Ladhuram Kedia vs Bengal Jute Mills Ltd.

Bachawat, J.—The Applicant is the seller and the Respondent is the buyer of jute under the contract dated July 28, 1949. The original time for delivery was September and/or October, 1949, and the time for delivery was later on extended. The buyer claimed damages for non-delivery and under the arbitration-clause contained in the contract the matter was referred to the arbitration of the Bengal Chamber of Commerce on January 24, 1950.

On March 2, 1950, the Registrar of the Bengal Chamber of Commerce constituted the court to decide the suit. The sellers repeatedly obtained from the Bengal Chamber of Commerce extension of the time to file a statement in January and March, 1950. On April 18, 1950, the seller applied to this Court for revocation of the authority of the arbitrators on the ground that the arbitrators were likely to be biased. On May 8, 1950, that application was dismissed. On May 13, 1950, the Registrar of the Bengal Chamber of Commerce asked for a certified copy of the order. Thereafter, the sellers again obtained several extensions of time for filing their statement. The last of such extension being on September 7, 1950. On September 30, 1950, the arbitrators made an award in favour of the buyers for the sum of Rs. 4,062-8.

The sellers have now applied for setting aside the award on two grounds: (1) that the time for making the award expired when the award was made and, therefore, the award is invalid, and (2) that one of the arbitrators is disqualified by reason of his relationship to the buyers. After this application was made the buyers took out a counter-notice of motion for an order that the time for making the award be extended.

It appears from the award that it was made by one Mr. D.P. Goenka and another European gentleman. It is stated in para. 8 of the petition that D.P. Goenka is the brother-in-law of Deoki Nandan Jalan, who is a partner of Surajmal Nagarmal, the managing agents, of the Respondent buyers. It is admitted by the Respondent that D. P. Goenka is the brother-in-law of Debki Nandan Jalan and that Mr. Jalan is a partner of Surajmal Nagarmal, who is the managing agent of the Respondent. I have also no doubt that before the award was made, the seller Applicant had no knowledge as to who actually were the arbitrators appointed. by the Registrar to decide the dispute. '' It seems to be a border line case. Giving my best consideration to the matter, I do not think that D.P. Goenka was disqualified to act as an arbitrator. It is not alleged that he had any pecuniary interest in the subject-matter of the litigation. There is no indication that in the course of the proceedings D.P. Goenka was in any way biased or partial in his attitude towards the buyers. Having regard to the contentions of the parties, the award does not also appear to be arbitrary or unfair. The relationship seems to be rather remote. Of course, it would have been better for the Registrar of the Bengal Chamber of Commerce not to appoint D.P. Goenka as an arbitrator in this case. If there was the least indication of any partiality or bias, I would have set aside the award. But I do not think that there is any such bias or partiality in this case. By virtue of the relationship by itself D.P. Goenka is not disqualified.

Having regard to the dates, I have no doubt that I should extend the time for making the award. Some delay was caused by reason of the application made by the sellers and further time was spent in order to obtain a certified copy of the order. Besides, even after the expiry of the time, the sellers asked for extension of the time to file their statement before the arbitrators.

I will, therefore allow the application of the buyers and extend the time of the arbitrators to make the award by September 30, 1950.

I dismiss the application for setting aside the award. Having regard to all the circumstances, I direct that both parties will pay and bear their respective costs of both the applications.

There will be judgment according to award and interest on judgment and costs.