The Punjab State Cooperative Supply And ... vs M/S Dasmesh Enterprises And Ors
2024 Latest Caselaw 16048 P&H

Punjab-Haryana High Court

The Punjab State Cooperative Supply And ... vs M/S Dasmesh Enterprises And Ors on 3 September, 2024

Author: Alka Sarin

Bench: Alka Sarin

                               IN THE HIGH COURT OF PUNJAB AND HARYANA AT
                                              CHANDIGARH

                                                                   RSA-4699-2019 (O&M)
                                                                   Reserved on : 28.08.2024
                                                                   Pronounced on : 03.09.2024

                     THE PUNJAB STATE CO-OPERATIVE
                     SUPPLY AND MARKETING FEDERATION LTD.                               ....Appellant

                                                        VERSUS

                     M/s DASMESH ENTERPRISES AND ORS                               ....Respondents

                     CORAM : HON'BLE MRS. JUSTICE ALKA SARIN

                     Present :     Mr. Ankit Choudhri, Advocate for
                                   Mr. P.I.P. Singh, Advocate for the appellant.

                     ALKA SARIN, J.

CM-13422-C-2019

1. For the reasons mentioned therein, the application for

condonation of 36 days' delay in filing the appeal is allowed. The delay of

36 days in filing the present regular second appeal is condoned.

RSA-4699-2019

2. The present appeal has been preferred by the plaintiff-appellant

challenging the judgment and decree dated 17.09.2016 passed by the Trial

Court and the judgment and decree dated 03.12.2018 passed by the First

Appellate Court.

3. Brief facts relevant to the present lis are that the plaintiff-

appellant filed a suit for recovery of ₹23,82,820 on the ground that during

the year 1994-95 the plaintiff-appellant procured paddy for custom milling

and delivery of milled rice to the Food Corporation of India (FCI). The

defendant-respondents were allotted the paddy for custom milling and an

agreement was entered into between the parties and the defendant-

respondents were to shell paddy for the year 1994-95. It is further the case

that the defendant-respondents failed to adhere to the schedule and

committed breach of the contract and hence compensation was claimed as

per the agreement along with interest @ 21% per month. The plaintiff-

appellant initially initiated arbitration proceedings. The Arbitrator held the

reference to be not maintainable. The said order of the Arbitrator was

challenged by the plaintiff-appellant before the Additional District Judge,

Ferozepur who held the arbitration reference to be maintainable. The order

of the Additional District Judge, Ferozepur was challenged in a revision by

the defendant-respondents wherein the order of the Additional District

Judge, Ferozepur was set aside vide order dated 14.03.2002 passed by this

Court. Review petition filed by the plaintiff-appellant was dismissed and

even the Special Leave Petition (SLP) preferred by the plaintiff-appellant

before the Hon'ble Supreme Court was also dismissed vide order dated

01.03.2007. It is further the case that after the dismissal of the SLP by the

Hon'ble Supreme Court, various notices were sent to the defendant-

respondents to come present. However, they did not appear and were

proceeded against ex parte and an order dated 10.03.2011 was passed by the

Managing Director wherein the defendant-respondents were held liable to

pay an amount of ₹23,82,820 plus interest. Since the amount was not paid,

the present suit was filed.

4. On notice, the defendant-respondents appeared and raised

preliminary objections regarding limitation and that earlier the Managing

Director of the plaintiff-appellant had appointed an Arbitrator, and the

arbitration proceedings were held to be not maintainable. The said order of

the Arbitrator was challenged by the plaintiff-appellant before the Additional

District Judge, Ferozepur who held the arbitration reference to be

maintainable. The order of the Additional District Judge, Ferozepur was

challenged in a revision by the defendant-respondents wherein the order of

the Additional District Judge, Ferozepur was set aside vide order dated

14.03.2002 passed by this Court. Review petition filed by the plaintiff-

appellant was dismissed and even the Special Leave Petition (SLP) filed by

the plaintiff-appellant before the Hon'ble Supreme Court was also dismissed

vide order dated 01.03.2007. Thereafter the matter was again referred by the

plaintiff-appellant to another Arbitrator, namely, Sh. K.D. Arora, nominated

by the Managing Director, who also rejected the arbitration reference. It was

further the case that the crop year 1994-95 was a bumper heavy crop and

there was shortage of space with the Government as well as with the

procuring agencies including the plaintiff-appellant and paddy was stored in

the mill premises under the custody and control of the officials of the

plaintiff-appellant. As per the terms and conditions, the miller was supposed

to deliver the advance rice in the shape of two wagons and only thereafter

the equivalent paddy was to be released out of the stored paddy but due to

the poor quality of paddy, rice was not within the specifications as laid down

by the Ministry of Food. The matter was reported to the Government of

India and Ministry of Food decided to dispose off the paddy under the public

policy declared by the Government. As per the said policy, paddy was

disposed off @ ₹442 per quintal, then @ ₹395 per quintal, then @ ₹330 per

quintal and thereafter @ ₹240 per quintal. It is further the case that once the

matter had been adjudicated right upto the Hon'ble Supreme Court, the

Managing Director had no right to re-open the same.

5. Replication was filed denying the averments made in the

written statement and reiterating those made in the plaint.

6. On the basis of the pleadings of the parties the following issues

were framed :

1. Whether the plaintiff is entitled to recover the suit

amount as prayed for ? OPP

2. Whether the plaintiff is entitled for interest, if so, at

what rate ? OPP

3. Whether the present suit of the plaintiff is time

barred ? OPD

4. Whether the present suit is not filed by any

competent person ? OPD

5. Whether the plaintiff is estopped by his own act

and conduct to file the present suit ? OPD

6. Relief.

7. The Trial Court held the suit to be barred by limitation

inasmuch as the matter was decided by the Hon'ble Supreme Court on

01.03.2007. Thereafter the matter was again entrusted to another Arbitrator,

namely, Sh. K.D. Arora by the Managing Director who also rejected the

reference vide order dated 09.04.2007. The present suit was filed in the year

2012 and hence it was held to be barred by limitation. It was further held

that the order passed by the Managing Director dated 10.03.2011 was illegal.

The Trial Court further held that PW-1, namely, Vishal Arora, Dealing

Assistant Paddy, Markfed Ferozepur had admitted that the paddy stored with

the millers was under the control and custody of the plaintiff-appellant and

was disposed off in terms of the Government policy. He further admitted in

his cross-examination that he had no personal knowledge of the documents.

The recovery in the present suit was based on the account statements (Ex.P-

24 to Ex.P-26). However, the said documents were not proved in accordance

with law. Even the accounts produced were not proved in accordance with

law. Accordingly, the suit of the plaintiff-appellant was dismissed vide

judgment and decree dated 17.09.2016. Aggrieved by the same, an appeal

was preferred by the plaintiff-appellant which appeal was also dismissed by

the First Appellate Court vide judgment and decree dated 03.12.2018.

Hence, the present regular second appeal by the plaintiff-appellant.

8. Learned counsel for the plaintiff-appellant would contend that

the suit was filed on the basis of the order of the Managing Director dated

10.03.2011 wherein he had held the defendant-respondents liable to pay an

amount of ₹23,82,820 along with interest. The learned counsel would further

contend that several notices were issued to the defendant-respondents who

failed to appear and hence the order was passed by the Managing Director.

9. Heard.

10. In the present case learned counsel for the plaintiff-appellant

has not been able to convince this Court that the Managing Director of the

plaintiff-appellant had any authority to pass the order dated 10.03.2011. The

earlier reference to the Arbitrator was held to be not maintainable right upto

the Hon'ble Supreme Court. Thereafter another Arbitrator was appointed by

the plaintiff-appellant who also held that the reference was not maintainable.

Subsequently the Managing Director himself passed an order dated

10.03.2011. The learned counsel has not been able to show under what

provision of law or under which agreement the Managing Director was

empowered to pass such an order. The Special Leave Petition (SLP)

preferred by the plaintiff-appellant was dismissed by the Hon'ble Supreme

Court on 01.03.2007. The present suit was filed in the year 2012. Hence the

same is clearly barred by limitation. No other argument was raised.

11. In view of the above, I do not find any merit in the present

appeal. No question of law, much less any substantial question of law, arises

in the present case. The appeal being devoid of any merit is accordingly

dismissed. Pending applications, if any, also stand disposed off.

(ALKA SARIN) 03.09.2024 JUDGE Aman Jain

NOTE: Whether speaking/non-speaking: Speaking Whether reportable: Yes/No