1999 PLP 2047 (CLC)

Total Deposit. Rs.49.73 624 (c) Loss of profit expected on the contracted Rs.2,35,480 sugar of Larkana Sugar Mills Q Paisas 40 per kg. i.e. Rs.400 per M.Ton. (d) Interest Q 16% on the amount of Rs.8,62,095 Rs.49,73,624 with effect from 20‑5‑1986 upto 4‑6‑1987 as no goods were supplied to claimant. (e) Loss of reputation, goodwill for not Rs.20,00,000 fulfilling the commitments. (f) Loss in Trade as the claimant could not do Rs.50,00,000 any business commitment due to blockade of Rs.50 lac for 14 months. Total. Rs.80,97,575

7. As a result of the pleadings filed by the parties the learned Arbitrator framed the following issues which were discussed separately with reference to the evidence brought on record. (1) Whether the plaintiff paid 100% price of the contracted sugar well within time? (2) Whether the plaintiff was given delivery order by the defendant No.2 to lift the sugar from premises of the defendant No.3? (3) Whether the defendants Nos. I and 2 delivered the contracted sugar to the plaintiff? (4) Whether the plaintiff Mukhtar Ahmed had also entered into agreement with the defendants Nos. l and 2 with regard to the contracts in Suits Nos.986 of 1989, 988 of 19759 and 989 of 1989? (5) Who breached the contracts? (6) Whether the plaintiff suffered any loss due to the breach by defendants Nos.2 and 3, if so, to what extent? (7) Whether the plaintiff requested the defendant Nos. l and 2 to adjust the payment in other contracts in Suits Nos.986 of 1989, 998 of 1989 and 989 of 1989?

8. In respect of issue No. l the finding are in favour of the plaintiff/claimant. It was held that the plaintiff had promptly paid 100% of contracted sugar on 20‑5‑1986. Evidence of the plaintiff was found to be more relevant and consistent Issues Nos.2 and 3 were jointly discussed where it was held that the plaintiff was not given delivery order by the Food Department Issues Nos.6 and 7 were also answered in favour of the plaintiff on the preponderance of evidence. Under Issue No.5 it was held that no quantity of sugar was delivered despite receipt of 100% consideration, Issue No.6 was considered m the following manner whereafter the award was also made which all read as follows:‑

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28. It may also be noted that the learned Counsel for Larkana Sugar Mills Mr. S.A.A.A. Rizvi did not file any affidavit‑in‑evidence not cross-examined the claimant. On perusal of the cross‑examination referred above it is clear that there is no rebuttal to the main grievance of the claimant. Further on perusal of the written arguments filed by the Food Department it appears that the Department tried to avoid its liability by saying that the contracted sugar was not delivered and that the claimant demanded refund of his deposit and on the basis of a subsequent agreement. On perusal of record it appears that the Department nowhere alleged that the claimant was at fault but on the contrary very candidly conceded to refund of amount. The contents of the minutes of the Sugar Disposal Committee dated 24‑12‑1986 filed with written reply of Food Department are very relevant for the present case as well as other cases in which the T.C.P. and Food Department have in fact admitted the allegation of the claimant. The claimant's request for refund and adjustment was made as far back as on 25‑6‑1986 vide Exhs. A/20 to A/22 while Food Department did not refund the amount uptil July, 1987 as evident from Food Department letter dated 29‑7‑1987 addressed to Chairman, TCP filed by Food Department with its written argument. Further the claimant had stated in writing that the 'Without Prejudice' his deposit be refunded meaning thereby 'Without prejudice to the legal rights. (Reference Exh.A/28, dated 11‑8‑1986). On perusal of the record and evidence it appears that neither T.C.P. nor Food Department ever showed their anxiety to fulfil the terms of the agreement in hand. The claimant has also exhibited two letters Exhs.A/14 and A/15 wherein the claimant was informed by his dealers, that they are unable to honour their advance commitment as they have not received the sugar under the above contract. The letters are self explanatory. The Food Department has not disputed these letters."

9. As a result of above findings, following Award was passed by the learned Arbitrator;‑

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29. In view of the above discussion, I award following amount as damages in favour of the claimant and against the Food Department‑‑‑ Loss of profit @ paisas 40 per kg. i.e. Rs.2,35,480 Rs.400 per M.Ton on 588.70 M.Ton For determining the loss of reputation and goodwill and loss in trade, I would like to mention that in case the claimant would have received the contracted sugar on the given date i.e. 20‑5‑1986 he would have certainly earned profit and would have rotated the above amount in other contracts pertaining to Fauji Sugar Mills Khoski and Mehran Sugar Mills from where the major quantity of balance sugar was to be lifted. (30) On perusal of the record it appears that the claimant was totally helpless as the sugar under the other contracts was bad in quality and short in weight which was forcibly delivered to him and further the entire deposit in this contract amounting to Rs. approx. 50 lac was lying with Food Department since 20‑5‑1986 for more than 14/15 moths which in fact had totally broken the claimant. I accept the version of the claimant on this account I award a consolidated sum of Rs.28,00,000 (Rupees twenty eight lacs) towards damages, for loss of business. goodwill, reputation, non‑fulfilment of the commitment by the claimants etc. against the claim of Rs.10,00,000 and Rs,30,00,000 as claimed by the claimants against the Food Department."

10. It was argued by Mr. Muhammad Akram Zuberi that the Court while considering the legality or otherwise of an award cannot substitute its own finding on appreciation of evidence in place of finding given by an arbitrator. It was further argued that mere wrong basis of assessment of damages by the Arbitrator cannot furnish a good ground for attach on the Award. He has placed reliance upon the cases Messrs Ibad & Company v. Province of Sindh and 2 others PLD 1980 Kar. 207, A. Qutubuddin Khan v. Karachi Electric Supply Corporation Limited 1980 PLC 1977, The Premier Insurance Company Pakistan Limited v. Ejaz Ahmed Khawaja and 3 others 1981 CLC 311 and the case of joint venture KG/RIST (supra); see also 1996 PSC 295). In the case of Messrs. Ibad & Co., (supra it was held by a learned single Judge of this Court, Ajmal Mian, J. (now Chief Justice of Pakistan) inter alia, that an award cannot be set aside on the ground that the Arbitrator has adopted a wrong basis for purpose of assessing the quantum of damages. Earlier than the case Messrs. Ibad & Co., another distinguished Judge of this Court, A.S. Farooqui, J., (as he then was) in the case Messrs, Pakistan Builders Company, Karachi v. Pakistan PLD 1961 (W.P.) Kar. 365 held, inter al ia, that an arbitrator is not bound to give reason for his decision nor he is bound by any technical rule or procedure and that he' need not record separate findings on the point on which the parties are at issue. It was finally held that it is no ground for challenging an award that the basis for ascertaining the amount of damages awarded was wrong. In the case Messrs Moosa Oomar & Company, Karachi v. Messrs Haji E. Dossa & Sons and another PLD 1971 Karachi 899 it was held, inter alia, by a Division Bench of this Court while following the rule laid down by the Privy Council in the case of Mohindra Singh v. Ramindar Singh and another AIR 1944 P,P. 83, that even if the Arbitrator had not awarded damages upon the settled principle, still the Award cannot be challenged on the ground of legal misconduct. However, the rule laid down in the abovenoted cases Ibad & Company A. Qutubuddin Khan; and Ejaz Ahmed Khawaja was prior to the introduction of section 26‑A in the Arbitration Act. 1940, and therefore, these judgments are of no help to Mr. Zuberi. After introduction of section 26‑A, now the Arbitrators are required to give sufficient reasoning or detail supporting their Award. It is clarified that it will not be necessary that the reasonings of Award be given in such details as are required in the judgment in civil suits.

11. It is settled law that a Court while examining the legality or otherwise of an Award as provided under sections 30 and 33 of the Arbitration Act, 1940 could not substitute its own finding on appreciation of evidence. It was held in the case of Messrs Joint Venture KG/RIST (supra) that an error or legal infirmity must appear on the face of award in order to warrant interference of the Court. In the instant case, there appears neither any illegality nor any infirmity on the face of record. The contention of Mr. Muhammad Saleem Sarno, A.A.‑G. that no reason in detail was provided by the Arbitrator in support of his Award is devoid of any fact. All the relevant pieces of evidence and documents were thoroughly discussed in the reasonings by the learned Arbitrator and I see no reason to interfere with the same.

12. As a result of the above discussion, the Award is made rule of the Court to the following extent. (a) Refund of the amount received by the Food Department from plaintiff for which no sugar was supplied. (b) Rs.2,35,480 as pecuniary compensation for the loss of profit. (c) Rs.10,00,000 (ten lass) as damages. (d) Interest at the rate of 12% from the date of decree till realisation. Order accordingly. H.B.T./A.247/K Order accordingly.