' MUHAMMAD ZAHOORUL HAQ, J.--This appeal is directed against the judgment of a Single Judge in Judicial Miscellaneous No, 40 of 1972 dated 24-2-1977.
' The relevant facts are that on 29-3-1968 a contract was entered between the appellant and 5 others and the respondent for sale of one lac twenty thousand metric tons of rice at 120 L per metric ton to be supplied by the appellant to the respondent for export. Four shipping periods of 1- 4-1968 to 30-6-1968, and similar 3 periods thereafter, upto 31-3-1969, were stipulated and in each period 30,000 tons of rice were to be lifted by the respondent. There was no difficulty in respect of the first shipping period but in the second and third shipping period there was a short fall in the lifting of 6,442 metric tons respectively by the respondent. Some correspondence took place between the parties and the respondents took up the position that since the appellants had entered into a contract of supply of ten thousand tons of rice at 105L per metric tons with Yogosalavia, therefore, it had become impossible for the respondents to complete the contract and, therefore, the contract had been frustrated.
2. On 1-1-1969 the appellants forfeited the bank guarantees furnished by the respondents.
Thereupon, Suit No, 19 of 1969 was filed by the respondent seeking to restrain the appellants from enchasing the bank guarantees. On 30th January, 1969, in view of application made under section 20 of the Arbitration Act the disputes between the parties were referred to the sole Arbitrator Aslam Abdullah by Mr. Justice Noorul Arfin. The parties had appeared before the Sole Arbitrator and had produced their correspondence. The appellants had filed a claim of about Rs,47,00,000 before the Arbitrator while the respondents filed a counter claim. Nine issues were framed by the Sole Arbitrator and the matter was argued before the Sole Arbitrator by two eminent counsels, namely, Mr. Sharifuddin Pirzada for the appellants and Mr. A.K. Brohi for the respondents. The Sole Arbitrator gave his award on 20th August, 1970 which was eventually made rule of the Court in Judicial Miscellaneous No, 376. Of 1970 and the judgment is reported in 1981 CLC 999.
3. No rice was lifted by the respondents during the shipping period of 1-1-1969 to 31-3-1979. The appellants claim that they have resold the rice of the fourth shipping period at a loss and, therefore, they are entitled to recover the short fall from the respondents. They had resold the same on 29-9-1969. On 8-3-1973 the appellants gave notice to the respondents claiming a sum at the rate of Rs, I, 20 per metric ton as the damages suffered by them for the loss in price of 30,000 tons of rice. On 7-4-1972 the respondents filed Judicial Miscellaneous No, 40 of 1972 claiming that the claim of the appellants in respect of the fourth shipping period was time-barred and in any case it was hit by the provisions or Order II, Rule 2, C.P.C. And that the appellant was estopped from raising new claim as their counsel had made a statement in the previous arbitration that the contract had been rescinded by the appellant at the end of third shipping period. The appellants had pleaded denial. The parties had filed their affidavits and had appended documents in support of their case.
After hearing the arguments of the learned counsel the Hon'ble Single Judge accepted the submissions of the respondents that the appellant's counsel in the previous arbitration had made a definite statement that the appellants had rescinded the contract on 1-1-1969 and, therefore, it had endorsed the encashment of the bank guarantees furnished by the respondents and had sold the rice because the respondents had by their letter of 26-12-1968 committed breach of the agreement. He, therefore, allowed the application of the respondents and declared that the arbitration agreement contained in clause 20 of the agreement, dated 29-3-1968 ceased to have effect and is inoperative as to the disputes then sought to be referred.
4. The appellants felt dissatisfied with the said judgment and have, therefore, presented this appeal. The main contention of Mr. A .I. Chundrigar is that there was an apparent conflict in the findings of the judgment of the Hon'ble Single Judge inasmuch as in para. 21 of the judgment he had held that there was nothing on record to show that the appellants had exercised their option to treat the conflict as terminated so as to absolve the respondents of their obligations, under the contract. But in the end of his judgment in paragraphs 25 and 26 the learned Single Judge had relied upon a statement made by the counsel of the appellants before the arbitrator in the previous arbitration proceedings where he had stated that the T.C.P. Were justified to determine the contract on any one of these dates and in any case on 1-1-1969. And he further relied upon the decision of the arbitrator in the previous arbitration that the agreement was determined by T.C.P.
On 1-1-1969 on the basis of the respondent's letter, dated 26-12-1968 which amounted to undisputed breach on the part of the respondents.
5. The appellants' counsel contended that once it had been found by the Single Judge that the contract for the lifting of rice by the respondents had been treated as subsisting by the present appellants even after 1-1-1969, which finding was based on the documents produced before the Single Judge, then thereafter, the Single Judge could not rely upon a statement made before the arbitrator by the appellants' counsel and thus arrive at inconsistent findings.
5. The submission of the learned counsel does not appear to be correct. The Single Judge in paragraph 21 of his judgment has referred to the correspondence between the parties but the finding in para. 21 has nothing to do with the actual dispute that was referred to the arbitrator and the decision which was made by the arbitrator in the case. The dispute referred and the decision of the arbitrator are discussed in the findings in paragraphs 25 and 26 of the impugned judgment and, therefore, there is no apparent conflict in the impugned judgment from our point of view.
' The Hon'ble Single Judge has taken into consideration almost everything that had been urged before him and he had decided in favour of the present appellants in respect of the contention whether the agreement had been frustrated on account of the contract of supply of rice by T.C.P.
To Yogosalavia; and had further held in favour of the appellants that the respondents had committed breach of the agreement when they had indicated on 31-12-1968 that they could not lift the due quantity of rice. He had further held that in spite of the breach of contract on the part of the respondents the present appellants had not terminated the contract as evidenced from the documents produced without the consideration of statement of counsel in previous arbitration.
7. However, he had decided the matter before him on the basis that since the appellants' counsel had conceded in the previous arbitration between the same parties in respect of the same matter that the agreement had been determined by the T.C.P. On 1-1-1969, thereafter, the appellants should have brought the whole dispute in respect of the entire contract and damages arising out of the contract before the arbitrator. And since they had not done so, therefore, they could not split their claim, as they had to include their entire claim in the previous arbitration.
8. We do not find anything wrong in the finding of the learned Single Judge. It would be worthwhile to note that on 1st January, 1969 the appellants had tried to encash the entire bank guarantees of about Rs, 165 crores given by the respondents and its collaborators in respect of the same contract and in order to frustrate this attempt of the appellants the respondent and five other persons had filed suit No,1 of 1969 restraining the appellants from encashing the said guarantees. On 30-1-1969 the Single Judge in the High Court had ordered that disputes between the parties were referred to arbitration. Thereafter, the parties had preferred their claims. The appellants had lodged claims of about Rs,47,00,000 while the respondents in their counter-claim had lodged claims of Rs, 1,14,93,438. The appellants had filed a rejoinder to the counter claim of the respondents. On 12-4- 1969 issues have been framed between the parties out of which issue No,3 was whether the claimants (T.C.P.) committed any breach of the agreement by entering into a new contract for the sale of 34,070 tons of Basmati rice before the expiry of the third shipment period with Messrs Towell and Company. If so what is the effect of the subsequent agreement with Messrs Towell and Company on the first agreement with the respondent Issue No,6 was which of the parties if any have committed breach of the contract and to what damages the aggrieved party is entitled in law.
9. It was in respect of the settlement of the above two issues alongwith other issues that the counsel of the appellants had taken the stand that the appellants had terminated the contract on 1-1-1969. The statement made by the appellants' counsel before the arbitrator was a question of fact and it was a part of the pleadings of the parties and the appellants cannot get away from that statement unless they could show that the statement made by their counsel was unauthorized. The single Judge was, therefore, justified in relying on the said statement.
10. Mr. Chundrigar submitted that the statement of the appellants' counsel in the previous arbitration proceedings was not authorized and, therefore, the same should not have been relied upon by the learned Single Judge. We do not agree with this submission. In the first instance, a statement on a question of fact made by a counsel of a party is binding upon the party. And, therefore, the appellants cannot get away from that statement. Moreover, we enquired from the counsel whether the appellants had ever taken the position that their counsel before the arbitrator was not authorized to make such statement. In fact, the appellants had filed objections before another single Judge in respect of the previous arbitration proceedings but in those objections they never took up the position that the statement of their counsel before the arbitrator that they had terminated the contract on 1-1-1969 was not justified.
11. In fact, even in the present appeal filed by the appellants we do not find any where a positive statement to the effect that their counsel before the arbitrator had not been authorized by them to make the statement which he did. The appellants have merely taken upon the position that the dispute which had been referred to the previous arbitration was only in respect of the second and third shipment periods and, therefore, it did not relate to the damages suffered by them arising out of the breach of contract in respect of the fourth shipping period viz: 1-1-1969 to 31-3-1969. But their counsel has made a statement before the previous arbitrator in or about April, 1969 that the appellants had terminated the contract on 1-1-1969 on account of breach of the contract committed by the respondents by their letters of 26-12-468 and 31-12-1968, therefore, the whole dispute was before the arbitrator or should have been. We are not concerned with the reasons which prompted Mr. Sharifuddin Pirzada to make that statement. But we are quite clear that that statement had been made. Mr. Khalil Anwar, the respondents' counsel, had tried to show to us that statement made by Shafiruddin Pirzada was in the best interest of the appellants because the respondents had claimed damages of more than one crore from th appellants on account of the sale of rice made by the appellants during subsistence of contract. Mr. Khalid Anwar wanted to show that the appellants could not have sold the rice without termination of the contract as otherwise they would have been held guilty of themselves having committed breach of the agreement, if the same was treated as subsisting, and in spite of that the sale had been made. We are not called upon to go into the reasons which prompted Mr. Sharifuddin Pirzada to make that statement but we are quite sure that the statement made must have been based on instructions from the appellants and on sound reasons otherwise the statement could not have been made.
We have already seen above that the factum or authority of the said statement has never been challenged by the appellants anywhere and, therefore, their grievance against the impugned judgment is completely uncalled for.
12. Appellants, counsel had submitted that if an admission of fact is made erroneously by the Advocate it is not binding on the client. He had referred to 1980 CLC 1533 for this purpose. We enquired from the counsel as to where the appellants have taken this plea. The same was never taken in the Judicial Miscellaneous proceedings arising out of the previous arbitration and this plea has not been raised even in this appeal and, therefore, it is not available to the appellants. No error is apparent in any case. Moreover, the appellants slept over till 1972 and this also shows that there was no error made.
13,. Mr. Chundrigar had tried to place reliance upon Annexures R-4 to R-8 for the purpose of showing that after 1-1-1969 the contract had been treated as subsisting between the parties. We are sure that the reference to these annexures is completely uncalled for because the appellants cannot get away from the position that in the previous arbitration proceedings their plea before the arbitrator, in spite of presence of R-4 to R-8 was that they have terminated the contract on 1-1- 1969 and, therefore, they cannot go back to these annexures unless they could wash away the effect of the statement made by their counsel before the arbitrator.
14. The appellants' counsel has also tried to show that the cause of action in respect of the non- lifting of fourth shipment-period-rice arose on 29-9-1969 when the rice was actually sold and hence order 2 rule 2 was not attracted. This plea is again not available to the appellants because once It is found in the previous arbitration proceedings that they had terminated the contract on 1- 1-1969 then thereafter they had to bring the whole dispute. Between the parties before the arbitrator including the question of damages. Since the agreement was terminated by the appellants on 1-1-1969, therefore, they could not treat the same as subsisting thereafter and hence whatever damages they claim on account of the breach of contract by the respondents in respect of this agreement had to be raised before the arbitrator who had decided the dispute on 20th August, 1970.
15. We, therefore, did not find any merit in this appeal and we had, therefore, dismissed the same by a short order on 20th August, 1985.