It held that the procurement of sugar as an alternative during the supply disruption was justified to protect an ongoing welfare programme
Hyderabad: A two-judge panel of the Telangana High Court upheld an arbitral award directing a jaggery supplier to compensate a government-owned nutrition organisation for losses caused by failure in the supply of jaggery powder meant for public nutrition schemes. It held that the procurement of sugar as an alternative during the supply disruption was justified to protect an ongoing welfare programme. The panel, comprising Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar dismissed a civil miscellaneous appeal filed by M/s Ashok Kumar Rakesh Kumar challenging an arbitral award passed in favour of Andhra Pradesh Foods, a government-owned nutrition society engaged in the supply of nutritious food to school children, pregnant women and lactating mothers.
The dispute arose out of a 1997 agreement under which the appellant agreed to supply jaggery powder required for the manufacture of nutritional food. According to AP Foods, the contractor failed to adhere to the agreed supply schedule from the very beginning and eventually stopped supplies altogether, compelling the organisation to procure sugar and later engage alternative contractors at higher rates to ensure continuity of supply under welfare schemes.
After disputes arose, a three-member arbitral tribunal headed by former Chief Justice A. Lakshman Rao was constituted. The majority award directed the appellant to pay over Rs 1.03 crore with interest for losses incurred by AP Foods due to procurement of sugar and jaggery powder from alternative sources. In the appeal before the High Court, the appellant contended that the contract stood frustrated because of a truck owners’ strike and argued that AP Foods could not unilaterally substitute sugar in place of jaggery powder or recover additional expenditure beyond forfeiture of security deposit.
It was further argued that the arbitral tribunal exceeded its jurisdiction by effectively modifying the contract terms. Rejecting the contentions, the panel held that the contractor fundamentally breached the agreement by failing to maintain the agreed supply schedule and observed that the contract was linked to a crucial public welfare programme aimed at nutritional support for vulnerable sections.
The panel noted that AP Foods was forced to procure sugar temporarily because jaggery powder was unavailable in the open market within Andhra Pradesh and immediate procurement was necessary to ensure uninterrupted implementation of the nutrition scheme. The court observed that such procurement amounted to mitigation of damages arising from the breach by the contractor and did not constitute unilateral modification of the contract. The court further held that Clause 11 of the agreement entitled AP Foods not only to forfeit the security deposit but also to recover differential costs incurred in having the remaining work executed through alternate suppliers.
The panel ruled that the contractual remedies were cumulative and not mutually exclusive. Emphasising the limited scope of judicial interference under Sections 34 and 37 of the Arbitration and Conciliation Act, the panel observed that courts cannot re-appreciate evidence merely because another interpretation is possible and that the arbitral award did not suffer from patent illegality or perversity warranting interference.
HC quashes kidnap case against mother
Justice N. Tukaramji of the Telangana High Court quashed criminal proceedings against a mother accused of kidnapping her own child and ruled that no offence was made out when a natural guardian takes custody of a child in the absence of any specific court order. The judge was hearing a criminal petition filed by Talugula Harika, a doctor, seeking to quash proceedings in a case registered at LB Nagar, Ranga Reddy district. The allegations arose from a matrimonial dispute between the petitioner and her husband, who initially contested divorce proceedings and later entered into a mutual divorce arrangement. During ongoing mediation, the petitioner allegedly took the child with her under the pretext of feeding, leading to a complaint of kidnapping. The judge observed that under the Hindu Minority and Guardianship Act, 1956, both mother and father are natural guardians of a child unless a competent court orders otherwise. He emphasised that when both parents are recognised as natural guardians, one parent taking the child cannot, by itself, amount to kidnapping. Holding that the essential ingredients of kidnapping were not made out and noting that the investigating agency failed to consider the legal position on guardianship, the judge found no prima facie case against the petitioner. The judge further also took note of the lapse on the part of the investigating officer in failing to consider the statutory position governing guardianship. Additionally, the complaint having been lodged by a mediator associated with the legal services authority was viewed in the context of the ongoing family dispute. Accordingly, considering the nature of the allegations and material on record, the judge allowed the criminal petition and quashed the proceedings.
