Quick Summary: The Bombay High Court dealt with a disagreement between the National Co-operative Consumer’s Federation of India (Federation) and Mirah Dekor Pvt. Ltd. The court supported an arbitration decision that required the Federation to pay Mirah over Rs. 1.36 crores, dismissing the Federation's objections.
This case is about a disagreement over payments between the National Co-operative Consumer’s Federation of India and Mirah Dekor Pvt. Ltd. Mirah supplied groceries to the Tribal Development Department (TDD) through the Federation. The Federation was supposed to pay Mirah after deducting a small margin, but things got complicated due to tax deductions.
Mirah delivered goods for several years, and the Federation took out taxes from these payments. Mirah claimed the deducted amounts should be paid to them, but the Federation said it would only pay after tax assessments were completed. This led to a stand-off and eventually arbitration.
"Mirah would raise invoices from time to time, and the Federation would pay the same after deducting its fixed margin of 1.5%."
The arbitration panel found that the Federation owed Mirah Rs. 1.36 crores. The panel ruled that the Federation's claim that the issue was too old to be considered was incorrect. The panel also noted that the Federation admitted it owed money multiple times.
"The Learned Arbitral Tribunal found that by letters... the Federation admitted its liability to the extent of Rs. ~1.36 crores."
The main issue was about how tax deductions were handled. The panel decided that tax amounts deducted by TDD were effectively payments to the Federation, which should then pay Mirah.
"The TDS amount is an integral part of the amount received by the Federation."
Judge Somasekhar Sundaresan agreed with the arbitration panel. He dismissed the Federation's request against the decision, stating that the panel's decision was reasonable and based on the facts.
"No case is made out for interference with the Impugned Award."
The court supported the arbitration decision, requiring the Federation to pay Mirah Rs. 1.36 crores, and dismissed the Federation's objections. This case highlights the importance of clear agreements and responsibilities, especially regarding tax deductions and payments.
