R.D. Gupta vs The Union of India (UOI)

S.K. Dutta, C.J.—This petition is against the orders of the Additional Deputy Commissioner, United Khasi & Jaintia Hills setting'' aside an award. The relevant facts are as follows. The Petitioner (herein inciter called the contractor) entered into an agreement with the opposite party. Union of India (hereinafter called the Government-for the construction of the Sadiya-Denning Road in the North East Frontier Agency (hereinafter called N. E. F.A. ). There was a provision in the said agreement for reference of any dispute arising out of it between the parties, to the Superintending Engineer, N. E. F. A. or his nominee for arbitration. Disputes having arisen, the said Superintending Engineer appointed one Sri O. P. Mittal a Superintending Engineer of the Central P. W. D., New Delhi as an arbitrator. Sri Mittal entered into the reference but resigned after some days on 3-2-60. Thereafter the Petitioner applied to the Assistant to the Deputy Commissioner, United Khasi and Jaintia Hills, Shillong for appointment of an arbitrator.

It may be pointed out here that the parties entered into the agreement within the jurisdiction of the Courts of the United Khasi and Jaintia Hills where the Munsiff is also an Assistant to the Deputy Commissioner and the position of the Deputy Commissioner or the Additional Deputy Commissioner is that of a District Judge. After Sri Mittal resigned, the Superintending Engineer, N. E. F. A appointed on 19-3-60 one Sri M. N. Malkani to act as an arbitrator. The Assistant to the Deputy Commissioner, however, held that the Superintending Engineer had no power to appoint Sri Malkani and therefore he appointed one Sri R. M. Nath as the arbitrator. It was ordered that if Sri Nath refused to act, the appointment should go to one Sri G. N. Dutta. Sri Nath entered into the reference on 4-10-61. The Government filed an appeal before the Additional Deputy Commissioner against the order of the Assistant to the Deputy Commissioner appointing Sri Nath as the arbitrator and the Additional Deputy Commissioner by an order dated 12-11-62 set aside the appointment of Sri Nath and restored the appointment of Sri Malkani. The contractor filed a revision petition before this Court which by its order dated 17-3-64 set aside the order of the Additional Deputy Commissioner on the ground that no appeal lay to him as the order of appointment made by the Assistant to the Deputy Commissioner was u/s 8 of the Indian Arbitration Act (hereinafter called the Act). On 21-1-62 a petition was filed by the Government under Sections 5, 11 and 12 of the Act before the Assistant to the Deputy Commissioner for revoking the authority of Sri Nath. But this petition was dismissed by an order dated 12-3-62. The Government filed a revision petition before this Court and this Court by an order dated 12-7-62 remanded the case. But on 6-12-62 the petition was withdrawn.

On 9-7-64 the Government filed another petition under Sections 5, 11 and 12, the Act before the Assistant to the Deputy Commissioner for revoking the authority of Sri Nath. This petition was dismissed by the Assistant to the Deputy Commissioner on 16-9-64. Thereafter the Government filed a revision petition before this Court against the said order. This petition was however, not pressed as in the meantime Sri Nath died. The Government also filed an appeal before the Supreme Court from the order of this Court dated 17-3-64 by which the order of the Additional Deputy Commissioner restoring the appointment of Sri. Malkani Was set aside. The Supreme Court by an order dated 24-3-65 held that the appointment of Sri Nath made by the Assistant to the Deputy Commissioner was u/s 8 of the Act and as such, no appeal lay to the Additional Deputy Commissioner. On the death of Sri Nath, Sri G. N. Dutta was appointed as the sole arbitrator u/s 8 of the Act. A revision petition filed by the Government against this order was rejected by this Court by an order dated 1-9-65. An appeal to the Supreme Court against the said order was also dismissed. Sri G. N. Dutta made his award on 23-3-66 and filed the same in the Court of the Assistant to the Deputy Commissioner at Shillong on 26-5-66. The Assistant to the Deputy Commissioner ordered on 26-5-66 for issue of notices on parties. The Government received the written notice on 30-5-66 and filed a petition on .27-6-66 for setting aside the award. The learned Assistant to the Deputy Commissioner allowed the petition and set aside the award. An appeal before the Additional Deputy Commissioner by the contractor was dismissed and hence tills petition.

The petition before us is purported to be under Rule 36 of the Rules for the Administration of Justice in the Khasi and Jaintia Hills and under Sections 115 and 151 of the Code of Civil Procedure. It is, however, not disputed that the proceedings in the case are under the Indian Arbitration Act. u/s 41 of the said Act the provisions of the CPC are applicable to all proceedings before the Court including appeals. u/s 39(2) of the Act, no second appeal lies from an order passed in appeal regarding setting aside of an award. In this view of the matter, this petition must be treated as a revision Petition u/s 115 of the Code of Civil Procedure. The powers of this Court under this section are limited. The High Court while exercising its jurisdiction under the said section cannot correct errors of fact, however gross they may be or even errors of law. It can only do so when the said errors have relation to the jurisdiction of the Court.

The first point raised by the contractor is that the objection petition filed by the Union of India was not valid as it was signed by Mr. Seshasar who had no authority either to sign the petition or to engage lawyer on behalf of the Government. In reply to this contention it may be pointed out that by a notification dated the 11th February, 1958 issued under Order 27 Rule 2 of the First Schedule to the CPC the Central Government authorised the Superintending Engineers and the Executive Engineers among others, to act for the Government in respect of any judicial proceeding. By another notification dated the 25th January 1958, issued in exercise of powers conferred by Order 27 Rule 1 of the First Schedule to the Code, the said officers were appointed as persons by whom plaints and written statements in suits in any Court of civil jurisdiction by or against the Government, could be signed and verified. Sri Seshasar was an Executive Engineer and therefore, had the authority to sign the objection petition and engage a lawyer for the Government. Sri Seshasar being authorised to act on be-half of the Government, became a "recognised agent" within the meaning of Order 27 Rule 2 of the Code of Civil Procedure. Under Order 3 Rule 1 of the Code of Civil Procedure, as a recognised agent of the Government, Sri Seshasar could make any appearance, application or act in or to any Court required or authorised by law (including the Arbitration Act) to be made or done, by the Government in such Court.

The argument that proceedings in court under the Arbitration Act are not proceedings under the CPC has no force. The Arbitration Act creates a substantive right, but it does not lay down the details of the procedure to be followed for the enforcement of the same. By Section 41(a) of the Act itself, the provisions of the CPC are specifically applied to all proceedings before the Court under the Act. It may be noted that the contractor filed the petition before us in person and also argued his case In person. This could be done by him only under Order 3 Rule 1 of the Code of Civil Procedure. If this provision of law was not attracted, there was no law under which he could enjoy these privileges. In these circumstances, it must be held that Sri Seshasar had the authority to sign the objection petition and to engage lawyers on behalf of the Government.

The second point raised before us Is that the objection petition was barred by limitation and therefore the Court had no jurisdiction to entertain the same. The award was filed on 26-5-66 and on that day the Court passed the following order:

Arbitrator filed the award along with the record of the proceeding and his bill amounting to Rs. 7163/-. Issue notices on the parties fixing 14-7-66.

The said order was shown to the lawyers for both the parties and Sri L. P. Changkakoti, Government Advocate wrote the word "Seen" and signed. u/s 14(2) of the Act, the Court has to Rive notice of filing of the award and then objection must be filed within thirty days of the service of the said notice, vide Article 158 of the old Limitation Act and Article 119 of the new Act. Sri Changkakoti signed as aforesaid on the 26th May, 1966. If that day is taken as the day of service of notice of filing of the award, the objection petition should have been filed within the 25th June, 1966. But it was actually filed on the 27th June, 1966. If however, the service of the written notice on the Government is taken as the date of service of notice, the objection petition is well within time.

It is true that a formal notice u/s 14(2) of the Act is not necessary and a verbal notice may be enough under certain circumstances. But what happened in this case was that the Court decided to issue a notice when it said- "Issue notice on the parties fixing 14-7-66". What Sri Changkakoti took note of was the fact that notice would be issued. The intention of the Court was clear that formal notice would go. As a matter of fact a copy of the award was received for the first time by the Government on the 30th May, 1966, when it received the notice u/s 14(2) served on it by the Court. If showing of the order of the Court to Sri Changkakoti amounted to the service of notice of the filing of the award, there was no point in serving a written formal notice on the Government again. The very fact that formal notice was issued, shows that mere showing of the order of the Court about Issuing of notice to Sri Changkakoti was not taken by the Court as notice of filing of the award. Moreover, knowledge of a lawyer cannot be deemed to be notice u/s 14(2) of the Act unless it can be shown that the party authorised the lawyer to receive such a notice. There is nothing in the Vakalat-name of Sri Changkakoti to show that he empowered to act in any way on be of the Government after the award was made. In the above view of the matter, I am of the opinion that the objection petition was not barred by limitation.

The third point is in respect of res judicata. It may be noted that one of toe grounds on which the award has been set aside, is that the arbitrator entertained claims which were not before the first arbitrator Sri Mittal. The claims filed before Sri Mittal by the contractor amounted to Rs. 2,81,871.67 P. whereas before Shri Nath they became Rupees 27,92,674.80 P. and before Sri Dutta they amounted to Rs. 48,65,295.24 P. It is submitted on behalf of the Government that as the appointments of Sri Nath and Sri Dutta were u/s 8 of the Act, they had only "like power" as that of the first arbitrator Sri Mittal and Could not entertain claims which were not before them. But the learned Assistant to the Deputy Commissioner while dismissing the petition under sections 5, 11 and 12 by an order dated 16-9-64, held that the appointment of Sri Nath was u/s 20 of the Act, Therefore, it is argued by the contractor that this operates as area judicata and it cannot now be contended that Sri Nath was not appointed u/s 20 of the Act. If the appointments of Sri Nath and Sri Dutta were u/s 20 of the Act. there could be no dispute that they could entertain any claim referred to them by the Court. It is submitted that the Courts below exceeded their jurisdiction in going into the question whether the arbitrators after Sri Mittal were appointed u/s 8 or Section 20. According to the contractor the decision of the Assistant to the Deputy Commissioner dated 16-9-64, by which it was held that the appointment of Sri Nath was u/s 20 of the Act, operated as res judicata.

It may, however, be noted that by the order dated 24-3-65 mentioned above, the Supreme Court held that the appointment of Sri Nath was u/s 8 of the Act. So, if there is any res judicata, it is the decision of the Supreme Court which operates as such. On the death of Sri Nath, the contractor made an application u/s 8 of the Act for the appointment of an arbitrator and Sri G. N. Dutta was appointed accordingly. Therefore, the finding of the Courts below, that the appointment of Sri Nath as well as of Sri Dutta was u/s 8 of the Act is not hit by res judicata. In this view of the matter, it is not necessary to examine whether the order of the learned Assistant to the Deputy Commissioner dated 16-9-64 is only an inter-locutory order which does not operate as res judicata.

Moreover, the learned Assistant to the Deputy Commissioner found some of the claims to be outside the agreement. Any dispute arising out of such claim could not be a dispute arising out of the agreement. The learned Assistant to the Deputy Commissioner had jurisdiction to decide this matter and if the arbitrator entertained any claim outside the scope of the agreement, the award must be set aside This court in revision cannot exa-pe the correctness of the finding that certain claims were outside the purview and scope of the agreement. It is enough for this Court to say that the learned Assistant to the Deputy Commissioner had jurisdiction to decide this matter and the appellate Court upheld the decision.

In the result therefore, there is no scope for interference by this Court with the order of setting aside of the award. The petition is, therefore, rejected. There will be no order as to costs.

P.K. Goswami, J.

I agree.