- (1.) These appeals are brought by certificate from the judgment of the Calcutta High Court, dated August 1, 1962 by which an award of the arbitrator Sir R. C. Mitter, dated September 2, 1959 was set aside.
(2.) The disputes arise out of two contracts being A. T. 1000, dated November 30, 1944 and A.T. 1048, dated June 25, 1945 between the Government of India (hereinafter called the 'Government') and the Bungo Steel Furniture Pvt. Ltd. (hereinafter called the 'appellant'). Both the contracts contained the usual arbitration clause embodied in Cl. 21 of the general conditions of contract in Form No. W.S.B. 133 for reference of any question or dispute arising in connection with the contract or arising under the conditions thereof. The claims and the counterclaims of the parties under the two contracts were referred to the arbitration of Sir R. C. Mitter. The award of the arbitrator is, dated September 2, 1959. The arbitrator found that the contract No. A.T. 1000 was for the supply of 4,700 bins at Rs. 107-2-6 per bin inclusive of the price of steel. In respect of the supply of bins under this contract the Government agreed to pay an extra Rs. 4-12-6 per bin for extra partition. The contract No. A.T. 1048 was for the supply of 2000 steel bins at Rs. 132-8-0 per bin inclusive of the price of steel. The arbitrator found that on February 20, 1946 the parties agreed to a modification of the contracts and the agreed modification was that the supply under contract No. A. T. 1000 would be reduced to 1805 bins and the supply under contract No. A. T. 1048 would be reduced to 367 bins, so that the total supply under the two contracts would be 4700 bins. The arbitrator further found that only 1,805 bins had been manufactured under contract No. 1000 and 367 bins had been manufactured under contract No. 1048 and that in all 2,172 bins were manufactured by the appellant and were accepted by the Government and the appellant was entitled to the price of 2,172 bins so supplied inclusive of the price of steel amounting to Rs. 2,42,044. The arbitrator held that the Government wrongfully cancelled the contract with respect to the balance 2,528 bins and that at the time of this cancellation the component parts of the balance 2,528 bins had not been assembled into finished bins. The arbitrator found that the appellant was entitled to a credit for the sum of Rs. 10,385 on account of the cost of supply of the extra partitions for 2,172 bins. This finding of the arbitrator was held to be erroneous by Mallick, J., who reduced the amount awarded to the appellant by a sum of Rs. 10,385. The finding of Mallick, J. was not challenged by the appellant before the Division Bench of the High Court. The arbitrator also found that the appellant was entitled to credit for the sum of Rs. 27,969 on account of payment made by the appellant towards the cost of steel on M. R.O. and that the Government was entitled to a cross credit for a sum of Rs. 7,851 on account of payment made by it to the appellant directly. These two findings of the arbitrator were not challenged before the Division Bench.
(3.) The arbitrator found that the Government was under an obligation to supply steel for the manufacture of the bins and that it did supply such steel to the appellant. The arbitrator disbelieved the appellant's case that it had rejected the steel sheets supplied by the Government and had used the steel sheets from their own stocks and that the steel sheets supplied by the Government became rusted and were still lying in their factory grounds as powdered rust. The arbitrator found: (a) that the price of the total quantity of steel supplied by the Government to the appellant at basic rates was Rs. 2,53,521, (b) that the price of the steel used for making 2,172 finished bins amounted to Rs. 87,696 and the Government was entitled to credit for this sum of money, and (c) that no surplus steel was left after manufacture of 2,172 finished bins and the component parts of the unfinished bins. It followed from this finding that the price of steel used up in making the component parts of the unfinished bins amounted to Rupees 1,65,825.;