RAJASTHAN STATE ROAD TRANSPORT CORPN. versus INDAG RUBBER LTD.

Citation: [2006] SUPP. 5 S.C.R. 743 · Decided: 05-09-2006 · Supreme Court of India · Bench: H.K. SEMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

' 
; 
RAJASTHAN STATE ROAD TRANSPORT CORPN. 
A 
v. 
JN DAG RUBBER LTD. 
SEPTEMBER 5, 2006 
[H.K. SEMA AND A.K. MATHUR, JJ.) 
B 
Arbitration: 
Arbitration Act, 1940: Section 33(b). 
c 
Arbitration award-Rule of court-Validity of-An agreement was 
executed between a company and a Corporation for purchase of cold 
processing re-treading plant and re-treading material-According to the 
warranty for re-treaded tyres, the company was required to guarantee 
pe1formance of 46, 000 KMs average life or 95% of new tyres-The Corporation D 
informed the company that re-treaded tyres used on its buses in their eight 
regions were not giving the guaran1eed kilometerage resulting in a loss to 
the Corporation-Company emphasized that the method of assessment adopted 
by the Corporation was not proper-A sole arbitrator concluded that the 
Corporation suffered a loss-District Judge made award as rule of the court-
On appeal, a Single Judge of the High Court set aside the judgment and E 
decree passed by the District Judge on the grounds that comparative 
assessment of new tyres with the re-treaded tyres was to be made in each 
region in similar conditions-Correctness of-Held: All the materials have 
been considered by the arbitrator and, after taking into consideration the 
average of each tyre in each region of the Corporation, he has worked out F 
t · 
that the performance of the re-treaded tyres was not to the extent of 95ra--
This was a finding of fact-Single Judge not justified in selling aside this 
finding of fact-Hence, view taken by the Single Judge cannot be sustained 
An agreement was executed between the respondent-company and the 
appellant-Corporation for purchase of cold processing re-treading plant and G 
re-treading material. According to the warranty for re-treaded tyres, the 
respondent-company was required to guarantee performance of 46,000 KMs 
average life or 95% of new tyres. 
743 
H 
744 
SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R. 
A 
... 
,r 
The appellant-Corporation informed the respondent-company that re-
treaded tyres used on its buses in their eight regions were not giving the 
guaranteed kilometerage resulting in a loss to the Corporation. The 
respondent-company emphasized that the method of assessment adopted by the 
appellant-Corporation was not proper. 
B 
A sole arbitrator appointed by the parties decided all the issues in favour 
of the appellant-Corporation and concluded that the appellant-Corporation 
suffered a loss but declined to grant damages claimed by the appellant-
Corporation. The District Judge made the award as a rule of the court. 
c 
On appeal, a Single Judge of the High Court set aside the judgment 
and decree passed by the District Judge on the grounds that comparative 
assessment of new tyres with the re-treaded tyres was to be made in each 
division in similar conditions; that the method of assessment was not in 
conformity with reference to the warranty clause and that the comparative 
D 
assessment of performance of re-treaded tyres with new ones was improper. 
Hence the appeal. 
Allowing the appeal, the Court 
HELD: I. The arbitrator, in his detailed award, has recorded his finding 
E on the basis of the average performance of new vehicle tyres with that of the 
re-treaded tyres of the Company and on that basis he has worked out the 
assessment. [751-AI 
2. All the materials have been considered by the arbitrator and, after 
taking into consideration the average of each tyre in each region of the 
F Corporation, he has worked out that the performance of the re-treaded tyres 
was not to the extent of 95%. This was a finding of fact recorded by the 
arbitrator and the same was made rule of the court by the District Judge. But 
. ' 
the Single Judge erroneously took upon himself to sit as a court of appeal 
and disturbed this finding of fact. The view taken by Single Judge of the High 
G Court cannot be sustained. [752-D, E, F[ 
B. V. Radha Krishna v. Sponge Iron (India) Ltd., [ 1997[ 4 SCC 693, State 
of Rajasthan v. Puri Construction Co. Ltd, [1994[ 6 SCC 485 and K.P. Poulose 
v. State of Kera/a, [1975[ 2 SCC 236, relied on. 
H 
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RAJASTHAN STATE ROAD TRANSPORT CORPN. 1·. INDAG RUBBER LTD. [AK MA THUR, J.] 74 5 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7032 of2001. 
From Judgment and Order dated 22.12.2000 of the High Court of 
Judicature for Rajasthan. Jaipur Bench, Jaipur in S.B. Civil Misc. Appeal No. 
618/2000. 
A 
Sushi! Kumar Jain, Sarad Singhania and H.D. Thanv

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