Bachawat, J.:— This is an application to set aside an award made by the Bengal Chamber of Commerce.
2. By a contract dated the 10th August, 1950, the petitioners Juggilal Kamlapat agreed to sell and the respondent, a Dutch Company, agreed to buy 500 bales of certain jute goods at Rs. 209 per 100 bags C. & F. Java, Main Ports, draft drawn at sight under an irrevocable letter of credit, shipment November|December, 1950 equally, subject to export licence and subject to the terms and conditions of the Calcutta Jute Fabrics Shippers Association contract form in use for the time being. That contract form amongst other clauses contains an arbitration clause, a clause providing that the Letter of Credit must be despatched to the sellers within 7 days of the contract and a clause providing that each monthly shipment would be deemed to be a separate contract. Under the contract all increases in freight and duty were on the buyer's account. The letter of credit was despatched to the sellers after great delay in the first week of December, 1950, but nevertheless the buyers accepted and acted upon it. Meanwhile the export duty was enhanced. On the 20th November, 1950, the parties agreed that the buyer would accept a Bank guarantee for payment of the increased duty pending amendment of the Letter of Credit and Letters dated the 14th, 18th and 19th December, 1950, were passed in this connection. The amendment was received soon thereafter on or about the 29th December, 1950. The petitioner shipped 200 bales under the contract in the 3rd week of January, 1951 and by letter dated the 20th January, 1951, informed the respondent that they were then unable to ship the balance goods on account of the default of their sellers and would arrange for their shipment as soon as they were ready. The price control legislation then in force was repealed in March, 1951, and soon thereafter on the 3rd April, 1951, the respondent's agents pressed the petitioner for delivery of the goods. On the same day the petitioner requested the respondent's agents to extend the time of shipment until July, 1951. The respondent's agents by their letter dated the 13th April, 1951, refused to extend the time and pressed for immediate shipment of the balance goods by S.S “Hoegh Silver Spray” expected to sail from Calcutta on the 24th April, 1951. The petitioners by their letter dated the 13th April, 1951, stated that as desired by the respondent they were ready to ship the goods per S.S “Hoegh Silver Spray” and were arranging accordingly. Shipping instructions were given by the respondent on the 16th April, 1951. In the meantime the freight had been increased and by their letter dated the 24th April, 1951, the respondent's agents requested the petitioners to send a separate debit note for the amount of the increase in freight and not to include it in the draft.
3. The petitioners did not ship the goods and by their letter dated the 1st May, 1951, wrote to the respondent's agents stating that the goods could not be loaded alongside, the steamer as their May|December, 1950, quota had expired and that under the circumstances the goods should be treated as lapsed. The respondent's agents by their letter of the same date asserted that the fact that the quota had expired could not be a reason for annulment of the contract because the petitioners had ample opportunity to ship before the end of March, 1951, and also because they should have received a new quota for January/June shipment. The respondent's agents requested the petitioners to hand over delivery orders in respect of the balance goods in case they could not obtain a new quota. The petitioners by their letter dated the 4th May, 1951, informed the respondent's agents that they had not been allotted any new quota for January June, 1951, and that they could not keep the contract pending and the same should be treated as cancelled. They further stated that they were unable to agree to hand over delivery orders as the contract was on the basis of C. & F Indonesian Ports. The respondent's agents by their letter dated the 7th May, 1951, informed the petitioner's that they could not under any circumstances agree to the cancellation of the contract and that they would start buying against the petitioners as from the next day and would hill the petitioners for the difference in price and at the same time would submit the matter to the Bengal Chamber of Commerce for arbitration.
4. On the 9th May, 1951, the respondents referred the dispute to the arbitration of the Bengal Chamber of Commerce. The respondents enclosed copies of the entire correspondence with their statement. The last paragraph of their statement is as follows:—
“We await your decision whether we are entitled to claim from the sellers the difference between the contract price and the price at which we have been obliged to cover, and also costs and interest for having had to keep letters of credit available.”
5. After this reference to arbitration the respondent wrote to the petitioners a letter dated the 16th May, 1951, stating that the respondent had bought against the petitioners on the 9th of May at the rate of Rs. 370-12-0 per 100 pieces C and F Java Main Ports from Messrs. Blackwoods (India) Limited. The petitioners replied on the 17th May, 1951, stating that any action taken by the respondent after the reference to arbitration was irregular.
6. The petitioners filed their counter statement on the 8th June, setting out their contentions and stating that the arbitrator could not assess any particular claim as the respondent had not disclosed the price at which they had been obliged to cover and that the reference was merely to elicit opinion and was not maintainable. The respondents filed their second statement on the 18th June, 1951. In that statement they referred to their letter of the 16th May, 1951, and their purchase against the petitioners on the 9th May, 1951. The petitioners filed their second counter statement on the 9th July, 1951. In that statement they stated that they could not recognise the letter of the 16th May, 1951, inasmuch as that letter was written when that matter had already been referred to arbitration. They also contended that in any event the amount claimed was inflated and that Rs. 38 per 100 bags should be deducted from the purchase price.
7. On the 16th May, 1951, the Registrar of the Bengal Chamber of Commerce constituted a Tribunal of Arbitration for adjudicating upon the dispute. The papers were passed to that Tribunal on the 12th July, 1951. On the 3rd September the parties were given notice of arbitration on the 6th September, 1951, and were asked to bring their witnesses. The arbitration was held on the 6th September, 1951, and the parties attended with their witnesses. Under the Rules of Arbitration of the Bengal Chamber of Commerce the Tribunal had four months' time for making their award as from the date of entering on the reference. That time having expired the Registrar of the Bengal Chamber constituted a second Tribunal on the 29th September, 1951, in accordance with Rule 7 of the Rules of Arbitration of the Bengal Chamber of Commerce. On the 13th October, 1951, the Tribunal gave fresh notice of Arbitration and on the 17th October, 1951, made an award adjudging that the respondents were entitled to their claim and directing the petitioners to pay to the respondent Rs. 1,48,725 in full settlement of the claim as also interest and costs.
8. The award is impeached on several grounds which are all set out in paragraph 26 of the petition.
9. The first ground taken is that the arbitration agreement was given a goby to and|or superseded and is not subsisting by reason of the subsequent variations in the terms of the original contract and|or by reason of the fresh agreements subsequently made. Strictly this plea should be raised by an application under section 30 of the Arbitration Act. I would have however given to the petitioners an opportunity to make such application if I found that there was any substance in this contention.
10. It is clear that there were extensions of the time of shipment fixed by the original contract. The petitioner undertook to ship the balance 300 bales within the extended time and strictly there were no longer separate contracts for each monthly instalment. There was an undertaking to ship by a named steamer although there was no such undertaking in the original contract. The original time for the opening of the Letter of Credit was not adhered to. There was a temporary arrangement for giving a Bank guarantee for the amount of the increased duty varying the contractual term for payment by Letter of Credit. With regard to the amount of the increased freight, the petitioners allege that there was an agreement for giving a Bank guarantee whereas the respondent alleges that there was an agreement to pay by separate debit note. I am therefore satisfied that the original contract was modified in certain material particulars.
11. In my judgment however it cannot be possibly said that the modifications rescind the original contract dated the 10th August, 1950, in its entirety or that the arbitration clause contained therein is no longer subsisting. Mere alteration or modification of the terms of a contract cannot amount to its rescission. Lord Atkinson in Morris v. Baron & Co. (1) (1918 Appeal Cases, 1, 31), observes thus:—
“Moreover, rescission of a contract, whether written or parol, need not be express. It may be implied, and it will be implied legitimately, where the parties have entered into a new contract entirely or to an extent going to the very root of the first inconsistent with it.”
12. In the same case at page 38 Lord Parmoor observes thus:—
“It is clear that these terms are an alteration of the September contract, but this in itself would not be sufficient to support the plea of rescission. It is necessary further to enquire whether the conditions have been so changed in their essential character that there is a substantial inconsistency such as to lead to the inference that the paries did intend to rescind the earlier contract of September. It is not possible to lay down any general principle, but where the alteration is such that the conditions of the earlier contract cannot be restored without placing one of the parties under a permanent and substantial disability there is a strong prima facie probability of an intention to rescind.”
13. Lord Dunedin expressed the view that there might be rescission of the original contract by a subsequent arrangement dealing with the same subject-matter and containing executory clauses enabling the parties to sue upon the second arrangement alone even if the original contract did not exist. The test laid down in this case and specially the observation of Lord Atkinson was followed in. British Bennington Ltd. v. N.W Cachar Tea Co. Ltd. (2) [(1923) A.C 48]. In the latter case the original contract provided that delivery was to he made in Bonded Warehouse in London and there was a subsequent arrangement whereby the buyer agreed to accept delivery of the goods at another place with an allowance. It was held that this variation could not possibly be held to have rescinded the earlier contract.
14. In the present case the modifications do not go to the very root of the first contract and do not change its essential character. The facts do hot warrant the inference that the parties intended to rescind the contract dated the 10th August, 1950. The April arrangement was entered into in response to pressing demands for delivery under that contract and with a view to implement it. The arrangement has no independent contractual force, no meaning and content separately from and independently of the original contract.
15. The effect of the alterations or modificaions is that there is a new arrangement; in the language of Viscount Haldane in Morris v. Baron & Co. (1) (1918 Appeal Cases, 1 at 17), “a new contract containing as an entirety the old terms together with and as modified by the new terms incorporated.” The modifications are read into and become part and parcel of the original contract., The original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications Those of the original terms which cannot make sense when read with the alterations must be rejected. In my view the arbitration clause in this case is in no way inconsistent with the subsequent modifications and continues to subsist.
16. The petitioner strongly relies upon the case of Luchmi Narain v. Hoare Miller & Co. (3) (I.L.R 41 Cal. 35). That was a suit for price of 300 bales of jute sold and delivered. There was a contract for sale of 500 bales of jute and this contract contained an arbitration clause. Subsequently there was an extension of the time of delivery up to 25.12.1912 subject to inspection at the press house before delivery. There was a subsequent letter from the buyer dated 13.1.1913 giving 3 more days for delivery. 300 kales were delivered after 21.1.1913 and a suit was instituted for the recovery of the price of these goods: Chaudhuri, J., declined to stay the suit. He held that there was a new arrangement as a result of the introduction of the new term but he does not rest his decision upon that fact alone. He points out that the goods were delivered after the extended time and on the record there was nothing to show under what arrangement that delivery was effected. It was possible that the arrangement under which the delivery was made was wholly outside the correspondence and consequently Chaudhuri, J., held that the claim was not covered by the arbitration clause. That decision is, therefore, merely an instance of exercise of discretion under section 34 of the Arbitration Act.
17. The petitioner also relies upon the cases of Turner v. Sartoris (4) (43 Chancery Divn. 150), and in Ramdas v. Orient Pictures (5) (I.L.R 1942 Bombay, 759). In those cases subsequent to the contract containing the arbitration clause the parties entered into an arrangement giving rise to new rights and obligations independently of the old contract. It was held that the disputes under the subsequent arrangement could not be referred under the arbitration clause contained in the first contract. There was no arbitration clause in the subsequent arrangement and the arbitration clause in the first contract was not broad enough to cover the disputes arising under the subsequent arrangement. On the facts in these cases it could not be held that the subsequent arrangement was merely a modification of and part and parcel of the original contact. Those decisions are clearly distinguishable. In this case the subsequent arrangements are merely modifications of the original contract. The correspondence expressly refers to the Sale Note. The modifications are incorporated into and become part of the original contract. The original terms continue to exist except in so far as they are inconsistent with the modifications. The arbitration clause contained in the original contract is in no way inconsistent with the modifications and continue to subsist.
18. In my view, therefore, the charge made in paragraph 26(a) fails.
19. In paragraph 26(b) and 26(c) a charge is made that Rule VII of the rules of arbitration of the Bengal Chamber of Commerce is illegal and opposed to section 28 of the Arbitration Act and, therefore, the constitution of a second Tribunal under that Rule is ultra vires and the second Tribunal had no legal authority to arbitrate upon the disputes between the parties. I have dealt with this contention in my judgment in Arbitration Case No. 45 of 1952 in re:arbn. Laduram Kedia v. Dhunichand Sanehi (6) (unreported). For the reasons, given in that judgment. I am of the opinion that there is no substance in this contention. The charge made in these sub-paragraphs, therefore, fails.
20. In sub-paragraphs (d), (e) & (f) of paragraph 26 a charge is made that the arbitrators did not properly apply their mind and failed to appreciate the real point in dispute and, therefore, had misconducted themselves. There is no material whatsoever to support this allegation,. Indeed, if I recollect rightly, counsel for the petitioners did not address any argument on these several charges.
21. In paragraph 24(g) a charge is made that the arbitrators made a gross mistake in awarding damages to the respondent although the respondent made no claim for damage in the original letter of reference dated 9th May, 1951. This charge is founded upon the peculiar language of the prayer of the respondents in their statement before the Bengal Chamber of Commerce which was as follows:—
“We await your decision whether we are entitled to claim from sellers the difference between contract price and price at which we have been obliged to cover, and also costs, and interest for having had to keep Letters of Credit available.”
22. It is contended that the respondents asked for a mere declaration of their rights and that no award for payment of the difference in price could be given as this was not asked for. The wording of the prayer is no doubt unhappy but the arbitrators were entitled to look at the substance of the matter and to find out the real relief asked for. Even a court of law is entitled to find out what relief is really prayed for and to grant it although the language used by the claimant is imperfect and even to grant a relief not specifically asked for where the justice of the case so requires. By way of illustration reference may be made to the decisions in Dinanath Kar v. Chawdhury Jiten-dra Nandan (7) [A.I.R, (1935) Cal. 744] and Abdul Vakil v. Secretary of State (8) (I.L.R 19 Luck. 163). In my view the arbitrators had jurisdiction to; award payment of the difference in price.
23. It is next contended that the arbitrator could not award a specific sum of money as no specific sum was mentioned or claimed in their statement. It is true that Rule 7, Order 7 of our Code of Civil Procedure enjoins that where the plaintiff seeks recovery of money the plaint must state the precise amount claimed. The arbitrators, however, are not bound by this technical rule of pleading. Where no specific sum is claimed and the particulars of the claim are not given in the statement the arbitrators may be guilty of misconduct if they make an award for a definite sum of money without calling for particulars of the claim and without giving opportunity to the other party to meet the specific case. In this case, however no such charge is or can be made. In the second statement the respondents gave full particulars of their claim and the petitioners had full opportunity to meet the specific case.
24. In the affidavit in reply it is alleged that there was no pre-existing dispute with regard to the quantum of damage prior to the date of the reference before the Bengal Chamber and it is contended that the arbitra tors had no jurisdiction to decide the quantum of damage.
25. In support of this contention strong reliance is placed by the petitioner's counsel upon the case of Mathura-das Goverdhandas v. Khusiram Benar-shilal (9) (53 C.W.N page 873). In that case the buyers claimed a small sum by way of difference on October 7, 1946. Before the arbitrators they however claimed a much larger sum on the basis that the time to deliver the goods had been extended until the 31st October, 1946. The latter claim was never asserted before the reference. In that context Mr. Justice Chatterjee made the following observation:
“In order to make out the jurisdiction of the Tribunal of Arbitration the appellants must show that the subject-matter of the reference was some dispute between the parties and that the particular dispute had arisen actually before the matter went before the Arbitrators. We hold that the appellants have failed to satisfy this condition precedent. At no stage was any demand made for Rs. 14,000. It is not a question of quantum of damages merely with regard to the breach of the contract, as Mr. Choudhury on behalf of the appellants wanted to put it. It is a different cause of action altogether. The claim that was referred in the two bills was the only claim which was before the parties. The claim that was made in the letter of reference was never communicated to the respondents. A dispute implies an assertion of right by one party and repudiation thereafter by another. There was no such assertion of right and therefore there could be no repudiation with regard to the matter which was actually referred to arbitration. The jurisdiction of an Arbitrator depends not upon the existence of a claim or the accrual of a cause of action but upon the existence of a dispute.”
26. In my opinion the contention that there was no dispute with regard to the quantum of damages and that the arbitrator had no jurisdiction to decide the quantum must fail for the following reasons:
(a) The petition does not allege that there was no dispute with regard to quantum of damage. Non-existence of dispute is a question of fact and if relied upon must be pleaded in the petition.
(b) In paragraphs 13 and 15 of the petition the petitioner states that disputes and differences arose and the disputes were referred to arbitration on or about the 9th May, 1951. The dispute referred was whether the respondent was entitled to claim the difference between the contract price and the price at which they were obliged to coyer. There is therefore an admission in the petition that the dispute with regard to the claim for the difference between the contract price and the price at which the petitioner had been obliged to cover arose before the reference commenced.
(c) The correspondence shows that prior to the reference there was a dispute whether the petitioner wrongfully failed to ship the goods and whether their cancellation of the contract was wrongful and whether the petitioner was entitled to damages. There was therefore a dispute with regard to breach of contract and consequential damages. The jurisdiction of the arbitrator is therefore attracted and the arbitrator is competent to assess the damages. The decision cited is distinguishable. The claim before the arbitrator in that case was on the basis of a cause of action which was never asserted before the reference started. The present case is not that of assertion of a new cause of action before the arbitrator. The question is that of assessment of damages with regard to breach of contract previously asserted. The claim for a definite sum of money is not a condition precedent to the exercise of jurisdiction by the arbitrator. Indeed on a general submission the arbitrator should determine and assess even prospective damages arising after the date of the submission. Smally v. Blackburn Rail. Co., 27 LJ Ex 65, Speake v. Taylor, 10 T.L.R 224.
27. There is therefore no substance in the charge made in paragraph 26(g) of the petition.
28. In sub-paragraph (h) of paragraph 26 of the petition it is asserted that there is an error apparent on the face of the award. No argument has been addressed before me on this charge. This charge therefore fails.
29. In sub-paragraphs (i) and (k) of paragraph 26 there is a charge that the Arbitrators were biased. There is no evidence of any bias before me. This charge also fails.
30. Sub-paragraph (j) of paragraph 26 makes a charge that the Arbitrators failed to appreciate that at the time of the breach the West Bengal Jute (Control of Prices) Act, 1950, was in force and the respondent was entitled to recover damages on the basis of rates not exceeding the maximum controlled price and that in awarding the damages the Arbitrators had not deducted the duty, Port Commissioners' charges, freight, etc. During argument Mr. Mitra abandoned this point. This charge therefore fails: The petition for setting aside the award is therefore dismissed with costs.
31. There is an application by the Dutch Company for extension of time to make the award until the 17th October, 1951. It is not necessary to extend the time at all having regard to my judgment in Re. Arbitration Case No. 45 of 1952 (Laduram Kedia v. Dunichand Sons & Co.). Counsel for the petitioners, however, points out that the Court of Appeal might take a different view and I should therefore deal with the application on the merits. On the facts before me I have no doubt that the Bengal Chamber of Commerce was not guilty of any unreasonable delay and that there should be an extension of the time as a matter of course. I therefore make an order in terms of prayer (b) of the petition enlarging the time of the award until the 17th October, 1951. The petitioner Dutch Company must pay to the respondent Messrs. Juggilal Kamlapat the costs of this application.
32. With regard to the judgment on award matter counsel for the award holder submits that I should pass judgment now and stay the execution of the decree for such time as I think fit.
33. He does not insist upon security. I do not see any useful purpose in passing judgment and at the same time staying execution of the decree. I therefore adjourn the matter of judgment upon award matter until the 15th March, 1953. Messrs. Juggilal Kamlapat undertake to file the appeal within three weeks from today and to take steps to have the appeal expedited. It is expected that the appeal will be disposed of before 15th March, 1953.
34. The order to be drawn up expeditiously.
P.S
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