Case: Rustees Of The Port Of Madras Vs. Engineering Constructions Corporation Limited

this period was mentioned during the discussions. The Boards case which we find set out in some of their letters is that the period of six months was only an approximate time within which they expected the plant and machinery might be available. But the Board would not and did not undertake definitely to supply the plant and machinery not later than six months from 6-10-1958, the date of the order to commence work. There is no oral evidence relating to this matter and there is no sufficient material in the correspondence to warrant the conclusion that there was a term of the contract which bound the Port Trust to deliver to the contractors the plant and machinery within six months. Even at the time when the two alternative proposals were placed before the contractors, it was impressed on them that the proposals for the Board itself to import the plant and machinery would involve delay. Obviously, it was not for the Board to be certain of the extent of the delay. The Board might have though that it would not take longer than six months for the arrival of the equipment. I am unable to find any default or remissness on the part of the Board in taking steps to get the equipment. It was as much to their interest as to the contractors that the plant should be available as early as possible. Otherwise, the completion of the work would be delayed. There is no suggestion of any mala fide act or negligence on the part of the Board in the procurement of the equipment. It should also be mentioned that the Contractors themselves took some time before they could give detailed specifications. Taking all the circumstances into consideration. I hold that there has been no breach of any term of the contract committed by the Board because of the late arrival of the plant and machinery." 23. The finding of the learned umpire is thus based upon the material placed before him by both the parties and was a pure finding of fact. Now, the Division Bench does not say that the correspondence that passed between the parties or that the materials placed before the arbitrator and referred to in the award establishes that the Board undertook a firm commitment to supply the machinery within six months from the date of acceptance of the tender (October 6, 1958) - assuming that it could say so. (We are, of course, of the firm opinion that it was not open to the Division Bench to re-appraise the evidence / material before the learned umpire and come to a different finding of fact.) What the Division Bench says is that even though there was no such firm commitment, "the Board was under a bounden duty to have supplied the machinery within a reasonable time" applying the principle of Section 46 of the Contract Act. The Bench finds that the delay that has occurred in supplying the machinery is unreasonable and on that basis holds that the contractor is entitled to compensation. With great respect, we are unable to agree with this approach. Apart from the fact that this theory of duty to supply within a reasonable time was not put forward before the learned umpire, it is neither referred to by the learned umpire, nor does it constitute the basis of his award - the finding recorded by the learned umpire (viz., that the period of six months was only a rough estimate, an expectation, within which the Board thought it could import the machinery) is inconsistent with the theory of obligation to import within a reasonable time. The learned umpire has also found that the contractors themselves took some time before they could give detailed specifications of the machinery and parts required for carrying out the work. The Bench did not also find - it was not even suggested by anyone - that the Board was guilty of any deliberate delay or of any negligence or that it was remiss in taking steps required for importing and/or supplying the machinery. The matter did not lay in its hands. In such a situation, there was no room for importing the theory of reasonable time and for punishing the Board for something of which it was not guilty. Secondly, the explanation to Section 46 makes it abundantly clear that "the question what is a reasonable time is, in each particular case, a question of fact." The question whether the machinery was imported and supplied to the contractor within a reasonable time or not was thus a question of fact and not a question of law. No such contention was raised before the learned umpire nor did he record a finding on the said aspect. It was not open to the Division Bench to record the said finding of fact, for the first time, at the stage of letters patent appeal and hold on that basis that the Board is guilty of not performing its obligation within a reasonable time. In short, this is not a case where the Division Bench has interfered on the ground that the award suffers from an error of law apparent on the face of award. This is a case where a new ground - and that too factual in nature - was made out for the first time at the Letters Patent appeal stage for setting aside the award. Indeed, a reading of the judgment of the Division Bench shows that the Bench approached the matter as if it was sitting in first appeal over the award. The judgment does not even indicate on which recognised ground is it setting aside the award. It does not say either that the award is vitiated by an error of law apparent on the face of it nor does it say that the learned umpire was guilty of any misconduct in conducting the proceedings or otherwise. We are of the firm opinion that this could not have been done.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]22. The proposition that emerges from the above decisions in this : in the case of a reasoned award, the Court can interfere if the award is based upon a proposition of law which is unsound in law. The erroneous proposition of law must be established to have vitiated the decision. The error of law must appear from the award itself or from any document or note incorporated in it or appended to it. It is not permissible to travel beyond and consider material not incorporated in or appended to the award. Now let us examine the award concerned herein from the above point of view and see whether it suffers from any error of law apparent on the face of the award. We have gone through the award of the learned umpire, a man of great learning and eminence, Dr. P. V. Rajamannar - very carefully. All that the learned umpire has done is to refer extensively to the correspondence that passed between the parties and the other material placed before him and infer therefrom that the appellant-Board did never make a firm commitment nor did it ever undertake to import and supply the machinery within a particular period much less within a period of six months. The learned umpire remarkedis no mention of this period of six months in the relevant minutes of the meetings of the Tender Committee; but it is fairly clear that this period was mentioned during the discussions. The Boards case which we find set out in some of their letters is that the period of six months was only an approximate time within which they expected the plant and machinery might be available. But the Board would not and did not undertake definitely to supply the plant and machinery not later than six months from 6-10-1958, the date of the order to commence work. There is no oral evidence relating to this matter and there is no sufficient material in the correspondence to warrant the conclusion that there was a term of the contract which bound the Port Trust to deliver to the contractors the plant and machinery within six months. Even at the time when the two alternative proposals were placed before the contractors, it was impressed on them that the proposals for the Board itself to import the plant and machinery would involve delay. Obviously, it was not for the Board to be certain of the extent of the delay. The Board might have though that it would not take longer than six months for the arrival of the equipment. I am unable to find any default or remissness on the part of the Board in taking steps to get the equipment. It was as much to their interest as to the contractors that the plant should be available as early as possible. Otherwise, the completion of the work would be delayed. There is no suggestion of any mala fide act or negligence on the part of the Board in the procurement of the equipment. It should also be mentioned that the Contractors themselves took some time before they could give detailed specifications. Taking all the circumstances into consideration. I hold that there has been no breach of any term of the contract committed by the Board because of the late arrival of the plant and machinery.The finding of the learned umpire is thus based upon the material placed before him by both the parties and was a pure finding of fact. Now, the Division Bench does not say that the correspondence that passed between the parties or that the materials placed before the arbitrator and referred to in the award establishes that the Board undertook a firm commitment to supply the machinery within six months from the date of acceptance of the tender (October 6, 1958) - assuming that it could say so. (We are, of course, of the firm opinion that it was not open to the Division Bench to re-appraise the evidence / material before the learned umpire and come to a different finding of fact.) What the Division Bench says is that even though there was no such firm commitment, "the Board was under a bounden duty to have supplied the machinery within a reasonable time" applying the principle of Section 46 of the Contract Act. The Bench finds that the delay that has occurred in supplying the machinery is unreasonable and on that basis holds that the contractor is entitled to compensation. With great respect, we are unable to agree with this approach. Apart from the fact that this theory of duty to supply within a reasonable time was not put forward before the learned umpire, it is neither referred to by the learned umpire, nor does it constitute the basis of his award - the finding recorded by the learned umpire (viz., that the period of six months was only a rough estimate, an expectation, within which the Board thought it could import the machinery) is inconsistent with the theory of obligation to import within a reasonable time. The learned umpire has also found that the contractors themselves took some time before they could give detailed specifications of the machinery and parts required for carrying out the work. The Bench did not also find - it was not even suggested by anyone - that the Board was guilty of any deliberate delay or of any negligence or that it was remiss in taking steps required for importing and/or supplying the machinery. The matter did not lay in its hands. In such a situation, there was no room for importing the theory of reasonable time and for punishing the Board for something of which it was not guilty. Secondly, the explanation to Section 46 makes it abundantly clear that "the question what is a reasonable time is, in each particular case, a question of fact." The question whether the machinery was imported and supplied to the contractor within a reasonable time or not was thus a question of fact and not a question of law. No such contention was raised before the learned umpire nor did he record a finding on the said aspect. It was not open to the Division Bench to record the said finding of fact, for the first time, at the stage of letters patent appeal and hold on that basis that the Board is guilty of not performing its obligation within a reasonable time. In short, this is not a case where the Division Bench has interfered on the ground that the award suffers from an error of law apparent on the face of award. This is a case where a new ground - and that too factual in nature - was made out for the first time at the Letters Patent appeal stage for setting aside the award. Indeed, a reading of the judgment of the Division Bench shows that the Bench approached the matter as if it was sitting in first appeal over the award. The judgment does not even indicate on which recognised ground is it setting aside the award. It does not say either that the award is vitiated by an error of law apparent on the face of it nor does it say that the learned umpire was guilty of any misconduct in conducting the proceedings or otherwise. We are of the firm opinion that this could not have been done.