Supreme Court of India
Hari Dutt Bhardwaj vs Haryana State Agriculture Marketing ... on 1 May, 1989
Equivalent citations: 1989 AIR 1670, 1989 SCR (2) 849, AIR 1989 SUPREME COURT 1670, (1989) 2 LAB LN 708, (1989) 2 JT 333 (SC), 1989 2 JT 333, 1989 SCC (L&S) 434, 1989 (3) SCC 130
Author: R.S. Pathak
Bench: R.S. Pathak
PETITIONER:
HARI DUTT BHARDWAJ
Vs.
RESPONDENT:
HARYANA STATE AGRICULTURE MARKETING BOARD,PUNCHKULA & ANR.
DATE OF JUDGMENT01/05/1989
BENCH:
PATHAK, R.S. (CJ)
BENCH:
PATHAK, R.S. (CJ)
NATRAJAN, S. (J)
CITATION:
1989 AIR 1670 1989 SCR (2) 849
1989 SCC (3) 130 JT 1989 (2) 333
1989 SCALE (1)1443
ACT:
Arbitration Act, 1940: Sections 14 and 30--Award--Wheth-
er arbitrator had jurisdiction--Dispute referred to
Superintending Engineer Agricultural Marketing Board--A
State Government officer on deputation to the Board--Award
made when arbitrator was on transfer to parent
department--State Government ordering continuance on deputa-
tion--Salary paid by Marketing Board--Held arbitrator had
jurisdiction to make award.
HEADNOTE:
The respondent--Marketing Board, entered into a contract
with the appellant for the construction of their office
building. The agreement stipulated that the Superintending
Engineer of the Marketing Board would be appointed as the
sole Arbitrator in case of a dispute.
A dispute arose in regard to the completion of the
construction, and it was decided to refer the matter to
arbitration. On 11th March, 1983 the respondent appointed
Shri Gupta, Superintending Engineer of the Marketing Board
as Arbitrator. While the Arbitrator was seized of the dis-
pute, the Chairman of the Marketing Board purported to
revert him to his parent department.
On 6th April, 1984, the Arbitrator made his award which
was in favour of the appellant. On 2nd May, 1984 the appel-
lant applied to the Sub-Judge for making the award a rule of
the Court. In the meanwhile, on 24th May, 1984, the State
Government passed an order confirming that Shri Gupta con-
tinued in the post as Superintending Engineer. On 28th
February, 1985, the Marketing Board passed a resolution
giving effect to the said direction of the Government and
extending the deputation tenure of Shri Gupta to 3rd Septem-
ber, 1985. On 30th July 1985, the Trial Court made the award
a rule of the Court.
In the appeal to the High Court it was urged that on 6th
April, 1984 the date on which the Arbitrator made his Award,
the Arbitrator had lost jurisdiction since he had been
transfered on 4th April, 1984 from the post of Superintend-
ing Engineer of the Marketing Board to his
850
parent department in the State Government. The High Court
accepted this plea and reversed the order of the Trial Court
and set aside the Award.
In the appeal by the contractor to this Court, the
question was; whether the Arbitrator, Shri Gupta had juris-
diction to make the award on 6th April, 1984 or had lost
jurisdiction because of the order dated 4th April, 1984
reverting him to his parent department.
Allowing the appeal,
HELD: 1. Shri Gupta was on deputation with the Marketing
Board up to September 4, 1984. He was prematurely required
by the Chairman of the Marketing Board by order dated 4th
April, 1984 to revert to his parent department. The State
Government, however, ordered on 24th May, 1984 that Shri
Gupta would continue on deputation with the Board. In fact,
Shri Gupta did not even resume a post in his parent depart-
ment. [852A-B]
2. The necessary consequences of the order of the State
Government continuing Shri Gupta on deputation with the
Marketing Board was to nullify the order dated 4th April,
1984 passed by the Chairman purporting to revert him to his
parent department. It is clear from the records that Shri
Gupta was paid his salary by the Marketing Board for the
entire month of April 1984, a circumstance which establishes
that he was continuing with the Board when he made the
Award. Shri Gupta must, therefore, he deemed to have enjoyed
jurisdiction as Arbitrator on 6th April, 1984 when he made
the Award. The deputation of Shri. Gupta with the Marketing
Board did never terminate. [852B-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2591 of 1989.
From the Judgment and Order dated 12.3.1986 of the Punjab and Haryana High Court in F.A.O. No. 986 of 1985. Rajinder Sachar, E.S. Agarwala, H.D. Bhardwaj, J.S. Manhas and R.K. Kapoor for the Appellant.
Dr. Y.S. Chitale, K.B. Rohatgi and Baldev Atreya for the Respondents.
The Judgment of the Court was delivered by 851 PATHAK, CJ. Special leave granted.
This appeal by special leave is directed against the order of the High Court of Punjab and Haryana setting aside an arbitration award.
The Haryana State Agricultural Marketing Board (referred to shortly as the "Marketing Board") entered into a contract with the appellant for the construction of their office building at Panchkula near Chandigarh. It was stipulated that the work would be completed within six months. It was also stipulated that in case of a dispute between the par- ties, the Superintending Engineer of the Marketing Board would be appointed as sole Arbitrator.
A dispute arose between the parties in regard to comple- tion of the construction, and it was decided to refer the matter to arbitration. On 11 March, 1983 the respondent appointed Shri D.P. Gupta, Superintending Engineer of the Marketing Board as Arbitrator. While the Arbitrator was seized of the dispute between the parties, the Chairman of the Marketing Board purported to revert him to his parent Department. On 6 April, 1984 the Arbitrator made his Award. Under the Award the appellant was held entitled to Rs.55,242.66 with interest. On 2 May, 1984 the appellant applied before the learned Subordinate Judge, Ist Class, Chandigarh, for making the Award a rule of the Court. Meanwhile, on 24 May, 1984 the State Government passed an order confirming that Shri D.P. Gupta continued in his post as Superintending Engineer of the Marketing Board. On 28 February, 1985 the Marketing Board passed a resolution, giving effect to the direction of the Government extending the deputation tenure of Shri D .P. Gupta to 3 September, 1985. On 30 July 1985 the Trial Court made the Award a rule of the Court. In appeal to the High Court, it was urged that on 6 April, 1984, the date on which the Arbitrator made his award, the Arbitrator had lost jurisdiction since he had been transferred out on 4 April, 1984 from the post of Superintending Engineer of the Marketing Board to his parent Department in the Haryana Government. The High Court accept- ed the plea and reversed the order of the Trial Court and set aside the Award.
The sole question before us is whether the Arbitrator, Shri D.P. Gupta, had jurisdiction to make the Award on 6 April, 1984 or had lost jurisdiction because of the order dated 4 April, 1984 reverting him to his parent Department. The material before us shows that Shri D.P. 852 Gupta was on deputation with the Marketing Board up to September 4, 1984 and that he was prematurely required by the Chairman of the Marketing Board by order dated 4 April, 1984 to revert to his parent Department. The State Govern- ment, however, ordered on 24 May, 1984 that Shri D.P. Gupta would continue on deputation with the Board, and it is not disputed that Shri Gupta rejoined the Board. He did not in fact ever resume a post in his parent Department. The neces- sary consequence of the order of the State Government con- tinuing him on deputation with the Marketing Board was to nullify the order dated 4 April, 1984 passed by the Chairman purporting to revert Shri Gupta to his parent Department. It appears from the record that Shri Gupta was paid his salary by the Marketing Board for the entire month of April 1984, a circumstances which establishes that the Board itself con- sidered him as continuing on deputation when he made the Award. That being so, he must be deemed to have enjoyed jurisdiction as Arbitrator on 6 April, 1984 when he made the Award. The deputation of Shri Gupta with the Marketing Board did never terminate.
In the result the appeal is allowed, the judgment and order of the High Court are set aside and the judgment and decree of the Trial Court are restored. No Order as to costs.
N.V.K. Appeal allowed.
853