SHREE MEENAKSHI MILLS LTD Vs. LANGLEY AND CO

JUDGEMENT

(1.) This is an appeal from a decision of Mr. Justice Kania dismissing a petition to set aside an award. The petition was based on there being an error of law on the face of the award, and on misconduct by the arbitrators in not having heard evidence as to damages.

(2.) So far as the first point is concerned, we have got to be satisfied that there is on the face of the award an error of law. Now the award states that: The dispute was regarding fifty bales of the variety of Cambodia cotton, being a part of a contract dated April 30, 1930, which was carried over till about May 16, 1931, by mutual consent. Plaintiffs wanted to have a specific performance of the contract for these fifty bales on the ground that the contract was in existence and the cancellation was not in order. All the contracts, telegrams, correspondence, etc., between the two branches of Messrs. Langley and Co. of Bombay and Coimbatore and the defendants offices at Madura were put in and carefully gone into and we, the arbitrators, are of opinion that Messrs. Langley and Co. (i.e. the respondents) did not deliver these fifty bales on May 15, 1931, as demanded by the defendants, hence they cannot sue for the specific performance of the contract against the defendants, and can only claim the difference between the rate of the contract and the rate prevailing on May 15, 1931, for the said cotton laid I down in Madura as per rule No. 74 of the by-law of the East India Cotton Association and then figures as to the price of cotton on May 15, 1931, are given, and the arbitrators award that the defendants shall pay to the plaintiffs Rs. 2,200, which is the difference between the contract price and the price prevailing on May 15, 1931.

(3.) It is argued on behalf of the appellants that when the arbitrators expressed the opinion that the respondents did not deliver the fifty bales on May 15, 1931, as demanded by the defendants, that is a finding of breach of contract by the respondents. On the other hand, the respondents argue that there is no express finding of breach of contract, because there might have been no obligation on the respondents under the contract to make delivery until they had received payment, or until some other condition had been fulfilled. Be that as it may, it is quite clear that the damages awarded against the appellants are not based on a failure of the appellants to pay for the goods to be delivered, the damages are based on an application of by-law No. 74. There was an appeal from the award of the arbitrators to the Board of the East India Cotton Association Ltd., and the Board dismissed the appeal and directed that the award of the arbitrators be confirmed. By so doing I think that the Board accepted the award of the arbitrators as a whole. Mr. Colt-man has contended that all that they did was to accept the actual figures of damages awarded, without approving the reasons of the arbitrators. But when the Board direct that the award of the arbitrators be confirmed, I think that they mean to accept the whole award as correct. The award being based on the construction of by-law No. 74, we are bound, in my opinion, to look at that by-law, and if we come to the conclusion that on the construction of that by-law the appellants are not liable for damages, then there is an error of law on the face of the award.