Bhan, J. - (1.) Food Corporation of India (for short "the Corporation") has filed this appeal against the Division Bench judgment and order of the High Court of Calcutta whereby and where under the High Court has upheld the award made by the arbitrator appointed under the directions of the Court.
(2.) Facts. Respondent was appointed as a handling and transport contractor on 14th June, 1979. On 4th January, 1980 respondent addressed a letter to the Managing Director of the Corporation requesting him to refer the disputes which had arisen between the parties for arbitration. Since no arbitrator was appointed to resolve the dispute, he filed an application under Section 20 of the Arbitration Act, 1940 (for short "the Act") in the High Court on the original side, with a prayer to issue a direction to the Managing Director of the Corporation to appoint an arbitrator in terms of the arbitration Clause XX of the agreement entered between the parties. Court by its Order dated 16th June, 1988 issued a direction to the Managing Director of the Corporation to appoint an arbitrator in terms of Clause XX of the agreement within six weeks from the date of communication of the order. The direction was given in the following terms: "Court Order in terms of prayer (a) of the petition. The Managing Director, Food Corporation of India is directed to appoint an arbitrator in terms of Clause 20 of the agreement within six weeks from the date of communication of the order. All disputes in the petition particularly the disputes mentioned in para 24 thereof be referred to the Arbitrator to be appointed by the Managing Director. Let it appear marked to be mentioned 8 weeks hence. All parties including Managing Director, Food Corporation of India and the proposed Arbitrator to act on a signed copy of the minutes of the Order on the usual undertaking." The relevant portion of the Clause XX is as under : "All disputes and difference arising out of or in any way touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract) shall be referred to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India. It will be no objection to any such appointment that the person appointed is or was an employee of the Corporation that he had to deal with the matters to which the contract related and that in the course of his duties as such employee of the Corporation he had expressed views on all or any of the matter in dispute or difference. The award of such arbitrator shall be final and binding on the parties to this contract. It is a term of this contract that in event of such arbitrator to whom the matter is originally referred being transferred on vacating his office or dying or being unable to act for any reason, Managing Director of the Food Corporation of India at the time of such transfer, vacation of office, death or inability to act shall appoint another person to act as arbitrator. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed as aforesaid should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all." Under this clause all disputes and differences arising out of or in any way concerning the agreement whatsoever were to be referred to the sole arbitration of a person appointed by the Managing Director except as to any matter the decision of which was expressly provided for in the contract. Clause XII enumerates the items excluded from the purview of Clause XX. Relevant sub-clauses (a), (d) and (e) of Clause XII are as under : "(a) The contractors shall be liable for all costs, damages, demurrages, wharfage charges and expenses suffered to incurred by the Corporation due to the contractors negligence and unworkman like performance of any service under this contract or breach of any terms thereof or their failure to carry out work with a view to avoid incurrence of demurrage etc. and for all damages or losses occasioned to the Corporation or in particular to any property or plant belonging to the Corporation due to any act whether negligent or otherwise of the contractors themselves or their employees. The decision of the Sr. Regional Manager regarding such failure of the contractors and their liability of the losses etc. suffered by Corporation shall be final and binding on the contractors. (d) The contractors shall be responsible for the safety of the goods from the time they are loaded on their trucks from Rly. Station/sidings, Depots Godowns or at other destinations. They shall provide tarpaulin on the decks of the trucks so as to avoid loss of grain etc. through the holes/crevices in the decks of the trucks. They shall deliver at the destination the number of bags and the weight of food grains etc. received by them and loaded on their trucks and shall be liable to make good the value of any loss, shortage or damage in transit. The Regional Manager will be the sole Judge for determining after taking into consideration all the relevant circumstances, the quantum and value of loss and also as regards the liability of the contractors for such loss and the amount to be recovered from them. The decision of the Regional Manager in this regard shall be final and binding on the contractors. (e) In case of loss, shortage, damage, pilferage, misappropriation (including missing of lorry loaded with consignments) to foodgrains/sugar/fertilisers and gunnies during transit, the Regional Manager shall have the right, without prejudice to other rights and remedies under this contract, to impose upon and recover from the contractors an amount not exceeding three times (3 times) the issue rates of the foodgrains/sugar/fertilisers applicable at the time of occurrence of such pilferage misappropriation and one time (1 time) value of the gunnies. The decision of the Regional Manager in this regard shall be final and binding on the contractors."
(3.) Respondent raised certain claims on the basis of which the following issues were framed. Corporation also claimed a sum of Rs. 5,62,522.70 p. on account of payment made towards demurrage and wharfage charges. Based on the claim of the contending parties the arbitrator framed the following issues : 1. Is the claim of the claimant barred by limitation 2. Is the claimant entitled to a sum of Rs. 6,71,903.59 paise towards handling and transport bills or to any part thereof 3. Is the claimant entitled to get refund of Rs. 67, 149.65 paise deducted for transit loss 4. Is the claimant entitled to refund of Rs. 89,743.34 paise deduced for other purposes 5. Is the claimant entitled to refund of Rs. 1,68,500/- deducted on account of demurrage and wharfage charges 6. Is the claimant entitled to Rs. 1,92,873.10 paise towards price of wheat and rice delivered in excess to the respondent 7. Is the claimant entitled to Rs. 3,21,870/- for running of trucks empty from Howrah siding to Howrah I and Howrah II for empty tare 8. Is the FCI entitled to Rs. 5,61,522.70 paise on account of payment made towards demurrage and wharfage charges 9. Is the claimant entitled to interest @ 18% per annum from the respective due dates of the bills till payment on the awarded sums ;