AMARCHAND LALITKUMAR FULCHAND KANHAIYALAL CO Vs. AMBICA JUTE MILLS LIMITED :KHARDA COMPANY LIMITED NATIONAL COMPANY LIMITED AND NEW CENTRAL JUTE MILLS COMPANY LIMITED

JUDGEMENT

(1.) THESE four appeals, all with special leave of this Court, have been heard together because they raise common questions of law and fact. This judgment will govern them all.

(2.) IN the High Court of Calcutta, in or about February-July, 1961, a series of applications numbering about 170 were filed by sellers of raw jute. The main relief asked for by those applications was the revocation of the authority of an arbitrator appointed under certain contracts which the applicants had entered into with the respondents in circumstances which we shall presently state. Except in two or three cases the respondents were all jute mill companies which purchase raw jute and manufacture finished goods therefrom. The main controversy which these applications gave rise to was dealt with by the High Court in its judgment dated 14/09/1961, in the application entitled Ram Kumar Chhotaria v. Titaghur Jute Factory Co. Ltd., (Matter No. 20 of 1961 (Cal ) before the High Court). Certain special points arising in some of the other applications were dealt with in separate judgments. The High Court stated in its judgment in Matter No. 20 of 1961 (Cal), that the only relief, among the many included in the petition, pressed at the hearing was leave to revoke the authority of the appointed arbitrator under the provisions of S. 5 of the ARBITRATION AND CONCILIATION ACT, 1940 (Act 10 of 1940) which provides that "the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement.''

(3.) ON 22/04/1960, M/s. Amarchand Lalitkumar, whom we shall refer to as the appellant, entered into a contract being contract No. 1786 with Shree Ambica Jute Mills Ltd., respondent in Civil Appeal No. 640 of 1961, whereby the appellant agreed to sell and the respondent agreed to buy some 10.000 maunds of Middle and Bottom Jute at a particular price. The contract was negotiated by a firm of brokers M/s. A. M. Mair & Co. (Private) Ltd., and was entered into in the standard printed form prescribed by the East India Jute & Hessain Exchange Ltd. (hereinafter referred to as the Exchange) and was subject to the rules and byelaws made by it The contract was a forward contract being a transferal le specific delivery contract in raw jute, the contract providing by a guarantee clause for "shipment or despatch during August/September, 1960''. By the operation of the provisions of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952), and the notifications made by the Central Government thereunder, forward contracts for the sale or purchase of raw jute in the city of Calcutta which included the area within the municipal limits of Calcutta, the Port of Calcutta and the districts of 24 Parganas, Nadia, Howrah and Hooghly, could only be entered into between members of a recognised association or through or with any such member. The Exchange was such a recognised association. The Act empowered recognised associations to make bye-laws for the regulation and control of forward contracts subject to the previous approval of the Central Government. The Exchange made such bye-laws relating to the transferable specific delivery contracts in raw jute which bye-laws will be found in Chapter IX of the Working Manual issued by the Exchange. Terms and conditions of transferable specific delivery contracts in raw jute as prescribed by the said bye-laws provided for arbitration of all claims and disputes arising out of or in relation to such contracts by the Tribunal' of Arbitration of the Bengal Chamber of Commerce and Industry or the Indian Chamber of Commerce in Calcutta in accordance with the rules framed by the said Chambers. In some appeals before us the contracts provided for arbitration by the Bengal Chamber of Commerce and Industry and some by the Indian Chamber of Commerce in Calcutta. The rules of the two Chambers for constituting Tribunals of Arbitration are similar and such difference as is material for our purpose will be adverted to later in this judgment. Paragraph 11 in Ch. IX of the Working Manual of the Exchange made certain provisions for unavoidable delay in the supply of goods by the sellers of jute. In order to appreciate the main controversy between the parties it is necessary to quote the relevant portions of that paragraph.