K. C. Mehra v. Union of India — 1959 DIGILAW 10 (HP)

JUDGMENT :- This appeal, under S. 39(1)(vi) of the Indian Arbitration Act, arises under the following circumstances : The appellant, who is a P. W. D. contractor, had taken three contracts for work in Himachal Pradesh. They consisted of : (i) Construction of dry stone retaining and breast walls in mile 1-6 Nahan Kumarhatti Road (Agreement No. 8); (ii) Constructing metalling and surface painting mile 4/5 to 4/7 and 8/1 Doon Road (Agreement No. 9) and (iii) Rebuilding and retaining walls on Arki-Bilaspur Road (Works Order No. 690677). Subsequently, disputes arose between the parties as to the amounts payable to the appellant on account of these contracts. Under cl. 25 of the Conditions of Contract, the disputes were referred by the Chief Engineer, Central P.W.D., to the arbitration of Shri V. D. Bhandari, Superintending Engineer, Aviation Planning Circle, C.P.W.D., New Delhi. The arbitrator gave his awards on 18-8-1954 in respect of the three contracts. On 21-9-1954, the Government Advocate of Mahasu District Himachal Pradesh moved an application under Sec. 14(2) of the Arbitration Act in the Court of the Senior Subordinate Judge, Mahasu, praying that a decree be passed in terms of the awards. Objections were taken by the appellant to the awards in respect of Agreements Nos. 8 and 9. The objections were two-fold : In the first place, it was contended that the Senior Subordinate Judge, Mahasu, had no jurisdiction to deal with the awards relating to Agreements Nos. 8 and 9, which, in their turn, related to Sirmur district, i.e. beyond the jurisdiction of the Senior Subordinate Judge, Mahasu. In the second place, objections were levelled against those awards on their merits also. It may be noted here that the appellant was content with the award in respect of work Order No. 690677, which pertained to the work done on the Arki-Bilaspur Road, which is within the jurisdiction of the Senior Subordinate Judge, Mahasu. On the point of jurisdiction, the then Senior Subordinate Judge (Shri Chet Ram) held that he had jurisdiction to deal with the three contracts, because, in his opinion, there was only one reference and since a part of the subject-matter was situated within his jurisdiction, he could deal with all the three contracts. A revision petition against that order was filed in this Court (Civil Revision No. 6 of 1956). A revision petition against that order was filed in this Court (Civil Revision No. 6 of 1956). That was rejected by this Court on 30-7-1956, without going into its merits, leaving it open to the Contractor to come up in appeal under Sec. 39 of the Arbitration Act in due course. When the case went back, Shri T.C Rewal, who had succeeded Shri Chet Ram as Senior Subordinate Judge, Mahasu, went into the other objections and came to the conclusion that there was no force in them. Consequently, he allowed the application under Sec. 14(2) made by the Government Advocate, District Mahasu, Himachal Pradesh, and passed a decree in terms of the award. It is against this order, refusing to set aside the awards (in respect of Agreements Nos. 8 and 9) that this appeal has been filed. 2. During arguments in this Court, Mr. Malhotra for the appellant stated that as far as work Order No. 690677 (work on the Arki-Bilaspur Road) was concerned his client was satisfied with the award and would not seek to set it aside. Counsels statement to that effect has been recorded on the Order-sheet on 5-11-1959. 3. Learned counsel for the appellant vehemently, urged before me that the Court of the Senior Subordinate Judge, Mahasu, had no jurisdiction to deal with Agreements 8 and 9, which related to work done in Sirmur district. He pleaded vigorously that it was a misnomer to say that there was only one reference to arbitration or that there was only one award. I find considerable force in this argument. The order of reference made by the Chief Engineer, Central P.W.D., Mr. B. S. Puri dated 19-10-1951 after referring to the three contracts separately in the heading (subject) clearly went on to say that disputes had arisen between the parties out of the said contracts and therefore, he was appointing Mr. V. D. Bhandari, Superintending Engineer, Aviation Planning Circle, C.P.W.D., as sole arbitrator to decide the disputes between the parties arising out of the above contracts, and to give his awards in respect of the three contracts separately. Mr. Malhotra further pointed out that the three contracts were entered into on different dates, i.e. Agreement No. 8 on 30-1-1950 and Agreement No. 9 dated 28-1-1950 and the Work Order No. 690677 on 1-11-1949. Mr. Malhotra further pointed out that the three contracts were entered into on different dates, i.e. Agreement No. 8 on 30-1-1950 and Agreement No. 9 dated 28-1-1950 and the Work Order No. 690677 on 1-11-1949. Further, Agreement No. 8 related to work done on the Nahan-Kumarhatti Road, while Agreement No. 9 related to work done on the Doon Road. The Work Order, as already stated, related to work done on the Arki-Bilaspur road. I fail to see how these three contracts can be said to form only one contract. The Chief Engineer, Shri B. S. Puri, in his order of reference, quoted above, has distinctly used the word contracts and not contract. Further, the Superintending Engineer, who was appointed arbitrator, was directed to submit three separate awards. Under these circumstances, it is idle to urge that there was only one contract or there was only one order of reference and similarly there was only one award. A perusal of the award made by Shri V. D. Bhandari dated 18-8-1954 would show that in the opening portion of the award (subject), he had also referred to the three contracts separately. It is also noteworthy that he has given his decision on each contract separately, i.e., he, first of all, gave his award on Agreement No. 8, then on Agreement No. 9 and finally on the Work Order. The mere fact that the awards in respect of the three contracts have been typed on three consecutive sheets of paper would not make it one award. It would have been proper for the Arbitrator to have got the three awards typed on three separate sheets of paper, appending his signature at the foot of each award. But his failure to do so would not convert the three awards into a single award. 4. On behalf of the respondent, emphasis was laid on the fact that before the awards were ready, the appellant, Shri K. C. Mehra, had given his consent to the grant of extension of time by the Senior Subordinate Judge, Mahasu, to the Arbitrator to submit his awards. The Court below was, however, aware that the consent of the parties cannot confer jurisdiction on a Court, which lacks it. It has, in this connection, referred to John Vasica v. Janda Rubber Works Ltd., AIR 1950 E.P. 188 and (S) AIR 1955 Cal 161 , Continental Drug Co. The Court below was, however, aware that the consent of the parties cannot confer jurisdiction on a Court, which lacks it. It has, in this connection, referred to John Vasica v. Janda Rubber Works Ltd., AIR 1950 E.P. 188 and (S) AIR 1955 Cal 161 , Continental Drug Co. Ltd., Bombay v. Chemoids and Industries Ltd. Calcutta. The Senior Subordinate Judge, Mahasu, obviously, had no jurisdiction in Sirmur district. 5. There remains the argument that a part of the cause of action arose in Mahasu district and, therefore, the Senior Subordinate Judge, Mahasu, could deal with all the three contracts. This argument takes it for granted that there was only one reference and one award. I have already given my reasons for repelling this contention. It is wrong to say that the Senior Subordinate Judge, Mahasu, had jurisdiction to deal with the three contracts because the Work Order relates to the work done in Arki-Bilaspur Road within his jurisdiction. The Senior Subordinate Judge, Mahasu, had jurisdiction to deal only with the contract relating to the Work Order No. 690677 and the resultant award. As stated in the opening portion of this judgment, the appellant was content with the award relating to this Work Order and there was no further dispute regarding it. As regards the other two contracts, i.e. arising out of the Agreements No. 8 and 9. I am clearly of the opinion that the Senior Subordinate Judge, Mahasu, had no jurisdiction to deal with the awards arising out of them. Under Sec. 2(c) of the Arbitration Act, Court means a Civil Court having jurisdiction to decide questions forming the subject-matter of the reference if the same had been the subject-matter of a suit. In case a suit had been filed respecting the work done on the Nahan-Kumarhatti Road or the Doon Road, it would not have been cognizable by the Senior Subordinate Judge, Mahasu. It seems to me that the application under Sec. 14 (2) was wrongly filed in the Court of the Senior Subordinate Judge, Mahasu, without proper consideration. 6. There remains the question as to what course should be adopted now in view of this Courts finding that the awards arising out of Agreements Nos. 8 and 9 could not have been dealt with by the Senior Subordinate Judge, Mahasu. 6. There remains the question as to what course should be adopted now in view of this Courts finding that the awards arising out of Agreements Nos. 8 and 9 could not have been dealt with by the Senior Subordinate Judge, Mahasu. In a similar case decided by the Madras High Court reported in Krishna Iyer v. Subbarama Iyer, AIR 1932 Mad 462, a Division Bench of that High Court allowed the appeal and directed that the application under para 20 to Schedule 2 to the Civil Procedure Code be returned to those who presented it. Section 14 (2) of the Arbitration Act corresponds to para 20 of the former Schedule 2. 7. The prayer made in this appeal is that the order of the Court below (refusing to set aside the award) be vacated and the award be set aside. At the risk of repetition, I may point out that as far as the Work Order is concerned, the award is not disputed. Therefore, so much of the award as relates to the Work Order must remain intact. As regards the awards arising out of Agreements Nos. 8 and 9, having held that the Senior Subordinate Judge, Mahasu, had no jurisdiction to deal with them, obviously, this Court must leave it to a Court of competent jurisdiction to go into the appellants objections against them and decide whether those awards should be maintained or set aside. Under these circumstances, this Court can only set aside that portion of the lower Courts order, as purports to pass a decree in terms of the award as far as Agreements Nos. 8 and 9 are concerned and direct that the application dated 21-9-1954 made under Sec. 14(2) of the Arbitration Act filed by the Government Advocate, Himachal Pradesh, be returned to him. This was the course adopted by the Division Bench of the Madras High Court in AIR 1932 Mad 462 in similar circumstances. ORDER 8. I allow this appeal to this extent that the order of the Court below is set aside in so far as it purports to pass a decree in terms of the awards relating to Agreements Nos. 8 and 9. I make it clear that the awards arising out of Agreements 8 and 9 have not been set aside by me. I allow this appeal to this extent that the order of the Court below is set aside in so far as it purports to pass a decree in terms of the awards relating to Agreements Nos. 8 and 9. I make it clear that the awards arising out of Agreements 8 and 9 have not been set aside by me. That would be a matter to be considered by a Court of competent jurisdiction, if and when duly moved in that behalf. The application under Sec. 14(2) of the Arbitration Act dated 21-9-1954 filed by the Government Advocate Himachal Pradesh in the Court of the Senior Subordinate Judge, Mahasu, will be returned to him, (i.e. Government Advocate). 9. Since this is the first case of its kind that has come up to this Court, I direct that parties will bear their respective costs here, and in the Court below. Appeal allowed.