A.N. Grover, J. - (1.) MESSRS Allen Berry and Co. Ltd. have filed an appeal under Section 39 of the Arbitration Act, 1940 (hereinafter to be referred to as the Act) against that part of the order of the Court below by which it has refused to set aside an award which has otherwise been remitted under Section 16 of the Act for reconsideration on certain points. The Respondent (Union of India) has filed cross -objections. Both the appeal and the cross -objections will be disposed of by this judgment.
(2.) IN order to understand the points in controversy which are a legion the background in which the disputes arose as also the other relevant facts must be stated. It is well known that World War II which began in September, 1939 ended in the year 1945. During the period of active hostilities there was an apprehension of an attack from Japan and the United States of America sent along with the American forces a large quantity of Military Stores including vehicles, trailers, spare parts and other equipment to certain depots in Assam and Bengal. On 16th May, 1946 the Government of that country entered into an agreement with the Government of India (Exhibit J/61), the effect of which was to transfer all the surplus stores to the latter. In order to dispose of these stores the Government of India created a Department known as the Directorate General of Disposals headed by the Director General who was assisted by a Deputy Director General and a couple of Directors and Deputy Directors. It was the Defence Department that had to make arrangements for taking over delivery of the stores from the U.S.A. army.. Proper records were to be maintained by that Department until the stores were disposed of by the Directorate General of Disposals. The Defence Department set up an organisation called the USASS (United States of America Surplus Stores). There was a Central Controller at Delhi, one in Assam and one in Calcutta. In Assam there were two Zones -Chabua and Ledo - and in Calcutta there were three Zones called Zones I, II and III. Detailed inventories were made of the stores. These were called white SPB3s and SPB3/1, the latter being those inventories which contained corrections or withdrawals. Copies of these inventories were made in green as well as pink (apparently the colour of paper). The copies in green were made by the depot authorities 0f USASS from white for distribution to various officers. The pink ones were for the stores in respect of any found surplus by the depot authorities. The first formal agreement between the Director General of Disposals acting for the Government of India and the present Appellants was entered into on 10th July, 1946. This contained generally the price as also the stores which were to be sold to the Appellants and it was mentioned in the agreement that detailed record of terms would be made on the following day. It was followed by sale letter No. 160, dated ll/12th July, 1946 and a second sale letter No. 161, dated 12th July, 1946 issued by the Director General of Disposals. On 31st July, 1946 another formal agreement was entered into between the parties. That was followed by sale letter No. 197, dated 2nd/6th August, 1946. The other sale letters which were issued and are stated to relate to the second agreement were Nos. 301, dated 27th August, 1946, 308, dated 5th September, 1946 and 311, dated 11th September, 1946. Throughout the arbitration proceedings it is the aforesaid six sale letters (which hereinafter shall be referred to as sale notes) which have been treated as the contracts between the parties.
(3.) THE Appellants wrote a letter on 14th October, 1947 to the Regional Commissioner (Disposals), Government of India, Industries and Supplies, saying that since various questions, disputes and differences had arisen in connection with the above contracts and the same were to be referred to arbitration, B.B. Natiiu Ram of Delhi had been appointed as their arbitrator. The Respondent was called upon to nominate its Arbitrator pursuant to the arbitration clause contained in paragraph 13 of the general conditions of contract (in form Con. 117) to which all these sales were subject. The Respondent moved the District Judge, Delhi, under Sections 33 and 39 of the Act for declaring the appointment of R.B. Nathu Ram as an Arbitrator on behalf of the Appellants as illegal and inoperative and for certain other reliefs. On 27th November, 1948 the learned District Judge decided that the arbitration clause governing the contracts in question was Clause 13 in form Con. 117 under which each party had to nominate its Arbitrator. Consequently the Respondent nominated Bakhshi Shiv Charan Singh as its Arbitrator. Sir B.L. Mitter was named as an Umpire by the Arbitrators. He died and Shri Manohar Lal, a retired Judge of the Patna High Court, was nominated to take his place as Umpire. Claims, counterclaims , written statements and replications were filed before the Arbitrators who framed the issues. There was some difference between the Arbitrators with regard to which nothing need be said. The whole case was referred to the Umpire for decision. Shri Manohar Lal unfortunately died and the District Judge appointed Shrij Harish Chandra, a retired Judge of the Allahabad Court, as an Umpire. He gave his award on 22nd March, 1958.;