M/S. AMARCHAND LALITKUMAR versus SHREE AMBICA JUTE MILLS LTD.

Citation: [1963] 2 S.C.R. 953 · Decided: 03-05-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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2 s.c.R. 
SUPREME COURT REPORTS 
953 
justice. It is hardly necessary to add that cl. 8 of 
s. 545 of the Bombay Police Manual ca.n not be held 
to be b1.d a.s contravening the rules of natural 
justice. 
'fhis finding however does not dispose of the 
entire matter. It is the contention of the respon-
dent that the Deputy Inspector Genera.I of police 
was not entitled in revision to enhance the punish-
ment and this question has not been decided by the 
learned Judges. It is therefore necessary to remand 
this case for hearing on this a.nd a.11 other issues 
whioh might a.rise for decision. We accordingly 
set a.side the order in appeal and remand the oa.se 
for hearing on the other points in· this oase. Coats 
of this appeal will a.bide the result of the hearing 
in the Court below. 
Gase remanded • 
M/S. AMARCHAND LALITKUMAR 
.v. 
SHREE AMBICA JUTE MILLS LTD. 
(S. K. DAS, M. HmA.YA.TULLA.B a.nd J. c. SRA.H, JJ.) 
..4.rbitration-Reoooation-Pt1Wtr 
of 
Ouurt-Periotlic 
fluctWJtion of price, if an emergency~:A.rbitralion Act, 1940 (10 
of 1940), 88. 6,34-Worlcing Manval ofllie lilaetlndia Jute and 
Heenan lil:rcliange, Oh. IX. paMB. 7(c), 11. 
The appellants as sellers of raw jute entered into 
forward contracts with the respondent jute mills to sell such 
jute to thCDI. The contracts.being transferable specific delivery 
contracts, were entered into . in the standard printed forms 
of'the ~t India Jute & Hessian Exchange Ltd., which was 
an association rCcognised under the Forward Contracts 
(Regulation) Act, 1912, and thus were subject to the rules 
and bye-Jaws made by the &change which provided for 
arbitration of .dispu!CI by the tribllll&I of· Arbitration of the 
198B 
Slate of My•or1 
v 
8, S. Matap., 
1981 
Ma, a. 
AtrMrcAanti 
Lalitb:mar 
v. 
Sltrte Adica Jule 
Miii• U4. 
954 
SUPREME COURT REPORTS [1963] 
Bengal Chamber of Commerce and Industry or the Indian 
Chamber of Commerce in Calcutta. 
The appellants failed 
to supply the stipulated jute within the time mentioned in 
the 
guarantee clauses. 
The respondents exercised their 
option under the rules aforesaid, canceJlcd the contracts and 
charged the appellants for the difference in price between 
the contract rate and the market rate prevailing on the date! 
of cancellation and on the appellants denying their liability 
applied for arbitration. The appellants thereupon applied 
to the High Court under s. 5 of the Arbitration Act, 1940, for 
Tevoking the authority of the arbitrator. 
There case in 
contemplated in Para 11, in Ch. IX of the Working Manual 
of the Exchange sub•tance was that there was an emergency 
as due to scarcity of raw jute and speculation at the relevant 
time and the price of raw jute shot up abnormally, tbiJ 
placed the buyers and sellers of r"w jute in two conflicting 
camp, and the majority of lhe arbitrators in the r,anel of 
arbitration of the Bengal Chamber of Commerce and 
ndustry 
being connected with the buyers of raw jute, the jute mills, 
wtre disqualified from acting as impartial arbitrators. 
The 
High Court held that no such emergent condition had been 
proved as would justify revocation of the authority of an 
appointed arbitrator. 
Held, that the normal periodical ftuctuation in the price 
of raw jute could not constitllte an emergency within the 
meaning of para. 11 in Ch. IX of the Manual since such 
fluctuations have been taken into consideration by those who 
entered Into forward contracts. Such an emergency must 
be one which is abnormal and which none could foresee. It 
could not, therefore, be said that in the present case there 
was such a conflict of interest between sellers and buyers as 
would render the panel of arbitrators having a practical 
experience of the normal fluctuations of the market disqualified 
to act as impartial arbitrators. 
Th• object of ss. 5 and 34 of the Arbitration Act was 
the same, namely, to prevent arbitration, with this difference 
tbat an application under s.5 would lie if proceedings had not 
yet .been 
commenced in Court 
whereas under s. 34 an 
application lay when they had commenced, 
But a Court would not lightly exercise its discretion to 
grant leave to revoke an arbitrator's authority. 
Before it 
would do so it must be satiafied that" a substantial miJcarriage 
of justice would otherwise take place. 
Parties would not 
be relieved from a tribunal of their own choice simply be-
caUIC they feared that its decision might go agalnat them, 
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