JUDGMENT Sinha, J. - This is an application on behalf of Khusiram Benarshilal for an order that the award made by the Bengal Chamber of Commerce dated September 17th 1947, be declared invalid and illegal and be set aside. On January 24, 1946, the Petitioners sold to the Respondents 3,00,000 yards of hessian at Rs. 28 per 100 yards, delivery April-June, 1946, at 1,00,000 yards monthly. The contract was in Form No. A of the Indian Jute Mills Association and the number of the contract is 183. 2. The Petitioners delivered the goods in respect of April-portion and half of the goods in respect of May and June portions. A balance of 1,00,000 yards remained undelivered. 3. There is nothing in, writing to show what happened after June, 1946, but on September 21, 1946, the Respondents wrote a letter to the Petitioners which reads as follows:-- With reference to the above contract, we hereby extend with mutual consent the delivery date of the undelivered portion of the contract, i.e., 1,00,000 yds. of hessian cloth to 31st October, 1946. 4. On the same date the Petitioners replied denying that any arrangement had been made with the Respondents regarding extension of time for delivery and asked them to send their difference bill as the Petitioners were unable to deliver the goods not having received the same from their sellers. 5. On September 28, 1946, the Respondents replied to the letter. In that letter it was alleged that the Petitioners had been approaching the Respondents for extension of time for delivery through brokers to which the Respondents verbally agreed. The letter ended as follows:-- However as you do not agree now to the extended period of delivery, please arrange to deliver the balance of 1,00,000 yds. hessian cloth immediately on receipt of this letter failing which we would hold you responsible for any loss which we will have to undergo in this transaction. 6. On October 1, 1946, the Petitioners replied that they had nothing to add to their letter of the 21st September, 1946, and denied all responsibility on their part. 7. hessian cloth immediately on receipt of this letter failing which we would hold you responsible for any loss which we will have to undergo in this transaction. 6. On October 1, 1946, the Petitioners replied that they had nothing to add to their letter of the 21st September, 1946, and denied all responsibility on their part. 7. On October 7, 1946, the Respondents wrote a letter in which they stated as follows:-- We shall be glad if you will please deliver the goods without any further delay; otherwise we will be compelled to take legal steps against you and hold you responsible for the loss we will have to undergo in this transaction. 8. This letter was replied to on October 9, 1946, in which the Petitioners referred the Respondents to their letter of October 1, 1946. 9. On February 21, 1947, the Respondents made out two bills each for Rs. 1,750 being Bills Nos. 415 and 416. The bills were made out calculating the difference at Rs. 3-8 per 100 yards, and it was stated in the bills that the contract had been settled at Rs. 31-8 per 100 yards. The Respondents allege that the said bills were sent to the Petitioners but inspite of requests the Petitioners did not pay the same. The Petitioners deny this. 10. On May 19, 1947, the Respondents sent the bills to the Gunny Trades Association for presenting them to the Petitioners. The Respondents allege that the Petitioners declined to pay the same. The Petitioners allege that the bills were sent by the Gunny Trades Association to them in the beginning of June, 1947, and that the Petitioners accepted the bills and sent information to the Respondents to send their representative to collect the amount of the bills from the Petitioners and that the representative of the Respondents did not call to receive payment. 11. On June 4, 1947, the Respondents referred the disputes to the Bengal Chamber of Commerce and claimed Rs. 14,250 with interest and costs as difference between the contract rate and the market rate prevailing on October 31, 1946, which, according to the Respondents, was Rs. 42-4 per 100 yards. 12. 11. On June 4, 1947, the Respondents referred the disputes to the Bengal Chamber of Commerce and claimed Rs. 14,250 with interest and costs as difference between the contract rate and the market rate prevailing on October 31, 1946, which, according to the Respondents, was Rs. 42-4 per 100 yards. 12. In the Letter of Reference dated June 4, 1947, the Respondents alleged that by their letter dated September 28, 1946, they requested the Petitioners to arrange to deliver goods by the 31st of October, 1946, or they would hold them responsible for all losses they would have to undergo in the transaction. It is to be observed, however, that this is not a correct summary of the contents of the letter dated the 28th September, 1946. By that letter the Respondents called upon the Petitioners to deliver the balance of 1,00,000 yards of hessian cloth immediately on receipt of that letter. The Letter of Reference further alleged that the Gunny Trades Association had extended the period of delivery by a circular to the 31st October, 1946, and in support of that allegation, Ex. No. 7 annexed to the letter was referred to. Ex. No. 7, however, is Bill No. 415 dated the 21st February, 1947. The Letter of Reference further stated that the Respondents submitted the bills to the Petitioners who did not care to pay and that thereafter they sent the bills to the Gunny Trades Association on May 19, 1947, for realisation from the Petitioners who did not agree to pay. The statement ends as follows:-- We agreed to take this sum as we are both members although we were entitled to a much larger sum on the basis of the rate as on October 31, 1946, but they declined to pay the sum and as we had extended the date for delivery of the balance goods to October 31, 1946 and as the price on that date was Rs. 42-4-0 per 100 yds. we request the learned arbitrators to give an award for Rs. 14,250 with interest and costs in our favour. 13. The Petitioners answered the statement above referred to by their statement dated July 17, 1947. 42-4-0 per 100 yds. we request the learned arbitrators to give an award for Rs. 14,250 with interest and costs in our favour. 13. The Petitioners answered the statement above referred to by their statement dated July 17, 1947. In that statement the Petitioners denied that they had mutually arranged for an extension of time for delivery of the outstanding goods and stated that they had intimated to the Respondents their inability to deliver the goods and asked the Respondents to send the difference bill. They also denied that the Gunny Trades Association had extended the period of any contract to 31st October, 1946. They further stated that when the Gunny Trades Association informed them about the difference bill of the Respondents the Petitioners informed the Respondents and asked them to send their man to take payment of their bill but no man was sent to take payment. The Petitioners, therefore, requested the learned arbitrators that reference should be dismissed or if they decided that the Petitioners should pay the Respondents the difference on October 1, 1946, according to the rate fixed by the Gunny Trades Association then the Petitioners should not be called upon to pay the costs of the arbitration. Further statements were filed by the parties before the arbitrators to which it is not necessary to refer. 14. On September 15, 1947, the Registrar gave notice to the Petitioners that the arbitration would take place on Wednesday, September 17, 1947, at 3-30 P.M. 15. On September 16, 1947, the Petitioners wrote to the Registrar that they were ready to give oral evidence and the Respondents must be asked to give particulars of the extension and to give oral evidence to prove the same. There is no evidence when this letter reached the arbitrators. 16. On September 17, 1947, the arbitrators matte their award whereby they awarded that the Petitioners should pay to the Respondents in full settlement of their claim the sum of Rs. 11,000 together with interest thereon at 4 per cent. per annum from 26th February, 1947, until the date of the award. 17. Notice of the filing of the award was served on the Petitioners on February 11, 1948. Notice of Motion for the present application was taken out on March 11, 1948. 18. 11,000 together with interest thereon at 4 per cent. per annum from 26th February, 1947, until the date of the award. 17. Notice of the filing of the award was served on the Petitioners on February 11, 1948. Notice of Motion for the present application was taken out on March 11, 1948. 18. The first point which has been taken by the Petitioners is that the award should be declared to be illegal and invalid because there was no valid reference as there was no dispute which could be referred to arbitration. 19. It is argued that before there can be a reference to arbitration there must be in existence a dispute. A dispute arises where a claim is made by one party and repudiated by another. It is argued that before June 4, 1947, no claim was made for damages on the basis of the difference between the contract rate and the market rate as on the 31st October, 1947, and there was no repudiation of that claim. Therefore, there was no dispute, and there could not be a valid reference. 20. There can be no doubt that the existence of a dispute is essential for a reference and is a pre-condition to the arbitrator's jurisdiction. The real question is whether on the facts there was a dispute which could be referred to arbitration. 21. The dispute between the parties was whether the Respondents were entitled to damages for non-delivery of the goods and if so for what amount. According to the Respondents they were agreeable to accept the difference at the rate of Rs. 3-8 and sent the bills to the Petitioners for payment but the same were not paid. There was no binding agreement between the parties. They sent again the bills through the Gunny Trades Association for payment but the Petitioners declined to pay. The sending of the bills was merely an offer to take a lower sum in place of a higher one to which the Respondents were entitled and the offer lapsed by the Petitioners not accepting the same. The result was, the Plaintiff was entitled to claim as damages the difference between the contract rate and the market rate on October 31, 1946, to which date, according to them, time for delivery had been extended. The result was, the Plaintiff was entitled to claim as damages the difference between the contract rate and the market rate on October 31, 1946, to which date, according to them, time for delivery had been extended. The Petitioners' case was that there was a binding agreement between the parties whereby the difference payable was settled at Rs. 3-8, that pursuant to the agreement the bills were presented through the Gunny Trades Association, and that the Petitioners accepted the bills and sent information to the Respondents to send their man to collect the amount of the bills. 22. In my judgment these disputes were within the arbitration clause and could be referred. The question is whether these disputes were in existence before the date of reference. 23. I think even on the assumption that there was a binding settlement between the parties; if one party disputed that he was bound by the settlement by reason of the non-payment of the bills, there arose a depute within the wide terms of the arbitration clause which could be referred to arbitration. If, however, there, was no settlement but only an offer by the Respondents to take a lower sum, the offer not having been accepted the Respondents could refer the dispute, as to what amount should be paid as damages, to arbitration. The mere fact that no letter was written or no claim was expressly made for Rs. 14,250 before the reference does not in my view affect the matter. From the statements filed before the arbitrators it seems to be clear that there were pre-existing disputes between the parties which could be arbitrated upon. 24. The next ground on which the award is challenged is that the arbitrators misconducted themselves and the proceedings. 25. According to the terms of the contract, the due date for the undelivered quantity was the last-date of May for 50,000 yards and the last date of June for 50,000 yards. The breach occurred on those dates unless there was an extension of time. There was nothing in writing showing any extension. On September 21, 1946, the Respondents wrote a letter to the Petitioners where they purported to extend the time "with mutual consent." The Petitioners promptly denied that they had made any arrangement for extension. On September 28, 1946, the Respondents called upon the Petitioners to deliver immediately as they did not agree to the extension. On September 21, 1946, the Respondents wrote a letter to the Petitioners where they purported to extend the time "with mutual consent." The Petitioners promptly denied that they had made any arrangement for extension. On September 28, 1946, the Respondents called upon the Petitioners to deliver immediately as they did not agree to the extension. This is reported in the letter of October 7, 1946. It is not alleged that there was any oral extension after September 28, 1946. The position appearing from the admitted correspondence is that there was no extension after September 21, 1946, the extension purported to have been given by the letter of that date having been withdrawn by the letter dated September 28, 1946. 26. It was alleged in the Letter of Reference by the Respondents that the market rate on October 1, 1946, was Rs. 32 for 100 yards and the market rate was the same on October 9, 1946. 27. If the arbitrators accepted the rate alleged by Respondents to be prevailing on the 1st and 9th October, 1946, they could not make any award for more than Rs. 4,000 provided there was no extension beyond October 9, 1946. They, however, awarded Rs. 11,000. They could only have awarded that sum if they found there was an extension of time for delivery beyond October 9, 1946. 28. The Respondents in their Letter of Reference claimed difference between the contract rate and market rate prevailing on October 31, 1946. This they did on two grounds: (a) they alleged that by the letter of September 28, 1946, they had requested the Petitioners to arrange to deliver goods by October 31, 1946; This is untrue, for by the letter of that date the Respondents called upon the Petitioners to arrange for delivery immediately, as they did not agree to the extension, (b) they alleged that the Gunny Trades Association had extended the time for delivery to October 31, 1946, by a circular. 29. The arbitrators could only have awarded the damages they did, if they accepted either of the two grounds made by the Respondents for extension of time. No other ground has been suggested which could justify the award. 30. Neither of the two grounds was tenable. The first ground is negatived by the admitted correspondence. 29. The arbitrators could only have awarded the damages they did, if they accepted either of the two grounds made by the Respondents for extension of time. No other ground has been suggested which could justify the award. 30. Neither of the two grounds was tenable. The first ground is negatived by the admitted correspondence. The second ground is also baseless as there was no circular and it does not appear that the Gunny Trades Association had any authority to extend the time for delivery under a contract between two of its members. Exhibit 7 annexed to the Letter of Reference was referred to as the circular. Exhibit 7 is, however, a bill being Bill No. 415 for Rs. 1,750 submitted by the Respondents. No circular has been produced before me and no rule of the said Association has been referred to which entitled the Association to extend the time. 31. Even if it was open for the Respondents to allege after their letter of September 28, 1946, that there was an oral extension of time for delivery up to October 31, 1946, the arbitrators should have called upon the Respondents having regard to the nature and circumstances of the case, to adduce oral evidence in support of their case of extension and it was not possible for them to come to a finding as to extension without such oral evidence. 32. Learned Counsel for the Petitioners argues that from the said facts I should hold that the arbitrators have misconducted themselves and mishandled the proceedings, and that either they did not apply their minds or that they failed to appreciate the facts of the case and the points involved and a grave injustice has resulted therefrom. 33. In any event the arbitrators ought to have taken evidence in order to decide the question of extension. 34. Learned Counsel for the Respondents submits that the question of extension was raised in the statements of the parties and the arbitrators were entitled to come to a conclusion on the statements of the parties without taking any oral evidence. Even if the conclusion is wrong, the award cannot be challenged unless the mistake is apparent on the face of the award. The Court cannot look into the record of the arbitration proceedings and come to a different conclusion and set aside the award on the ground of misconduct. Even if the conclusion is wrong, the award cannot be challenged unless the mistake is apparent on the face of the award. The Court cannot look into the record of the arbitration proceedings and come to a different conclusion and set aside the award on the ground of misconduct. Further, no oral evidence was offered by the Petitioners and the arbitrators cannot, therefore, be held to be guilty of misconduct for not taking evidence. 35. It is quite true that this Court will not allow itself to be made a Court of Appeal against the decision of arbitrators. This Court must also give a wide latitude to the arbitrators to decide rightly or wrongly and the mistake of the arbitrators, if they proceed honestly and impartially, will not be corrected unless it appears on the face of the award. This Court must also "go very far in ignoring technicalities and irregularities on the part of arbitrators unless there is some real substance of error behind them." 36. The Court will not, however, release real and effective control over arbitrators or give them a free hand to decide according to law or not according to law as they think fit. The Court must retain sufficient control over them to prevent and redress any injustice on the part of the arbitrators. If the arbitrators do not appreciate the points involved in the case and do not apply their minds to them, or if they decide in a way in which no reasonable man occupying a judicial or a quasi-judicial position would decide, it is open to the Court to interfere with the award in the interest of justice. 37. "Misconduct" is an ambiguous word and includes any mishandling of the arbitration proceedings or any neglect of duty on the part of the arbitrators which is likely to lead to substantial miscarriage of justice. A gross mistake may be evidence of misconduct. It does not mean personal turpitude such as corruption and bribery. 38. Further the arbitrators in deciding whether they will take oral evidence or not must exercise their discretion judicially, even where the parties have left it to the arbitrators to decide whether to take oral evidence or not. Rule 15 of the rules of arbitration of the Bengal Chamber of Commerce gives power to the arbitrators if they think fit, to hear oral evidence. Rule 15 of the rules of arbitration of the Bengal Chamber of Commerce gives power to the arbitrators if they think fit, to hear oral evidence. This power conferred on them involves a duty on their part to hear oral evidence where the nature and circumstances of the case are such that it is impossible for them to decide one way or the other without taking oral evidence. It is true that the rule gives them a wide power but if the arbitrators do not exercise the power in a judicial manner, the Court may interfere on the ground of misconduct. 39. I think that having regard to the materials before the arbitrators and the circumstances of the case it was impossible for the arbitrators to decide as they did, if they really applied their minds to the facts of the case. I, therefore, hold that the arbitrators were guilty of misconduct and I set aside the award with costs.