- (1.) The appellants in these appeals are the legal representatives of one B. Manik Peter who had obtained an award against the Union of India for Rs. 37,874-12-2 besides interest and costs made on 5/12/1956. The award-holder had preferred an application under Section 14 (2) of the Arbitration Act (hereinafter to be referred to as the 'act') calling upon the arbitrator (the umpire) to file his award coupled with a prayer for the passing of a decree in terms of the award. The Union of India not only resisted that application but preferred an application under S. 30 and 16 of the Actfor setting aside the award, and, in the alternative, remitting the award back to an umpire to be appointed by the Madras High court for reconsideration. The learned single Judge of the Madras High court who heard the two petitions together allowed the award-holder's application and dismissed that of the Union of India. A division bench of the same High court hearing appeals preferred from the said order set aside the award. By the present appeals the appellants ask for restoration of the order of the single Judge.
(2.) The facts necessary for the. disposal of the appeals lie in a small compass. B. M. Peter, deceased, had entered into four contracts with the Union of India for the supply of coirfibre according to certain specification. The contracts were in the usual form of calling of invitations to tender and acceptance there of The goods were to be put on rail at Cochin for transport to kanpur There was provision for inspection of the goods by a representative of the Union of India at Cochin before the goods were put on rail. The coirfibre was to be delivered 'in new, clean and dry condition in bales of 1 12 Ibs. each. The baling was to be carried out in 5 wooden or bamboo batons each at least 3' in length and secured in containers. The bales were to be rectangular in shape and approximately 3/ X 1 3/4 / in dimension. The net weight of coirfibre in any bale was not to be less than 112 Ibs. Clauses 11 and 12 of the invitation to tender and instructions with schedule in each case provided as follows : "11.The permissible moisture content of 15 % caters for the extreme humid conditions of atmosphere prevailing in the coir producing districts. The moisture content of coirfibre in any consignment should not on any account exceed 15%. And if the coir is packed as stipulated in the relevant specification there is not much chance of the fibre inside the bale losing the natural moisture and the consignee consequently receiving short supply on this score. It is only when the bale is opened and fibre exposed that loss in weight due to dirge takes place. 12. Payment will be made on the basis of net weight actually received and accepted by the consignee. "the acceptance to the tender shows that the place of delivery and the term as to delivery was F. O. R. Cochin Harbour Terminus of Badagara. Clause. 19 of the acceptance to tender contained certain special instructions as given below: "19.Special instructions : (1) Contractors are responsible. . . . . (2) Suppliers will be responsible for any shortage at the destination and payment will be made on the basis of net weight actually received and accepted by the consignee. (3) 90 per cent. payment will be made on the proof of dispatch of stores supported by copies Nos. 2 and 5 of inspection note duly received by the consignee. (4) Book Examination clause (attached). "the supplier put lie goods on rail in December 1950 and January 1951. As and when tile goods reached Kanpur they were taken delivery of by the military authorities. 90 per cent. of the value of the goods was paid for in terms of the contract with a retention of 10 %. According to the supplier the total amount of retention came to Rs. 37,820-1-6. The goods were not weighed immediately on reaching their destination. The evidence disclosed in this case showed that they were weighed on diverse dates between 4 and 15 days after their arrival at Kanpur. Several letters were addressed in February 1951 by the military authorities at Kanpur to the Officer in Charge G. S. I. D. , Madras withcopies to the supplier showing that each bale on weighment showed a certain deficiency in weight as compared to the figures thereof given in the railway receipt. The supplier wrote back to say that each bale of goods had been examined and weighed and the weight of each bale had been noted at the time of inspection prior to the enrolment thereof. He could give no explanation of the reported shortage but proceeded to say that the shortage, if any, might have been brought about by the escape of moisture content of fibre (within permissible limits as per governing specification) owing to the climatic changes of the place from that obtaining at Cochin and as such he should not be held responsible for the same. Evidently this did not satisfy the Union of India and after a good deal of correspondence the supplier asked for arbitration in terms of Clause 21 of the conditions of contract V. S. B. 133. Thereafter the parties proceeded to appoint an arbitrator each and the arbitrators called for statements of claim and written statement thereto and settled several issues of which it is necessary to note only the following : (2) What is the correct weight of stores consigned to Kanpur from cochin Harbour Terminus (3) What is the correct weight as ascertained at Kanpur for the various consignments (4) Is the price payable on the basis of the net weight actually received and accepted by the consignee at Kanpur unfortunately the arbitrators could not agree and the matter was referred to an umpire. According to him the only point in dispute was about the effect of the clause in the contract, namely, whether payment would be made on the basis of the net weight actually received and accepted by the consignee. He noted that it was not the case of the government that the goods had not been packed according to the specification or that any defect had been noticed at destination. Further the supplier did not admit that the weights reported by consignee were the correct weight of the goods when they reached Kanpur and taken delivery of. According to him : "It was admitted that the reported shortage in weight was due to dirge of the moisture contents of the fibre. "
(3.) Before the umpire only one witness was examined on behalf of the Union to produce certain files or papers. These documents were admitted in evidence but the umpire held that they did not disclose that "the goods were weighed before they were taken delivery of from the railway or immediately thereafter". The reasoning of the umpire was as follows : "The moisture content permissible is as high as 15 per cent. The loss in weight discovered at the time the weights are taken, does not in any one of the consignments with which we are concerned exceed 7 per cent. In the dry climate of Kanpur the moisture will evaporate much sooner than elsewhere and the loss in weight might have occurred after the goods reached Kanpur and they were taken delivery of by the consignee. In any event the evidence adduced by the government on whom the burden of proof lies regarding the loss of weight does not enable me to record of finding that there was shortage in the weights actually received and accepted by the consignee. ";