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TMI Blog1952 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... week of December 1950, but nevertheless the buyers accepted and acted upon it. Meanwhile the export duty was enhanced. On 20-11-1950 the parties agreed that the buyer would accept a Bank guarantee for payment of the increased duty pending amendment of the Letter of Credit and letters dated the 14th, 18th and 19th December 1950 were passed in this connection. The amendment was received soon thereafter on or about 29-12-1950. The petitioner shipped 200 bales under the contract in the 3rd week of January 1951 and by letter dated 20-1-1951 informed the respondent that they were then unable to ship the balance goods on account of the default of their sellers and would arrange for their shipment as soon as they were ready. The price control legislation then in force was repealed in March 1951 and soon thereafter on 3-4-1951 the respondent's agents pressed the petitoner for delivery of the goods. On the same day the petitioner requested the respondent's agents to extend the time of shipment until July 1951. The respondent's agents by their letter dated 13-4-1951 refused to extend the time and pressed for immediate shipment of the balance goods by S. S. Hoegh Silver Spray ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim from the sellers the difference between the contract price and the price at which we have been obliged to cover, and also costs and interest for having had to keep letters of credit available. 6. After this reference to arbitration the respondent wrote to the petitioner a letter dated 16-5-1951 stating that the respondent had bought against the petitioner on the 9th of May at the rate of ₹ 370-12-0 per 100 pieces C P Java Main Ports from Messrs. Blackwoods (India) Limited. The petitioner replied on 17-5-1951 stating that any action taken by the respondent after the reference to arbitration was irregular. 7. The petitioners filed their counter statement on the 8th June setting out their contentions and stating that the arbitrator could not assess any particular claim as the respondent had not disclosed the price at which they had been obliged to cover and that the reference was merely to elicit opinion and was not maintainable. The respondent filed their second statement on 18-6-1951. In that statement they referred to their letters of 16-5-1951 and their purchase against the petitioner on 9-5-1951. The petitioner filed their second counter statement on 9-7-195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Credit was not adhered to. There was a temporary arrangement for giving a Bank guarantee for the amount of the increased duty varying the contractual term for payment by Letter of Credit. With regard to the amount of the increased freight, the petitioner alleges that there was an agreement for giving a Bank guarantee whereas the respondent alleges that there was an agreement to pay by separate debit note. I am therefore satisfied that the original contract was modified in certain material particulars. 12. In my judgment however it cannot be possibly said that the modifications rescind the original contract dated 10-8-1950 in its entirety or that the arbitration clause' contained therein is no longer subsisting. Mere alteration or modification of the terms of a contract cannot amount to its rescission. Lord Atkinson in -- 'Morris v. Baron Co.', 1918 AO 1, at page 31 (A), observes thus : Moreover, rescission of a contract, whether written or parol, need not be express. It may be implied, and it will be implied legitimately, where the parties have entered into a new contract entirely or to an extent going to the very root of the first inconsistent with it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations are read into and become part and parcel of the original contract. The original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications. Those of the original terms which cannot make sense when read with the alterations must be rejected. In my view the arbitration clause in this case is in no way inconsistent with the subsequent modifications and continues to subsist. 16. The petitioner strongly relies upon the case of -- 'Luchmi Narain v. Hoare Miller and Co.', AIR 1914 Cal 294 (C). That was a suit for price of 300 bales of jute sold and delivered. There was a contract for sale of 500 bales of jute and this contract contained an arbitration clause. Subsequently there was an extension of the time of delivery up to 25-12-1912 subject to inspection at the press house before delivery. There was a subsequent letter from the buyer dated 13-1-1913 giving 3 more days for delivery. 300 bales were delivered after 21-1-1913 and a suit was instituted for the recovery of the price of these goods : Chaudhuri J. declined to stay the suit. He held that there was a new arrangement as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. I have dealt with this contention in my judgment in -- 'In re Arbn., Laduram 'Kedia v. Dhunichand Sanehi,' Arbitration Case No. 45 of 1952 (Cal) (F). For the reasons given in that judgment I am of the opinion that there is no substance in this contention. The charge made in these sub-paragraphs therefore fails. 20. In sub-paragraphs (d), (e) and (f) of paragraph 26 a charge is made that the arbitrators did not properly apply their mind and failed to appreciate the real point in dispute and therefore bad misconducted themselves. There is no material whatsoever to support this allegation. Indeed if I recollect rightly counsel for the petitioners did not address any argument on these several charges. 21. In paragraph 24 (g) a charge is made that the arbitrators made a gross mistake in awarding damages to the respondent although the respondent made no claim for damage in the original letter of reference dated 9-5-1951. This charge is founded upon the peculiar language of the prayer of the respondent in their statement before the Bengal Chamber of Commerce which was as follows: We await your decision whether we are entitled to claim from sellers the difference betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed a small sum by way of difference on 7-10-1946. Before the arbitrators they however claimed a much larger sum on the basis that the time to deliver the goods had been extended until 31-10-1946. The latter claim was never asserted before the reference. In that con- text Mr. Justice Chatterjee made the following observation: In order to make out the jurisdiction of the Tribunal of Arbitration the appellants must show that the subject-matter of the reference was some dispute between the parties and that the particular dispute had arisen actually before the matter went before the Arbitrators. We hold that the appellants have failed to satisfy this condition precedent. At no stage was any demand made for ₹ 14,000/-. It is not a question of quantum of damages merely with regard to the breach of the contract, as Mr. Choudhury on behalf of the appellants wanted to put it. It is a different cause of action altogether. The claim that was referred in the two bills was the only claim which was before the parties. The claim that was made in the letter of reference was never communicated to the respondents. A dispute implies an assertion of right by one party and repudiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alley v. Blackburn Rail Co.', (1857) 27 LJEX 65 (J). -- 'Speak v. Taylor , (1894) 10 TLR 224 (K). There is therefore no substance in the charge made in paragraph 26(g) of the petition. 27. In sub-paragraph (h) of paragraph 26 of the petition it is asserted that there is an error apparent on the face of the award. No argument had been addressed before me on this charge. This charge therefore fails. 28. In sub-paras, (i) and (k) of paragraph 20 there is a charge that the Arbitrators were biased. There is no evidence of any bias before me. This charge also fails. 29. Sub-paras. (J) of paragraph 26 makes a charge that the Arbitrators failed to appreciate that at the time of the breach the West Bengal Jute (Control of Prices) Act 1950 was in force and the respondent was entitled to recover damages on the basis of rates not exceeding the maximum controlled price and that in awarding the damages the Arbitrators had not deducted the duty, Port Commissioners' charges, freight, etc. During argument Mr. Mitra abandoned this point. This charge therefore fails. The petition for setting aside the award is therefore dismissed with costs. 30. There is an application by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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