Back
HIGH COURT OF CALCUTTA
CHAKRABARTI, LAHIRI
FATEH CHAND MURLIDHAR - Appellant
Versus
JUGGILAL KAMLAPAT - Respondent
A. F. O. O. 22 Of 1954
Decided On : JULY 16, 1954
ARBITRATION - AWARD - MISCONDUCT - BURDEN OF PROOF - SETTLEMENT - ADMISSION - CONFESSION AND AVOIDANCE - DAMAGES - DIFFERENCE BETWEEN CONTRACT PRICE AND MARKET PRICE - APPEAL - COMPETENCY.
Fact of the Case:
Appellants and respondents entered into a contract for the sale and purchase of Wool Packs. The appellants failed to deliver the third installment of the goods on time. The respondents sent further shipping instructions, which were received by the appellants on 12-1-1952. The goods were placed alongside the vessel on 13-1-1952, but were not lifted. The appellants informed the respondents that they had made a valid tender of the goods, but the respondents failed to take delivery. The appellants sold the goods on 1-3-1952 at a lower price and sent a bill for the difference to the respondents. The respondents claimed damages for non-delivery of the goods. The dispute was referred to arbitration. The arbitrators allowed the appellants' claim for the difference between the contract price and the auction price. The respondents applied to the court to set aside the award on the ground that the arbitrators had been guilty of misconduct and that the quantum of damages awarded was in violation of the law. The court set aside the award on the ground that the arbitrators had misconducted the proceedings by disbelieving the settlement arrived at between the parties in the absence of any evidence to the contrary.
Finding of the Court:
The court held that the arbitrators had not been guilty of misconduct and that the quantum of damages awarded was not in violation of the law. The court found that the respondents had not proved the settlement alleged by them and that the burden of proof lay on them to prove their case.
Issues: 1. Whether the arbitrators had been guilty of misconduct in disbelieving the settlement arrived at between the parties in the absence of any evidence to the contrary? 2. Whether the quantum of damages awarded by the arbitrators was in violation of the law?
Ratio Decidendi: 1. The court held that the arbitrators had not been guilty of misconduct in disbelieving the settlement arrived at between the parties in the absence of any evidence to the contrary. The court found that the respondents had not proved the settlement alleged by them and that the burden of proof lay on them to prove their case. The court held that a written statement is not a pleading in confession and avoidance whereby a defendant is bound by the confession and compelled to prove the avoidance: if used as evidence against a defendant, the whole statement must be taken together. 2. The court held that the quantum of damages awarded by the arbitrators was not in violation of the law. The court found that there was no evidence in the case at all as to what the market price on the due data was and therefore no evidence to show that it was not the same as the auction price. The court also held that the principle that for a breach of contract a party is entitled by way of damages to the difference between the contract price and the market price, is not an absolute and inviolable principle.
Final Decision: The court allowed the appeal, set aside the order of the lower court setting aside the award, and directed that the matter of a judgment on award be dealt with on the merits.
( 1 ) THIS is an appeal from an order of S. R. Das Gupta, J. , dated 29-6-1953, by which the learned Judge set aside an award in favour of the appellants on the ground that in making it without any evidence in its support, the arbitrators had misconducted the proceedings.
( 2 ) THE facts are as follows. On 3-11-1951, the appellants, Messrs. Fatehchand Murlidhar, agreed to sell and the respondents, Messrs. Juggilal Kamlapat, agreed to buy, 15,000 pieces of Wool Packs at the fate of Rs. 11/12/- per piece. The goods were to be delivered in three equal instalments of 5,000 pieces each on 25-11-1951, 15-12-1951, and 7-1-1952, respectively. Delivery of the first two instalments was duly given and no question arises with regard to them. With regard to the third instalment due to be delivered on the 7-1-1952, shipping instructions were given on 20-12-1951, for placing the goods alongside a vessel, called "pantakota". Admittedly, the goods were not delivered and ordinarily there would be a breach of the contract on the part of the appellants. On 11-1-1952, however, the respondents forwarded to the appellants further shipping instructions which they had received from their own buyers and those instructions were for placing the goods alongside another vessel, named S. S. "purnea. According to the appellants, the letter from the respondents buyers, Messrs. Jute and Gunny Brokers Ltd. , which had been endorsed in their favour, was received by them on the 12-1-1952, and the goods were, in fact placed alongside the vessel on the the 13th of January following. The goods were, however, not lifted. In those circumstances, the appellants began to write to the respondents to the effect that they had made a valid tender of the goods, but the respondents had failed and neglected to take delivery and that accordingly they had become responsible to pay them the full price of the goods at the contract rate, or if they were compelled to sell the goods, to pay the difference. The respondents, on the other hand, it appears treated the appellants to have been in default and on 21-1-1952, they sent them a bill, being Bill No. 2008/908, for a sum of Rs. 7,500/- which they claimed to be entitled to recover as damages on account of the non-delivery of the goods. Earlier on 18-1-1952, the appellants had sent to the respondents their own bill for Rs. 58,750/- which was the price of 5,000 pieces of Wool Packs at the rate of Rs. 11/12/- per pack. Sundry correspondence followed and it appears that the respondents demanded from the appellants proof of their having placed the goods alongside the "purnea" on 13-1-1952, Such proof was furnished, but no payment was yet made by the respondents. Their contention was that the goods had been placed alongside the ship after it had closed loading. Thereafter, the appellants informed the respondents that if they did not yet take delivery of the goods and pay the price, they would be compelled to sell them on account of the respondents and at their risk. There having been still no response from the respondents, except that they went on repeating their own claim for Rs. 7,500/-, the appellants actually sold the goods on 1-3-1952, at the rate of Rs. 8/2/-per piece. Thereafter, they sent the respondents a bill for Rs. 18,328/2/- which was made up of Rs. 18,125/- being the difference between the contract price and the auction price of the 5000 pieces of Wool Packs and a sum of Rs. 203/2/- which was said to have been charged by the auction-broker as his brokerage. The bill was not paid.
( 3 ) THEREAFTER, the appellants referred the dispute to the arbitration of the Bengal Chamber of Commerce in accordance with an arbitration agreement contained in the contract. They claimed the same sum of Rs. 18,328/2/- on the allegation that they had made a valid tender of the goods within the time up to which the period of delivery had been extended and that the respondents had wrongfully failed and neglected to take deliv
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
