ORDER
S.N. Kapoor, J.
1.1 This judgment shall dispose of IA Nos. 1970/95, 1971/1995 as well as suit No. 1880/94.
1.2 In this case, the award was filed by the arbitrator along with the proceedings. Notices were accordingly issued and respondent filed objec-tions vide IA 1970/95 along with an application IA 1971/95 under Section 5 of Limitation Act.
2.1 It is claimed in IA No. 1971/95 – the application for condensation of delay, that the notice of filing the award was not served on any of the authorised representatives of the respondent company. Shri Surender Sureka, Managing Director of the respondent firm was mentally disturbed and was away to Bombay in connection with diagnosis and tests of his brother from September 1994 to January 1995. On 23rd January 1995 while going through the papers, he came across one notice received from the court. He could not immediately connect the notice with the concerned case. He contacted his
counsel Shri S.L. Jain and it transpired that the notice related to award dated 8th February 1994 and not 17th August 1994 as mentioned in the notice. It appears from the record that the notice was served on some official of the company on 8th September 1994. The delay appears to have been explained for it had not been received by any of the partners of the plain-tiff firm but by an employee as is evident from the report. Seeing the circumstances, the delay in filing the application is condoned and IA 1971/95 is accordingly allowed.
3. Learned counsel for the objector challenged the award given by Shri Ram Bahadur, Sole Arbitrator dated 8th February 1993 on the ground that the general damages amounting to Rs.6,03,603.80 allowed by the Arbitrator were unjust for purchases were not made in the year 1985 but in 1987. The learned counsel for the applicant referred to letters Annex.3 to 5 indicat-ing that Madhav Cotton Mills Limited, UP Handloom Stores and National Textile Corporation had not supplied dusty blue 91 cm. width dyed fastness on or around 31st March 1985. In this connection, learned counsel for the
objector referred to AT No. BTX-4/0055/COAD/118 dated 3rd September 1984 and A/T No. BTX-4/118(84)/RP/COAB/025 dated 29th September 1987 placed by Union of India on NTC for purchase of stores. It indicated that a 74,796 mtrs. of cotton cloth dosuti blue of 91 cms. width was to be supplied at Rs.13.90P per mtr. It is further submitted that the learned arbitrator ignored the modified rate at which the goods under this A/T were supplied. It is submitted that it is evident from the record that the rates given in the A/T dated 28th May 1985 were not final. The damages should have been
assessed only on the date of breach of contract and not on any date subsequent to the date of breach of the contract.
4. On the other hand, the submission of the claimant is that the objec-tion is mis-conceived for the award indicated that Union of India had filed A/T No. BTX-4/0053/COAD dated 28th May 1985 to prove the difference between the contract rate at Rs.6.48 per mtr. and market rate of Rs.12.86 per mtr. on or about the date of breach 31st March 1985. But rate mentioned in letter was not the rate which was relied upon by the Arbitrator. No doubt, the arbitrator relied upon A/T dated 28th May 1985 but with modified rates. The letter dated 13th November 1986 addressed to National Textile Corpora-
tion Ltd. indicated that the goods of the same quality were supplied at the rate of Rs.12.86 per meter. and this is the rate which was considered by the learned arbitrator. As such, the objector is probably labouring under some mistaken belief that 1987 rates had been applied by the contractor.
5. Having heard the parties counsel and having gone through the record, it appears that the only point which requires consideration is whether the arbitrator has committed misconduct by accepting A/T No. BTX-4/058 dated 28.5.85 as appropriate basis for calculating damages.
6. In so far as lack of evidence of market rate is concerned, if the claimant had failed to file any other vidence, the defendant objector could have themselves filed some other evidence to show different rates. In such matters when both the parties are allowed to file and lead evidence and rates of exact date of breach of contract are not ailable, the court as well as Arbitrator do consider such rates to arrive at just conclusion.
7. The learned counsel for the claimant relied upon Nagar Palika, Mirza-pur Vs. The Mirzapur Elect. Supply Co. Ltd., , M.L. Dalmiya & Co. Ltd. Vs. International Airport Authority of India, and M/s Ruttonsha International Rectifier Pvt. Ltd. Vs. Union of India,
in support of his contention that the objections are not maintainable.
8. I find a lot of force in the submissions of the learned counsel in view of the aforesaid facts.
9. Learned counsel for the objector relied upon M/s.Murlidhar Chiranjilal vs. M/s. Harishchandra Dwarkadas and another, and Section
73 of the Contract Act. In para 9 of the judgment, the Supreme Court laid down the following principles relating to calculation of damages:
(9) The two principles on which damages in such cases are calculated are well-settled. The first is that, as far as possible, he who has proven a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this princi-ple is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to taken such steps: (British
Westinghouse Electric and Manufacturing Company Limited Vs. Underground Electric Ry. Co. of London, (1912) AC 673 at p.689. These two principles also follow from the law as laid down in S.73 read with the Explanation thereof. If, therefore, the con-tract was to be performed at Kanpur it was the respondent’s duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it suffered any damage thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be re-imbursed for the loss. Even if the respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to
damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the con-tracted rate resulting in loss to it. But the respondent did not make any attempt to prove the rate for similar canvas prevalent in obviously be not entitled to any damages at all, for on this state of the evidence it could not be said that any damage natu-rally arose in the usual course of things.”
10. The above said observations relate to a suit. In arbitration proceed-ings, the similar standard of proof is certainly preferable but some room for estimation is also left. In Murli Dhar’s case (supra), there was no
evidence at all. But in the present case, there is some evidence on the basis of which the estimate could be made.
11. In so far as Section 73 of Contract Act is concerned, it reads as under:
“73. Compensation for loss or damage cause by breach of contract _
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the con-tract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the reach.”
12. It is undisputed that the contract was to be performed by 31st March 1985 and the order was placed on 28th May 1985. The law as to such type of damages is that damages are to be assessed with reference to date fixed for delivery and the court must estimate rate as best as it can and it matters not that the estimate to a certain extent is speculative. If it is proved that after rescission of the contract the claimant acting reasonably and as prudent man, he might have made a contract at better rates that could be considered ground for abatement of damages and if after the breach of the contract, fresh contract is entered which is at the risk of the party other than the party claiming damages for he cannot make use of such a purchase for the purpose of enhancing his damages. The mere fact that it is somewhat difficult to accept the damages with certainty and precision,does not relieve the defendant of his liability to pay the damages to the plaintiff to compensate for the loss. The plaintiff would be entitled to the benefit of every reasonable presumption as to the loss suffered. Supposing that the market rate at place of delivery is not available, the arbitrator could
take into consideration the market price at the nearest place and on this very logic if the market rate on the exact date of breach is not available, the arbitrator can certainly take into consideration the market price at the nearest day. (See also M/s Saraya Distillery, Sardarbaggar Vs. Union of India & Anr., and Andard Mount (London) Ltd., England Vs. Curewel (India) Ltd., New Delhi, AIR 1985 Delhi 45).
13. In the above said circumstances, if the arbitrator has considered A/T dated 28th May 1985 and its modified rates as per letter dated 13th Novem-ber 1986 which is nearest to the date of breach of the contract, no fault can be found with the award on this score. The arbitrator has given a reasoned award and appears to be justified in what has been stated above. In such circumstances, the award cannot be challenged on the ground that reasons given by the arbitrator were inadequate or that the appraisal of evidence was not up to the mark and the conclusions reached by him are
questionable. No interference with the award is permissible in the absence of any misreading of the document or ignoring any material evidence.
14. Accordingly, I do not find any force in the submission of learned counsel for the objector and the award given by Shri Ram Bahadur dated 8th February 1993 is made rule of the court. The claimant shall be entitled to interest at the rate of 18% per annum on Rs.6,03,603.85 from the date of this decree till realisation.
15. Decree sheet be prepared accordingly.