BARANAGORE JUTE FACTORY CO LTD Vs. HULASCHAND RUPCHAND

JUDGEMENT

(1.) THIS is an appeal from a judgment and order, dated 7th March, 1955, of Bachawat, J., who has rightly observed that the case involves certain important questions of arbitration law. Those questions, some of which concern particularly arbitrations by the Bengal Chamber of Commerce and Industry, have arisen in the following way.

(2.) BY a contract entered into on 9th February, 1953, the appellant, The Baranagore Jute Factory Co. Ltd., agreed to buy and the respondent, Messrs. Hulaschand Rupchand, agreed to sell a certain quantity of jute of certain specifications. The contract contained an arbitration Clause in the standard form prescribed by the Indian Jute Mills Association and provided inter alia that all disputes and claims

(3.) IN pursuance of the contract, the respondent delivered a portion of the jute contracted for, but the appellant, while accepting the goods, raised a question as to their quality and also alleged that they contained excessive moisture. The respondent was not prepared to admit those allegations and a dispute having thus arisen between the parties, it was referred by the appellant on 16th March, 1953, to the arbitration of the Bengal Chamber of Commerce and INdustry. Thereupon, the Registrar of the Chamber numbered the reference as Case No. 233 of 1953 and constituted for its consideration a Court, consisting of one Mr. Carstairs and one Mr. McCraw. The arbitrators made their award on 2nd April, 1953 after they had inspected the goods and by it directed that the appellant would retain the jute and the respondent would pay it certain allowances and penalties. The respondent did not accept the award and after sundry correspondence between the parties and certain further proceedings before the arbitrators to which it is not necessary to refer, the award was filed in Court. Thereupon the respondent made an application for setting aside the award and by an order, dated 28th August, 1953, S. R. Das Gupta, J. set it aside. The learned Judge held that the 'award had been made without jurisdiction but what he found was nof that the arbitral Court had been illegally constituted, nor that the Court was not competent to entertain the reference but only, as he made it clear in his judgment, that by reason of the provisions of Clause 10 (3) of the contract, the arbitrators could not award allowances and penalties unless they made provision in the award itself for an allowance of a market difference of a certain percentage and a similar allowance for moisture, which they had not done. The learned Judge, however, did not supersede the reference. "I am not superseding the reference, he said expressly in his judgment, and the reservation was incorporated in his order, as drawn up, by the words "without supersession of the Arbitration proceedings herein and o the reference thereof."