Gupta, J. - (1.) In these two appeals by special leave the appellant, Food Corporation of India, challenges the correctness of two orders passed by the High Court of Madras staying under Section 34 of the Arbitration Act two suits for damages it had instituted in the Court of the Subordinate Judge at Tuticorin. The question for consideration is whether the first respondent in each of these two appeals, who is the first defendant in the respective suits out of which these appeals arise, was "ready and willing to do all things necessary to the proper conduct of the arbitration" as required by Section 34 This is really a question of fact and the trial court found that in neither case the defendant who applied for stay satisfied this test. On appeal, the High Court stayed the suits reversing the decision of the trial court by two separate orders passed on the same day. Whether the High Court acted rightly would depend upon the facts and circumstances of the two cases which are essentially similar. It is necessary therefore to state briefly the facts leading to the institution of the suits.
(2.) The appellant Food Corporation of India, referred to hereinafter as the Corporation, chartered two ships belonging respectively to M/s. Thakur Shipping Co Ltd. and the Great Eastern Shipping Co Ltd. for carrying rice from Thailand to India. The charter-party between the Corporation and the shipping companies contained a clause, namely clause 42, which reads as follows: "Any dispute under this charter to be referred to arbitration in India one Arbitrator to be nominated by the owners and the other by the charterers and in case the Arbitrators shall not agree then to the decision of an umpire to be final and binding upon both parties." The bills of lading Provided inter alia that the contract between the parties was subject to the Indian Carriage of Goods by Sea Act, 1925 and that the provisions of the Act would be deemed as incorporated in the bills of lading. The bills of lading contained a clause that "no suit shall be maintained unless instituted within one year after the date on which the ship arrived or should have arrived at the port of discharge notwithstanding any provision of law of any country or State to the contrary". The Indian Carriage of Goods by Sea Act, 1925 in clause 6 of Article III of the Schedule also provides inter alia that "the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when goods should have been delivered".
(3.) The ship belonging to M/s. Thakur Shipping Co. Ltd., first respondent in Civil Appeal No, 1518 of 1974 and first defendant in Suit No. 103 of 1970 out of which this appeal arises, arrived at Tuticorin Port. which is the port of discharge, on August 31,1969 and discharge of cargo was completed, on September 13, 1969. The Corporation made a claim for damages for short delivery, provisionally on November 29, 1969 and finally on January 24, 1970. On July 2, l970 the Corporation sent a telegram to the second defendant in the suit, M/s. Pent Ocean Steamship Private Ltd., Bombay, who were the Operating Managers of, the ship concerned, asking them to confirm whether they were agreeable to refer the dispute as to short delivery to the sole arbitration of the Director General Shipping, Bombay stating that the matter was "most immediate". It is to be noted that the proposed reference to the sole arbitration of Director-General Shipping was a deviation from clause 42 of the charter-party. There was no reply to this telegram. On July 8, 1970 another telegram repeating the earlier proposal was sent to the second defendant again emphasizing the urgency of the matter. On July 9 1970 the second defendant sent a reply saying that they were no longer the Operating Managers and asking the Corporation to contact the first defendant for further advice. The Corporation then sent a telegram on July 10 , 1970 to the first defendant seeking to know if they were agreeable to have the dispute referred to the sole arbitration of Director-General Shipping, Bombay repeating that the matter was "most urgent". The first defendant chose not to answer the telegram. Any reminder after this, one expected, would be sent to the first defendant but on July 25, 1970 the Corporation telegraphically asked the second defendant again to nominate an arbitrator in terms of clause 42 of the Charter Party in case the proposal for arbitration by the Director-General Shipping, Bombay was not acceptable. In this telegram it was stated that the time within which the claim should be made was to expire shortly and that failure on the part of the other side to take prompt action for reference of the dispute to arbitration would compel the Corporation to take legal proceedings. Failing to get any response from the other direction, the Corporation on August 31, l970 instituted Suit No.-103 of l970 in the Court of the Subordinate Judge at Tuticorin for recovery of Rs. 1,57,724/73 p. on account of short delivery and damage to the rice shipped. A few days' more delay would have barred the claim. Served with the summons of the suit, the first defendant applied under Section 34 of the Arbitration Act for stay of the suit. As stated already, the trial Court rejected the application; on appeal the High Court reversed that decision and allowed the prayer for stay on the view that the trial Court had failed to exercise its discretion properly. Civil Appeal 1518 of 1974 arises out of this order.;