D.N.Roy, J. - (1.) THESE are two connected appeals by rival parties to certain arbitration proceedings under Section 20 of the Arbitration Act (No. X) of 1940. Appeal No. 199 of 1951 is by the Indian Minerals Company. It has been made under Section 39(1) (iv) of the Arbitration Act and is directed against an order dated 14-6-1951 by which the agreement of a reference to arbitration was ordered to be filed. Appeal No. 257 of 1953 is by the other side, namely by Brij Lal Suri and Sons, Proprietors of Northern India Lime Marketing Association, Dehara Dun. It has been made under Section 39(1) (vi) of the same Act and it is directed against an order dated 30-7-1953, by which an application to set aside the award dated 14-2-1953, was dismissed by trie Civil Judge and the suit was dismissed in terms of the award.
(2.) THE facts may be briefly stated. An application under Section 20 of the Arbitration Act of 1940 was filed by Brij Lal Suri and Sons, Proprietors of Northern India Lime Marketing Association, Dehra Dun, through Brij Lal Suri and against the Indian Minerals Company, a firm carrying on business at Maihar in Central India, now Madhya Pradesh. It was contended that the parties had entered into a contract. THE conract was that the Indian Minerals Company would supply certain amount of Hind-awn soap-stone lumps every month for certain territories including Dehra Dun on certain conditions. THEre was no formal contract, but the parties exchanged letters which proved the contract On 20-9-1942, a letter was written by the plaintiff to the defendant setting out the terms upon which he would be prepared to take tha goods from the defendant. Along with the letter he sent a cheque of Rs. 500/-. On the next day, i.e. on 21-9-1942 the defendant wrote a letter to the plaintiff. In this letter reference was made to the plaintiff's letter on the 20th September and a new condition was put forward, namely, that if the plaintiff did not take up 30 wagons of the goods contracted for within six months, the deposited amount of Rs. 500/- would be forfeited. THE defendant required confirmation of this letter from the plaintiff. On 24-9-1942, a letter was written by the plaintiff to the defendant confirming the terms offered by the defendant in their letter of the 21st September. THE contract was therefore completed by means of the plaintiff's letter of 24-9-1942. One of the terms agreed to between the parties by means of this correspondence was that disputes arising between the parties in the matter of the contract shall be referred to mutual arbitration. THE plaintiff alleged that the defendant was guilty of breach of contract and that therefore according to the arbitration Clause the matter Was liable to be referred to arbitration. He therefore made the application under Section 20 of the Arbitration Act for the agreement being filed in Court and the arbitration proceedings being taken in pursuance of it. An affidavit was filed by the plaintiff in support of his allegations. THEre was no counter-affidavit from the other side. THE learned Civil Judge of Dehra Dun rejected the application on the ground that it was not proved that there was any cause of action for the application within his jurisdiction. THE learned Judge held that the only evidence to prove that the contract was made at Dehra Dun was the affidavit filed on behalf of the plaintiff and because, in his opinion, this matter could not be proved by an affidavit, the learned Judge ordered that the application be returned for presentation to proper court. Against that decision F. A. F. O. No. 186 of 1948 was filed in this Court and two points were urged at the hearing of that appeal. Firstly, that the letters themselves which were admitted by the defendant clearly showed that the contract was made at Dehra Dun, and that, at any rate, it was to be performed partly at Dehra Dun. Secondly, that an affidavit under Section 33 of the Arbitration Act could be filed in proceedings under Section 20 of the Act. It was held by this Court on 3-8-1950, in that appeal that the contract took place at Dehra Dun and that at any rate it was to be performed partly at Dehra Dun and consequently the Court at Dehra Dun had jurisdiction to entertain the application. Upon that view the court refrained from expressing any opinion on the other question, namely, whether the matter in controversy in an application under Section 20 can be proved by an affidavit as provided by Section 33 of the Act. THE result was that that appeal was allowed and the order of the learned Civil judge was set aside and the case was remanded to him for trial according to law. After the case was remanded, the original application was amended and the matters at dispute were specified in it. Further written statement was filed by the defendant. The learned Civil Judge then set forth two issues for decision, namely, (1) Whether there was in fact any agreement of reference to arbitation and (2) what are the disputes between the parties which are to be referred to arbitration. The Civil Judge by his order dated 14-6-1951, held, relying upon the terms of the contract and in particular upon Clause 6 of the letter Ex. 1 dated 20-9-1942 of the plaintiff, which was not repudiated by the defendant in his letter Ex. 2 dated 21-9-1942, which stipulated that "if unfortunately any dispute may arise out of the agreement it may be referred to mutual arbitration," that there was an agreement of reference to arbitration between the parties as alleged by the plaintiff.
(3.) ON the question as to what were the matters which were in dispute between the parties two of the matters, according to both sides, related to the interpretation of the terms of the letter Ex. 2 dated 21-9-1942. The plaintiff insisted that he must be given five waggons per month as the minimum supply. The defendant, on the other hand, contended that the supply in terms of Ex. 2 was to be made to the plaintiff after meeting the demand of the defendant's own factory at Dohad, which was about six wagons per month. Closely connected with those questions was the ancillary question as to whether the defendant was justified in supplying materials to other parties within the contracted zone after entering into contract with the plaintiff. In the letter Ex. 1 there was reference to the territory of N. W. F. P., Punjab, Delhi and Districts of Western U. P. above the line Moradabad-Delhi. In respect of this territory the plaintiff wanted in his letter Ex. 1 that no quantities of soap-stone should be supplied by the defendant to other parties and all inquiries and orders received by the defendant direct should be sent to the plaintiff for disposal. The modification suggested to this term in the letter Ex. 2 was that all orders previously accepted By the defendant for the above mentioned territory will be executed by the defendant. The plaintiff agreed to this modification. The defendant supplied some soapstone to other parties also in the territory after the contract was made. The plaintiff objected to this supply. The defendant justified his conduct by relying on the modified terms in Ex. 2 and contended that the orders supplied had really been received before the contract was made with the plaintiff. The plaintiff was not satisfied with that explanation. The question therefore arose whether the defendant was justified in supplying materials to other parties in that territory after entering into contract with the plaintiff. Then again there was the question as to whether the defendant was liable in any damages on account of any breach of contract. The learned Civil Judge after formulating those essential points which arose for determination, directed by his order dated 14-6-1951, that the agreement of reference to arbitration be filed. That order was in fulfilment of the provisions of that part of Section 20(4) of the Arbitration Act which says that "the court shall order the agreement to be filed." By a subsequent order of a later date the Civil Judge in terms of the second part of Section 20(4) made "an order of reference to an arbitrator" appointed by the court because the parties could not agree to a common name. After the order of reference together with the necessary papers reached the arbitrator, the arbitrator refused to recognise the points formulated by the court for his decision and proceeded to frame his own issues which were as follows: 1. Was there any contract between the plaintiff and the defendant? What were the terms of the contract? 2. If yes, has there been a breach of the contract? 3. Whether Sri Brij Lal Suri and Sons are the Proprietors of the Northern India Lime Marketing Association, Dehara Dun, and Sri Brij Lal Suri its karta? 4. To what damages, if any, is the plaintiff entitled?;