M. K. Chawla ( 1 ) THE scope and powers of the Courts to interfere with the conclusions of the Arbitrators in non-speaking awards, have been clearly demarcated and defined by authoritative pronouncements of the various High Courts and the Supreme Court. There is no use to state the well settled principle of law laid down in this behalf, except to keep in mind that prima facie in view of the non-speaking nature of the award the Court is not required to go into the findings of fact. The arbitrator having decided the disputes between the parties in a manner which appeared to him most just and reasonable, will not entitle the Court to speculete, where no reasons are given, as to what impelled him to arrive at a particular conclusion. It is presumed that the Arbitrator arrived at his conclusion by a certain process of reasoning. It is also well settled that it is not open to the Court to attempt to probe the mental process by which the Arbitrator has reached his conclusion, where it is not disclosed by the terms of the award. The Court cannot re-examine and reappraise the evidence and to sit in appeal over the conclusion of the Arbitrator in proceedings to set aside the award. The mere dissent by a Court from Arbitrator s conclusion is not enough to set aside the award unless it can be shown by anything appearing from the face of the award that the Arbitrator has tred himself down to some legal proposition which is unsound. This setties the controversy that as a rule, the findings of the Arbitrator in a non-speaking award must be held to have become final, conclusive and binding on the parties. What about the speaking/reasoned awards. In this behalf also the endeavours of the Courts from the very beginning have been to approach an award with a desire to support it if that is reasonably possible, rather than to destroy it by calling it illegal. Under Section 30 of the Arbitration Act the Court exercises a limited jurisdiction. What about the speaking/reasoned awards. In this behalf also the endeavours of the Courts from the very beginning have been to approach an award with a desire to support it if that is reasonably possible, rather than to destroy it by calling it illegal. Under Section 30 of the Arbitration Act the Court exercises a limited jurisdiction. When the arbitrator give reasons for his award this does not open the doors to the Court to see what the contention of the party was and what was the evidence given by the parties on it and then examine the evidence to see whether the disputed findings of fact are sufficiently supported by the evidence or not. The theory propounded that the Court can see the reasonableness of the reasons, if accepted, "would act at the root of the whole purpose of Arbitration, the basic idea of which is that the Arbitrator s decision shall be final. " It has also been repeatedly emphasized by the Courts that the Arbitrator as a sole Tribunal is entitled to decide rightly or wrongly. It is not a misconduct on the part of the Arbitrator to come to an erroneous decision whether his error is one of fact or law and whether or not his finding of fact are supported by evidence. Under no circumstances the award of the Arbitrator can be challenged or opposed on the short ground that there was no sufficient evidence or that it was too tenacious or the like. From the Arbitrator what is wanted is "a practical decision on the disputed issues" and nothing more or less. Once the Arbitrator indicates his reasons for coming to a conclusion, the Court is not permitted to re-appraise the evidence sitting as a Court of appeal over the arbitrator s award. The Courts have gone to the extent of holding that it is not misconduct on the part of the Arbitrator to go wrong in law so long as the mistake of law does not appear on the face of the award. With this background let us analyse the facts of the present case, with a view to decide the objections of the State Trading Corporation. Sh. V. Bhargava (retired Judge of the Supreme Court) was appointed as the sole arbitrator to decide the disputes of 150 sugar mills. With this background let us analyse the facts of the present case, with a view to decide the objections of the State Trading Corporation. Sh. V. Bhargava (retired Judge of the Supreme Court) was appointed as the sole arbitrator to decide the disputes of 150 sugar mills. The Learned Arbitrator after hearing the parties at length made and published his award on 10-6-1981. It was a non-speaking award. The State Trading Corporation (for short, The STC ) filed a petition for setting aside the said award on almost all conceivable grounds. The matter came up before D. R. Khanna, J. By his detailed order dated 30th of July, 1982 the objections were accepted, but instead of setting uside the award, it was remitted to the learned Arbitrator for re-consideration on certain aspects only. Against this very order refusing to set aside the award, the STC filed special leave petition in the Supreme Court which was ultimately dismissed as withdrawn. The relevant portion of the order of Khanna, J. remitting the award for re consideration is contained in paragraph 64 of the Judgment. It reads as under: "in my considered opinion the award in the present case suffer from infirmity when the learned Arbitrator overlooked the very material documents relating to the restrictions placed by the Government in July, 1977 on the export of sugar. The position in these documents has been disclosed at some length above in paras 29, 33 and 59. It is for the learned arbitrator to consider their implications on the controversies raised before him whether the contract became frustrated and whether they could not be treated as alive after 31. 5. 77 or July, 1977. These documents can also throw light how far the observations made above, specially in paras 47 and 48 with regard to the non marketing of sugar in domestic market after 31-5-77 have relevance with the sugar mills and the Government were interested to not allow the domestic price of the sugar to fall. How far in that STC could be made liable, has be considered. The clause in the contact about 5% of the stipulated quantity being less lifted, has not been REFERRED TO to by the learned Arbitrator. In the present case where damages have gone to crores, those 5% can have material bearing. Similarly, documents refered to in paras 48. How far in that STC could be made liable, has be considered. The clause in the contact about 5% of the stipulated quantity being less lifted, has not been REFERRED TO to by the learned Arbitrator. In the present case where damages have gone to crores, those 5% can have material bearing. Similarly, documents refered to in paras 48. 51 to 54 and others having bearing on the computation, of damages may be looked into. Their probation value has to be considered for arriving at just decision. I am, in the circumstances, constrain to remit back the award to the learned arbitrator for consideration on all these aspects. " ( 2 ) THE bare reading of the concluding portions of the judgment clearly indicate that the scope for the learned Arbitrator for reconsideration was very limited. Pursuant to the directions of Khanna, J. the learned Arbitrator considered the matter afresh. He not only considered the scope of the documents REFERRED TO to in para 64 of the judgment, and other relevant correspondence throwing light on the controversy but also discussed the law on the subject. By his award dated 1st May, 1984, the learned Arbitrator confirmed his earlier award. The award is now sought to be challenged on various grounds, including the objection that it is perverse, based on no evidence, suffers from arbitrariness, misconduct of the Arbitrator inasmuch as he has travelled beyond the scope of the directions of Khanna, J. and that the errors of fact and law are apparent on the face of the award. The petitioner-claimant controverted each and every objection. On the pleadings of the parties the following issues were framed: "1. Whether the award/order dated 1. 5. 84 is bad in law for not examining/considering the matters which had been specifically directed to be considered by the remission order of this Court; if so, to what effect? 2. Whether the award in dispute is liable to be set aside for the reasons stated in the objection petition. 3. Relief". ( 3 ) AS directed, the parties filed affidavits by way of evidence. The objectors filed the affidavit of Sh. Tek Chand whereas the respondent/claimant relied upon the affidavit of Sh. J. S. Mehta, Secretary General of ISWA. ( 4 ) I have carefully perused the objections, the affidavits and the oral and documentary evidence placed and proved before the learned Arbitrator. The objectors filed the affidavit of Sh. Tek Chand whereas the respondent/claimant relied upon the affidavit of Sh. J. S. Mehta, Secretary General of ISWA. ( 4 ) I have carefully perused the objections, the affidavits and the oral and documentary evidence placed and proved before the learned Arbitrator. My findings on the issues are as under:- "issue Nos. 1 and 2. " ( 5 ) THE learned counsel for the parties agree that under Issue No. 1 this Court has only to examine, whether the arbitrator has complied with the directions of this Court contained in the order of remission or not, and then to consider the objections, subject matter of Issue No. 2. At this stage it will be relevant to keep in mind that even Khanna, J. after going through the documents, now sought to be re-appraised by the learned Arbitrator, refused to set aside the award, but preferred TO to issue the directions for their reconsideration. Normally, the Arbitrator is expected to carry out and abide by the order remitting the matters to him. If he has not, then certainly the objectors have a grouse, but if the directions have been complied with, and are borne out on the face of the award, then certainly this Court would be handicapped in setting aside the award on this score only. At the outset the learned Arbitrator in his impugned award, made the mention that, "he had considered all the points and aspects, which were mentioned by the High Court to throw doubts on the award. . . . . . " Before proceeding to decide this controversy the learned Arbitrator also remarked, "thus, counsel for both the parties have had full opportunity to argue the case, and I have taken into consideration all ihe arguments advanced at various stages by both the parties. " ( 6 ) THIS clearly indicate that not only the directions contained in the remission order were complied with but other aspects were also looked into. Simply on this observation of the learned Arbitrator, prima facie this Court will be justified in making the award the rule of the Court. However, with a view to dispel the doubts of the objectors I am inclined to consider the various grounds raised before Court, keeping in mind the limits within which this Court has to function, in such like cases. However, with a view to dispel the doubts of the objectors I am inclined to consider the various grounds raised before Court, keeping in mind the limits within which this Court has to function, in such like cases. The learned counsel for the respondent, Sugar Mills, however, maintain that the conclusion reached by the learned Arbitrator is not only based on the documentary evidence but is also a legal one. The correct law has been applied to the facts of the present case and on appreciation of the documents, a correct conclusion has been reached. ( 7 ) THE first and foremost contention of the learned counsel for the objector is that the learned Arbitrator has decided the issue of passing of the property by taking recourse to the provisions of Section 23 of Use Sales of Goods Act, in the absence of any pleadings or proof. The said finding, according to the learned counsel is beyond the scope of para 64 of the judgment of Khanna, J. remitting the letter for reconsideration. This plea of passing of the property in favour of STC was never raised before the learned Arbitrator, either in the statement of claim or in the reply, of tlie STC. In fact there was no averment to such effect. Furthermore, no issue to this effect was ever framed. This plea was raised and entertained for the first time, before the Arbitrator at the time of hearing arguments. Even otherwise according to the learned counsel the bare perusal of the terms of the contract would indicate that the property in the goods being unascertained could not have legally passed to he objectors. ( 8 ) THE learned counsel also REFERRED TO to Section 18 of the Sales of Goods Act which postulates that the property in the goods cannot pass until they are ascertained. Furthermore, Section 23 (1) provides that the property in unascertained goods may pass if they are unconditionally appropriated to the contract either by the buyer with the assent of the seller or by the seller with the assent of the buyer. Sub-section (2) creates a legal fiction regarding unconditional appropriation. The necessary pre-requisite for its application are:- (A) Goods in a deliverable state must be: (b) Delivered to the buyer or carrier; or other bailee by the buyer. ( 9 ) NONE of these ingredients have been either alleged or proved on record. Sub-section (2) creates a legal fiction regarding unconditional appropriation. The necessary pre-requisite for its application are:- (A) Goods in a deliverable state must be: (b) Delivered to the buyer or carrier; or other bailee by the buyer. ( 9 ) NONE of these ingredients have been either alleged or proved on record. In support of his contention that the goods were not in deliverable state and could not be passed to the buyer, the learned counsel placed reliance on the observations appearing at para 709 of the Hallsbury Laws of England, 4th Edition, Volume 41. It states:- "ascertainment of goods necessary" where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer, unless and until the goods are ascertained. In particular where the individuality of the goods depends upon their being separated, weighed, measured, tested or accounted, or upon some other act or thing being done in relation to them for their ascertainment, the goods are not ascertained until such act or thing is done. Goods are unascertained notwithstanding that they are to be taken from the specified larger bulk, if the identity of the position so to be taken is unascertained". ( 10 ) RELIANCE was also placed on the observations made at page 157 of the Sales of Goods Act (5th Edition) by Sh. P. S. Atiya. It reads as under:- "one thing at least is clear that where an unidentified part of a bulk is sold there can be no appropriation until there is a severance on the part sold from the rest. " ( 11 ) SUPPORT was also sought from the judgments in AIR 1956 Madras 168, AIR 1956 Punjab 21 7. Reliance was also placedon the terms of the contract under which the sugar mills were required to perform various functions, such as, the packing of the sugar, determination of quality and its weight and finally the delivery of the goods under clean railway receipt. ( 12 ) THE learned Arbitrator on consideration of the revisions of Section 23 of the Sales of Goods Act and the documents REFERRED TO to and relied upon by the parties in this behalf came to the conclusion that on receipt of release orders in favour of STC various sugar mills appropriated the goods for specific contracts and the goods were in a deliverable state. The unconditional appropriation was done by the factories with the assent and knowledge of STC and was never opposed by the S 1c. In fact even the STC always treated the contracted sugar lying with the sugar factories as their sugar. He was further of the opinion that the requirements of Section 23 (2) were fully satisfied in this case inasmuch as the sugar (which was subsequently sold at loss) had been earmarked and kept separately by the bailee sugar factories for despatch to the buyer and they did not have the right of disposal. The STC must be deemed to have unconditionally appropriated the goods to the contract. Prima facie this finding, is a finding of fact which cannot be re-agitated in these proceedings. Farthermore, the bare look at the various clauses of the contract would reveal that it was not a conditional one as alleged. The terms and conditions contained in the contract in fact relate to the conditions of delivery of the consignment and it is well settled that the property in goods can pass to the buyer even without the delivery of goods. Section 23 itself provides for property passing where the contract is for the sale of unascertained goods. In accordance with this provision there party in the goods passes to the buyer once the unascertained goods are in deliverable state and are inconditionally appropriated to the contract either by !hc seller with the assent of the buyer or by the buyer with the assent of the seller. As per the evidence on record it stands proved that in the present case on the receipt of the release orders the factories had appropriated the goods to the specific contracts and further they were in a deliverable state. The unconditional appropriation was done by the factories with the assent and knowledge of STC and in fact this appropriation was never opposed by the STC. ( 13 ) ON the contrary the conduct of the STC all alone have been to treat the sugar as their property. The following documents will throw light on this aspect. The consideration of these letters will also indicate that the learned Arbitrator not only perused, considered their scope, but also draw a right conclusion. ( 14 ) ON 19. 7. The following documents will throw light on this aspect. The consideration of these letters will also indicate that the learned Arbitrator not only perused, considered their scope, but also draw a right conclusion. ( 14 ) ON 19. 7. 77 the Cabinet Committee on Economic Affairs decided that sugar should be exported during 1977-78 session to the extent of "commitment made", in a manner which would minimize the extent of financial loss. At that time there were stated to be only two firm export orders with the STC, one from EEC for 25000 tons and the other for 1 lac tons from Iran. In compliance with the said decision, Sh. S. P. Aggarwal, Under Secretary vide his letter dated 10. 8. 77 informed the Chief Marketing Manager of the STC, that the Corporation should immediately go ahead to meet the export commitment, undertake to export sugar to Iron and ECC and clear the 1. 30 lac tons of sugar lying in stock with the STC. However, by that time Iranian side indicated that they were not interested for the import of Indian sugar, while ECC expressed their inability to lift their quota before March 1978. The sugar factories on the other hand pressed for the lifting of the contracted sugar. ( 15 ) FACED with this difficult situation the Secretary to the Government of India vide his noted October 1977 for the Cabinet Committee traced the history of the export of sugar and further specifically stated that "the State Trading Corporation has the following stock available with them at present:-These stocks were out of 1976-77 crops and earmarked for exports. ( 16 ) IT was also mentioned that since the sale of sugar in the domestic market is considerad inadvisible. the STC has no other alternative but to find new market abroad for the stock hold by it. The decision of the Cabinet was sought as to whether the STC should be directed to the export of 1. 30 lac tons of sugar which is lying in stock with, to avoid likely loss of about 15 37 crores, or what other course should be adopted. The Cabinet Committee on economic affairs in its meeting held on 8 12. 77 considered the note and decided that 1. 13 lac tons of sugar lying with the STC should be sold in the market and not exported, at a loss. The Cabinet Committee on economic affairs in its meeting held on 8 12. 77 considered the note and decided that 1. 13 lac tons of sugar lying with the STC should be sold in the market and not exported, at a loss. This position was also accepted by the STC vide their letter dated 26-12-77 to the Manager 1s1ec and the material portion of the said letter reads as under:- "you are aware that approximately 66,000. 00 metric/tonnes of free sale sugar of 1976-77 crop purchased at Ks. 2911- per quintal is lying undespatched with the factories. Food Department has agreed to cancel these undespatched quantities of individuals and to release the same out of 1977-78 production simultaneously. " ( 17 ) IT appears that the S TC also obtained legal opinion from the Law Department who advised that unless release orders were cancelled at the instance of STC, the stock lying with the factories will be treated as the property of the STC. This was the very stand of the STC before the learned Arbitrator. The bare perusal of the affidavit of Rcijinder Singh, Chief Marketing Manager, STC and his cross examination makes the position clear. ( 18 ) IN compliance with this stand, backed by the legal opinion STC sought further information, regarding the total quantity of sugar released; total quantity despatched and total undelivered quantity lying with the factories from their agents. Even after having been informed of this exact position of the stock of sugar lying with the factories, they did not move in the matter. From the letters/correspondence it can safely be said that the STC treated the contracted such as their own lying in a deliverable state with the factories. But for reasons best known to the STC, no steps were taken to cancel the ralease orders, inspite of reported notices/reminders of the sugar factories. ( 19 ) ON the contrary, the sugar factories under no circumstances could have disposed of the sugar contracted for, in the open market before the delivery date or subsequently till the cancellation of the realease orders. Clause IV of the agreement by which the STC purchased quantity 1,25,000 metric tonnes of sugar for export show that the factories were required to keep ready the contracted sugar for despatch on or before 31st May, 1977. Clause IV of the agreement by which the STC purchased quantity 1,25,000 metric tonnes of sugar for export show that the factories were required to keep ready the contracted sugar for despatch on or before 31st May, 1977. This was subject to the condition of issuance of valid documents including the release orders, the despatch instructions, the block transfers and the loans etc. The contents of release order further confirm the view that the factories were required to despatch the sugar as per the instructions, which in this case were never issued by the STC or their agents on or before 31-5-1917. Then the contracted sugar was not lifted within the stipulated period, all the factories wanted to dispose of the said sugar and sought permission from the agents of the STC. Even this step was not allowed to be taken by the sugar factories as is clear from one of the letters dated 11-10-1977 issuedby the Indian Sugar Industry Export Corporation Ltd. to the Nizam Sugar factory. By this letter the export corporation informed the sugar factory, that their principals i. e. , the STC, have advised them not to issue any despatch instructions presently. It was also given out that not only in the case of Nizam Factory but also in the case of all other factories in India no further despatch instructions have been issued on the basis of their principal s advice. It is an admitted case of the parties that at no relevant point of time the desfetch instructions have been issued. As the contracted sugar was in the state of deterioration the sugar mills preferred TO to remind the STC that in spite of the information sought for the disposal of undespatched quantity of sugar out of 1976-77 production, they are still waiting for the issuance of despatch instructions. In this letter it was also made clear that if the despatch instructions are not issued for the balance quantity within the stipulated time, they will consider it a breach of contract on their part and the factories will be within their right to dispose of the balance quantity of sugar in the free market at their risk and cost. In spite of the receipt of this letter, the STC never cared to send any reply. In spite of the receipt of this letter, the STC never cared to send any reply. Similarly, on 20th July, 1978 the Indian Sugar Mills Association again drew the attention of the STC that even after the expiry of 15 days period, no action has been initiated by the STC in sending the despatch instructions for the unlifted sugar lying with the various sugar factories. It was also made clear that this will be treated as a breach of the contract and the Sugar Mills Association will have on other option but to advise the sugar factories to sell the unlifted sugar in free market and claim the losses and damages suffered by them. Surprisingly enough even this letter was not either acknowledged or replied. ( 20 ) ALL these facts taken together, leave no doubt in my mind that there is ample evidence on record to show that the STC neither terminated the contract nor treated it as cancelled for the disposal of the unlifted sugar on or before 31-5-1977, inasmuch as by not issuing the despatch instructions for the disposal of the sugar, as per the contract. They forced the sugar mills to keep the stock of contracted sugar with them on their behalf. It may be, and in fact there could not be, any discussion on the provisions of Section 23 of the Sales of Goods Act, according to the learned counsel for the STC, there was no pleading from the side of any of the party. As to how and under whit circumstances the learned arbitrator came to consider this legal proposition, is stated in the order itself. The relevant portion reads as under: "mr. L. N. Sinha in his oral arguments did not very much emphasize the point which had led the High Court to remand the case to me and the other hand raised two new points. Consequently, I shall first deal with the points raised by Mr. Sinha. The first point raised was that the sugar which was sold at a loss never vested in the STC in view of the provisions of Section 23 of the Sales of Goods Act, 1980. The second point was that in the claim, the claimants had themselves pleaded that the breach of the contract by the STC took place on 31st May, 1977 when delivery was not taken of about 66,000. The second point was that in the claim, the claimants had themselves pleaded that the breach of the contract by the STC took place on 31st May, 1977 when delivery was not taken of about 66,000. 00tonnes of sugar from the various sugar factories and the sugar factories should have sold the sugar as soon as possible after the breach of the contract had taken place in which ca:. e there would hardly have been any losses, if at all, because there had been no fall in the prices soon after 31st May, 1977". ( 21 ) AS is clear from the above observation. Section 23 of the Sales of Goods Act for the first time was raised by the counsel for the STC. Its scope on the facts of this case came in for interpretation, and it was dealt with at length. This provision had a very close link with the question of continuation of the contract, which in turn require consideration of the various documents. After going through the relevant law and the judgment cited at the Bar I am of the view that a correct interpretation of these provisions has been placed keeping in view the circumstances under which the parties were placed. No legal infirmity in the impugned award either exist or have been pointed out by the counsel for STC. Even otherwise as per the judgment reported as M/s. Tarapur and Co. v. Cochin Shipyard Ltd. 1 once a question of law is specifically REFERRED TO and the parties desired to have a decision on this specific question from the arbitrator than from the Court, then the Court will not interfere with the award of the arbitrator on the ground that there is an error of law apparent on the face of the award, even if the view of the law taken by the arbitrator does not accord with the view of the Court. It was further observed that the view that common law courts were very reluctant to part with its jurisdiction has hardly any relevance where a specific question of law including the one touching the jurisdiction of the aibitrator is REFERRED TO to the arbitrator for his decision. Even if the decision of the arbitrator does not accord with the view of the Couit. Even if the decision of the arbitrator does not accord with the view of the Couit. the award cannot be set aside the sole ground that there is an error of law apparent on the face of it. ( 22 ) AS observed earlier this provision has been correctly applied to the facts of the present case by the learned arbitrator and even if there is some distinction which is sought to be pointed out by the learned advocate for the STC on the basis of some judgments, this Court will be reluctant to enter into this controversy. In this view of the matter the award under challenge cannot be said to be perverse or bad in law, on this score. ( 23 ) THE next question which requires going into is, as to whether the contract between the parties stood frustrated, after the imposition of ban by the Government of India for the export of sugar. According to the learned counsel since the contract by the S-TC with the sugar mills was, for the purchase of sugar for export and export only, the same automatically stood frustrated when the Government banned the export of sugar. This fact according to him was in the knowledge of the respondents and is also borne out from the correspondence, exchanged between them. This argument is also devoid of any substance being contrary to the evidence on record. In fact the documentary evidence REFERRED TO to and discussed earlier by itself is a complete answer to this argument. However, at the risk of petition, we may hurriedly scans through the admissions of the STC relevant on this aspect of the case. Useful reliance can be placed on the cross examination of Shri Rajinder Singh, the then Marketing Manager of the STC, who frankly admitted that there was a direction from the Government to honour the existing commitment for export, which included 66,000 tonnes of unlifted contracted quantity of sugar lying withthe sugar factories. This commitment according to him, relates to sugar factories and not to the contract made with the foreign buyers. The STC itself has taken this very stand in their letter dated 10-10 1977 to the Nizam Sugar Factory. The factory was informed that the export of sugar is under suspension since April, 1977, sending finalization of sugar export policy by the Government. The STC itself has taken this very stand in their letter dated 10-10 1977 to the Nizam Sugar Factory. The factory was informed that the export of sugar is under suspension since April, 1977, sending finalization of sugar export policy by the Government. As there were no shipments no procurement of sugar was effected by STC. The agreement entered into by ISIC on behalf of STC. the sugar will be taken from the sugar factories, as per requirements of shipment schedule agreed upon with the foreign buyers. The STC then assured the factory that the agents of STC would be taking steps to procure undelivered quantity as soon as the sugar is required at ports for further shipment. By this letter the intention of the STC was to direct the sugar factories to keep ready or hold over the undelivered contracted sugar as the same can be taken delivery at any time. This inference stands fortified from another letter dated 11-10-1977 of the ISIEC to the Nizam Sugar Factory, informing that their principals STC has advised them not to issue despatch instructions at this time. The next important Circular based on the decision of the Cabinet Committee dated th December, 1977, in fact settles this controversy. The Cabinet Secretary informed the concerned authorities that the Cabinet has decided that 1. 30 lakh tonnes of sugar with the STC may be sold in the local market and not exported at a loss. The committee further directed that the Department of Food should closely monitor the internal retail price of sugar and take steps, as necessary to ensure that the average retail price remains Rs. 390. 00 per quintal. On the receipt of this Circular the best course left with the STC was to cancel the release orders and allow the sugar factories to dispose of the unlifted sugar. For reasons best known to the STC no steps in this direction were taken and instead forced the factories to hold over the stock. The intention of the STC is further clarified if one peruse the letter dated 10th January, 1978 from the Managing Director, National Federation of Co-operative Sugar Factories Ltd. to the agents of the STC, informing that STC has not agreed to the cancellation of the release orders. The intention of the STC is further clarified if one peruse the letter dated 10th January, 1978 from the Managing Director, National Federation of Co-operative Sugar Factories Ltd. to the agents of the STC, informing that STC has not agreed to the cancellation of the release orders. Admittedly as per the agreement it was the duty of the STC to obtain release orders for the sugar factories, and they could only be cancelled at their request. The STC at no stage asked the Government to cancel the release orders, leaving no option for the factories to keep the stock until the decontrol of sugar. As observed earlier the STC did not care to acknowledge or send any reply to the persistent requests of the sugar mills, that the stock of undelivered sugar is lying with them for the last about 10 months as a result of which these factories are facing considerable hardship and in case the necessary steps in this regard are not taken, the loss will be entirely that of the STC. ( 24 ) FACED with this dilemma the Minister of Commerce and Civil Supplies made a statement in the Lok Sabha in answer to a question, as to whether the Government has stopped the export of sugar and if so the total loss suffered by it?, "the Government has never stopped the export of sugar and as such there is no question of any loss. " He further stated that in July 1977, the Government has decided that during the year 1977-78 sugar should be exported to the extent of the existing commitment. In spite of this assurance, the STC neither cancelled the release orders nor sent the despatch instructions for the disposal of unlifted sugar for the internal marked with the result that the sugar mills suffered heavy losses at the time of the disposal of the sugar, after the lifting of the ban on 16-8-1978. ( 25 ) EVEN otherwise the question of frustration contract does not arise because a concluded binding contract has come into existence under which the STC purchased sugar from the factory. As observed earlier, the property in the goods had already passed to STC and the goods viz. the contracted sugar for export was all along treated is the property of the STC. As observed earlier, the property in the goods had already passed to STC and the goods viz. the contracted sugar for export was all along treated is the property of the STC. This proposition stands fortified from the observation in paragraph 424 of the Benjamin s Sales of Goods Act (end edition ). It is stated as under:- "a contract of sale may be frustrated where, after the contract has been entered into, but before the property in the goods has passed to the buyer, without default of either parties, the contract has become impossible of legal performance, or incapable of being performed because the circumstances in which the performance is called for rendered it a thing radically different from that which was under-taken by the contract " ( 26 ) THE Supreme Court has also held to the same effect in a case reported as Raja Dhruv Dev Chand v. Raja Harmohlnder Singh and another. 2 The observation reads as under: "there is a clear distinction between a completed conveyance and an executory contract, and events which discharge a contract do not invalidate a concluded transfer. " ( 27 ) IN the or sent case after the SIC purchased the sugar, they were only required to perform two duties i. e. (a) Lifting of sugar from the factories; and (b) payment for rice by the STC to sugar factories: Neither of the aforesaid two obligations arising out of the contract were incapable of being discharged by the alleged Government prohibitions. According to the pleading of the STC they could not lift the same not because of the alleged Government ban, but because the foreign buyers, namely Iran and EE Countries refused to take sugar from the STC. In view of this stand, the STC cannot claim the benefit of Section 56 of the Contract Act as is now sought to be made before this Court. At this stage it will be relevant to keep in mind the observations of D. R. Khanna J. , in the impugned judgment which lays down that the in such circumstances the remedy if any for the STC was to sue foreign buyers and claim damages. If the STC chooses not to do so, it cannot absolve itself from its contractual liability towards the claimant factories. If the STC chooses not to do so, it cannot absolve itself from its contractual liability towards the claimant factories. ( 28 ) IN view of the fact that the STC had all along been representing that their sugar lying (purchased by them) with thefactories would be lifted as per the schedule. The claimants could not have legally sold the said sugar of STC. It is well settled that if the buyer does not carry away the goods bought within the reasonable time, the seller nny charge him warehouse room; or he may bring an action for not removing them, should he prejudiced by delay. But the buyer s neglect does not entitle the seller to put an end to the contract. ( 29 ) ON the other hand, had the sugar factories sold the sugar purchased by STC the claimant would have exposed themselves thin action on tort. All this facts taken the their have no doubt in my mind that there was no question of the contract having been frustrate as alleged. ( 30 ) REGARDING the issue as to the extension of contract, learned counsel for the objector contents that as per terms of the contract, the correspondence and the transaction between the parties make it clear that the contract between the STC and the claimant was for purchase of sugar for the purposes of export and export only, and that delivery had to be made to the STC by sugar mills latest by 31-5-1977 The shipment of the sugar as per the contract was to be made during April/june 1977 and this fact was clearly known to the parties. The Government of India, however, suspended the export of sugar sometime in April, 1977 with which fact the claimants were fully aware. In view of these circumstances learned counsel contents, that the date of breach, if any, was on or by 31-5-1977. After the contract is breached, there could be no extension of the date for the performance of the contract, and even assuming that an extension was possible, it could not be by a unilateral act. It has to be with the consent, wherein all terms must be settled by the parties. After the contract is breached, there could be no extension of the date for the performance of the contract, and even assuming that an extension was possible, it could not be by a unilateral act. It has to be with the consent, wherein all terms must be settled by the parties. In support of this submission learned counsel placed negligence on a number of judgments, the substance of which is as under:- "under Section 55 of the Contract Act a promisee is given the option to avoid a contract on the failure of the promises to perform it of the time fixed by the contract. But if the premisses exercise the option and does not put an end to the contract, that fact does not mean that the time for the performance of the contract has been automatically extended. The mere fact of the promisee not exercising the option to avoid the contract cannot alter or extend the date of performance fixed under the contract under Section 63 of the Contract Act, extension can only be by agreement between the parties and not by unilateral act of the promisee. ( 31 ) ACCORDING to the learned counsel, the learned Arbitrator instead of examining whether there was extension of time or not and as to whether the sugar mills had taken steps to mitigate the damages, proceeded straightaway to hold that the sugar could not be sold by the mills because according to him the release orders were not in favour of the STC and, therefore, till the latter pot them cancelled (which was its duty) there could be no question of sale of the sugar, and that the property in the sugar had vested in the STC. On this aspect learned counsel submits that as far the duty to obtain cancellation order is concerned, there was no such stipulation or obligation on the part of the STC, either expressed or emplied, under the contract. The only obligation was to obtain rule as orders. In fact, according to the learned counsel, the sugar mills did not desire cancellation of release order for the simple reason that there was a surplus situation. ( 32 ) NONE of these arguments prima facie find support of the material placed and proved before the learned arbitrator. The only obligation was to obtain rule as orders. In fact, according to the learned counsel, the sugar mills did not desire cancellation of release order for the simple reason that there was a surplus situation. ( 32 ) NONE of these arguments prima facie find support of the material placed and proved before the learned arbitrator. One has only to carefully peruse the terms and conditions of the agreement under which the STC purchased the sugar from the mills. Clause IV of the Agreement is very material on this aspect The bare perusal of this clause would reveal that the stipulated date is only relevant with regard to obligation of the factory to complete despatches by 31-5-1977 subject to the conditions that all the formalities required to be completed by STC are completed at least 30 d;iys before the last date of delivery by the factories i. e. the factories should have in their possession 30 days before the last date of delivery all the valid documents which include (i) release orders (ii) despatching instructions (iii)block transfers, despatches and ARA forms etc. to enable the factories to complete the despatches by that date. In case of breach by the STC of the above Conditions, the result thereof is contemplated in the third paragraph of the said clause, wherein option has been given to either despatch the quantity or treat it as cancelled partially or wholly. As already observed earlier the contract was kept alive by both the parties even after the stipulated date of 31st May, 1977. Further more, the S TC has been representing to sugar factories that they would be lifting the contracted quantity as per requirement of shipment schedule. The sugar purchased by the STC was not even marketable at the instance of the sugar factories prior to the refusal of the STC to lift the sugar, or before the cancellation of the release orders the Sales of Goods Act. Even as late as July 7, 1978, the STC exchanged the correspondence under the caption "procurement of unlifted quantity of 66,000 tons of 1976-77 production. " " This treating the sugar as their own. Termination of the contract even if the time is said to be essence of the contract will have to be by a proper notice under Section 66 of the Contract Act. " " This treating the sugar as their own. Termination of the contract even if the time is said to be essence of the contract will have to be by a proper notice under Section 66 of the Contract Act. Even otherwise the date of breach could not be said to be 31-5-1977 as some of the contracts were signed between ISIC and sugar factories on or after 31-5-77. In fact, STC has also lifted some quantity of contracted sugar even after 31-5-77. Correspondence between ISIC and Modi Sugar Mills, one of the claimant, also shows that ISIC was insisting upon signing of contracts even as late as August 11, 1977. Even some of their lease orders were issued as late as on 28-5-77, which could not have reached the mills before 31-5-77. In fact clause 4 never stipulated this date as the last date for the STC to lift sugar. This date was material only in respect of factories obligations. STC was free to lift the sugar even after that date. On the other hand the sugar factories could have never treated the contract as having come to an end after May 31, 1977, either under Sections 55/56 of the Contract Act or under Clause IV ofthe Agreement. At no point of time the STC repudiated the contract. Rather, they continued extending promises to the sugar mills that they would lift the sugar as and when shipment schedule is fixed. In this way the time for performance of the contract must be deemed to have been extended. In the present case the extension of the performance of the contract was not to any particular fixed date and accordingly to the agreement to postpone the performance for an unspecified time operates as an extension and consequently the date to be taken must be one at which there is a failure or refusal to perform on the part of the STC. Therefore, the relevant date of breach in this case will be expiry of the notice period specified in the final notice of the sugar factories calling upon the STC to lift the sugar. Under these circumstance the date to be taken into account for the purpose of assessment of damages cannot be 31-5-77 but the date on which there is a failure or refusal by the STC to perform the contract. Under these circumstance the date to be taken into account for the purpose of assessment of damages cannot be 31-5-77 but the date on which there is a failure or refusal by the STC to perform the contract. The claim sugar factories could not have sold the sugar earlier than they have actually sold because of the constraint both legal and commercial. The finding of the learned arbitrator in this behalf is factually and legally correct. The question regarding the grant of quantum of damages to the sugar factory should not detain us. It is not disputed that both the parties suggested and agreed upon a formula to be followed with regard to the grant of damages. ( 33 ) THE parties agreed that damages would have to be assessed on one of the two basis namely:- (A) the actual sale price in respect of unlifted quantities sold by the various factories; or (b) the figure worked out from the prevailing rate and as shown in the , publication of "cooperative sugar. " ( 34 ) THE claimant on the basis of the first alternative prepared the chart, showing the rate at which the various factories sold sugar in respect of which they had filed claims. In case, the damages are quantified on the alternative agreed basis of the publication of "co-operative sugar" the claimant factories would be entitled to much higher amount. The learned arbitrator, in my opinion, has acted in the interest of STC, by awarding the amount on the basis of the first alternative. It was for this reason that the STC has not raised any grievance on the quantum of damages awarded by the learned arbitrator. ( 35 ) THE learned arbitrator has also considered the provisions of Clause 9 (F) of the Agreement with regard to the option, of the STC to take delivery of 5% less sugar than that contracted for, with the various sugar factories. It is not disputed that STC has not exercised the option to take 5% less than the contracted quantity. On (he other hand, the STC had got the release orders issued for the entire quantities. It is not disputed that STC has not exercised the option to take 5% less than the contracted quantity. On (he other hand, the STC had got the release orders issued for the entire quantities. Valid reasons have been given by the Arbitrator in helding that the factories were compelled to keep 5% also in stock to fulfil the contract and the loss that occurred on the sale of that sugar was consequently the result of the STC not having cancelled the release orders. ( 36 ) LASTLY, learned counsel for the STC contended that the Arbitrator has gone beyond the terms of reference by passing an award even in respect of claims regarding the production of sugar out of the year 1977-78, which was never the subject matter of contract between the parties. According to the learned counsel from the statement filed by fhe claimant, it is clear that out of 155 arises REFERRED TO the arbitration, 26 sugar mills filed their claims in respect of sugar for the year 1976-77 as well as 1977-78. The total claim in respect of this sugar comes to Rs. 89,21,232. 40 paise which the learned Arbitrator could not have allowed. ( 37 ) THIS objection appears to have been raised for the sake of raising an argument. One cannot lose sight of the fact that the terms of reference under which the disputes were REFERRED TO to the arbitrator are contained in the letter dated March 6, 1979, from the National Food Corporation Sugar Factory Ltd. to the Registrar, Indian Council of Arbitration. In this said letter the entire claims including the claims arising out of re-processed sugar for 1977-78 were factually and actually REFERRED TO to the arbitration. The arbitration was with regard to the sugar lying with the mills and "undergoing deterioration in quality. " Along with this letter the names of the sugar factories indicating the quantity of sugar sold by them was annexed. Pursuant to the said letter, the STC suggested the name of Mr. Justice V. Bhargava, retired Judge of the Supreme Court. The parties considered and proceeded on the basis that the reference to arbitration in all cases is valid. " Along with this letter the names of the sugar factories indicating the quantity of sugar sold by them was annexed. Pursuant to the said letter, the STC suggested the name of Mr. Justice V. Bhargava, retired Judge of the Supreme Court. The parties considered and proceeded on the basis that the reference to arbitration in all cases is valid. At no postage of the proceedings either before the learned arbitrator, before this Court, before the Supreme Court or in their remind proceedings before the learned Arbitrator, the objector raised or pressed this objection nor it was dealt with at any time during these proceedings. At this late stage, this Court is reluctant to raise new issue and re-open the case afresh. In fact because of this stand of the STC. the sugar mills did not feel the any evidence, to show that where the claimant had mentioned sugar of 1977-78 production, they were really referring to contracted sugar of 1976-77, which became sugar of 1977-78 production, on reprocessing because of the provisions of explanation clause 4 (2) of the Sugar (Packing and Marking) Order, 1970 made by the Central Government in exercise of power conferred by clause 5 of the Sugar Control Order 1966. It may also be kept in mind that theSTC in this case has not suffered any loss because if sugar of 1977-78 "production" had been taken into consideration, the same is to the benefit of the STC; sugar of 1976-77 would have fetched a much lower price. For these reasons I do not propose to entertain this plea. ( 38 ) LEARNED counsel for the petitioner may have a variance for not referring to the authorities cited at the bar. I have intentionally not REFERRED TO to or discussed those authorities. Firstly, they are not relevant to the fact in issue; and secondly, are quite distinguishable. The present objections, in fact have been disposed of mostly on the admission exchanged between the parties and relied upon of the STC as is clear from the correspondence by the learned arbitrator. Before concluding I have no other option at to concern with the observations of Justice D. A. Desai in case reported as Ms. Suri Bank Foundation v. M/s. Tan Singh and. S S. C. , begnning in view the inordinate delay which has occurred in this case under the Arbitration Act. Before concluding I have no other option at to concern with the observations of Justice D. A. Desai in case reported as Ms. Suri Bank Foundation v. M/s. Tan Singh and. S S. C. , begnning in view the inordinate delay which has occurred in this case under the Arbitration Act. The relevant portion reads as under:- "interminable, time consuming complex and expensive Court procedures impelled, jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural elaptrap and this led them to Arbitration Act, 1940. However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyer laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with legalese of unreasonable complexity. " ( 39 ) THE case in hand amply demonstrates the same. ( 40 ) AS a result of the above discussion I have no hesitation to hold that there is no force in the objections and the same hereby dismissed. The award of the Arbitrator dated 1-5-84 to all the 158 cases is made a rule of the Court. A decree in terms of the award be prepared. In case the amount of the award is not paid to the claimant within three months from today, the petitioner STC will he liable to pay interest at the rate of 12% p. a. from the date of the award till realisation.