upon

doctrine of internal management and that the appellant could

not have grievance. The arbitrator had rejected the contention of

the appellant challenging the authority of Mr.Jitender Singh

Punia.

4. The second contention raised by the appellant is on merits

of the awarded amount. It is submitted that the appellant had

not become the owner of the goods as the title had remained

vested in the respondent. Therefore, the appellant were not

liable to pay customs/storage charges etc. It is submitted that

goods were subsequently auctioned by the customs and the

auction money received is lying with them.

FAO(OS) (COMM) 148/2017 Page 3

5. We have considered the said contention but find that the

issue has been dealt and rightly answered by the Arbitrator.

There were agreements dated 5th March, 2007, 23rd October,

2007 and 24th December, 2007. There are also Deeds of Pledge

dated 1st March, 2007, 5th September, 2007 and 26th November,

2007 whereby the appellant had charged and pledged the goods

stored at Kandla by way of first charge in favour of

respondent/P.E.C. Ltd. The appellant had given 3 post dated

cheques aggregating Rs.8.08 crores towards the cost of the

consignments along with 3 legal undertakings dated 8th April,

2009 to pay the balance amount in respect of the above import,

on the first demand without demur and protest. The aforesaid

cheques bounced and proceedings under section 138 of the

Negotiable Instruments Act, 1981 have been initiated by the

respondent / P.E.C. Ltd. They are pending. In addition, there

were High Seas Sale Agreements dated 19th February, 2007,

22nd August, 2007 and 9th November, 2007 for transfer/sale to

the appellant High Seas Sale basis. The arbitrator, in the

impugned order has observed and held that the goods had

FAO(OS) (COMM) 148/2017 Page 4 vested in the appellant and they were liable, even when the

appellant had failed to discharge and pay their liability. The

learned Single Judge has rightly held that there was no infirmity

in the said finding.

6. The contention of the appellant with reference to the

auction proceeds does not impress us. Merely because the

auction proceeds are still available with the customs, does not

and would not establish that the P.E.C. Ltd. is the owner of the

goods and not the appellant. The appellant has obviously not

paid the amount due and payable and it is open to P.E.C. Ltd. to

proceed against the appellant by filing execution for recovery of

the amount in accordance with law.

7. We do not find any merit in the appeal and the same is

dismissed.

                                               SANJIV KHANNA, J



                                                NAVIN CHAWLA, J
JULY 24, 2017
RN




FAO(OS) (COMM) 148/2017                                          Page 5