SUSHIL CHANDRA DAS AND COMPANY Vs. SUKHAMAL, BANSIDHAR

JUDGEMENT

(1.) These are connected applications to file two awards, purporting to be made on the 12 of November, 1,920, at the close of proceedings taken under the Indian Arbitration Act in connection with a trade dispute between two firms. It is one of a number of connected applications which would, in the ordinary course of things, have been filed in the court of the District Judge of Cawnpore, but were transferred to this Court with the consent of the parties, to be disposed of in the exercise of its original jurisdiction, because of the importance to the commercial community of some of the questions involved.

(2.) The firm in whose favour the awards have been made, that of Sushil Chandra Das & Co., which may conveniently be spoken of as the plaintiff firm, are importers of piece-goods from Manchester. The defendant firm, that of Sukhamal, Bansidhar, deals in the said goods, but does not import on its own account. On the 24 of August, 1918, the defendant firm placed in the hands of the plaintiff firm two indents drawn up on a form published by the Delhi Piece Goods Association; one indent was for one hundred bales of red shirting, the other for twenty-five bales of white lawns. On the 2nd of September, 1918, the plaintiff firm wrote intimating their acceptance of, the former order, and on the 4 of September, 1918, they similarly accepted the latter. It is admitted that the conclusion of the Armistice on the 11 of November, 1918, was followed by a heavy fall in the price of piece-goods in the Indian market. On the 24 of November, 1918, the defendant firm wrote to the plaintiff firm begging the latter to arrange with their "suppliers at home to expunge these orders from their books", and offering to pay "nominal damages" in return for this favour. Further correspondence followed; and on the 20 of January, 1919, the defendant firm wrote repudiating liability on the ground that there had never boon any completed contract of sale between the parties. The plaintiff firm claimed to have the dispute referred to arbitration under the terms of Clause 15 of the conditions endorsed on the printed form of tender which the defendant firm had used. The latter took up the position that, inasmuch as there had never been any completed contract between the parties, it necessarily followed that they were bound by no agreement to refer anything to arbitration. One attempt at obtaining a decision through a single arbitrator failed, the District Judge holding that the conditions necessary to entitle the one arbitrator nominated by the plaintiff firm to proceed to the delivery of an award had not been fulfilled: this order was upheld by this Court in a judgment dated the 9 of August, 1920. A supplementary award, which the same arbitrator had delivered while the proceedings relating to the filing of his first award were pending, was finally withdrawn by the plaintiff firm from the court of the District Judge, on the very proper view that it had become ineffective owing to the decision affirmed by this Court's order of the 9 of August, 1920. The plaintiff firm, however, has proceeded upon certain principles laid down in the order above referred to; it has assumed that the submission to arbitration is effective and subsisting, and has accordingly made another attempt to carry it into effect. On the 20 of August, 1920, they sent the other side notice that they desired to submit the entire dispute to arbitration and again nominated Mr. J.C. Roberts, President or Chairman of the Committee of the Delhi Piece Goods Association, as their arbitrator. The defendant firm, under protest and without prejudice to their contention that they were not bound to go to arbitration at all, nominated Mr. A.C. Khosla. The two arbitrators held a single meeting at Delhi, on the 27 of September, 1920. Mr. Khosla suggested the adjournment of the proceedings to a later date, on the strength of a telegram which he had received, to the effect that the party nominating him was not ready with its evidence. Mr. Roberts took a very strong view that the defendant firm was merely trying to evade any effective arbitration, or in any case to spin out the proceedings until the expiration of a period of three months from the date of this Court's order of the 9 of August, 1920, should enable them to withdraw a considerable sum of money which they had deposited in the District Judge's court: he definitely refused to adjourn and the arbitrators separated without having decided anything. A memorandum of their proceedings on that date was drawn up and signed by both of them. There has been a conflict of evidence between Mr. Roberts and Mr. Khosla as to whether or not they ever got so far as discussing the merits of the dispute, or the appointment of an umpire to adjudicate on the same upon their failure to agree: they certainly did differ on the question whether they should or should not proceed at once to pronounce a decision upon the materials available, and they did separate without appointing an umpire, Mr. Roberts proceeded at once to draw up a paper which has been loosely described as his "award", it is of course a statement of his opinion on the dispute drawn up for the consideration of the umpire. On the 1 of October, 1920, Mr. Khosla similarly drew up a statement of his own. The plaintiff firm applied to the Committee of the Delhi Piece Goods Association to appoint an umpire Notice of the application was sent to the opposite party; and, on the 30 of October, Mr. Gur Prasad Kapur wrote to them to say that he had been appointed umpire and had fixed the 12 of November, 1920, for deciding the matter. On that date he delivered the two awards sought to be filed; they adopt in its entirety the opinion formed by Mr. Roberts and award the plaintiff firm an ascertained sum by way of damages for the breach of contract of which the defendant firm is held guilty.

(3.) The objections taken to the filing of the award may now be stated and disposed of seriatim. (1) It is contended that there was never any completed contract between the parties, and consequently no binding agreement to submit disputes arising out of the contract to arbitration. This argument is based upon the wording of two letters of the 2nd of September, and 4th of September, 1918, by which the plaintiff firm intimated their acceptance of the two indents received from the defendant firm. In each case the letter begins with the words: "We have the pleasure to accept your indent"; then follow particulars which are a mere repetition of the conditions specified is the indent under reply, and finally comes the phrase upon which the dispute has hinged: "The above-mentioned acceptance is subject to revision and confirmation by mail if required." For the plaintiff firm Mr. Sushil Chandra Das himself has gone into the witness-box and given evidence as to the ordinary course of business. He was a somewhat confused witness, and over-ready to make sweeping assertions which subsequently required qualification: but I have no doubt he was trying to speak the truth to the best of his ability. He repudiated the suggestion which his own counsel had pub forward, to the effect that the indents signed by the defendant firm must be regarded as completing and recording a contract, inasmuch as they were acceptances of offers orally made on behalf of the plaintiff firm. Nevertheless I am satisfied that there had been negotiations between the parties and a provisional agreement arrived at before the signatures of the defendant firm were put to the two indents. The mere fact that the written entries on the indent forms, apart from the printed matter, are in the handwriting of the manager or agent of the importing firm is strong corroboration of the evidence of Sushil Chandra Das on the point. The indents are in effect promises by the defendant firm to take delivery of certain goods and to pay for them at certain rates, subject to certain specified conditions, and subject also to the plaintiff firm's intimating within the prescribed period (twelve days in the case of indent No. 898 and five days in the case of indent No. 899) that they had ascertained by cable from their Manchester correspondents that the latter could supply the goods to enable the plaintiff firm to perform its part of the contract according to its terms. The reply of the plaintiff firm in each case is to the effect that the necessary cable has been sent and reply received, and that the bargain is concluded, subject only to this reservation, that the terms may have to be revised or the bargain confirmed on arrival of the English mail containing the reply of the Manchester correspondents. Such "revision and confirmation" is to remain open until, the arrival of the mail, "if required". In their context these words can only be understood as meaning, "if circumstances should arise making such revision or confirmation necessary." The circumstances contemplated by both parties are clearly stated in the sixteenth clause of the printed form of indent, a clause which by virtue of the signature of the defendant firm became part of the contract between the parties. This clause stipulates that "It is distinctly understood between the sellers and the buyers in India that offers if accepted by telegram are subject to revision and confirmation by mail only if any mistake has been made in the telegram." The following statements made by Sushil Chandra Das in his deposition seem to me obviously true in fact and a correct statement of the nature of the contract entered into, as it was understood by both parties: In this transaction there was no mistake in the cables to England between me and my English correspondents. When the mail is received from England and shows that there has been no mistake in the cables, there is nothing for me to confirm to the purchasing firm. The acceptance by cable binds me to everything, to all the terms stated in the indent, except in the event of a telegraphic error in transmission.