H.R.Sodhi, J. - (1.) THIS first appeal from order is directed against the judgment passed on 25th November, 1965, by the Senior Subordinate Judge, Kamal, who disallowing the objections preferred by the Appellants made the impugned award a rule of the Court without in any way modifying or amending the same. By virtue of this award, a decree for the recovery of Rs. 73,342.43 and also for the possession of the land and buildings situate in Nilokheri, district Kamal, as referred to in the plaint, was passed. In order to appreciate the objections advanced by the Appellants, it is necessary to state a few relevant facts in detail.
(2.) THERE was a milk dairy being run by the Government in Nilokheri which had been set up as a Rehabilitation Colony to rehabilitate mostly displaced persons. It appears that somewhere in the year 1950, the Government decided to hand over the management of the dairy as a running business concern to displaced persons, who formed themselves into a Dairy Association (hereinafter called the Association). An agreement Exhibit R/1 was, therefore, executed between some displaced persons, namely, Ram Saran Dass, Jagan Nath, Gurbax Rai, Jenda Ram and Nihal Chand, acting on behalf of the Association on one side, and Administrative Officer, Nilokheri, on the other. This agreement was to come into operation with effect from 1st October, 1950. There is no dispute that the Administrative Officer was acting on behalf of the Union of India. There are several clauses of this agreement which it is not necessary to reproduce here. It may, however, be stated that in terms of the agreement, the Association was handed over the entire business concern including agricultural land, buildings, equipments, furniture, fixtures and livestock. The Association was assured of the facilities by the administration in the matter of electricity, water -supply, procurement of raw materials, etc., so that the fodder and food for the animals to be maintained in the dairy could be, made available. As a consideration for taking over the complete control and management of the dairy, the Association had to make certain payments towards the price of livestock, rent of buildings and other amenities, though these payments could be made on instalment basis. Interest at the rate of 3 1/2 per cent was payable to the Government on the unpaid balance of the capital, cost of equipments, furniture and fixtures, and live stock, transferred to the new private enterprise. It was also provided in the agreement that the total value of the livestock, raw materials and finished goods in the godown along with bank balances will at no time fall short of the money due to the administration; and in the event of these falling short, the administration will have the powers to rescind the contract. The contract could also be rescinded if the Association closed its business for more than a week without the prior approval of the administration or assigned or sublet the contract or committed any other acts referred to in the agreement including the violation of any of the clauses thereof. Clause (D) of the agreement relates to the liability of the Association to pay certain charges to the administration. In Clause (E), it is provided that the Association shall at least maintain 80 cattle heads and if the strength of the cattle heads at any time fell below the said limit, the Association will have to relinquish the use of If acres of land for every cattle head. The Association had been given about 135 acres of reclaimed land for growing fodder and other feeds for the animals. Clause (O) and (W) are reproduced here for facility of reference: (O) That if at any time after the commencement of this contract the Administration shall for any reason whatsoever not require the continuance of this contract or fail to provide the basic facilities for the running of this business as indicated in Clause 'C' above, the Administration shall give notice in writing of this fact to us. In such an event the Administration shall consider the question of paying compensation to us for any loss that we might suffer as a result thereof. The amount of compensation fixed by the Administration shall be acceptable to us without any further claim to any payment or compensation whatsoever. (W) That you. shall have the power to rescind the contract in the event of our failure to comply with any clause or clauses of this contract. In such an event we shall render our -selves, liable to pay the full compensation as decided by you, which shall be binding on us. The assets created by us in this business or other personal properties owned by us individually or jointly, not connected with this business shall stand forfeited against the payment of the compensation if the amount of compensation so demands. With the agreement Exhibit R/1 were appended certain statements as annexures in order to indicate the value for which livestock, equipment, etc. had to be transferred. The value of some of the young livestock was not taken into account whereas that of some animals in bad condition was assessed below their book value and a rebate was accordingly allowed. The total rebate came to Rs, 4,930 -11 -6 and this amount was deducted from the total book value of that live stock which was under some disability. As against certain cows and buffaloes whose book value was shown to be Rs. 11,941 and Rs. 35,580 -1 -9, respectively, the expression 'provisional' had been written in the remarks column. It may be useful to reproduce that entry here - The Association later converted itself into a co -operative society registered under the Punjab Co -operative Societies Act, and continued its business under the name and style of M/S Kapoor Nilokheri Co -operative Dairy Farm Society, Ltd., Nilokheri (hereinafter called the Society). As a result of the formation of the Society which was a separate juristic person incorporated under the Punjab Co -operative Societies Act, a fresh agreement was necessitated and on 5th May, 1953, the agreement Exhibit R/2 was thus executed. There was no variation in the terms and conditions operative between the parties. Some disputes subsequently arose between the parties. On an application made under Section 20 of the Arbitration Act on 31st July, 1959, Shri B.L. Mago, Subordinate Judge, First Class, Patiala, was appointed the arbitrator. The Union of India and the Punjab State on one hand and the Society on the other were the contesting parties before the arbitrator. The Government claimed that the Society had not made payments of its dues whereas the case of the Society was that it was entitled to certain depreciation after the value of the livestock, which had been originally mentioned as 'provisional' according to the entries in the books of accounts, had been determined in accordance with the formula adopted by the Dairy Department of the Government keeping in view the age of the animals, its milching capacity and other relevant factors. The plea seems to have been that the word 'provisional' had been used purposely because the final price of the livestock transferred to the Society and against which the word 'provisional' had been used, was yet to be decided.
(3.) ON the pleadings of the parties before the Arbitrator, the following issues were framed : (1) What was meant by the expression 'provisional' used in the annexures to the agreements, dated 5th May, 1953 and 1st October, 1950? (2) Has the first agreement ceased to have any force in view of the second contract? (3) Is the claimant entitled to any depreciation? If so, how much? (4) Has any of the parties committed breach of the contract? If so, what is the effect? (5) To what damages, if any, is the claimant entitled? (6) Was the equipment returned on the specific condition that the material received will be put to auction for sale and sale -proceeds given credit to the claimant? (7) If so, what are the sale -proceeds? (8) If issue No. 6 is not proved, then what is the amount which the claimant is entitled to be credited for payment for equipment returned? (9) How much amount was received oh account of the claims delivered to the Respondents? (10) Was any technical guidance to be given by the Respondents? (11) If so, what is effect of its not having been given and to what damages, if any, is the claimant entitled on that account? (12) Whether any facilities other than laid down in the agreement were to be provided by the Respondent to the claimant? (13) If so, were they provided and with what effect as to damages or otherwise? (14) What damages, if any, is the claimant entitled to because of the entire land not having been allotted to the claimant in time? (15) Was the land given not of agreed quality and situation? (16) If so, to what damages, if any, is the claimant entitled? (17) Was the claimant not entitled to similar treatment as to other agriculturist allottees in so far as liability for payment and for its adjustment towards rent is concerned? (18) Is the claimant entitled to get the land transferred? If so; on what terms? (19) Should the Society be wound up for reasons given in the counter-statement of facts filed by the Respondents and can the Respondents raise this plea? (20) If issue No. 4 is proved in favour of the (sic) is the claimant bound to deliver back (sic) to the Union of India? (21) To what dues is the Respondent entitled? (22) Relief. It is not necessary for the purposes of this appeal to refer to the findings of the arbitrator on each issue. Suffice it to say that the arbitrator found that the claimant (the Society) had committed breaches of the following terms: (i) The rent of the building was not paid by the claimants monthly as agreed by them, - -vide Clause D(i) of the Contract Exhibit R/2. (ii) The claimants did not pay the total book value of the equipments, furniture and fixtures, and livestock transferred to them on instalment payment basis as agreed by them, -vide Clause D(iv) of the contract. (iii) The claimants failed to pay interest on monthly basis at 30 per cent as agreed by them, - -vide Clause D(v) of the contract. (iv) The claimants failed to pay the cost of raw -material as agreed by them, - -vide Clause D(ix) of the contract. (v) The claimants failed to pay the rent of agricultural land as agreed by them, - -vide Clause D(x) of the contract. (vi) The claimants did not put the whole of the land to use for which it was given.;