GULJARILAL KANORIA Vs. BUSI AND STEPHENSON LTD.
HIGH COURT OF CALCUTTA
Busi And Stephenson Ltd.
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BACHAWAT, J. -
(1.) THE appellant is an Indian merchant. The respondent is a company incorporated in England and carries on business in Liverpool. There were two contracts for sale of 'B' Twill Bags size 44' x 261/2, by the appellant to the respondent. The contracts are dated May 28 and June 29. 1950 respectively. The first contract is for shipment of 100 bales to Nigeria during July/August 1950 at 253 shillings per 100 bags f. o. b. Calcutta with quota secured for Nigeria. The second contract is for shipment of 250 bales to Nigeria during October 1950 but if possible in September 1950 at 245 shillings per 100 bags f. o. b. Calcutta with quota secured for Nigeria, Both contracts provide for payment against documents by confirmed Banker's credit in Calcutta. The contracts are on the terms of the Calcutta Jute Fabrics Shippers Association Contract Form 1935. Each of the contracts contains a wide arbitration clause providing for submission of disputes arising under the contract to the arbitration of the Bengal Chamber of Commerce, Calcutta. The due dates of both the contracts were extended up to 28 -2 -1951. On 19 -1 -1931 the appellant refused to perform the contracts. The repudiation was accepted by the respondent, on 16 -2 -1951. The respondent preferred two separate claims, before the Tribunal of Arbitration of the Bengal Chamber of Commerce. In respect of the first contract for 100 bales the respondent claimed a sum of 1005 as damages on the basis of the difference between the contract price and the repurchase price at 335 shillings per 100 bags. In respect of the second contract the respondent claimed a sum of 3037 -10 -0 as damages on the basis of the difference between the contract price and the repurchase price of 150 bales at 335 shillings per 100 bags and the re -purchase price of the balance 100 bales at 350 shillings per 100 bags. The respondent stated that -though the official ceiling price was 270 shillings, it was impossible to buy any goods at that, price. It may be mentioned that it the time when the contracts were made and also at the time when they were broken the Jute Goods (Expert Central) Order, 1949, was in force. The Control Order fixed ceiling prices in respect of manufactured jute goods. The ceiling price fixed for 100 bags 'B' Twill Bags 44' x 26 1/2' was Rs. 155/12/ - or roughly 245 s. 6d. Taking into account the increased export duty of 15 shillings far 100 bags the official ceiling price per 100 bags was roughly 270 shillings per 100 bags on 28 -2 -1951. It is to be noticed that the respondent claimed damages on the basis of market prices in excess of the ceiling price. The appellant in his answer submitted that the respondent was entitled to only the difference between the contract price and the market price ruling in Calcutta on the date of the breach and that in view of the Control Order the contract price could not exceed the ceiling price. The Bengal Chamber of Commerce duly made two awards allowing the claim of 1005 in respect of the first contract and the claim of 3037 -10 s. in respect of the second contract. The two awards were filed in Court. The appellant applied to the Court for setting aside the two awards. The learned trial Judge dismissed the application and passed two separate judgments on the two awards. These two connected appeals have been filed from the order and the two judgments.
(2.) ON behalf of the appellant Mr. Sethia contended that the arbitrators misconducted themselves by damages on the basis of the difference between the contract price and the repurchase price. He argued that on a breach of contract by a seller to deliver the goods, the buyer would be entitled to the difference between the contract price and the market price on the date of the breach by way of damages and that it would be wholly erroneous to award damages on the basis of the difference between the contract price and the repurchase price as claimed by the respondent. There is no merit in this argument. Mere error of law is not misconduct. The arbitrator is the final judge of both fact and of law. His verdict cannot be assailed on the ground that the award is erroneous either in law or in fact. There is no appeal from an award. The Court cannot review an award on the ground that it is erroneous in law unless the error appears on the face of the award. The awards on the face of them, do not show any error. Besides I am not satisfied that the arbitrators committed any error of law or that they awarded damages on the basis of the cost of repurchase. In the statements of claim the respondent asked for damages on the basis of the difference between the contract price and the repurchase price. On the other hand in his defence the appellant claimed that the damages should be awarded on the basis of the difference between the contract price and the market price prevailing in Calcutta. Issue was joined before the arbitrators on both counts, The arbitrators were called upon to decide whether damages should be awarded on the basis of the repurchase price or on the basis of the market price prevailing in India on the date of the breach. The arbitrators are experts in the trade and are best judges of the market price of the goods prevailing on the date of the breach. The arbitrators may well have thought that the market price of the goods on the date of the breach was such that the respondent was entitled to the sum of 1005 in the case of the first contract and the sum of 3037 -10 -0 in the case of the second contract.
Mr. Sethia and following him Mr. Bhabhra urged that the arbitrators were guilty of misconduct for another reason. They contended that having regard to the Jute Goods (Export Control) Order. 1949 it was illegal to buy and sell jute goods at prices in excess of the ceiling price fixed by the Control Order and that in awarding damages on the basis of a market price in excess of the ceiling price, the arbitrators had recognised an illegal market and had thereby misconducted themselves. They relied upon the principle laid down in a series of decisions in which this Court had to deal with awards made by the Bengal Chamber of Commerce in cases where the breach of con -tract took place while the Jute Price Control Order was in operation and while it was illegal to buy and sell jute at prices in excess of the maximum price fixed by the Jute Price Control Order. They relied particularly upon the decision in Chhhogmal Rawatmal v. Sankachand G. Shah, 53 Cal WN 828 and the decision in Tolaram Nathmal v. Ganesh Commercial Co. Ltd., Appeal from Original Order No. 6 of 1948, cited in Bejoy Singh v. Bilasroy and Co., : AIR1951Cal529 . where Harries, C. J., market for the goods at the controlled rate, the value of the goods on the due dates would be the value as determined by the controlled rate,
(3.) IN my judgment the whole argument of Mr. Sethia and of Mr. Bhabhra proceeds upon a misconception and upon a misreading of the Jute Goods (Export Control) Order. 1949. That order in no way prohibited the sale and purchase of jute goods at prices in excess of the ceiling prices. That order prohibited the export of certain classes or manufactured jute goods except under and in accordance with a licence issued under that Order and also prohibited the issue of an export licence if the price at which the goods had been or were being, sold by the applicant for the licence was more than the ceiling price and an additional sum not exceeding 5 per cent thereof on account of certain brokerage or commission. Consequently, if the applicant for the licence had sold or was selling the goods intended for export at a price in excess of the ceiling price and the extra 5 per cent the applicant would be unable to obtain the export licence or to export the goods.;
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