Jagdish Chandra ( 1 ) AWARD dated 31st December, 1984 in the matter of arbitration between Union of India (DGS and D) v. Mis Adya Industries, Ludhiana was filed in Court by the sole arbitrator Ms. R. L. Lakshmanan and notices were issued to both the parties to file objections, if any, against the same. Objections against the award were preferred only by Union of India and not by M/s. Adya Industries which, however, controverted the objections of Union of India and from the pleadings of the parties, the following issues were framed :- 1. Whether the Arbitrator had committed legal misconduct as alleged in the objection petition ? 2. Whether there was an error apparent on the face of the award ? 3. Whether the award was otherwise invalid ? 4. Relief. ( 2 ) ISSUES Nos. 1 to 3 : The perusal of the award shows that the arbitrator found that the contractor committed breach of the contract inasmuch as he had failed to supply the stores as per the terms of the contract but he nevertheless dismissed the claim of Union of India for awarding a sum of Rs. 1,35,806. 00 as loss suffered by Union of India on account of placement of the contract for part of the stores on another firm at the risk and cost of the respondent-contractor. The ground given by the arbitrator for disallowing the aforesaid claim of Union of India was that the Union of India had failed to observe the principle of mitigation of damages. Ms. Kadambini learned cousel for the Objector/ UOI confines her objections only to this item and does not press her objections in respect of any other items of this award. The objection raised on behalf of Union of India in respect of the disallowing of the item of Rs. 1,35,806. 00 claimed by Union of India is that it was legal misconduct on the part of the arbitrator to have disallowed this claim of Union of India simply on the ground that the Union of India had failed to observe the principle of mitigation of damages even though the arbitrator had accepted that it was the contractor who had committed breach of the contract by failing to supply the stores as per the terms of the contract. According to the learned counsel this is obvious and clear inconsistency on the part of the arbitrator which goes to show legal misconduct on his part. The learned counsel also contends that the findings of the arbitrator that the Union of India had not taken any steps for mitigation of the aforesaid damages, is not correct. ( 3 ) THE contentions of the learned counsel for Union of India are erroneous and cannot be accepted. Section 73 of the Indian Contract Act, 1872 talks of the compensation for loss or damages caused by breach of contract, and there is an explanation towards the end of this provision of law and this explanation reads as follows :- "explanation :-In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. " ( 4 ) SO, obviously in view of this explanation the steps to be taken by way of mitigation of damages on the part of the non-defaulting party have to be taken into account while estimating the loss or damage arising from a breach of contract, even though it may not amount to a legal right with a defaulting party to enforce the same. It has been held in A. K. A. S Jamal v. Moola Dawood Sons and Co. ,1 as follows :- "a plaintiff who sues for damages for breach of contract of sale owes the duty of taking all reasonable steps to mitigate the loss consequent upon the breach and cannot claim as damages any sum which is due to his own neglect. But the loss to be ascertained is the loss at the date of the breach. If at the date the plaintiff could do something or did something which mitigated the damage, the defendant is entitled to the benefit of it. . . . . . But the loss to be ascertained is the loss at the date of the breach. If at the date the plaintiff could do something or did something which mitigated the damage, the defendant is entitled to the benefit of it. . . . . . "so, according to this authority no amount whatever can be claimed as damages by a plaintiff who sues for damages for breach of contract if he fails in his duty of taking all reasonable steps to mitigate the loss consequent upon the breach and further if the plaintiff could do something or did something which mitigated the damage, the defendent is entitled to the benefit thereof Exactly to the same effect is also Mis Murlidhar Chiranjilal v. Mis Harishchandra Dwarkadas and another. ,2 ( 5 ) THE learned counsel for Union of India has relied upon M. Lachia Setty and Sons Ltd. , \. The Coffee Board, Bangalore9 wherein the law on the point has been summed up on page 169 towards the close of paragraph 13 thereof, which reads as follows :- "from the above statement of law it will appear clear that the non- defaulting party is not expected to take steps which would injure innocent persons. If so, then steps taken by him in performance or discharge of his statutory duty also cannot be weighed against him. In substance the question in each case would be one of the reasonableness of action taken by the non-defaulting party. "from this enunciation of law it cannot be said that the non-defaulting party is under no obligation to take all reasonable steps for mitigation of loss or damage occasioned by the default on the part of the other party in the performance of the contract. On the other hand, it simply says that the non-defaulting party, while in the process of mitigation of loss or damage, is not expected to take steps which would injure innocent persons and consequently the steps taken by the non-defaulting party in performance or discharge of his aforesaid statutory duty also cannot be weighed against him. It, however, lays down that the question in each case would be one of the reasonableness of action taken by the non-defaulting party and this necessarily implies that reasonable action has to be taken by the non-defaulting party in terms of the statutory duty cast upon it for mitigation of damages. It, however, lays down that the question in each case would be one of the reasonableness of action taken by the non-defaulting party and this necessarily implies that reasonable action has to be taken by the non-defaulting party in terms of the statutory duty cast upon it for mitigation of damages. Thus, even though a non-defaulting party is under no obligation to take such steps as may tend to destroy his own property or injure himself or his commercial reputation or injure innocent persons he is bound to take all reasonable steps for mitigation of the loss or damage caused to him on account of the breach of contract committed by the other party. Thus, it is evident that for failure to take all reasonable steps for mitigation of damages, the non-defaulting party cannot be granted any sum by way of damages or compensation for the breach of the contract on the part of the other party and in this view of law the learned arbitrator cannot be said to have committed any misconduct much less legal misconduct when he disallowed claim of Union of India in the sum of Rs. 1,35,806. 00 which Union of India had claimed by way of damages against the respondent, even though the arbitrator had found that the defaulting party was the respondent-contractor who had committed the breach of the contract by not supplying the stores as per the terms of the contract. ( 6 ) THE learned counsel for U. O. I, contended and pointed out that after the respondent-contractor committed breach of the contract by not supplying the stores to Union of India, the Union of India had invited tenders for as many as 45 firms and was justified in rejecting 4 of them even though their tenders were lower than the one accepted by the U. O. I, in the risk purchase contract. It is a question of fact that the Union of India had not taken steps to observe the principle of mitigation of damages and whatever the evidence on this point made out before him, the arbitrator was competent to draw his inference and conclusion and this Court cannot sit in appeal on that judgment of the arbitrator. It is a question of fact that the Union of India had not taken steps to observe the principle of mitigation of damages and whatever the evidence on this point made out before him, the arbitrator was competent to draw his inference and conclusion and this Court cannot sit in appeal on that judgment of the arbitrator. This Court has no power to re-appraise the evidence produced before the arbitrator to come to another conclusion as suggested by the learned counsel for U. O. I. The President, Union ofindia and another v. Kalinga Construction Co. (P) Ltd. ,* is the very clear authority on this settled law and it lays down as follows :- "in proceeding to set aside award appellate Court cannot sit in appeal over the conclusion of the arbitrator by re-examining and re-appraising the evidence considered by the arbitrator and hold that (he conclusion reached by the arbitrator is wrong. The learned counsel for Union of India, as already pointed out above, has not pressed the other item pertaining to Union of India s claim for Rs. 15,313 00 nor any other item. There is no error apparent on the face of the Award which is not even otherwise invalid and so all those issues are decided against Union of India. ( 7 ) ISSUE No. 4 : In view of the above discussion the objections of Union of India against the Award are dismissed with no order as to costs. ( 8 ) THE Award dated 31-12-1984 is consequently made a rule of the Court and a decree in terms thereof shall follow.