Delhi High Court
Union Of India (Uoi) vs Jai Society Wood Works And Anr. on 14 January, 1998
Equivalent citations: AIR1998DELHI187, AIR 1998 DELHI 187, (1998) 2 ARBILR 248
ORDER C.M. Nayar, J.
1. The present petition has been filed under Sections Hand 17 of the Arbitration Act, 1940 on behalf of Union of India for filing of award dated March 18, 1986 and for making the same Rule of the Court.
2. The learned arbitrator has given a non-speaking award without assigning any reasons. The documents on record, however, will indicate his thought process and it is settled that it is riot necessary for the Arbitrator to indicate reasons and he is well within his rights to pass such an award. In this context, reference may be made to the judgments of the Supreme Court as reported in Raipur Development Authority etc. v. Chokhamal Contractors etc., and Secretary, Irrigation Department, Government of Orissa v. G. C. Roy, . The award, accordingly, cannot be assailed on merits.
3. The learned counsel for the respondents has, however, contended that the plea that there was never a valid existing arbitration agreement as no agreement was ever entered into between the parties was not decided by the arbitration. The arbitrator, therefore, possessed no jurisdiction to decide the disputes which were referred to him for adjudication. On the other hand, the learned counsel for the petitioner has argued that the respondents on their own had asked the matter to be referred to arbitration by communication dated July 7, 1983 as addressed to the Director General of Civil Supplies and Disposal. Reference is also made to letter dated March 10, 1981 to reiterate that a valid contract had been entered into between the parties.
4. Reading of the Award will show that the arbitrator has not examined this plea of lack of jurisdiction and as to whether the contract entered into between the parties complied with the requirements of law as contained in Article 299 of the Constitution of India. The judgment of the Supreme Court reported in Union of India v. Hanuman Oil Mills Ltd. 1987 (Supp) SCC 84 deals with the situation as has arisen in the present case. The short order which was passed by that Court reads as under :
"An award by an arbitrator in terms of which a decree was passed by the trial court was set aside on appeal by the High Court on the ground that there was no concluded contract between the parties in terms of Article 299 of the Constitution, and therefore, there was no arbitration agreement either. The High Court based its conclusions on the circumstances that the post copy of the telegram of acceptance of the tender, the receipt of which was itself disputed by the party, was signed by one S. S. Bajaj, Deputy Director of Purchase purporting to be 'For and on behalf of President of India' but that there was no evidence to show that the Deputy Director of Purchase was authorised to act 'For and on behalf of President of India' under Article 299 of the Constitution. The question about the competence of the Deputy Director to accept the tender 'For and on behalf of the President of India' was generally raised by the respondent at the very outset when he said in his objections to the Award that 'there was no valid or unconditional offer of the petitioners contained in tender dated October 31, 1958 by the respondent in the name of President of India or otherwise or by any person duly authorised on behalf of respondents or duly authorised by the President of India. The question was expressly raised in the memorandum of grounds before the High Court. However, no evidence was led by Union of India to satisfy the court authorised to act 'For and on behalf of the President of India' in terms of Article 299 of the Constitution. The High Court, therefore, had no option but to allow the appeal. Before us, after searching the record for some time we found a statement in the petition of appeal that the Deputy Director Purchase was authorised to enter into contracts for and on behalf of Union of India by S. R. O. 3442 dated November 2, 1955. We are not, however, ready to act on this statement in the petition of appeal as no attempt has been made to produce any additional evidence before us nor do we think it just to permit the appellant to produce at this stage any additional evidence when they had ample opportunity to produce any evidence which they had in the trial court and in the first appellate court. We therefore, dismiss the appeal. Nocosts."
5. In view of the above, the Award is remitted back to the Arbitrator to decide as to whether there was concluded contract between the parties and, therefore, the Union of India could invoke clause in the contract for reference of disputes to the arbitrator. The Union of India shall take appropriate action for nominating the Arbitrator in case the arbitrator who has rendered this award is no longer available to determine the question as referred to above. The arbitrator shall give his findings expeditiously after hearing both the parties in accordance with law. This petition is disposed of in the above terms.
Let copy of the order be given Dasti to learned counsel for Union of India as well as to learned counsel for the respondent.