S.K. Das - (1.) THESE four appeals, all with special leave of this Court, have been heard together because they raise common questions of law and fact. This judgment will govern them all.
(2.) IN the High Court of Calcutta, in or about February-July, 1961, a series of applications numbering about 170 were filed by sellers of raw jute. The main relief asked for by those applications was the revocation of the authority of an arbitrator appointed under certain contracts which the applicants had entered into with the respondents in circumstances which we shall presently state. Except in two or three cases the respondents were all jute mill companies which purchase raw jute and manufacture finished goods therefrom. The main controversy which these applications gave rise to was dealt with by the High Court in its judgment dated 14/09/1961, in the application entitled Ram Kumar Chhotaria v. Titaghur Jute Factory Co. Ltd., (Matter No. 20 of 1961 (Cal ) before the High Court). Certain special points arising in some of the other applications were dealt with in separate judgments. The High Court stated in its judgment in Matter No. 20 of 1961 (Cal), that the only relief, among the many included in the petition, pressed at the hearing was leave to revoke the authority of the appointed arbitrator under the provisions of S. 5 of the ARBITRATION AND CONCILIATION ACT, 1940 (Act 10 of 1940) which provides that "the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement.'' We shall now state the circumstances in which the applications were made for leave to revoke the authority of the appointed arbitrator and in doing so we shall state somewhat fully the facts alleged in the application of M/s. Amarchand Lalitkumar, a firm registered under the Indian Partnership Act and carrying on business in Calcutta, which firm is the appellant before us in Civil Appeal No. 640 of 1961. The facts being similar we shall not repeat them with regard to the other three appeals, but refer to such special facts or points in those appeals as have been pressed before us.
(3.) ON 22/04/1960, M/s. Amarchand Lalitkumar, whom we shall refer to as the appellant, entered into a contract being contract No. 1786 with Shree Ambica Jute Mills Ltd., respondent in Civil Appeal No. 640 of 1961, whereby the appellant agreed to sell and the respondent agreed to buy some 10.000 maunds of Middle and Bottom Jute at a particular price. The contract was negotiated by a firm of brokers M/s. A. M. Mair & Co. (Private) Ltd., and was entered into in the standard printed form prescribed by the East India Jute & Hessain Exchange Ltd. (hereinafter referred to as the Exchange) and was subject to the rules and byelaws made by it The contract was a forward contract being a transferal le specific delivery contract in raw jute, the contract providing by a guarantee clause for "shipment or despatch during August/September, 1960''. By the operation of the provisions of the Forward Contracts (Regulation) Act, 1952 (Act 74 of 1952), and the notifications made by the Central Government thereunder, forward contracts for the sale or purchase of raw jute in the city of Calcutta which included the area within the municipal limits of Calcutta, the Port of Calcutta and the districts of 24 Parganas, Nadia, Howrah and Hooghly, could only be entered into between members of a recognised association or through or with any such member. The Exchange was such a recognised association. The Act empowered recognised associations to make bye-laws for the regulation and control of forward contracts subject to the previous approval of the Central Government. The Exchange made such bye-laws relating to the transferable specific delivery contracts in raw jute which bye-laws will be found in Chapter IX of the Working Manual issued by the Exchange. Terms and conditions of transferable specific delivery contracts in raw jute as prescribed by the said bye-laws provided for arbitration of all claims and disputes arising out of or in relation to such contracts by the Tribunal' of Arbitration of the Bengal Chamber of Commerce and Industry or the Indian Chamber of Commerce in Calcutta in accordance with the rules framed by the said Chambers. In some appeals before us the contracts provided for arbitration by the Bengal Chamber of Commerce and Industry and some by the Indian Chamber of Commerce in Calcutta. The rules of the two Chambers for constituting Tribunals of Arbitration are similar and such difference as is material for our purpose will be adverted to later in this judgment. Paragraph 11 in Ch. IX of the Working Manual of the Exchange made certain provisions for unavoidable delay in the supply of goods by the sellers of jute. In order to appreciate the main controversy between the parties it is necessary to quote the relevant portions of that paragraph. "11 (a) In the case of jute and in the event of sellers being prevented or delayed in carrying out their obligations under the contract by the occurrence of fire, strikes, riots, political or commercial disturbances, hartals and/or civil commotions, breakdown of public transport services, suspension of bookings, they shall given immediate intimation thereof to buyers. The sellers' and buyers' rights shall thereupon be as follows: (i) ON the sellers producing satisfactory evidence of the prevention or delay, they shall be granted an extension of time for delivering not exceeding thirty days from due date free of all penalties. (ii) If the contract be not implemented within the extended period referred to in Cl. (i) above buyers shall thereupon be entitled to exercise any one of the following options: (1) Of cancelling the contract, (2) Of buying against sellers in the open market on the day on which the option is declared and charging them with any difference, (3) Of cancelling the contract and charging sellers the difference between the contract and the market price on the day on which the option is declared.Sellers shall notify buyers that the goods will or will not be shipped within such extended period referred to in Cl (i) and in the case of sellers intimating that they will be unable to ship within the extended time buyers shall exercise their option under Cl. (ii) on the fifth working day of receiving such notice and notify sellers. In the absence of any such notice from sellers it shall be deemed that the goods have not been shipped and buyers shall exercise their aforesaid option on the fifth working day after expiration of the extended date and notify sellers. ... '' The case of the appellant was that at the relevant time certain emergent conditions arose in the raw jute trade and industry, which prevented the appellant from supplying the raw jute stipulated for in the contract within the time mentioned in the guarantee clause. By a letter dated 10/10/1960, the respondent exercised its option under para 11 quoted earlier, cancelled the contract and charged the appellant for the difference in price between the contract rate and the market rate prevailing on the date of cancellation. The appellant denied that if had any liability to pay the difference. Thereupon, the respondent applied for arbitration by the Tribunal of Arbitration constituted in accordance with the rules of the Bengal Chamber of Commerce and Industry. The Registrar of the Chamber wrote to the appellant that the arbitration case (No. 10 of 1961) would be heard by the Tribunal on a certain date. The date was then extended and before the Arbitration Tribunal could decide the matter the applications in the High Court were made for revoking the authority of the appointed arbitrator.;