A wrong decision on a question of law by arbitrators does not invalidate the award if the question of law was specifically referred to the arbitrators.

1. This is an appeal by the Union of India against the order of a Subordinate Judge dismissing objections against an arbitration award and making it a rule of the Court and passing a decree is accordance with the award in favour of the respondent Messrs. United Timber Works of Jagadhri.

2. The facts of the case are that in 1952 the Union of India through the Director General of Supplies and Disposals placed an order with the respondent firm for the supply of 61,490 cubic feet of kiln seasoned mango planks, to be used for the manufacture of ammunition boxes, at Rs. 8/10.00 per cubit foot. The terms of the contract were that 6,600 c. ft. were to be supplied by the 15th of June and the balance in monthly instalments of 20,000 c. ft. the last of which was due by 15-9-1952. It was specified in the contract that failure to adhere to the monthly quota of supplies specified would mean automatic cancellation of the outstanding quantity in the particular month at the risk and cost of the contractor.

3. There seems to be no doubt that the contractor fell sadly behind as regards delivery, and the Department wrote on 20-8-1952, to the effect that although by that time 46,000 c. ft. should have been supplied only 5, 565, c. ft., had been supplied. The explanation for the delay was asked for and it was intimated that unless the outstanding quantity was delivered before the expiry of the final delivery date, 15-9-1952, the Department would be compelled to enforce the terms of the contract.

4. The contractor wrote on the 21st of August explaining his difficulties and requesting that the time for delivery should be extended up to the middle of January 1953. On the 16th of October the Department again wrote saying:

"According to the terms of the contract you should have supplied 6, 600 c ft. by 15-6-1952 and the balance in monthly instalments of 20,00 c. ft., to be completed by 15-9-1952. Since you have failed to complete the contract strictly in accordance with the terms of delivery, the position of the requirements has considerably changed and as a result 50 per cent of the stores ordered against the subject A. T. are no longer required. Your request for extension in the delivery date up to 15-1-1953 cannot be agreed to for the entire contracted quantity as per amendment to the Schedule as under, the balance being cancelled without financial repercussions on either side. Please note, however, that in respect of quantities for which extension up to 15-1-53 is granted, the right to recover liquidated damages at 2 per cent per month or part of a month beyond 15-9-52 in exercise of any right under clause 11 (iii)(a) of the general conditions of contract is hereby reserved."

The schedule was amended accordingly, the figure of 30,745 c. ft. being substituted for 61,490 c. ft. and Rs. 2,65,175/10.00 having substituted for the total cost of Rs. 5,30,351/4/- and it was stated to be without prejudice to the rights under the terms of the contract.

5. The contractor replied on 13-11-1952, regretting that a substantial quantity had been cancelled without notice resulting in heavy loss and reserving his rights under the contract. Thereafter it seems that the supply of the contract. Thereafter it seems that the supply of the quantity as educed above was actually made and paid for, but the contractor then claimed Rs. 72,000.00 as damages by way of loss of profit for the cancellation of half or the contracted supply. The dispute was referred to arbitration under the terms of the contract, one arbitrator being appointed by the Government and one by the contractor. Before these arbitrators the contractor put forward his claim for Rs. 72,000.00 as damages while the Government put in a counter claim for Rs. 10,448/- as liquidated damages for delay in supplies beyond the contracted delivery period originally stipulated in the contract.

6. After disagreement between the arbitrators Mr. Hari Krishana Bhargava Advocate was appointed as Umpire and he gave his a