FAO-338-2019(O&M) and FAO IN THE HIGH COURT OF PUNJAB AND HARYANA AT 207 1. FAO-338 LALIT KUMAR BANSAL BHUPINDER KUMAR AND OTHERS 2. FAO-515 LALIT KUMAR BANSAL ABHISHEK GOYAL AND OTHERS CORAM : HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Mr. Himanshu Puri, Advocate Mr. Sunny K. Singla, Advocate for respondents No.1 and 2 in FAO for respondents No.2 and 3 in FAO Mr. Harsh Goyal, Advocate for respondent No.3 in FAO for None for respondent No.5. LAPITA BANERJI, J. Challenge in the present appeal December 07, 2018 passed by the Additional the impugned order, the learned ADJ modified the award dated May 28, 2015 passed by the learned Arbitrator. 2019(O&M) and FAO-515-2019(O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION : 338-2019(O&M) LALIT KUMAR BANSAL Versus BHUPINDER KUMAR AND OTHERS 515-2019(O&M) LALIT KUMAR BANSAL Versus ABHISHEK GOYAL AND OTHERS HON’BLE MS. JUSTICE LAPITA BANERJI Mr. B.K. Mehta, Advocate for the appellant. Mr. Himanshu Puri, Advocate for Mr. Sunny K. Singla, Advocate for respondents No.1 and 2 in FAO for respondents No.2 and 3 in FAO Mr. Harsh Goyal, Advocate for respondent No.3 in FAO-338- for respondent No.1 in FAO-515- None for respondent No.5. LAPITA BANERJI, J.(ORAL) Challenge in the present appeals is December 07, 2018 passed by the Additional the impugned order, the learned ADJ modified the award dated May 28, 2015 passed by the learned Arbitrator. 2019(O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT DATE OF DECISION : 09.07.2026 …APPELLANT …RESPONDENTS …APPELLANT …RESPONDENTS HON’BLE MS. JUSTICE LAPITA BANERJI for the appellant. for for respondents No.1 and 2 in FAO-338-2019 and for respondents No.2 and 3 in FAO-515-2019. -2019 and -2019. is to the impugned order dated December 07, 2018 passed by the Additional District Judge, Sangrur. Vide the impugned order, the learned ADJ modified the award dated May 28, PRINCE SAINI 2026.07.14 19:01 I attest to the accuracy and integrity of this document FAO-338-2019(O&M) and FAO 2. Learned Arbitrator the name of M/s Bhagwati Rice and General Mills, four partners and shareholding of each of the partners was 1/4 The said firm entered into a shelling agreement with the PUNGRAIN on October 29, 2010. Since the contractual said firm, a sum of Rs.2,93,42,482/ directed to be recovered from the proceedings. Learned Arbitrator hel one Abhishek Goyal was present at the time of the physi the claimant as stated in the physical verification report 2012, he was alone liable to pay for 3/4 remaining 1/4th partners in equal shares. 3. A rice fell short out of the total quantity of 23,308.69 quintals. Only 7537.65 quintals of rice were delivered. 4. Learned ADJ while hearing the application under Section 34 of the Arbitration and Conciliation Act, 1996 1996 Act”), modified the said award and held that prior to the default being caused by the partnership firm, the same was dissolved by a memorandum of resolution dated January 19, 2012. Therefore, the entire liability was to be paid by the s 2019(O&M) and FAO-515-2019(O&M) Learned Arbitrator inter alia held that the partnership firm by the name of M/s Bhagwati Rice and General Mills, four partners and shareholding of each of the partners was 1/4 The said firm entered into a shelling agreement with the PUNGRAIN on October 29, 2010. Since the contractual obligation m, a sum of Rs.2,93,42,482/- along with interest @ 12% was directed to be recovered from the firm/partners proceedings. Learned Arbitrator held that since out of four partners Abhishek Goyal was present at the time of the physi the claimant as stated in the physical verification report he was alone liable to pay for 3/4th th value of the shortage was to be deposited by all the three partners in equal shares. As per the physical verification report rice fell short out of the total quantity of 23,308.69 quintals. Only 7537.65 quintals of rice were delivered. Learned ADJ while hearing the application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter refer modified the said award and held that prior to the default being caused by the partnership firm, the same was dissolved by a memorandum of resolution dated January 19, 2012. Therefore, the entire liability was to be paid by the sole proprietor being one Lalit Bansal 2019(O&M) held that the partnership firm by the name of M/s Bhagwati Rice and General Mills, Manakheri, Sangrur had four partners and shareholding of each of the partners was 1/4th in the firm. The said firm entered into a shelling agreement with the PUNGRAIN on obligations were not fulfilled by the along with interest @ 12% was firm/partners in the arbitration d that since out of four partners only Abhishek Goyal was present at the time of the physical verification by the claimant as stated in the physical verification report dated May 08, th of the said shortage. The value of the shortage was to be deposited by all the three the physical verification report, 14771.04 quintals of rice fell short out of the total quantity of 23,308.69 quintals. Only 7537.65 Learned ADJ while hearing the application under Section 34 of (hereinafter referred to as “the modified the said award and held that prior to the default being caused by the partnership firm, the same was dissolved by a memorandum of resolution dated January 19, 2012. Therefore, the entire liability was to ole proprietor being one Lalit Bansal/the appellant instead PRINCE SAINI 2026.07.14 19:01 I attest to the accuracy and integrity of this document FAO-338-2019(O&M) and FAO of the liability being fastened in the Arbitrator held 5. Learned counsel appearing for the appellant submits that a course of action is impermissible in law relying on the Constitutional Bench Judgment in Technologies Limited 6. Respondents No.1 and 2 are represented by Mr. Himanshu Puri, Advocate. Respondent No. Advocate. No one appears on behalf of respondent No.5 7. This Court has heard the learned counsel for the parties and perused the material on record. 8. It is relevant at this stage decision of the Apex Court in extract is reproduced hereinafter: “85. Accordingly, the questions of law referred to by Balasamy limited power under modify the arbitral award. This limited power may be exercised under the following circumstances: 2019(O&M) and FAO-515-2019(O&M) liability being fastened in the proportion in which the learned Arbitrator held the erstwhile partners to be liable. Learned counsel appearing for the appellant submits that rse of action is impermissible in law relying on the Constitutional Bench Judgment in Gayatri Balasamy Vs. M/s ISG Novasoft Technologies Limited reported in 2025 SCC OnLine SC 986 Respondents No.1 and 2 are represented by Mr. Himanshu Advocate. Respondent No.3 is represented by Mr. Harsh Goyal, Advocate. No one appears on behalf of respondent No.5 This Court has heard the learned counsel for the parties and perused the material on record. It is relevant at this stage to refer to the conclusions in the the Apex Court in Gayatri Balasamy extract is reproduced hereinafter:- 85. Accordingly, the questions of law referred to by Balasamy (supra) are answered by stating that the Cou limited power under Sections 34 and 37 of the 1996 A modify the arbitral award. This limited power may be exercised under the following circumstances: I. when the award is severable, by severing the “invalid” portion from the “valid” portion of the award, as held in Part II of our Analysis II. by correcting any clerical, computational or typographical errors which appear erroneous on the face of the record, as held in 2019(O&M) proportion in which the learned erstwhile partners to be liable. Learned counsel appearing for the appellant submits that such rse of action is impermissible in law relying on the Constitutional Gayatri Balasamy Vs. M/s ISG Novasoft 2025 SCC OnLine SC 986. Respondents No.1 and 2 are represented by Mr. Himanshu 3 is represented by Mr. Harsh Goyal, Advocate. No one appears on behalf of respondent No.5-PUNGRAIN. This Court has heard the learned counsel for the parties and to refer to the conclusions in the Gayatri Balasamy (supra). The relevant 85. Accordingly, the questions of law referred to by Gayatri (supra) are answered by stating that the Court has a Sections 34 and 37 of the 1996 Act to modify the arbitral award. This limited power may be exercised under the following circumstances:- I. when the award is severable, by severing the “invalid” portion from the “valid” portion of the award, Analysis. II. by correcting any clerical, computational or typographical errors which appear erroneous on the of the record, as held in Part IV and V of our PRINCE SAINI 2026.07.14 19:01 I attest to the accuracy and integrity of this document FAO-338-2019(O&M) and FAO 9. This Court has dated December 07, 2018, the learned ADJ dated May 28, 2015. In view of the law laid down by the Hon’ble Court in Gayatri Balasamy stand on. Accordingly the same is application under Section 34 of the 1996 Act is directed to take a fresh decision on merits after taking into consideration the decision of the Hon’ble Apex Court in 10. FAO of. 11. Connected application(s), if any, shall 12. Photocopy of this order be placed on the file of other connected case. JULY 09, 2026 Prince Whether speaking/reasoned : Whether reportable : 2019(O&M) and FAO-515-2019(O&M) Analysis; III. post award interest may be modified in some circumstances as held in and/or IV. Article 142 of the Constitution applies, albeit, th power must be exercised with great care and caution and within the limits of the constitutional power as outlined in Part XII of our This Court has no hesitation to hold dated December 07, 2018, the learned ADJ dated May 28, 2015. In view of the law laid down by the Hon’ble Gayatri Balasamy (supra), the impugned order has no legs to . Accordingly the same is set aside. The learned Court taking up the under Section 34 of the 1996 Act is directed to take a fresh decision on merits after taking into consideration the decision of the Hon’ble Apex Court in Gayatri Balasamy (supra). FAO-338-2019 and FAO-515-2019 are accordingly Connected application(s), if any, shall Photocopy of this order be placed on the file of other connected case. 2026 Whether speaking/reasoned : Yes/No Whether reportable : Yes/No 2019(O&M) III. post award interest may be modified in some circumstances as held in Part IX of our Analysis; IV. Article 142 of the Constitution applies, albeit, the power must be exercised with great care and caution and within the limits of the constitutional power as of our Analysis.” no hesitation to hold that by the impugned order dated December 07, 2018, the learned ADJ sought to modify the award dated May 28, 2015. In view of the law laid down by the Hon’ble Apex (supra), the impugned order has no legs to set aside. The learned Court taking up the under Section 34 of the 1996 Act is directed to take a fresh decision on merits after taking into consideration the decision of the (supra). 2019 are accordingly Disposed Connected application(s), if any, shall also stand disposed of. Photocopy of this order be placed on the file of other (LAPITA BANERJI) JUDGE PRINCE SAINI 2026.07.14 19:01 I attest to the accuracy and integrity of this document