Back
HIGH COURT OF CALCUTTA
P. B. Mukharji, N. K. Bose
PRATABMULL RAMESHWAR - Appellant
Versus
K. C. SETHIA (1944), LTD. - Respondent
Appeal 200 Of 1958
Decided On : DECEMBER 24, 1959
The plaintiff-appellant, a seller, entered into four contracts with the defendant-respondent, a buyer, for the sale of certain quantities of jute to be delivered in Italy. The contracts were made through the exchange of Bought Notes, which contained the terms and conditions of the London Jute Association contract. The contracts did not expressly appear to be subject to any condition that they were subject to the appellant obtaining license or quota from the Governments of India and Pakistan. The appellant failed to supply the jute as per the contracts and the respondent claimed damages for breach of contract. The disputes were referred to the arbitration of the London Jute Association, which made an award in favor of the respondent. The appellant challenged the validity of the contracts and the awards in a suit filed in the Calcutta High Court. The trial court dismissed the suit, and the appellant appealed to the Supreme Court.
Fact of the Case:
The appellant, a seller, entered into four contracts with the respondent, a buyer, for the sale of certain quantities of jute to be delivered in Italy. The contracts were made through the exchange of Bought Notes, which contained the terms and conditions of the London Jute Association contract. The contracts did not expressly appear to be subject to any condition that they were subject to the appellant obtaining license or quota from the Governments of India and Pakistan. The appellant failed to supply the jute as per the contracts and the respondent claimed damages for breach of contract. The disputes were referred to the arbitration of the London Jute Association, which made an award in favor of the respondent. The appellant challenged the validity of the contracts and the awards in a suit filed in the Calcutta High Court. The trial court dismissed the suit, and the appellant appealed to the Supreme Court.
Finding of the Court:
The Supreme Court held that the contracts were absolute in their terms and did not contain any condition that they were subject to the appellant obtaining license or quota from the Governments of India and Pakistan. The court also held that the appellant had not established that it had used its best efforts to obtain the quota and license or that it had taken proper steps in that direction. The court further held that the provisions of the Arbitration (Protocol and Convention) Act, 1937 did not constitute a bar to the maintainability of the suit filed by the appellant.
Issues: 1. Whether the contracts between the appellant and the respondent were subject to the condition that the appellant would obtain a license or quota from the Governments of India and Pakistan. 2. Whether the appellant had used its best efforts to obtain the quota and license or had taken proper steps in that direction. 3. Whether the provisions of the Arbitration (Protocol and Convention) Act, 1937 constituted a bar to the maintainability of the suit filed by the appellant.
Ratio Decidendi: 1. The contracts between the appellant and the respondent were absolute in their terms and did not contain any condition that they were subject to the appellant obtaining license or quota from the Governments of India and Pakistan. 2. The appellant had not established that it had used its best efforts to obtain the quota and license or that it had taken proper steps in that direction. 3. The provisions of the Arbitration (Protocol and Convention) Act, 1937 did not constitute a bar to the maintainability of the suit filed by the appellant.
Final Decision: The Supreme Court dismissed the appeal.
( 1 ) THIS is an appeal from the judgment of G. K. Mitter, J. dismissing the plaintiff's suit for a declaration that certain jute contracts and the relative Arbiration agreements contained therein are void and unenforceable, that the awards made thereupon are void and unenforceable, that such awards be taken off the file and for perpetual injunction restraining the defendants, their servants and agents from enforcing the award or taking any steps thereunder.
( 2 ) THE plaintiff appellant is the seller and the defendant respondent is the buyer of certain jutes. The plaintiff is a partnership and the defendant is a limited company. Under four different contracts, two dated 28-7-1947 and the other two dated 5-9-1947, the plaintiff agreed to sell certain bales of jute to the defendant at rates and prices mentioned in such contracts; the Port of delivery was Genoa, Italy, and the stipulated time for shipment under the first two contracts was from September to November, 1947 and under the last two contracts was from December, 1947 to January, 1948. The contracts were made through the exchange o usual Bought Notes.
( 3 ) THE plaintiff supplied certain bales but not all under these contracts. In fact, the plaintiff's case is that the plaintiff shipped 842 bales against the said four contracts; 742 bales were shipped in May, 1948 and 100 bales in July, 1948.
( 4 ) THE plaintiff's reason for non-performance of these contracts with respect to the balance of the goods is that in spite of best efforts the balance could not be supplied because of the inability of the plaintiff to receive the quotas from the Government of India and Pakistan under which the export of jute was then regulated.
( 5 ) THE defendant, however, demanded delivery, and thereupon disputes arose between the parties. Under the Arbitration Clause contained in those contracts, the defendant referred the dispute to the Arbitration of London Jute Association. The defendant's claim before the Arbitrators failed. But then the defendant appealed to the Committee of London Jute Association and on such appeal the Special Committee made an award on 5-5-1949 in the form of a special case allowing damages against the plaintiff-appellant for the total sum of Rs. 1,93,693-l-6p equivalent to 14,501-15s.-2d. under four separate awards covering the said contracts.
( 6 ) THE parties had a long run in the Arbitration forum. The dispute was first submitted to Arbitration under the Bye Laws of the London Juto Association who decided in favour of the appellant. An appeal was taken by the present respondents under the same Bye Laws to the Appeal Committee of that Body, who reversed the decision of the Arbitrators but stated a case for the opinion of the High Court in London, The appellant lost before Lord Goddard, Lord Chief Justice of England, then before the Court of Appeal consisting of Tucker, Singleton and Jenkins, L. JJ. and finally before the House of Lords. The Court and the Court of Appeal upheld the award of the Appeal Committee and the House of Lords also dismissed the appeal with costs.
( 7 ) LORD Porter who delivered the-leading judgment of the House of Lords came to the following conclusions which will be material for the purpose of a decision on this appeal:" (1) In terms the contract contains no limitation on the sellers' obligation to supply or ship the goods; it is for them if they seek to be excused to set up and prove facts which would exonerate them. Prima facie, therefore, they are liable and the onus is on them to establish circumstances which discharge that liability. In my opinion the facts as found, so far from constituting an excuse for non-performance, rather show that an absolute liability was intended or at any rate that the prima facie obligation is not abrogated". " (2) The actual system of controlling the working of the licence or quota system is by no means clear from the award. The appellants may have been obliged to obtain first a qu
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
