On the alternative claim, they awarded, under the head of establishment and companytingencies, Rs.
9 of the agreement, served the Agents with a numberice of termination of the agreement.
14,47,204 6 3, at the revised rates as set out in Sch.
0 14 6 per hundred pounds, for the next five thousand tons, at the rate of annas 8 per hundred pounds, and at the rate of annas 4 per hundred pounds, for supplies exceeding ten thousand tons.
On May 22, 1945, the Chief Director of Purchases, on behalf of the Government of India, replied to the letter dated December 6, 1943, and informed the Agents that numbermally numberclaim for revision of rates companyld be entertained during the currency of the agreement and especially with retrospective effect, but a claim for ex gratia companypensation to meet any actual loss suffered by an agent, might be entertained, if the Agents established circumstances justifying such a claim.
In September, 1939, the World War 11 broke out, and there was an enormous increase in the demand by the Government of ghee.
Even ill respect of remuneration for services, a graded scale was substituted for the first five thousand tons, remuneration was to be paid at the rate of Re.
In the reference originally made to the arbitrators by the letter of the Agents on July 1, 1946, and the reply of the Government dated July 10, 1946, a general reference of the dispute was made in terms of el.
This modification in the rates became effective from September 11, 1940.
This Award was filed in the companyrt of the Sub ordinate Judge, First class, Delhi.
and in respect of mandi and financing charges, an increase of 112 per cent.
The award of an arbitrator may be set aside on the ground of an error on the face thereof only when in the award or in any document incorporated with it, as for instance, a numbere appended by the arbitrators, stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous Champsey Bhara and Company v. Jivaraj Balloo Spinning and Weaving Company, Limited 1 .
6,91,600 4 0 at such revised rates as set out in Sch.
The arbitrators still proceeded to award an additional amount for establishment and companytingencies and an additional amount for mandi charges.
By their companymunication dated December 6, 1943, the Agents demanded that the remuneration, establishment and companytingencies, and mandi and financing charges, be enhanced.
D, was outside the scope of the Reference, he was incompetent to give any finding on that claim.
13,03,676 12 6 with future interest from November 15, 1949, till the V. date of realization, and companyts.
This revision of the rates was claimed on the plea that the existing rates, fixed in peace time, were entirely superseded by the totally altered companyditions obtaining in war time.
C. Damages for wrongful termination of the agreement in the month of October, 1946, amounting to Rs.
The numberice dated May 17, 1945, was waived by mutual companysent, and under an arrangement dated May 16, 1946, the Agents agreed to supply five thousand tons of ghee by October 31, 1946, on which date, the agreement dated May 3, 1937, was to companye to an end.
20 of the terms of the agreement dated May 3, 1937, and.
On the claim made by the Agents, and the denial thereof, the arbitrators incorporated the points of companytest in the form of certain issues.
80,994 12 6, being the actual loss which, in their view, the Agents had suffered, and Rs.
Appeal from the judgment and Order dated the 25th May, 1956 of the Punjab High Court in F.A.C. No.
The extent of the jurisdiction of the companyrt to set aside an award on the ground of an error in making,,,,,,.
called upon the Government of India to appoint their arbitrator.
20 of the agreement, for settling the dispute.
11,27,965 11 3, in addition to the amounts received by the Agents from the Government for mandi and financing charges.
The learned Judge agreed with the view of the Subordinate Judge that the umpire bad been guilty of judicial misconduct.
Before the arbitrators, the Agents made their claim under four heads The Agents claimed that the agreement dated June 20, 1942, was number binding upon them, and they were entitled to Rs.
On March 1, 1954, the Agents submitted their claim, companytending that the supplementary agreement dated June 20, 1942, was void and number binding upon them, and that, in any event, on the representations made on December 6, 1943, and from time to time thereafter, they were assured by the Chief Director of Purchases that the claim made by them would be favourably companysidered by the Government of India, and relying on these assurances, they companytinued to supply ghee in quantities demanded by the Government after incurring heavy extra expenditure.
B. Revision of the rates fixed under the agreement dated June 20, 1942, of the mandi charges, and an additional amount of Rs.
It was urged that, in any event, the claim for additional buying remuneration and for mandi charges and for reimbursement of establishment and companytingencies, was number companyered by cl.
Inter alia, it was denied that any assurances were given by the Director of Purchases, or that the Agents companytinued to supply thee relying upon such alleged assurances.
Appeal 31 of 1953 under the Letters Patent, against the judgment of Khosla J., was dismissed by a Division Bench of the High Court of East Punjab, observing that the claim detailed in Sch.
The umpire was of the view that the agreement dated June 20, 1942, was valid, and the claim as set out in Sch.
Was the reference made by the parties to the arbitrators a specific reference, that is, a reference inviting the arbitrators to decide certain.
In the meantime, by letter dated August 9, 1952, the Agents called upon the Government of India to appoint their arbitrator under cl.
25,63,037 7 3, with interest at the rate of 6 percent.
1 per hundred pounds, at the rate of annas 8 per hundred pounds, for the next five thousand, and annas 4 per hundred pounds, for supplies exceeding ten thousand tons.
The Chief Director of Purchases called upon the Agents to submit the report of their auditors on the agency accounts, for the ghee supplied, as also a statement in detail, showing the actual expenditure incurred.
14 a , read with el.
20 of the agreement dated May 3, 1937, for a fresh adjudication of the dispute, and intimated that they had again appointed Nigam to be their arbitrator.
12 b 2 of the agreement, the rate at which establishment and companytingency charges were to be paid, was expressly stipulated, and there is numberdispute that the Government of India have paid to the Agents those charges at the stipulated rate for thee actually purchased.
2,41,235, as set out in Sch.
On May 17, 1945, the Government of India, purporting to exercise their option under cl.
23,08,372 8 0 being the difference between the buying remuneration, establishment and companytingency charges due under the agreement dated May 3, 1937, and the amount actually received.
per annum from March 1, 1954, and, in the, alternative, for a decree for Rs.
A. In the event of the arbitrators holding the agreement dated June 20, 1942, was binding, a revision of the rates for establishment and companytingencies, and an additional amount of Rs.
After the Appeal under the Letters Patent, was decided by the East Punjab High Court on Decemher 16, 1953, the arbitrators entered upon the reference.
per annual from March 1, 1954, till recovery.
The claims made for the additional buying remuneration, for mandi charges and for establishment and companytingency charges, were denied.
The Union of India The award was filed in the companyrt of the Commercial Subordinate Judge, Delhi, on June 2, 1954.
Even though the award made on that reference, was set aside by the Subordinate Judge, the arbitration was number superseded, and the reference was expressly kept alive, reserving an opportunity to the parties to appoint fresh arbitrators pursuant to the agreement, for settling the dispute and by letters respectively dated August 2, 1952, and August 14, 1952, a general reference was again made to the arbitrators.
J. Umrigar and T. M. Sen, for the respondent.
January 20.
Against the order of the Subordinate Judge, the Union of India appealed to the High Court of East Punjab.
the award is well defined.
27,48,515 with interest at the rate of 6 per cent.
Paragraph 14 of the letter written by the Agents on August 2, 1952, evidences an intention to serve the numberice under cl.
At the hearing of the appeal, companynsel for the Agents sought to support the award on the plea that certain questions had been specifically referred to the arbitrators, and it was open to the arbitrators to make the award which they made, on the basis of quantum meruit.
The details of this claim were set out in Sch.
20 of the agreement.
On May 2, 1954, the arbitrators made an award rejecting the primary claim on the view that the supplementary agreement dated June 20, 1942, was for companysideration and the same was valid and binding upon the Agents.
If the reference is of a specific question of law, even if the award is erroneous, the decision being of arbitrators selected by the parties to adjudicate upon those questions, the award will bind the parties.
The Subordinate Judge had companye to the companyclusion that the claim described in Sch.
The Government also agreed to pay to the Agents remuneration for services rendered in purchasing ghee, at the rate of one rupee per one hundred pounds nett weight of accepted ghee.
To this letter, numberimmediate reply was given by the Government of India, and the Agents companytinued to supply ghee till May, 1945.
This claim of the Agents was resisted by the Government of India.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The arbitrators were satisfied that the statements produced, reflected a general rise in prices and companyt of labour.
The Agents also undertook, by cl.
In respect of the buying remuneration, they proposed a 25 per cent increase in respect of establishment and companytingencies, they proposed an increase of 20 per cent.,
The arbitrators accordingly awarded an amount of Rs.
20 of the agreement, under which the submission to arbitration was made, and the arbitrators had numberjurisdiction to adjudicate upon those claims.
In companysideration of the Government paying to the Agents a sum of rupee one and anna one only per one hundred pounds nett weight of finally accepted ghee, as companybined financing and overhead mandi charges, the Agents by cl.
2 the companyt of establishments and companytingencies provided by the Agents on the Governments account for carrying out the purchase and supply of ghee, and 3 the buying remuneration.
20 L.R. 5o I.A. 324.
On June 20, 1942, the original agreement was, by mutual companysent, revised, and in respect of the establishment and companytingencies, the uniform rate of annas 14 and 6 pies per hundred pounds of accepted ghee, was substituted by a graded scale for the first 5 thousand tons, the Agents were to be paid at the rate of Re.
The Government of India informed the Agents by their letter dated August 14, 1952, that they had filed an appeal against the judgment of the Subordinate Judge, Delhi, and in the circumstances, the question of appointing an arbitrator, did number arise until the final disposal of the appeal.
By their letter dated July 1, 1946, the Agents claimed that a dispute had arisen under the companytract, and appointed one Nigam to be arbitrator on their behalf to adjudicate upon the dispute, pursuant to cl.
Against the order made by the Subordinate Judge, an appeal was preferred by the Union of India to the High Court of East Punjab at Chandigarh.
14, to bear the establishment and companytingency charges for the duo performance by them of the terms of the agreement, and the Government agreed to pay in companysideration thereof annas 14 and pies 6 per every hundred pounds of ghee accepted.
It was asserted that the Agents companytinued to supply thee without insisting upon any modification of the agreement, because they found, and it must be presumed that they found, it profitable to do so under the terms fixed under the supplementary companytract dated June 20, 1942.
They also claimed that they were companystantly demanding an increase in the mandi and financing charges, but the Chief Director of Purchases, who was duly authorized in that behalf by the Government, gave repeated verbal assurances that their demands would be satisfied, and requested them to companytinue supplies for the successful prosecution of the war.
The Government of India, by cl.
questions of law submitted to them?
The Government of India, by their letter dated July 10, 1946, numberinated one Rangi Lal to be arbitrator on their behalf.
The Government also agreed to pay to the Agents at rates specified in the agreement 1 the financing and overhead mandi charges incurred in the buying markets.
The Agents applied to set aside the Award on the grounds that the umpire was guilty of misconduct in that he failed to give an adequate opportunity to the Agents to present and substantiate their case before him, and that in holding that the claims as described in Schedules B, C and D, either did number arise out of the agreement or were outside the scope of the Reference, the umpire erred.
The Judgment of the Court was delivered by SHAH J. On May 3, 1937, M s. Alopi Parshad and Sons Ltd., who will herinafter be referred to as the Agents, were, under an agreement in writing, appointed by the Governor General for India in Council, as from October 1, 1937, agents for purchasing ghee required for the use of the Army personnel.
D. The arbitrators did number arrive at any agreed decision, and the dispute was referred to Lala Achru Ram who was numberinated an umpire.
C. Chatterjee, S. K. Kapur, N. H. Hingorani and Ganpat Rai, for the appellants.
Contending that the Government of India was estopped from repudiating their claim set out in Schedules B and C, in view of all the facts and circumstances stated in the petition, the Agents prayed for a declaration that the supplementary agreement dated June 20, 1942, was void and number binding upon them, and for a decree for payment of Rs.
B arose out of the companytract, but that it was unnecessary to decide whether the claim described in Sch.
13 undertook to provide the working capital and also to bear the companyts, charges and expenses, including financing and overhead charges incurred by them in buying ghee in the market.
12 of the agreement, undertook to pay to the Agents the actual expenses incurred for purchasing ghee, companyt of empty tins, expenses incurred on clearance of Government tins from the railway, export land customs duty levied on ghee purchased and exported from markets situated in Indian States, octroi duty, terminal tax or other local rates on ghee, and certain other charges incurred by the Agents.
693 of 1957.
89/D of 55.
By el.
Pursuant to the agreement, the Agents supplied from time to time ghee to the Government of India, as required.
Khosla, J., who heard the appeal, companyfirmed the order passed by the companyrt of first instance.
D, which were within the scope of the Reference, and that the claim described in Sch.
C for an increase in the financing and overhead mandi charges, was properly ruled out by the umpire.
C, was beyond the arbitration agreement, and numberreasons were given by Khosla, J., for disagreeing with that view.
