P.Chakravartti, C.J. - (1.) THIS is an appeal from an order of S. R. DAS Gupta J., dated 2-8-1955, whereby the learned Judge set aside an award made by the Bengal Chamber of Commerce and Industry in the appellant's favour, superseded the reference to the Chamber and directed the arbitration agreement to cease to have effect with respect to the difference referred. The award was set aside on two grounds, first, that it was made on a second reference which was not maintainable in law and, secondly, that the arbitrators who made it had misconducted themselves by shutting out the respondent from adducing material evidence. The first ground did not reflect the learned Judge's own opinion which he expressly declared to be different but since there was a previous decision of Bachawat J., according to which a second reference was not competent and since the practice of the court required a Judge, sitting singly on the Original Side, to follow an earlier decision of a Judge of co-ordinate jurisdiction, if any such decision on the same subject existed, he set aside the award on the first ground as well. The appellant questions that order and contends that neither of the grounds given in its support is sustainable.
(2.) THE decision of Bachawat J., which the learned Judge purported to follow in setting aside the award on the first ground was that in the case of Hulaschand Bupchand v. THE Baranagore Jute Factory Co., Ltd. (A). That case was itself brought up on appeal, and judgment in the appeal has Just been delivered by us. (Baranagore Jute Factory Co, Ltd. v. Hulaschand Rupchand. We have not been able to agree with Bachawat J., In all the views expressed by him; but in his views as to cases of the present type, we have agreed. On the principles enunciated by Bachawat J., and upheld by us, the award in the present case cannot be impugned as invalid on the ground of its having been made on a second reference. With great respect to S. R. Das Gupta J., he seems to have been under some misapprehension as to what had been actually held by Bachawat J., as I shall presently explain, but before I do so, I must state the relevant facts. THEy are as follows. On 26-3-1951, the appellant entered into a contract with the respondent for sale of 4,02,000 yards of Hessian cloth, manufactured in its own mills, of which 3,00,000 yards were to he delivered in July, August and September, 1951 at the rate of 1,00,000 yards per month and the remaining 1,02,000 yards were to be delivered in October next. The contract provided that each month's delivery was to be treated as a separate contract and it contained an arbitration Clause in the standard form prescribed by the Indian Jute Mills Association. The goods due to be delivered in the first three months were duly delivered and accepted, but when the last instalment, deliverable in October, was despatched, the respondent refused to accept the goods on the ground that they were not of the appellant's manufacture. The appellant repudiated the allegation and after selling the goods, claimed damages from the respondent for loss suffered. The respondent refused to pay and dispute having thus arisen between the parties, the appellant referred it to the arbitration of the Bengal Chamber of Commerce and Industry. Thereupon, a Court was constituted to hear the reference, which was numbered 16G of 1952, but as the court failed to make an award within the time allowed, the Registrar of the Chamber constituted a second court under Rule VII of the Rules of Arbitration. That court made an award in the appellant's favour. The respondent, however, made an application to this court for setting aside the award on several grounds and the court set it aside on the ground that the second court, which had made the award, had been constituted of the same persons as had constituted the first court. Thereafter, on 22-4-1953, the appellant addressed a further communication to the Registrar of the Chamber which has been taken by the learned Judge as a second reference. By it, the appellant submitted a fresh statement of claim, but explained its reason for doing so by pointing out that though the previous award had been set aside, the arbitration had not been superseded and that the statement of claim, originally filed, had been forwarded by the Chamber to this Court along with the previous award and was lying here, as were the statements of the respondent and further statements of the parties. On receipt of the appellant's letter, the Registrar started a proceeding which he numbered as 162-G of 1953 and called upon the respondent to file its statement in reply. The respondent took up the position that there could be no further arbitration by the Chamber, since, with the making of the previous award, the arbitration agreement had been exhausted, but as that contention did not find favour with the Chamber, it asked for time to apply to the court for leave to revoke the authority of the arbitrators. An application was made, but it did not succeed. The respondent then filed its statement under protest and thereafter participated in the proceedings. As on the previous occasion, the court, first constituted, was unable to make an award within the time allowed, whereupon a second court was constituted and that court eventually made an award which was again in the appellant's favour. It is that award which the learned Judge has held to be bad on the ground that it was made on a second reference and therefore the decision of Bachawat J., applied.
(3.) ON the above facts, the decision of Bachawat J., undoubtedly applied, but in holding that that decision compelled him to condemn the award as invalid, the learned Judge waS, with respect to him, in error. It has been seen that when the award was set aside, the reference was not superseded. The reference was therefore subsisting even after the award had gone. The award was set aside on the ground that the Court which made it had been illegally constituted and had therefore no jurisdiction to make the award. That finding meant that all the proceedings held by the court were void and not merely illegal and the resultant position arising out of the court's decision was that while a valid reference had been made to the arbitration of the Chamber, the Chamber, as the arbitrator, had taken no effective steps by way of holding an arbitration under the reference. Bachawat, J. held that, in such a case, the proceedings held by the arbitral court and the award made by them were nullities and with that view, S. R. Das Gupta J., has expressed his agreement. Bachawat J., held further that after the award had been set aside in such a case, the parties would be restored to the position in which they were before the abortive proceedings began and they would be entitled to a revival of the proceedings and a valid and effective determination of their dispute. S. R. Das Gupta J., has noted that proposition as well, though he has added that his own view is different. Then he has quoted from the early part of the judgment of Bachawat J., a general proposition and a partial exception thereto, viz., that a second reference of the same dispute under the same arbitration agreement is not competent, but in proper circumstances, a second reference may be treated as a revival and continuation of the first reference, and he has again observed that his own view is different. After referring to those propositions of Bachawat J., the learned Judge has observed that they compel him to hold that the award in the present case is invalid. "If", he has said, "I follow the view taken by Bachawat J., on this point, then I have to hold in favour of the petitioner because, in this case, there has been a fresh reference and not a revival of the old reference." It appears to have been overlooked by him that Bachawat J., treated a case of the present type as coming not under his general proposition but under the exception. After pointing out that when the award was set aside in such a case, the parties were relegated, as they were in all cases where the award was set aside as a nullity, to the position in which they were before the abortive proceedings began, Bachawat J., held that the position to which the parties were so relegated was that a valid reference had been made but no valid arbitration, and therefore no arbitration, had taken place thereon. He proceeded to say that, in that position, the parties would clearly be entitled to have further arbitration for a determination of their dispute and they would be able to have such arbitration, unless it was impossible to provide the necessary machinery for it. According to him, in the case of an arbitration by the Bengal Chamber of Commerce and Industry, it was possible to have the necessary machinery for further arbitration when an award was set aside as a nullity, because in such a case it might well be said that the arbitral court had allowed the time for making an award to expire "without making an award" within the meaning of Rule VII of the Rules of Arbitration and therefore the Registrar might, under that Rule, constitute "another Court" to proceed with the arbitration. The conclusion of the learned Judge was that, in such a case, a reference, which was purportedly a second reference, might properly be treated as a revival and continuation of the original reference, because not having been superseded and not having been worked out upto an effective award, that reference was still pending and further proceedings therein were possible. "While S. R. Das Gupta J., has noticed the view of Bachawat J., that in proper circumstances a second reference may properly be treated as a revival and continuation of the first reference, he has overlooked the further opinion of the learned Judge that one case where a second reference may be so treated is where an award made by an arbitral court of the Bengal Chamber of Commerce and Industry is set aside as a nullity on the ground that the constitution of the Court was illegal and thereupon a fresh statement of case is filed before the Chamber. In our judgment in the appeal from the decision of Bachawat, J., we have upheld this view of the learned Judge for the reasons given there. We must accordingly hold that in taking the view that the decision of Bachawat J., required him to declare the award in the present case to be invalid, as an award made on a second reference, S. R. Das Gupta J., misdirected himself and also that the declaration is, on the merits, wrong.;