SHAMJI MAL Vs. SEFTON & CO LTD

JUDGEMENT

(1.) The short point for decision in the present case is whether the Director General of Supply was t liberty to nominate an arbitrator when the original arbitrator nominated by him had neglected or refused to act.

(2.) When the second World War was in progress the Government of India decided to inaugurate a scheme in pursuance of which certain buying agents were appointed with the object of purchasing wool for certain manufacturers employed by Government. The price of these goods was primarily to be paid to the vendors by the vendees themselves but in order to safeguard the interests of the parties the Government of India accepted responsibility for the commitments which had been entered into by any of the parties on its behalf. Once of the clauses in the agreements which were executed with the buying agents under the Central Wool Purchase Scheme was in the following terms :-

(3.) In pursuance of this scheme Messrs. Shamji Mal, a joint Hindu family firm carrying on business at Delhi, supplied a quantity of wool to Messrs. E. Sefton and Company Limited, Mirzapur. Certain disputes arose between the parties concerning the prices of the goods supplied and the matters in controversy were referred to arbitration of one Mr. K.B. Rao, a nominee of the Director General of Supply. Mr. Rao entered upon the arbitration, issued notices to the parties and proceeded with the case but owing to certain reasons which do not appear on the file he had to leave for the United States before the award could be announced. On the 31st July 1950 the Director General nominated one Bakhshi Shiv Charan Singh, another officer of the Supply Department, as arbitrator. The latter gave his award on the 31st August 1951. Messrs. Shamji Mal filed the award in Court on the 28th September 1951 and on 27th November 1951 Messra. E. Sefton and Company raised a number of objections. They questioned the validity of the award on the ground that the power conferred upon the Director General having once been exercised was exhausted, that he had no power to nominate Bakshi Shiv Charan Singh, and consequently that Bakshi Shiv Charan Singh had no power to make the award. The Commercial Sub Judge of Delhi upheld the objection and Messrs. Shamji Mal have come to this Court in revision.