FAO-5305-2023 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT Lakhvir Singh M/s Supreme Agro Foods Pvt. Ltd. CORAM : HON’BLE MS. JUSTICE LAPITA BANERJI Present : Dr. Naresh Kaushik, Advocate, for the appellant. LAPITA BANERJI Under challenge in the present appeal is the award dated October 3, 2017 passed by the learned Arbitrator and July 25, 2023 passed by the learned Additional District Judge, Ludhiana. 2. The brief facts of the case are as follows: i. Appellant company basis. ii. At the time of the engagement, the claimant was provided with various machineries including milk cooler, etc. iii. Charges electricity charges were to be paid by the respondent. 3. It is the case of the appellant uninterrupted requisite payments to the claimant. 2023 (O&M) Sr. No.235 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO Date of Decision : Lakhvir Singh Versus M/s Supreme Agro Foods Pvt. Ltd. HON’BLE MS. JUSTICE LAPITA BANERJI Dr. Naresh Kaushik, Advocate, for the appellant. *** LAPITA BANERJI, J. (Oral) Under challenge in the present appeal is the award dated October 3, 2017 passed by the learned Arbitrator and July 25, 2023 passed by the learned Additional District Judge, Ludhiana. The brief facts of the case are as follows: ellant-claimant was appointed as an agent of the respondent company for collection of milk from different villages on contract At the time of the engagement, the claimant was provided with ous machineries including milk cooler, Charges for diesel consumed for electricity charges were to be paid by the respondent. It is the case of the appellant supply of milk, the respondent isite payments to the claimant. Page 1 of 7 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-5305-2023 (O&M) Date of Decision : 24.04.2025 …Appellant …Respondent HON’BLE MS. JUSTICE LAPITA BANERJI Under challenge in the present appeal is the award dated October 3, 2017 passed by the learned Arbitrator and the judgment dated July 25, 2023 passed by the learned Additional District Judge, Ludhiana. The brief facts of the case are as follows:- claimant was appointed as an agent of the respondent- for collection of milk from different villages on contract At the time of the engagement, the claimant was provided with ous machineries including milk cooler, generator sets, geyser maintaining generator and electricity charges were to be paid by the respondent. It is the case of the appellant-claimant that despite supply of milk, the respondent company did not make the VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) 4. Despite repeated assurances on the part of the respondent company, the respondent, at stipulated rates. 5. It was urged on behalf of the claimant that since April no sum was paid by the respondent Rs.90,000/- was payable by the respondent on account of cost of milk and a sum of Rs.58 difference in rate it. 6. Since the respondent failed to pay the aforesaid arbitration proceedings were instituted. 7. In July 2015, the agent/representative of the respondent company arrived at the appellant’s premises and sought to take away the machinery belonging to the respondent. appellant, the been handed over to the appellant. 8. The claimant inter alia respondent that dues of the claimant were settled on said dues had been The amount paid by the respondent was accepted by the claimant out of his free will. However, requisite standards, t to upgrade the quality of the supplied milk. 9. Despite such intimation on behalf of the respondent, the claimant continued to supply milk and receive payments. 2023 (O&M) Despite repeated assurances on the part of the respondent the entire payment of the claimant was not released by the respondent, at stipulated rates. It was urged on behalf of the claimant that since April no sum was paid by the respondent to the appellant. A was payable by the respondent on account of cost of milk and sum of Rs.58,72,826/- was payable by the respondent toward the difference in rate agreed to be paid by the respondent and actually paid by Since the respondent failed to pay the aforesaid arbitration proceedings were instituted. In July 2015, the agent/representative of the respondent arrived at the appellant’s premises and sought to take away the machinery belonging to the respondent. However, due , the respondent could not take away the machineries been handed over to the appellant. The respondent-Company opposed the claim of the appellant inter alia by bringing on record its defects. that dues of the claimant were settled on said dues had been accepted by the claimant without The amount paid by the respondent was accepted by the claimant out of his free will. However, since the quality of milk supplied requisite standards, the claimant was required by the respondent to upgrade the quality of the supplied milk. Despite such intimation on behalf of the respondent, the claimant continued to supply milk and receive payments. Page 2 of 7 Despite repeated assurances on the part of the respondent- entire payment of the claimant was not released by the It was urged on behalf of the claimant that since April 2, 2015 to the appellant. A total sum of was payable by the respondent on account of cost of milk and was payable by the respondent toward the e respondent and actually paid by Since the respondent failed to pay the aforesaid amounts, In July 2015, the agent/representative of the respondent arrived at the appellant’s premises and sought to take away the However, due to the protests of the take away the machineries which had opposed the claim of the appellant- by bringing on record its defects. It was the case of the that dues of the claimant were settled on a yearly basis. The by the claimant without any protest or demur. The amount paid by the respondent was accepted by the claimant out of his since the quality of milk supplied was not up to the he claimant was required by the respondent-company Despite such intimation on behalf of the respondent, the claimant continued to supply milk and receive payments. However, after a VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) period the claimant stopped supplying milk to the respondent without any reason 10. It was the respondent’s case that the claimant well illegally and unauthor fixtures of the respondent Company respondent that as per the terms of the contract, the claimant was required to hand over the machineries when demanded by the respondent. 11. The l considering the evidence on record held that the claimant failed to prove that the respondent did not make payment at the prevailing market rates. Furthermore, t calculation of p the claimant, were provided to substantiate its claim. 12. Learned Arbitrator found that the respondent, on the other hand, was able to fact that he had voluntarily accepted the payments. Such receipts were issued on the letterhead of the respondent company. Furthermore, the General Manager of the respondent Company deposed that the claimant unauthorizedly withheld the pro produced affidavits of evidence of passed by the Additional Sessions Judge, Ludhiana dated April 16, 2015. 13. Therefore, the learned Arbitrator relying on the documentary evidence and evidence on af failed to prove his case against the respondent. 2023 (O&M) the claimant stopped supplying milk to the respondent any reason. It was the respondent’s case that the claimant illegally and unauthorizedly withheld the machines, of the respondent Company. It was also urged on behalf of the respondent that as per the terms of the contract, the claimant was required to e machineries/equipments/fixtures demanded by the respondent. The learned Arbitrator after per considering the evidence on record held that the claimant failed to prove the respondent did not make payment at the prevailing market rates. Furthermore, the claimant failed to provide calculation of prevailing market rates. Only handwritten ra the claimant, were provided to substantiate its claim. Learned Arbitrator found that the respondent, on the other was able to produce receipts signed by the claimant that he had voluntarily accepted the payments. Such receipts were issued on the letterhead of the respondent company. Furthermore, the General Manager of the respondent Company deposed that the claimant unauthorizedly withheld the property of the company produced affidavits of evidence of several witnesses along with the order passed by the Additional Sessions Judge, Ludhiana dated April 16, 2015. Therefore, the learned Arbitrator relying on the documentary idence and evidence on affidavits held that the claimant failed to prove his case against the respondent. Page 3 of 7 the claimant stopped supplying milk to the respondent-company It was the respondent’s case that the claimant knowing fully izedly withheld the machines, equipments and It was also urged on behalf of the respondent that as per the terms of the contract, the claimant was required to /equipments/fixtures to the respondent as and earned Arbitrator after perusing the documents and considering the evidence on record held that the claimant failed to prove the respondent did not make payment at the prevailing market rates. provide documentary evidence for nly handwritten rate lists signed by the claimant, were provided to substantiate its claim. Learned Arbitrator found that the respondent, on the other by the claimant evidencing the that he had voluntarily accepted the payments. Such receipts were issued on the letterhead of the respondent company. Furthermore, the General Manager of the respondent Company deposed that the claimant company. The respondent also witnesses along with the order passed by the Additional Sessions Judge, Ludhiana dated April 16, 2015. Therefore, the learned Arbitrator relying on the documentary fidavits held that the claimant completely failed to prove his case against the respondent. VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) 14. Not only did were outstanding from the satisfactory answer Certificate/receipts outstanding from the respondent. claimant was rejected. 15. The learne given in favour of the respondent equipment, machinery and fixtures illegally withheld by the claimant since the same was beyond the scope of 16. The said award was c 34 of the Arbitration and Conciliation Act, 1996 the 1996 Act’) law came to the finding that the learned Arbitrator has passed reasoned award after taking into consideration the entire evidence. The learned ADJ 34 of the 1996 Act had held that there was no ground m Section 34 (2) of the 1996 Act. Therefore, he dismissed the application being devoid of any merits. 17. Learned counsel appearing on behalf of the appellant submits that the evidence has not been appreciated proper perspective. He submits that despite outstanding sums payable to the claimant, his Arbitrator. 2023 (O&M) Not only did the claimant fail to prove that lakhs of rupees were outstanding from the company but also failed answer to the question why he had signed the ‘ ertificate/receipts in favour of the respondent when outstanding from the respondent. Therefore, the claim of the appellant claimant was rejected. The learned Arbitrator also found that given in favour of the respondent-Company equipment, machinery and fixtures illegally withheld by the claimant since the same was beyond the scope of the arbitral reference. The said award was challenged in an application under Section 34 of the Arbitration and Conciliation Act, 1996 the 1996 Act’). The learned Additional District Judge after discussing the law came to the finding that the learned Arbitrator has passed reasoned award after taking into consideration the entire evidence. The held that the Court examining the application under 34 of the 1996 Act had no jurisdiction to sit in appeal over an award. He held that there was no ground made out to set aside the award under Section 34 (2) of the 1996 Act. Therefore, he dismissed the application being devoid of any merits. Learned counsel appearing on behalf of the appellant submits that the evidence has not been appreciated proper perspective. He submits that despite outstanding sums payable to the claimant, his claims were erroneously rejected by the learned to prove that lakhs of rupees company but also failed to provide any why he had signed the ‘No Dues’ the respondent when several lakhs were Therefore, the claim of the appellant- found that no directions could be ompany for handing over the equipment, machinery and fixtures illegally withheld by the claimant since arbitral reference. hallenged in an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to ‘ . The learned Additional District Judge after discussing the law came to the finding that the learned Arbitrator has passed a well reasoned award after taking into consideration the entire evidence. The held that the Court examining the application under Section no jurisdiction to sit in appeal over an award. He ade out to set aside the award under Section 34 (2) of the 1996 Act. Therefore, he dismissed the Section 34 Learned counsel appearing on behalf of the appellant submits by the learned Arbitrator in proper perspective. He submits that despite outstanding sums payable to erroneously rejected by the learned VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) 18. This Court has heard the learned counsel for the appellant and perused the material on record. 19. It appears from the award discussed hereinabove that the learned Arbitrator analyzed the documentary evidence on record and the affidavits given by the parties and came to the finding that by handwritten rate chart unable to prove before the learned Arbitrator that the said rates were stipulated for supply of milk or that the respondent was at default in not paying according to the rate charts. 20. Furthermore claimant as to why he signed the ‘ pointed to the fact that there was nothing due and payable by the respondent-company satisfactorily why despite lakhs of rupees being purportedly payable by the respondent, the claimant continued to supply milk to the respondent. 21. It is well settled proposition of law that the learned Arbitrator is the master of may be made to the decision of the Supreme Court in Vs. Delhi Development Authority, (2015) 3 SCC 49 is reproduced hereinbelow: “12. xxxxx xxxxxxx xxxxxx xxxxx xxxxx applying the “public policy” test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts h ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral. Thus an award based on little evidence or on evidence which does not measure up in quality of a on this score[1]. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. 2023 (O&M) This Court has heard the learned counsel for the appellant and the material on record. It appears from the award discussed hereinabove that the rbitrator analyzed the documentary evidence on record and the given by the parties and came to the finding that by rate charts that were only signed by the claimant, he was unable to prove before the learned Arbitrator that the said rates were stipulated for supply of milk or that the respondent was at default in not paying according to the rate charts. Furthermore, no satisfactory explanation aimant as to why he signed the ‘No Dues’ receipts which unambiguously pointed to the fact that there was nothing due and payable by the company to the claimant. Moreover actorily why despite lakhs of rupees being purportedly payable by the respondent, the claimant continued to supply milk to the respondent. It is well settled proposition of law that the learned Arbitrator is the master of quality and quantity of evidence. may be made to the decision of the Supreme Court in Vs. Delhi Development Authority, (2015) 3 SCC 49 is reproduced hereinbelow:- 12. xxxxx xxxxxxx xxxxxx xxxxx xxxxx It must clearly be understood that when a court is applying the “public policy” test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral. Thus an award based on little evidence or on evidence which does not measure up in quality of a trained legal mind would not be held to be invalid on this score[1]. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. Page 5 of 7 This Court has heard the learned counsel for the appellant and It appears from the award discussed hereinabove that the rbitrator analyzed the documentary evidence on record and the given by the parties and came to the finding that by producing only signed by the claimant, he was unable to prove before the learned Arbitrator that the said rates were stipulated for supply of milk or that the respondent was at default in not actory explanation could be given by the receipts which unambiguously pointed to the fact that there was nothing due and payable by the Moreover, it was also not answered actorily why despite lakhs of rupees being purportedly payable by the respondent, the claimant continued to supply milk to the respondent. It is well settled proposition of law that the learned Arbitrator evidence. A beneficial reference may be made to the decision of the Supreme Court in Associate Builders Vs. Delhi Development Authority, (2015) 3 SCC 49. The relevant extract 12. xxxxx xxxxxxx xxxxxx xxxxx xxxxx It must clearly be understood that when a court is applying the “public policy” test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on as necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral. Thus an award based on little evidence or on evidence which does not measure up in trained legal mind would not be held to be invalid on this score[1]. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) xxxx with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do. It was further held that it has been opined by this court that when it comes to setting award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrato what it considers to be “justice”. xxxxx 22. Furthermore, the Court dealing with an appeal under Section 37 is more restricted than the Court adjudicating the application under Section 34 of the 1996 Act. A beneficial reference may be made to decision of the Supreme Court in Pradesh (2022) 2 SCC (Civ) 401, where a similar view was taken. The relevant extract of the same is reproduced hereinbelow: “15… the learned Single Judge committed a gross error in reappreciating the findings returned by the Arbitral Tribunal and taking an entirely different view in respect of the interpretation of the relevant clauses of the implementation agreement governing t to the said court to do so in proceedings under Section 34 of the Arbitration Act, by virtually acting as a court of appeal. 16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed.” 23. A beneficial reference may be made to the decision of the Apex Court in Bridge Project Undertaking, (2023) 9 SCC 85. reproduced hereinbelow: 2023 (O&M) xxxx xxxxx xxxx xxxx xxxx xxxx An arbitral tribunal must with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do. It was further held that it has been opined by this court that when it comes to setting award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrato what it considers to be “justice”. xxxxx xxxxxx xxxxxx xxxxx xxxxxx Furthermore, the Court dealing with an appeal under Section 37 is more restricted than the Court adjudicating the application under of the 1996 Act. A beneficial reference may be made to decision of the Supreme Court in UHL Power Company Ltd. State of Himachal (2022) 2 SCC (Civ) 401, where a similar view was taken. The relevant extract of the same is reproduced hereinbelow: 15… the learned Single Judge committed a gross error in reappreciating the findings returned by the Arbitral Tribunal and taking an entirely different view in respect of the interpretation of the relevant clauses of the implementation agreement governing the parties inasmuch as it was not open to the said court to do so in proceedings under Section 34 of the Arbitration Act, by virtually acting as a court of appeal. 16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed.” A beneficial reference may be made to the decision of the Apex Court in Konkan Railway Corporation Limited Vs. Chenab Bridge Project Undertaking, (2023) 9 SCC 85. reproduced hereinbelow:- xxxx xxxx xxxx xxxxx An arbitral tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do. It was further held that it has been opined by this court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do xxxxxx xxxxxx xxxxx xxxxxx xxxx xxxxx” Furthermore, the Court dealing with an appeal under Section 37 is more restricted than the Court adjudicating the application under of the 1996 Act. A beneficial reference may be made to decision UHL Power Company Ltd. State of Himachal (2022) 2 SCC (Civ) 401, where a similar view was taken. The relevant extract of the same is reproduced hereinbelow:- 15… the learned Single Judge committed a gross error in reappreciating the findings returned by the Arbitral Tribunal and taking an entirely different view in respect of the interpretation of the relevant clauses of the implementation he parties inasmuch as it was not open to the said court to do so in proceedings under Section 34 of the Arbitration Act, by virtually acting as a court of appeal. 16. As it is, the jurisdiction conferred on courts under Section is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more A beneficial reference may be made to the decision of the Konkan Railway Corporation Limited Vs. Chenab Bridge Project Undertaking, (2023) 9 SCC 85. The relevant extract is VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document FAO-5305-2023 (O&M) "14. Analysis: At the outset, we may state of the Court under Section 37 of the Act, as clarified by this Court in akin to the jurisdiction of the court under Section 34 of the Act. Scope of interference by a court in an appeal u of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act. 15. Therefore, the scope of jurisdiction under Section 34 and Se jurisdiction. It is well with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the c the findings of the Arbitral Tribunal." 24. In view of the discussion made hereinabove and the well settled principles of law, this Court is of the view that neither the impugned award dated October 3, 2017 by the learned Additional District Judge, Ludhiana suffers from any infirmity or merits interference. Accordingly, FAO dismissed. 25. Connected applications, if any, are also accordingly disposed of. April 24, 202 Vandana Whether speaking/reasoned : Whether reportable 2023 (O&M) "14. Analysis: At the outset, we may state of the Court under Section 37 of the Act, as clarified by this Court in MMTC Ltd. VS. Vedanta Ltd., (2019) 4 SCC 163 akin to the jurisdiction of the court under Section 34 of the Act. Scope of interference by a court in an appeal u of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act. 15. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal." In view of the discussion made hereinabove and the well settled principles of law, this Court is of the view that neither the impugned October 3, 2017 nor the judgment dated by the learned Additional District Judge, Ludhiana suffers from any infirmity or merits interference. Accordingly, FAO Connected applications, if any, are also accordingly disposed (LAPITA BANERJI) JUDGE 2025 ther speaking/reasoned : Yes/No Whether reportable : Yes/No "14. Analysis: At the outset, we may state that the jurisdiction of the Court under Section 37 of the Act, as clarified by this MMTC Ltd. VS. Vedanta Ltd., (2019) 4 SCC 163 is akin to the jurisdiction of the court under Section 34 of the Act. Scope of interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act. 15. Therefore, the scope of jurisdiction under Section 34 and ction 37 of the Act is not akin to normal appellate settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or ontract does not entitle courts to reverse the findings of the Arbitral Tribunal." In view of the discussion made hereinabove and the well settled principles of law, this Court is of the view that neither the impugned he judgment dated July 25, 2023 passed by the learned Additional District Judge, Ludhiana suffers from any infirmity or merits interference. Accordingly, FAO-5305-2023 is Connected applications, if any, are also accordingly disposed (LAPITA BANERJI) JUDGE VANDANA 2025.04.30 10:04 I attest to the accuracy and integrity of this document