WANCHOO - (1.) J.: This is an appeal by special leave against the judgment of the Calcutta High Court. The appellant is a company, incorporated in India, with its registered office in Calcutta dealing in jute. It entered into a contract on 18/06/1945, with the respondent-company, which is incorporated in England and has its registered office in London. The contract was for the supply of five hundred bales of jute of crop 1945-46 to be shipped from Calcutta or Chittagong to Rio de Janeiro, when freight became available. The contract provides that in the event of default of tender or delivery, the seller shall pay to the buyer as and for liquidated damages 10s. per ton plus the excess (if any) of the market value over the contract price, the market value being that of jute contracted for on the day following the date of default. This date was to be the date in London on declaration of default by telegram or without such declaration if default was eventually made by lapse of time on the 21st day after expiry of the extended period. There is also a provision for arbitration, which lays down that any claim or dispute whatever arising out of, or in relation to this contract or its construction or fulfilment shall be referred to arbitration in London in accordance with the bye-laws of the London Jute Association, and it was open to either party to claim arbitration whenever and as often as disputes arose. The contract also provides for an appeal by any party dissenting from an arbitration award to the London Jute Association in accordance with the regulations in force for the time being. Lastly, it is provided that the contract would be construed according to the laws of England whatever the residence and nationality of the parties might be or become and would be deemed to be performed there. The courts of England or arbitrators, as the case might be, would have exclusive jurisdiction over all disputes which might arise under the contract, except for the purpose of enforcing in the Colonies or abroad any arbitration award made under this contract.
(2.) ON 23/06/1947, thirty-nine bales of jute were consigned by the appellant to Rio de Janeiro in part performance of the contract and information of this was given to the respondent by letter on 17/07/1947. It was said in this letter that difficulty had arisen because of the non-availability of quota and it was hoped that the balance remaining under the contract would be shipped as soon as quota was available. The respondent sent a reply to this letter on 25/07/1947, and the appellant wrote a further letter on 1/08/1947, in which it was said that the remaining "amount of jute under the contract would be shipped as soon as the quota was available. We do not know what happened thereafter till we come to August 1948. It seems that the respondent received a cable on 12/08/1948, from the appellant stating that the contract stood cancelled long ago. The respondent by its letter dated 12/08/1948, refused to accept this position. Thereafter there were disputes and differences between the parties and eventually the respondent claimed default on or about June 1949 in terms of the contract. On ' or about 14/07/1949, the respondent referred the matter to the arbitration of the London Jute Association, which appointed two of its members as arbitrators. The respondent filed its claim before the arbitrators on 23/07/1949. On Ju 27/07/1949, the arbitrators gave notice to the appellant to file its answer by 19/08/1949. The appellant, however, filed no answer before the arbitrators. What the appellant did in reply was to file an application under S. 33 of the Indian Arbitration Act, No. X of 1940, (hereinafter called the Arbitration Act) on the original side of the Calcutta High Court, in which it made three prayers, namely- (a) declaration that the arbitration agreement, if any, between the parties was void ah initio on the ground of uncertainty and was not binding on the appellant. (b) declaration that there was in fact and in law no contract between the parties on account of mutual mistake of the parties; and (c) that the court might be pleased to adjudicate on the existence and/or validity of the alleged arbitration agreement and the effect of the same. This application was moved on 12/08/1949. It appears that on 13/08/1949, the appellant sent a cable to the respondent and the London Jute Association informing them that an application has been made in the Calcutta High Court challenging the submissions contained in the contract and that the arbitrators had become functus offcio pending disposal of the application, which was fixed for August 29. The appellant received a reply to its cable in which it was asserted that no such application as the appellant had made to the Calcutta High Court could be made there and that the arbitrators would proceed with the adjudication on August 27 as already fixed. On 17/08/1949, the appellant sent a letter to the London Jute Association in which it referred to its cable and the reply of the Association to that and reiterated its stand that any further steps taken in the arbitration proceedings pending disposal of the application under S. 33 would be invalid under the Arbitration Act. The arbitrators, however, proceeded with the arbitrition and gave their award on 17/10/1949. No proceedings thereafter were taken by the appellant in London, nor does it appear that any steps were taken by it to have its application under S. 33 decided, till we come to 26/11/1951. On that date, an application was filed by the respondent in the Calcutta High Court under Section 5 of the Arbitration [Protocol and Convention) Act, 1937, (VI of 1937) (hereinafter called the Protocol Act). Along with this application it filed the award dated 17/10/1949, and prayed that judgment be pronounced in accordance with the award and decree be passed accordingly. Notice of this was issued to the appellant, which filed its reply on 14/01/1952. We do not think, it necessary to set out the petition of the respondent under S. 5 of the Protocol Act and the appellant's reply thereto in detail, because when the matter came to be heard in court only two points were urged on behalf of the appellant, namely- (1) that the award was made after the notice of filing of the petition dated 10/08/1949, under S. 33 of the Arbitration Act had been given to the respondent and the arbitrators, and consequently the award made after the receipt of the said notice and during the pendency of the said application was bad under S. 85 of the Arbitration Act; and (2) that the award was bad on the face of it and could not therefore be enforced in view of the provisions of S. 7(e) of the Protocol Act, which lays down that an award cannot be enforced in India if it is contrary to the law of India. It was contended that the award was contrary to the law of India and this appeared on the face of it inasmuch us the arbitrators had purported to award such damages as could not be done under the provisions of the Indian Contract Act, No. IX of 1872.
(3.) BOTH these contentions were negatived by the learned Single Judge and he ordered the award to be filed in court and passed a decree in terms thereof. The appellant then went up in appeal, which was heard by a Division Bench of the Calcutta High Court. The grounds of appeal show that the same two points, which were urged before the learned Single Judge, were reiterated therein. When the matter came to be heard before the Division Bench, the same two points were raised on behalf of the appellant there also. The Division Bench negatived the two contentions raised before it on behalf of the appellant and confirmed the judgment of the learned Single Judge. It is curious, however, to notice that though all these proceedings were being taken on the application under S. 5 of the Protocol Act the appellant apparently took no steps to have its application Under S. 33 of the Arbitration Act, which seems to have been adjourned sine die, decided along with the respondent's application under S. 5 of the Protocol Act.;