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It appears that the respondent did not respond to the said suggestion by the appellant but all the same its vessel continued to be on charter with the appellant
Facts
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The writ petition was ultimately disposed of on 20th August,1999.It was only after a gap of about seven months that on 15th March,2000,the IOC informed the respondent about the evaluation of the tenders in terms of the order passed by the High Court
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Charter hire rate worked out by the Committee for vessel JAG PRAJA for the period from 1st September,1998 to 31st August,1999 was communicated to the respondent
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In response,the respondent,while expressing their disappointment with the rate but purportedly,in view of their long business relations with the appellant conveyed their acceptance of the proposed rate in respect of each of the vessels named in separate letters,all dated 1st
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May,2000,with the expectation that their outstanding balance of the hire shall be paid to them at the earliest
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However,the respondent did not convey their acceptance of the charter hire rates for two vessels,viz
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JAG PRAJA and JAG PRAYOG
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It appears that the respondent wrote various letters to the appellant for upward revision of the rate in respect of these two vessels but seemingly their request was ultimately turned down on 2nd November,2000,on receipt of which,the respondent slammed a legal notice dated 6th November,2000,on the appellant,inter alia,requesting them to revise the rates on the basis of mutual discussions and settle the accounts
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Having failed to receive any reply to the said notice,by another legal notice dated 1st December,2000,the respondent called upon the appellant to pay balance amount of Rs.43,947,517/-to them as charter hire in respect of vessel JAG PRAJA for the period from 1st September,1998 to 31st August,1999 within 15 days from date of receipt of the said notice or treat it as an arbitration notice
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The name of the arbitrator was also communicated to the appellant
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It seems that pursuant to the said notice and some subsequent correspondence exchanged between the parties,an Arbitral Tribunal was constituted
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Claims and counter claims were filed before the Arbitral Tribunal
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On the basis of the pleadings of the parties,the Arbitral Tribunal framed as many as eight issues
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However,arguments were heard only on the following three issues
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Issue No.1:-Whether the Hon ble Arbitral Tribunal has no jurisdiction to adjudicate upon the dispute between the Claimant and the Respondent for the period September,1998 to August,1999
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in respect of the vessel Jag Praja for the reasons stated in para 1 of the written statement
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Issue No.2:-Whether there is any common practice that if the vessel is not re-delivered at the end of the period mentioned in the time charter the vessel would be governed by the charter party under which originally it was chartered
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Issue
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No.5:-Whether the time charter party dated 6th
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May,1997 came to an end by efflux of time on 30th August,1998
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Vide order dated 12th
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May,2003 the Arbitral Tribunal came to the conclusion that the appellant having invoked the arbitration clause contained in charter party agreement dated 6th May,1997,which was valid upto 31st August,1998
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and as the dispute between the parties related to the period subsequent to 31st
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August,1998,they had no jurisdiction to decide the Reference
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The learned Tribunal found issue No.2 in the negative and issue No.5 in the affirmative
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According to the Tribunal on and after 1st September,1998,charter party agreement dated 6th May,1997 was superseded by a fresh agreement and a term of the agreement was that the charter hire rate would be determined by the Oil Co-ordination Committee of the IOC.In nutshell,the Tribunal was of the view that with the performance,original charter party dated 6th May,1997 got extinguished
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The respondent challenged the said Award before the High Court
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By the impugned order,the learned Single Judge has set aside the said Award,inter alia,holding that Arbitral Tribunal has the jurisdiction to adjudicate the disputes between the parties as the vessel continued to be hired by the appellant for the period subsequent to 31st August,1998 on the same terms and conditions,as were contained in the charter party dated 6th May,1997,only subject to the revision or modification of the rate of hire to be determined by the Oil Co-ordination Committee
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The learned Judge also felt that the Tribunal had erred in totally excluding from its consideration cls.23 and 4.1 of the charter party dated 6th May,1997,whereunder the charter party was to come to an end on re-delivery of the vessel
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Admittedly,after 31st August,1998,re-delivery of vessel did not take place and,therefore,in terms of clause 23,the vessel continued to be hired on the same terms and conditions except the term as to the hire charges,on which there was disagreement between the parties
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It was thus,held that the charter party dated 6th May,1997 did not come to an end by efflux of time and it was extended by the parties on the same terms and conditions except the rate of hire
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Correctness of this order of the High Court is questioned in this appeal
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Mr
Argument
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Sudhir Chandra,learned senior counsel appearing on behalf of the appellant has assailed the impugned order on the sole ground that the Charter Party dated 6th May,1997 having come to an end by efflux of time on 31st August,1998,the arbitration clause contained in it also perished and,therefore,in the absence of a fresh arbitration agreement,claim of the respondent relating to the period 1st September,1998 to 31st August,1999 could not be referred to arbitration by invoking arbitration clause in Charter Party dated 6th May,1997.Laying emphasis on the fax message dated 26th August,1998 addressed by the Oil Co-ordination Committee to the oil companies,including the appellant,inter alia,informing them that no further extension of the Current Charter Hire Rate will be allowed,learned counsel submitted that the said message made it clear to all concerned that Charter Party dated 6th May,1997 would not be extended under any circumstance
Argument
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Shyam Divan,learned senior counsel appearing on behalf of the respondent,on the other hand,submitted that notwithstanding the fact that the period fixed originally under the Charter Party or under the Addendum dated 29th June,1998 had come to an end,the subsequent conduct of the parties goes to show that charter of the vessel by the appellant beyond 31st August,1998 continued to be governed by the terms and conditions stipulated in charter party dated 6th May,1997 and,therefore,an arbitration agreement did exist between the parties
Argument
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Learned counsel argued that even otherwise till the vessel was not re-delivered in terms of Cls.4 and 23 of Charter Party dated 6th May,1997,the said agreement could not come to an end
Argument
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It was pointed out that all the obligations of the owners as well as of the charterers during the period the vessel was in use continued to be discharged under the Charter Party dated 6th May,1997 even after the expiry of the period of the Charter Party
Argument
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In support of the proposition that the concurrence of a party can be gathered from his conduct,like continued user of the vessel in the present case,without any objection to respondent s letter dated 4th January,1999,reliance is placed on a decision of this Court in The Godhra Electricity Co
Argument
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Ltd.& Anr
Argument
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Vs
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The State of Gujarat & Anr 1974 Indlaw SC 253
Argument
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It was also submitted that the view taken by the High Court being a plausible view,interference in exercise of extra-ordinary jurisdiction u/art.136 of the Constitution is unwarranted
Argument
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Thus,the short question for determination is whether on the expiry of the extended period of charter hire on 31st August,1998,Charter Party dated 6th May,1997 came to an end and the arbitration agreement between the parties perished with it
Ratio of the decision
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Before we proceed to examine the rival stands,we may note,at the outset,that neither the Arbitral Tribunal nor the High Court have gone into the question whether the claim made by the respondent would otherwise fall within the ambit of the arbitration clause in the Charter Party or not
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What is in dispute is whether the arbitration agreement between the parties had got extinguished after 31st August,1998,i.e.the date of expiry of the extended period of the Charter Party
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Therefore,we refrain from expressing any opinion on the scope and ambit of the arbitration clause though,prime facie,it appears to be quite widely worded
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It is,no doubt,true that the general rule is that an offer is not accepted by mere silence on the part of the offerree,yet it does not mean that an acceptance always has to be given in so many words
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Under certain circumstances,offerree s silence,coupled with his conduct,which takes the form of a positive act,may constitute an acceptance an agreement sub silentio
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Therefore,the terms of a contract between the parties can be proved not only by their words but also by their conduct
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In our view,the principle of sub silentio is clearly attracted in the present case
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As noted above,after the extended period of Charter Party dated 6th May,1997 had come to an end on 31st August,1998
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and the bids received pursuant to fresh invitation were pending finalization,vide their letter dated 12th
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October,1998,the respondent had informed the appellant that they were agreeable to apply new rates for use of the vessel from 1st July,1998 provided all the nine vessels are used
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However,on 31st October,1998,the appellant faxed IOC s message informing them of the extension of the existing coastal tanker fleet for the month of October,1998 at reduced rates,viz.80% of the Charter Party rates prevailing till 30th August,1998.On receipt of the said letter,the respondent vide their letter dated 5th November,1998,protested against the revision of the rates for the vessel not being considered under the new bid and stated in unequivocal terms that it was not possible for them to accept the proposal of the Oil Co-ordination Committee,communicated to them vide letter dated 12th
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October,1998.Yet again while responding to appellant s fax dated 31st December,1998,whereby the respondent was required to sign a provisional charter party by 4th January,1999,vide their letter dated 4th January,1999,the respondent,pointed out to the appellant that usual practice is that pending finalization of the new Charter,the existing terms and conditions of the Charter Party continue to apply and,therefore,they were willing to sign the agreement as contemplated by the appellant based on the existing terms and conditions
Ratio of the decision
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It was suggested that an agreement may be signed between them for the period from 1st September,1998 until the matter was finally decided by the appellant under the tender,on the existing terms and conditions with the charter hire being provisionally paid on ad hoc basis at 90% of the rate which was prevailing under the existing Charter Party
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As noted hereinabove,there was no response by the appellant to respondent s letter dated 4th January,1999 though it appears that vide their letter of even date,the appellant did suggest to the respondent that as a token of formal agreement the said letter may be jointly signed by the charterers and the vessel owners
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Admittedly,no such agreement was signed between the parties
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Indubitably,there was no further exchange of correspondence between the parties during the year
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Nevertheless,the appellant continued to use the vessel on hire with them under the time charter dated 6th May,1997.The conduct of the parties,as evidenced in the said correspondence and,in particular appellant s silence on respondent s letters dated 5th November,1998 and 4th
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January,1999,coupled with the fact that they continued to use the vessel,manifestly goes to show that except for the charter rate,there was no other dispute between the parties
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They accepted the stand of the respondent sub silentio and thus,continued to bind themselves by other terms and conditions contained in the Charter Party dated 6th May,1997,which obviously included the arbitration clause
Ratio of the decision
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We may examine the issue from another angle,based on respondent s stand that charter party dated 6th May,1997 continues to be in vogue till the chartered vessel is re-delivered
Ratio of the decision
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In this context,it would be appropriate to refer to Cls.4 and 23 of the Charter Party dated 6th May,1997.These are in the following terms: "4.Delivery & Redelivery 4.1
Statute
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The vessel shall continue to be on charter to charterers in direct continuation from 2348 hrs.22.09.1996 to 30.06.1998.The vessel shall be re-delivered by charterers to owners on dropping last outward pilot at any port on west coast of India at charterers option
Statute
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Charterers to give owners 15 days notice to probable port of re-delivery
Statute
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4.2 Charterers to load last three cargoes clean and re-deliver the vessel in clean condition
Statute
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Final Voyage Should the vessel be on her voyage towards the port of redelivery at the time of payment of hire is due,payment of hire shall be made for such length of time as Owners and Charterers may agree upon as being estimated time necessary to complete the voyage,less any disbursements made or expected to be made or expenses incurred or expected to be incurred by Charterers for owners account and less the estimated amount of bunker fuel remaining at the termination of the voyage and when the vessel is redelivered any overpayment shall be refunded by the owners or underpayment paid by Charterers
Ratio of the decision
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Notwithstanding the provisions of cl.4 hereof should the vessel be upon voyage at the expiry of the period of this charter,Charterers shall have the use of vessel at the same rate and conditions for such extended time as may be necessary for the completion of the round voyage on which she is engaged and her return to a port of redelivery as provided by the Charter
Ratio of the decision
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On a conjoint reading of the said clauses,it is plain that the appellant was under an obligation to re-deliver the vessel as per the procedure contemplated in the afore-noted clauses
Ratio of the decision
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Indisputably,the vessel in question had not been re-delivered at least during the relevant period and the appellant continued to use the vessel beyond 31st August,1998.Having failed to re-deliver the vessel in terms of Cl.4.1 of the Charter Party,the appellant cannot plead that the Charter Party had been fully worked out
Ratio of the decision
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It is clear from the pleadings and issue No.2,framed by the Arbitral Tribunal,that it was respondent s consistent stand that since the hired vessel had not been re-delivered at the end of the time charter party,the vessel would be governed by the terms and conditions in the Charter Party dated 6th May,1997
Ratio of the decision
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However,the Arbitral Tribunal answered the said issue against the respondent
Ratio of the decision
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It appears to us that even the question in regard to the effect and consequences of non-delivery of the vessel in terms of the Cl.4.1 and 23 would by itself be a dispute arising under the said Charter Party .With
Ratio of the decision
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respect
Ratio of the decision
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the learned Arbitral Tribunal overlooked this aspect of the matter
Ratio of the decision
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We are,therefore,of the opinion that though performance of the Charter Party agreement dated 6th May,1997 may have come to an end on 31st August,1998
Ruling by Present Court
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but it was still in existence for some purposes,viz.the effect of vessel s non re-delivery as per the prescribed mechanism and its continued use beyond the stipulated time
Ruling by Present Court
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and,thus,the arbitration clause in the said Charter Party operated in respect of these and other allied purposes
Ruling by Present Court
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Therefore,the factual scenario in the instant case leads to an inescapable conclusion that notwithstanding the expiry of the period fixed in the time charter party dated 6th May,1997,the said charter party did not get extinguished,inter alia,for the purpose of determination of the disputes arising thereunder and the arbitration clause contained therein could be invoked by the respondent
Ruling by Present Court
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In view of the foregoing discussion,we do not find any infirmity in the view taken by the High Court that Charter Party dated 6th May,1997 had not come to an end by efflux of time and it got extended by the conduct of the parties,warranting interference
Ruling by Present Court
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Having come to the conclusion that an arbitration agreement existed between the parties,the question which remains to be considered is whether the disputes between the parties should be referred to the same Arbitral Tribunal which had come to the conclusion that in the absence of any arbitration agreement it did not have jurisdiction to entertain and try the claims and counter claims
Ratio of the decision
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We feel that it would be proper and expedient to constitute a fresh Arbitral Tribunal
Ruling by Present Court
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Accordingly,we constitute an Arbitral Tribunal consisting of Justice M.Jagannadha Rao (Presiding Arbitrator),Justice D.P.Wadhwa and Justice S.N.Variava,former Judges of this Court to adjudicate upon the claim/counter claim by the parties,subject to their consent and such terms and conditions as they may deem fit and proper
Ruling by Present Court
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It goes without saying that the learned Tribunal shall deal with the matter uninfluenced by any observations in this order on the respective stands of the parties
Ruling by Present Court
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Resultantly,the appeal being devoid of any merit is liable to be dismissed,which we do,leaving the parties to bear their own costs
Ratio of the decision
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The Registry is directed to communicate this order to the learned Members of the Arbitral Tribunal to enable them to enter upon the Reference and decide the matter as expeditiously as practicable
Ruling by Present Court
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Appeal dismissed
Ruling by Present Court
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One Lakshminarayana Iyer, a Hindu Brahmin, who owned considerable properties in the Tirunelveli district, died on 13th December, 1924, leaving him surviving a widow Ranganayaki, and a married daughter Ramalakshmi
Facts
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Ramalakshmi had married the plaintiff and had a number of children from him
Facts
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They were all alive in December, 1924, when Lakshminarayana died
Facts
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Before his death he executed a will on 16th November, 1924, the construction of which is in controversy in this appeal
Ratio of the decision
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By this will he gave the following directions -- "After my lifetime, you, the aforesaid Ranganayaki Amminal, my wife, shall till your lifetime, enjoy the aforesaid entire properties, the outstandings due to me, the debts payable by me, and the chit amounts payable by me
Facts
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After your lifetime Ramalakshmi Ammal, our daughter and wife of Rama Ayyar Avergal of Melagaram village, and her heirs shall enjoy them with absolute rights and powers of alienation such as gift, exchange, and sale from son to grandson and so on for generations
Facts
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As regards the payment of maintenance to be made to Chinnanmal alias Lakshmi Ammal, wife of my late son Hariharamayyan, my wife Ranganayaki Ammal shall pay the same as she pleases, and obtain a release deed
Facts
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Ranganayaki entered into possession of the properties on the death of her husband
Facts
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On 21st February, 1928, she settled the maintenance claim of Lakshmi Ammal and obtained a deed of release from her by paying her a sum of Rs
Facts
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3,350 in cash and by executing in her favour an agreement stipulating to pay her a sum of Rs
Facts
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240 per annum
Facts
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Ramalakshmi died on 25th April, 1938 during the lifetime of the widow
Facts
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