Banerjee, J. - (1.) These two appeals by the grant of Special Leave and arising out of the judgment of the Delhi High Court focus two singularly singular questions pertaining to (i) the time being the essence of the contract and (ii) authority of the High Court in the matter of interference with an Arbitral Award under the Repealed Act of 1940 (The Arbitration Act, 1940).
(2.) For effectual disposal of these two questions, noticed above, reference to certain factual details in this judgment is inevitable and adverting thereto it appears that on October 4, 1989 Union of India floated an invitation to tender for purchase of sugar to meet the urgent requirement of anticipated scarcity in the Indian market during the Dussehra and Diwali festivals in November, 1989 which however, and without much of a factual narration, culminated in an Agreement dated 24th/25th October, 1989 with M/s. Arosan Enterprises, being the appellants herein for the supply of 58000 metric tonnes of sugar. The Contract as above inter alia contained the following terms: "(a) That the claimant shall supply 58,000 M.T. of sugar (net weight plus minus 5% at sellers option). (b) That the claimant shall arrange shipment of entire quantity of the contracted sugar so as to reach Indian Ports not later than 31st October, 1989; shipment within the contracted delivery period was to be the essence of the contract. In case of delay the seller was to be deemed to be in contractual default with a right to the buyer to cancel the contract. The buyer could however extend the delivery period at a discount as may be mutually agreed between the buyer and the seller. (c) That price payable was to be U.S. dollar 480 per metric tonne. (d) That the seller had to establish an unconditional irrevocable performance guarantee in favour of the buyer by any Indian Nationalised Bank at New Delhi for 10% of the total contract value of the maximum guaranteed quantity to be shipped within 7 days of the contract. (e) That the payment was to be made to the seller by irrevocable letter of credit (L/C) covering 100% value of the contract quantity. The L/C was to be established by the buyer within seven days of the receipt of an acceptable performance Bank Guarantee. (f) The Performance Bank Guarantee (PBG) was to be by any Indian Nationalised Bank at New Delhi and was to be kept valid for a minimum period of ninety days beyond the last date of contract shipment period."
(3.) The factual score further depicts that on 24th October, 1989, itself the appellant did furnish a performance bank guarantee for $ 29,28,000 and upon bank guarantee being furnished, the Government of India assigned the contract to the Food Corporation of India (FCI) under clause 20 of the Agreement. FCI also in its turn opened a Letter of Credit for the full value of the contract though, however, as the records depict that while on 26th October, 1989, the Letter of Credit was opened by FCI but its authentication was not effected within the delivery date i.e. 31st October, 1989.;