Judgment

BEG. J.:- This is a plaintiffs appeal by special leave. The plaintiff M/s. Hansraj Gupta & Co. (hereinafter referred to as the Company ) had brought a suit on 1-2-1950 on the basis of a contract for supply of fire-wood to the Military Units at Dehradun and Clement Town from 1-4-l944 to 31-3-1945 entered into by Mahesh Chandra Gupta, defendant No. 2, (hereinafter referred to as "the Contractor"), and the Govt. of India, acting through the Commander, U. P. Area, now represented by the Union of India, defendant No. 1. The Company claimed as the financier of the Contractor and sued on the strength of an authority conferred by a power of attorney executed by the Contractor to collect monies due for supplies made under the contract by the supplying contractor. According to the plaint, the whole supply was actually made by the Contractor.

2. The Contract (Ex. A-3), dated 15-2-1944, provided that the parties were to be governed by special conditions or stipulations contained in instructions to "tenderers" which were to be a part of the contract. According to these instructions, the rates agreed upon for the supply of Common firewood and Split fire-wood could not be varied at all for the first six months in a contract for a year like the one under consideration. But, revision of rates agreed upon could be recommended, under clause 13 of the special conditions by referees appointed by the Government, who presumably constituted the "Reviewing Tribunal." consisting of "the Deputy Commissioner or his representative, the Commander, Royal Indian Army Supply Corps (C. R. I A. S. C.) or his representative, and the local purchase officer (Military)" Three members were to constitute the quoram. The clause went on to provide that the contractor could present his case for revision which was apparently only to be recommended by the Tribunal. The clause said "The final recommendation in all cases reviewed shall rest with the officer sanctioning the contract". This rather nebulous clause, apparently made the referees members of the Tribunal to be appointed to revise rates conformably with the rise and fall of market rates. It is not quite clear whether the referees were also members of the Tribunal; but presumably they were. It also appeared that the function of referees or the Tribunal was nothing more than to recommend the matter to the sanctioning officer. And, even the officer sanctioning the contract could only recommend a revision. It was not specified when the right to obtain payment at revised rates was to accrue and upon whose sanction.

3. Clause No. 21 in the contract itself, which is also relevant for this case, may be set out here. It reads as follows:

"Any dispute or difference arising out of the contract, settlement of which is not hereinbefore provided for, shall be referred to the arbitration of the officer sanctioning the contract, whose decision shall be final and binding".

4. The plaintiff s case was that the contractor supplier had asked that the contract be terminated sometime after the supplies had begun, but he was induced to continue delivery of the fire-wood for the whole year due to the representations of the Defence Department that the rates of payment will be revised. The terms of the contract, however, excluded any revision of rates for the first six months. Hence no claim for revision could be made for payment at enhanced rates before 1-10-1944.

5. The plaintiff s case as set out in the plaint, was that the rates were actually enhanced by means of an "award" dated 31-12-1946 which was accepted by the plaintiff on 6-1-47 and that the suit was filed within three years of this award. The plaintiff relied upon the arbitration clause 21 for the effectiveness of the enhanced rates of payment on a contract performed more than a year prior to the alleged award. It is noteworthy that there is no case found in the plaint based upon any revision of rates recommended under clause 13 of special conditions. The concurrent findin