JUDGMENT The judgment of the Court was as follows :–– This suit was filed by Union of India on October 9, 1969, for a declaration that the decree dated April 20, 1969, passed by the Original Side of this Court in terms of an award dated February 4, 1969, in Award Case No. 67 of 1969, is without jurisdiction and is null and void and not binding on the Government; for adjudging the said decree to be void and directing the same to be delivered up and cancelled; for an injunction restraining the defendant contractor from executing the said decree against the plaintiff, hereinafter referred to as the Government, and for costs. 2. Material averments made in the plaint are that by a written contract dated January 2, 1963, containing an arbitration clause and entered into at Lucknow, the defendant hereinafter referred to as the contractor, agreed to carry out some constructional works for extension of a Bar and Rod Mill of the Metal & Steel, Factory of the Government situate at Ichhapur outside the jurisdiction of this Court. The said contract was entered into by the Chief Engineer, Eastern Command of the Army, for and on behalf of the President. Disputes between the parties relating to claims and counter-claims in relation to the said works were referred to an Arbitrator who made the said award in favour of the contractor for Rs. 10,16,380-17 which was filed in this Court. The contractor's cause of action forming the subject-matter of the said reference arose wholly outside the jurisdiction of this Court and this Court had no jurisdiction to decide the question forming the subject-matter of the said reference. In these circumstances the said award could not be filed in this Court and the said decree was passed without jurisdiction and is a nullity. 3. The contractor in its written statement admitted that the contract in suit was signed at Lucknow but said that the invitation to submit the tender having been receive by the contractor at Calcutta within the jurisdiction of this Court and the contractor having sent its tender from Calcutta, a part of the contractor's cause of action had arisen within the jurisdiction of this Court, though the formal contract was signed at Lucknow. Main defence pleaded is that after the contract was entered into the office of the Chief Engineer, Eastern Command, was shifted to Fort William at Calcutta which is situate within the jurisdiction of this Court, and the Chief Engineer, Bengal Zone of the Eastern Command, did various matters in relation to said contract from Fort William and many orders relating to deviation from works and extra works beyond the limits prescribed by the contract were issued from Fort William, and in pursuance of those orders the contractor carried out those deviated and extra works. The Government had paid diverse sums of money to the contractor against running account bills by means of account-payee crossed cheques which were drawn on Calcutta branch of the Reserve Bank of India situate within the jurisdiction of this Court and those cheques were cleared by the contractor through its bankers at Calcutta whose offices were situate within the jurisdiction of this Court. All those facts constituted several parts of the contractor's causes of action and they had arisen within the jurisdiction of this Court. In the said reference the contractor made an application in this Court under the Arbitration Act for restraining the Government from withholding the payment of Rs. 5 lacs payable to the contractor under a different contract and an order being made in favour of the contractor an appeal was preferred by the Government which was allowed; on merits and the costs of those proceedings were left to the decision of the Arbitrator. The Government did not question the jurisdiction of this Court in those proceedings and, thereafter the Government referred its claim for cost of those proceeding before the Arbitrator. On the application of the Arbitrator this Court had also issued subpoenas on several persons for production of some documents before the Arbitrator. In these circumstances, this Court had acquired an exclusive jurisdiction over the award under the Arbitration Act. The contractor denied that this Court had no jurisdiction to pass the said decree as alleged by the Government and further pleaded that, inspite of the service of notice under section 14(2) of the Arbitration Act, the Government did not make any application to take, the award off the file on the ground of alleged lack of jurisdiction of this Court and the said decree is binding on the Government. Plea of res judicata and estoppel were also taken in the written statement. 4. The Government after filing this suit made an application for an injunction restraining the contractor from executing the said decree which was allowed by me as the parties agreed to go to the trial in no time. Thereafter, one witness for the Government was examined de bene esse, but it is unnecessary to discuss his evidence. After the case was opened by Mr. A. K. Basu, appearing for the Government, the following issues were settled by me :–– (1) It the suit barred by res judicata or by principles analogous thereto as mentioned in para 17 of the written statement? (2) Is the plaintiff estopped from contending that this Court has no jurisdiction to pronounce the judgment in accordance with the award ? (3) Had this Court no jurisdiction to pass the decree dated April 28, 1969 ? (4) Is the said decree null and void as alleged in the plaint ? (5) Is the suit barred by the provisions of the Arbitration Act as alleged in para 18 of the written statement ? (6) To what relief, if any, is the plaintiff entitled ? 5. Many documents were tendered by consent of the parties including the statements filed before the Arbitrator. It is an admitted fact that after the contract was entered into at Lucknow, the office of the Chief Engineer, Eastern Command, was shifted to Fort William and is still situate at Fort William. Other admitted fact is that the contractor submitted three groups of drawings relating to those works out of which two groups were submitted at Fort William and they were approved by the Chief Engineer, Bengal Zone of the Eastern Command at Fort William, but Mr. Basu had contended that the said officer had no authority to approve those drawings. 6. The contractor's claim for over Rs. 50 lacs before the Arbitrator included claims for compensation for doing deviated and extra works under the Authority of the Chief Engineer, Bengal Zone, and also for recovery of money payable for executing works in accordance with the contract. The Government disputed the contractor's claim before the Arbitrator and in its cross-claim prayed for an award in its favour for over Rs. The Government disputed the contractor's claim before the Arbitrator and in its cross-claim prayed for an award in its favour for over Rs. 15 lacs which included claims for compensation from the contractor for not executing the works in accordance with the contract and the orders relating to the deviated and extra works. The Government also claimed the costs of those proceedings of this Court in the said reference. In its first counter-statement of fact the Government disputed the jurisdiction of the Arbitrator to decide the contractor's claim for compensation relating to deviated and extra works on the plea that those claims were not covered by the arbitration clause contained in the said contract. Thereafter, a separate arbitration agreement in writing was entered into by the parties referring those claims of the contractor to the said Arbitrator which was exhibited in this suit and the said claims of the contractor became a subject-matter of the said reference. As the fact of the suit will depend on the decision on issue Nos. 3 and 4, I will deal with them before the other issues. Issue Nos. 3 and 4 7. Following points were urged by Mr. Basu on these two issues : (a) The contractor's whole cause of action, forming the subject-matter of the said reference, arose outside the jurisdiction of this Court and so the award could not be filed in this Court in view of section 2(c) and section 31(e) of the Arbitration Act this Court had no jurisdiction to have the said decree in terms of the said a ward. (b) No award can at all be field in this Court unless this Court shall have jurisdiction over the whole of the subject-matter of the reference and even if in this case a part of the contractor's cause of action could be said to have arisen within the jurisdiction of this Court, still this award could not be field in this Court, as the contractor's whole cause of action did not arise within its jurisdiction, and so the decree passed by this Court in terms of the said award was wholly without jurisdiction. (c) Assuming that the said award could be filed in this Court on the basis that a part of the contractor's cause of action had arisen within its jurisdiction, still have under clause 12 of the letters patent not being obtained from this Court for filing the said award, this Court had not jurisdiction to pass the said decree on the said award and the said decree having been passed without jurisdiction is null and void. (d) This Court shall have jurisdiction to pass a decree on an award when the party against whom the award is made resides or carries on business or personally works for again within the jurisdiction of this Court at the time of filing of the award, but the award in suit could not be filed on this basis in this Court as the Government did not carryon any business nor did it personally work for gain within its jurisdiction. Re : Point (a) of Mr. Basu : 8. The contract in suit being executed at Lucknow I reject the contention of Mr. Bhabhra that the offer inviting tenders by the Government and submission of the tender by the contractor constituted a part of the contractor's cause of action in view of the judgment of the Supreme Court in (1) Bhagwandas Goverdhandas Kedia v. Girdharilal v. Purshottamdas & Co. & Ors., AIR 1966 SC 543 and the judgment of Mallick J. in the case of (2) S. P. Consolidated Engineering Co. (P) Ltd. Union of India & Anr. AIR 1966 Cal 259 . 9. I accept the evidence adduced on behalf of the Government that the State Bank of India at Ichhapur acted as a 'treasury' within the meaning of that term used in the contract. The contract provides for payment to be made to the contractor at the 'treasury' situate near the works site and I hold that contractual place of payment was at Ichhapur and the contractor's cause of action for non-payment of money by the Government under the contract arose outside the jurisdiction of this Court. 10. After the office of the Chief Engineer, Eastern Command, was shifted of Fort William where the office of the Bengal Zone of the Eastern Command was situate, the Officers of the Bengal Zone did everything in relation to the contract on behalf of the Chief Engineer, Eastern Command. 10. After the office of the Chief Engineer, Eastern Command, was shifted of Fort William where the office of the Bengal Zone of the Eastern Command was situate, the Officers of the Bengal Zone did everything in relation to the contract on behalf of the Chief Engineer, Eastern Command. The Chief Engineer of the Bengal Zone approved two groups of drawings at Fort William which were submitted by the by the contractor. The Supervisor of Works, Bengal Zone of Eastern Command, whose office was also situate at Fort William, also signed those drawings at Fort William. The Assistant Supervisor of works, the Garrison Engineer and his assistants belonging to the Eastern Command of the Bengal Zone Supervised the works at Ichhapur on behalf of the Government. 11. The document in connection with invitation of submit the tender and the contractor's tender were incorporated in the contract so as to make them a part of the said contract. Those three groups of drawings, submitted by the contractor to the Government, were as follows : (i) Drawings to be submitted by the contractor along with the tender in terms of clause 2 (see serial page 3) and clause 11 (a) and (b) (see serial page 68) of the contract exhibited in the suit and they are hereinafter referred to as tender drawings for convenience : (ii) Drawings to the submitted by the contractor in terms of clauses 11(c) (see serial page 69) and they are hereinafter referred to as preliminary drawings : (iii) Drawings to be submitted by the contractor in terms of Clause 12 (see serial page 69) of the contract and they are hereinafter referred to as working drawings. 12. The contractor was enjoined to submit tender drawings in terms of clause 11 (a) and (b) and was further required by Clause 2 to quote 'unit rates' calculated on the basis of tender drawings, but those unit rates were not 'firm' rates at stated in Clause 4 of the contract (see serial page 5). Moreover, under Clause 4 of the contract actual quantities of work to be executed by the contractor were to be calculated on the basis of approved working drawings after the contract was entered into. Clause 11(c) (see serial page 69) enjoined the contractor to submit preliminary drawings after the contract was entered into to enable the 'Accepting Officer' to check the designs. Clause 11(c) (see serial page 69) enjoined the contractor to submit preliminary drawings after the contract was entered into to enable the 'Accepting Officer' to check the designs. Under Clause 11 (f) (see serial page 69), the contractor was to make all preliminary arrangements during the period taken in preparation of preliminary drawings and working drawings and was also to commence work, if possible. The contractor was required by Clause 12 to submit working drawings after the approval to the preliminary drawings by the 'Accepting Officer' and after working drawings were approved by the officer the contractor was further required to supply several sets of preliminary and working drawings to the Government, but no fabrication work was to be done by the contractor until working drawing were approved. 13. Tender drawings were submitted by the contractor at Lucknow. Preliminary and working drawings were submitted by the contractor at the shifted office of the Chief Engineer at Fort William and they were approved and accepted by the officers of the Bengal Zone and an work were done on the basis of those approved drawings. 14. Mr. Basu, in his argument, disputed the authority of these officers of the Bengal Zone to approve those drawings, but before the Arbitrator the Government did not question their authority. On the other hand, the Government claimed large sums of money in the reference as damages on the allegation that the contractor did not execute the work in accordance with those approved drawings. In my opinion, the Government is debarred from assuming this inconsistent position and, apart from anything else, as this very contention of Mr. Basu strikes at the root of the award, it makes the suit wholly barred under section 32 of the Arbitration Act. This Court cannot go behind the award in this suit and the a ward must be taken according to its tenor and the only question which can be agitated here is as to whether this Court had no jurisdiction to pass the said decree in terms of the said award. Moreover, the authority of those officers were not questioned in the plaint and this Court must proceed on the basis that those officers had sufficient authority to accept and approve those drawings. Moreover, the authority of those officers were not questioned in the plaint and this Court must proceed on the basis that those officers had sufficient authority to accept and approve those drawings. 15 Now, the question is whether submission of those preliminary and working drawings by the contractor and approval of those drawings by the Government could have constituted a part of the contractor's cause of action had a suit been filed by the contractor against the Government. The contract imposed an obligation on the contractor to submit preliminary drawings, and unless this obligation was discharged by the contractor the question of further performance of the contract by the contractor could have never arisen though the contractor could have started some work, if possible. Those drawings could either be approved or rejected by those officers, and if they were rejected then the contract would have automatically been discharged. The very foundation of the contract rested not only on the performance of this obligation on the part of the contractor to submit those preliminary drawings but also on the approval of those drawings by the Government and if any one of those two conditions was not fulfilled the contract would have automatically been discharged. 16. Above obligation having been preformed by the contractor and those drawings having been approved by the Government a further obligation was incurred by the contractor under the contract to submit working drawings for approval of the officer. Performance of this obligation on the part of the contractor was of vital importance as no fabrication work could at all be undertaken by the contractor until those working drawings were approved by the Government and if those working drawings were not approved by the Government the contract would have automatically been terminated. Moreover, actual quantities of those works and payment at unit rates were to be calculated on the basis of those working drawings. The contractor's right to receive any money and its quantum and the Government's liability to pay any money to the contractor solely dependent on the execution of works by the contractor in accordance with those approved working drawings, and unless those working drawings were approved by the Government no such right would have accrued to the contractor. The contractor's right to receive any money and its quantum and the Government's liability to pay any money to the contractor solely dependent on the execution of works by the contractor in accordance with those approved working drawings, and unless those working drawings were approved by the Government no such right would have accrued to the contractor. The contractor's claim arising out of execution of those works in accordance to those working drawings was disputed by the Government which was one of the subject-matter of the said reference before the Arbitrator. 17. Delivering the opinion of the judicial Committee in (3) Mohammad Khalil & Ors. v. Mahbub Ali, LR 75 IA 121 (144) Sir Madhavan Nair, J. said :–– The cause of action means every fact which will be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment.................The cause of action has no relation whatever to the defence that may be set up by the defendant, nor does it depend on the character of the relief prayed for by the plaintiff. It refers to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour (Muss. Chand Kour v. Partab Singh, 15 IA 156 at 157). 18. Instead of referring its claim before the Arbitrator had a suit been filed by the contractor on this contract the contractor would have to prove 'if traversed by the Government that the preliminary and working drawings were submitted by the contractor to the Government and those drawings were approved' by the Government in order to get a decree in its favour irrespective of the 'defence' that might have been 'set up' by the Government in such a suit. In those circumstances, I hold that these facts constituted a part of the contractor's cause of action which formed a part of the subject-matter of the reference and this part of the contractor's cause of action arose within the jurisdiction of this Court. 19. I will now go to some other facts to ascertain whether they also constituted a part of the contractor's cause of action and, if so, whether it arose within the jurisdiction of this Court. 19. I will now go to some other facts to ascertain whether they also constituted a part of the contractor's cause of action and, if so, whether it arose within the jurisdiction of this Court. General conditions of the contract are contained in I.A.F.W. 2249 which is a printed booklet and clause 7 of those conditions provides that the contractor shall not make any alteration in addition to or omission from the works as described in the tender documents unless authorized by the Garrison Engineer in writing. This clause empowered the Accepting Officer or any person authorized by him to make variations by way of addition to or deduction from the said works within the limits specified therein. Limits of the said deviations were fixed upto a maximum of 15% of the said works which will appear from serial PP. 20 and 21 of the contract. Clause 62 of I.A.F.W. 2249 provides the manner of calculating the money to be paid to the contractor for executing additional and the deviated works as may be ordered by the officer exceeding the agreed limits. 20. Jurisdiction of the said Arbitrator to decide the claims of the contractor relating to deviated and extra work was disputed by the Government and a fresh arbitration agreement was entered into as stated earlier. The Chief Engineer, Bengal. Zone of the Eastern Command, executed this arbitration agreement for and on behalf of the President and in this agreement he admitted that he had 'ordered certain works' to be carried out by the contractor 'which exceeded the limits as set out in the said contract' and the contractor had executed the aforesaid works exceeding the deviation limit under the said contract. It is to be noticed here that the authority of the Chief Engineer, Bengal Zone, to place those orders were neither denied nor disputed by the Government before the Arbitrator and on the other hand the Government in its statement of claim filed before the Arbitrator made a cross claim for awarding compensation in its favour against the contractor for failure to carry out several items of works in accordance with those orders relating to deviated and extra work. 21. It is wholly unnecessary to go into the disputed question as to whether those orders were received by the contractor at Calcutta or at Ichhapur in view of other facts stated hereinafter. Mr. 21. It is wholly unnecessary to go into the disputed question as to whether those orders were received by the contractor at Calcutta or at Ichhapur in view of other facts stated hereinafter. Mr. S. N. Sinha was the Assistant Garrison Engineer and he supervised the work at Ichhapur, and as a witness for the Government Mr. Sinha in examination-in-chief (Qs. 30-33) said that those orders were placed with the contractor at Ichhapur by the Garrison Engineer, and in cross-examination (Q.155) he said that the office of the, Eastern Command was shifted to Fort William practically by the end of April 1963. In Q. 156 he said : The Chief Engineer, Eastern Command, had a Zonal Chief Engineer or Chief Engineer, Bengal Zone, and under him there was C.W.E. and under C.W.E. there was the Garrison Engineer and whose office was located at Ichhapur and under whom the works were executed. In Q. 157 he admitted that the offices of the Chief Engineer, Eastern Command, and the Chief Engineer, Bengal Zone, were all through situate at Fort William. Then he was asked the following relevant questions: Q. 160. Can you find out the deviation to the contract from Ex. G or from the file containing Ex. G ? The deviation I meant regarding extra works which were ordered on the contractor during the currency of the contract and not the contractual condition. Q. 162. Can you find out from the Ex. G or, from the file containing Ex. G the deviation Nos. 1, 2 and 7 in the contract ? If I remember aright I have already answered this question that the extra work were ordered on the contractor through site order book maintained at Ichhapur. Q. 163. That site order book under which the extra orders were issued had not been produced in the Court, can you tell my Lord under whose instruction the extra work orders were issued ? Who originally gave directions for extra work being done ? As far as I know, to me it was given by the Garrison Engineer and he in turn might have got it from his superiors. Q. 166. I am suggesting to you that whatever deviations or extra works were directed to be done they were directed by the Chief Engineer, Bengal Zone, Fort William, Calcutta, or the Chief Engineer, Eastern Command, Fort William, Calcutta ? Yes. 22. Q. 166. I am suggesting to you that whatever deviations or extra works were directed to be done they were directed by the Chief Engineer, Bengal Zone, Fort William, Calcutta, or the Chief Engineer, Eastern Command, Fort William, Calcutta ? Yes. 22. According to Mr. Sinha deviated and extra works were directed to be done by Chief Engineer, Bengal Zone, from Fort William or, by the Chief Engineer, Eastern Command, from Fort William (Q. 166) and, the Garrison Engineer placed those orders on the contractor at Ichhapur through the site order book maintained at Ichhapur (Qs. 30-33, 162-63). I accept the evidence of Mr. Sinha as it is fully corroborated by documents exhibited in the said suit and I hold that the Chief Engineer, Bengal Zone, had authorized those deviated and extra works which were beyond the prescribed limits and he did so at Fort William. The Garrison Engineer by placing those orders to the contractor at Ichhapur, had carried out the instructions of the Chief Engineer, Bengal Zone. In other words, it was the Chief Engineer, Bengal Zone, who had ordered those deviated and extra work to be done by the contractor and in conveying those orders the Garrison Engineer merely acted as a conduit pipe. 23. It is true that the Garrison Engineer had placed these orders but he was not the authorized person under the contract to issue any order for doing works beyond the prescribed limit. The 'Accepting Officer' was the Chief Engineer, Eastern Command, under the contract and he or any officer authorized by him was the only person who had the authority to place any order relating to deviated or extra work beyond the prescribed limits. This authority of the Chief Engineer, Bengal Zone, was questioned in cross-examination of Mr. A. C. Gupta, who was the Manager of the contractor, but Mr. Sinha had expressly admitted that the Chief Engineer, Bengal Zone, had such an authority. Moreover, the Government did not dispute the authority of the Chief Engineer, Bengal Zone before the Arbitrator and, on the other hand, the Government made a cross claim against the contractor on the basis of those very orders issued by the Chief Engineer, Bengal Zone. Sinha had expressly admitted that the Chief Engineer, Bengal Zone, had such an authority. Moreover, the Government did not dispute the authority of the Chief Engineer, Bengal Zone before the Arbitrator and, on the other hand, the Government made a cross claim against the contractor on the basis of those very orders issued by the Chief Engineer, Bengal Zone. In the premises, the Government 'having a clear knowledge of the circumstances on which' it 'might have founded an objection to the Arbitrator proceeding to make' his 'award' did submit to the arbitration going on; that the Government 'allowed' the Arbitrator to deal with the case as it stood before him 'taking' its chance of the decision being more or less favourable to the Government and so 'it is too late for' the Government 'after the award has been made to insist on this objection' as laid down by the Judicial Committee in (4) Chowdhury Murtaza Hossain v. Musstt. Bibi Bechunissa, LR 3 IA 209 (228). 24. Authority of the Chief Engineer, Bengal Zone, was not disputed in the plaint and the Government did not call any witness to prove that the Chief Engineer, Bengal Zone, had no such authority though in the agreement to refer those claims for the decision of the Arbitrator the said officer representing the Government had unequivocally admitted that he had placed those orders to the contractor. Moreover, the Government having made a cross claim for damages for non-execution of those works in accordance with the said orders had accepted the position that the said officer had ample authority to place those orders and, in my opinion, the Rule of Estoppel debars the Government from assuming this inconsistent position. The Government is bound by the evidence of Mr. Sinha and, apart from anything else, the Government has totally failed to prove that the Chief Engineer, Bengal Zone, had no authority to place those orders with the contractor. In any event this submission of Mr. Basu directly affects the validity of the award which cannot be gone into in this suit and this very submission makes the whole suit barred under section 32 of the Arbitration Act. This Court cannot go behind the award in this suit and must take the award on its face value. I overrule the contention that the Chief Engineer, Bengal Zone, had no authority to authorize those deviated and extra work. 25. This Court cannot go behind the award in this suit and must take the award on its face value. I overrule the contention that the Chief Engineer, Bengal Zone, had no authority to authorize those deviated and extra work. 25. Orders of the Chief Engineer, Bengal Zone, relating to those deviated and extra work placed through the Garrison Engineer constituted a 'bundle of facts' and the contractor would have to prove those facts if denied in a suit for recovery of those sums against the Government and, accordingly, those facts constituted a part of the contractor's cause of action. In these circumstances, I am unable to accept the contention of Mr. Basu that the contractor's whole cause of action forming the subject-matter of the said reference arose outside the jurisdiction of this Court and I hold that several parts of the contractor's causes of action arose within the jurisdiction of this Court. I will later on discuss the legal questions involved in this point alongwith the legal questions involved in point (d) of Mr. Basu for convenience. 26. In view of my above findings, it is wholly unnecessary to go into other facts for deciding whether they also constituted several parts of the contractor's causes of action and they arose within the jurisdiction of this Court as contended by Mr. Bhabhra, but I will briefly indicate below what were urged by him in this connection : (i) The Chief Engineer, Bengal Zone, from Fort William passed orders excluding several items of work from the said contract with the result the contractor had suffered damages and had claimed those damages in the arbitration proceedings; (ii) The contractor was entitled to be paid at a higher rate due to the increase in price of steel in terms of the contract and the said increase in price took place in Calcutta pursuant to the order of the Iron and Steel Controller whose office was situate in Calcutta within the jurisdiction of this Court though the relevant notification increasing the price was published in the Gazette at New Delhi; (iii) The Government had made diverse payments to the contractor on running account bills by means of account-payee cross cheques mostly drawn by the Government on the Calcutta Branch of the Reserve Bank of India, and those cheques were encashed by the contractor through its bankers at Calcutta. Proceeds of those cheques were to be adjusted with the final bill and the Government having claimed before the Arbitrator that the contractor was overpaid and that the Government was entitled to adjust those amounts in terms of close 67 of I. A. W. F. 2249, the Contractor would have to prove that no over payment was made by the Government in order to succeed in a suit; and (iv) All these facts constituted several parts of the contractor's causes of action and they arose within the jurisdiction of this Court and so this Court would have jurisdiction to entertain a suit if filed by the contractor in this Court. Re: Point (b) of Mr. Basu : 27. Before discussing the legal question it is necessary to say briefly that the subject-matter of the reference before the Arbitrator was divided in three groups of claims and they were : (i) The contractor's claim for over Rs. 50 lacs against the Government arising out of the said contract and its breach including the claims arising out of the orders relating to those deviated and extra work; (ii) The Government's claim for over Rs. 15 lacs against the contractor for compensation for breach of the said contract and for not performing some items of deviated and extra work in accordance with these orders; and (iii) the Government's claim for costs arising out the said proceedings in this Court. 28. Mr. Basu contended that no award can be filed in a Court unless the whole of the subject-matter of the award falls within the jurisdiction of this Court, but a similar contention was rejected by a Division Bench of the Bombay High Court in (5) Raghawendra Ayyagi Desai v. Gururao Raghawendra Desai, ILR 37 Bom 442 and it was held that the whole of the subject-matter of the award need not lie within the jurisdiction of a Court before that Court could direct the filing of an a ward under para 20 of the Second Schedule to the Code of Civil Procedure, 1908, which inter alia, provided that any person interested in the award may apply to any Court having jurisdiction over the subject-matter of the award that the award be filed in Court. On the other hand, in (6) V. N. Krishna Iyer v. V. N. Subbarama Iyer, ILR 55 Mad 689 (694), where one immovable property was situate within and another one outside British India, it was held by a Division Bench of the Madras High Court that such an award could not be filed in a Court in British India, and in delivering the leading judgment Anantakrishna Ayyar, J. observed as follows :–– Prima facie, the expression 'over the subject-matter of the award' would seem to imply over the whole of the subject-matter of the award. The words 'whole or in part' occur in paragraph 11 of the Second Schedule, and, in section 17 of the Code, the words 'any portion of the property' occur. If therefore the intention of the Legislature was that the words 'subject-matter of the award' should mean the whole or a portion of the subject-matter of the award, then it is reasonable to expect that it would have said so expressly. 29. In (7) Gangadhar Laxman Deshpande v. Dattatrya Laxman Deshpande, AIR 1937 Bom 211 (212) a Division Bench of the Bombay High Court dissented from the above observations of Anantakrishna Ayyar, J. in the following terms : No doubt 55 Madras 689, cited by the learned Judge, supports the view which he has taken. The Madras High Court has held in that case that the language of paragraph 20, Schedule 2 requires that the Court must have jurisdiction over every item of the property dealt with by the award, and that if this is not so the award cannot be split up and nothing can be done but to refuse to filed it. This would mean that in many cases private arbitrations could never be made effective in the manner contemplated by the Legislature, since there would be no Court to which the application could be made. With all deference to the learned Judges, who decided this case, we are not satisfied that this is the law. 30. In (8) Madipalli Venkatachellam v. Madipalli Suryanarayanamurty & Ors., AIR 1941 Mad 129 (133, 138, 135-6) another Division Bench of the Madras High Court rejected the contention that a Court had no jurisdiction over an award dealing with two immovable properties out of which one was situate within and the other one was situate outside its jurisdiction. 30. In (8) Madipalli Venkatachellam v. Madipalli Suryanarayanamurty & Ors., AIR 1941 Mad 129 (133, 138, 135-6) another Division Bench of the Madras High Court rejected the contention that a Court had no jurisdiction over an award dealing with two immovable properties out of which one was situate within and the other one was situate outside its jurisdiction. Mocket, J. and Krishnaswami Ayyangar, J. expressly dissented from the observations of Anantakrishna Ayyar, J. quoted above and shared the views of the learned Judges of the Bombay High Court. In his separate judgment, Krishnaswami Ayyangar, J. laid dawn the principle for deciding the question in the following terms :–– In the first place, though paragraph 20 speaks of a Court having jurisdiction over the subject-matter of the award, neither it nor Schedule 2 contains any rules for determining the Court invested with jurisdiction in matters within Schedule 2. We would be left entirely without any guidance on the point unless we can refer to the provisions of sections 15 to 25 in the Code as providing the necessary machinery. * * * * So it seems to me that it is not only permissible but obligatory upon the Court to take note of the provisions of sections 15 to 20 and with their aid to ascertain which Court is the proper Court to entertain an application under paragraph 20............ If this construction is not to be accepted it would lead, as my learned brother has observed, to starting results; it would really result in denying altogether to a litigant an easy and inexpensive remedy, by way of application in every case where the subject-matter of the award lies in more jurisdiction than one. In fact, if such were the case no Court whatever would have jurisdiction to deal with an application under the paragraph. If this was the intention of the Legislature, one would expect to find more explicit language to have been used. In my opinion, it is a forced construction that is sought to be placed upon the ward subject-matter in para 20. If this was the intention of the Legislature, one would expect to find more explicit language to have been used. In my opinion, it is a forced construction that is sought to be placed upon the ward subject-matter in para 20. It is not to be forgotten that the primary object of the Legislature is to place in the hands of litigants an easy, speedy and inexpensive remedy by resort to a domestic tribunal of their own choice without the necessity of having to institute a suit with all the delay, expense, worry and trouble it might entail. Paragraph 20 appears to my mind to be conceived with the object of promoting such a beneficent purpose and I am of opinion that if I accede to the contention of the appellant, it would result, in an appreciably large number of cases, in the frustration of the very object behind the paragraph. Beyond stating that such was the law and the plain construction of the language, the appellant's learned counsel was unable to point to any intelligible or rational basis for the distinction that he drew between a suit and an application for enforcing an award. And I find it difficult for my part, more especially when the language is not plain, to give my assent to a construction which, far from advancing justice, has the effect of hindering it. 31. In (9) Anandi Lal Poddar v. Keshavdeo Poddar & Ors., AIR 1949 Cal. 549 (552) Gentle, J. sitting singly in this Court after citing section 2 of the Arbitration Act, 1899, and clause 12 of the Letters Patent said :–– It follows that, since the decree was passed by this Court, part of the immovable properties, which are the subject-matter of the arbitration, being situated within its jurisdiction, the Court could have given leave under clause 12 of the Letters Patent for a suit to be filed in which the same matters would have been in issue as were in contest in the arbitration and consequently the Arbitrators and jurisdiction to hear the arbitration and also there is jurisdiction in this Court for the award to be filed in it. 32. Mr. 32. Mr. Basu's contention is, no doubt, supported by the observations made in (6) V. N. Krishna Iyer's case (supra), but the learned Judges of the Madras High Court in (8) Madipalli's case (supra) and the learned Judges of the Bombay High Court expressly rejected it and so do I not only for the reasons given by the learned Judges of the Bombay High Court and Krishnaswami Ayyangar, J. but also for the reasons given hereinafter. It was rightly pointed out by Krishnaswami Ayyangar, J. in (8) Madipalli's case (supra) that section 2 of the Arbitration Act, 1889, and the provision of the Second Schedule to the Code of Civil Procedure, 1908, did not deal with the jurisdiction of the Courts and one will have to look into the provisions of the relevant enactments creating the jurisdiction of the Courts for deciding this question. Section 2(c) of the Arbitration Act, 1940, defines a Court as a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but it does not include the Small Cause Court excepting for the purposes mentioned therein. Section 31(1) of the Act provides that an award may be filed in a Court having jurisdiction in the matter to which the reference relates. Section 31(4) of the Act provides that when several Courts have jurisdiction over an arbitration matter and if an application in the reference is made in one of such Courts, then that Court shall have exclusive jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no ether Courts. 33. The Arbitration Act, 1940, does not deal with the question as to when this Court shall have jurisdiction over the subject-matter of a suit, and so I will have to go to the Letters Patent of 1865 to find out whether this Court had any jurisdiction to decide the questions forming the subject-matter of the said reference. 33. The Arbitration Act, 1940, does not deal with the question as to when this Court shall have jurisdiction over the subject-matter of a suit, and so I will have to go to the Letters Patent of 1865 to find out whether this Court had any jurisdiction to decide the questions forming the subject-matter of the said reference. I find that Clause 11 of the Letters Patent has prescribed the territorial limits of this Court and Clause 12 has prescribed the pecuniary jurisdiction of this Court and, subject to the fulfilment of its pecuniary jurisdiction, has conferred jurisdiction on this Court to receive, try and determine : (i) Suits for land and other rights over immovable properties, if they are wholly situate within its territorial limits or with the leave of this Court, being first obtained, if a part of the land or the immovable property is situate within and a part outside its territorial limits, but neither the jurisdiction over the defendant nor the fact that the cause of action has arisen within its territorial limits will confer jurisdiction on this Court in relation to this suits concerning lands and other rights in respect of immovable properties; (ii) All other types of suit if (a) the whole cause of action has arisen within its territorial limits, or (b) a part of the cause of action has arisen within and a part outside its territorial limits provided leave of this Court is first obtained to institute such suit, or (c) at the time of institution of the suit the defendant (i) dwells or (ii) carries on business or (iii) personally works for gain within its territorial limits. 34. Now, it is necessary to set out below the relevant portions of two sections of the Arbitration Act 1899, and also the relevant portion of section 2(c) of the Arbitration Act, 1940 : Arbitration Act, 1899 Relevant portion of section 2 : This Act wilt apply in cases where, if the subject-matter submitted to arbitration were subject of a suit, the suit could, either with leave or otherwise, be instituted in a Presidency town, Provided that the local Government may by Notification in the Local Gazette declare this Act applicable in other local area as if it were a Presidency town. Relevant portion of section 4 : In this Act, unless there is anything repugnant in the subject or context, (a) the 'Court' means, in the Presidency towns, the High Court, and, elsewhere the Court of the District Judges. Relevant portion of section 2(c) of the Arbitration Act, 1940 : In this Act, unless there is anything repugnant in the subject or context, a '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. 35. As the Arbitration Act, 1899, was repealed by the Act of 1940 which was enacted to consolidate and amend the law relating to arbitrations and as the words 'either with leave or otherwise' in section 2 of the repealed Act were not reproduced in section 2(c) of the present Act, it was contended by Mr. Basu that the Legislature has taken away the jurisdiction of the Courts in the presidency towns in relation to all arbitration matters where leave of such Courts is necessary for filing a suit and has confined their jurisdiction solely to those cases where a suit could be filed without obtaining such leave. He said that the jurisdiction of the District and Subordinate Courts was created by the present Act and that the Legislature has not only extended the jurisdiction of the District and Subordinate Courts but has also conferred on them the ousted jurisdiction of the Courts of the Presidency towns in arbitration matters. He said that under the Code of Civil Procedure no leave is necessary to file a suit when a part of the immovable property is situate within and a part outside the jurisdiction of a District or a Subordinate Court and, in the same way, no leave is necessary to file suits other than immovable properties when part of the cause of action arises within and a part outside the jurisdiction of these Courts, but that is not the case with the High Court exercising ordinary original civil jurisdiction in the Presidency towns. He contended that knowing this difference as to jurisdiction of different Courts the Legislature in enacting the present Arbitration Act had purposely ousted the jurisdiction of this Court in relation to arbitration matters when obtaining leave under Clause 12 of the Letters Patent is a condition precedent for instituting a suit in this Court. 36. He contended that knowing this difference as to jurisdiction of different Courts the Legislature in enacting the present Arbitration Act had purposely ousted the jurisdiction of this Court in relation to arbitration matters when obtaining leave under Clause 12 of the Letters Patent is a condition precedent for instituting a suit in this Court. 36. When there are more than one defendant and one of them does not reside within the jurisdiction of a Court, then leave from such a Court is necessary under section 20(b) of the Code of 1908 to institute a suit against such a defendant if he does not agree to the institution of the suit against him and the other conditions laid down in the Code are not attracted. Instead of filing a suit, if those parties refer their disputes to an arbitrator then his award cannot be filed in any Court if the contention of Mr. Basu is accepted as correct which I am unable to do. 37. Section 2 of the repealed Act did not speak of any Court but it said that when a suit either with leave or otherwise could be filed in a Presidency town in respect of a subject-matter of arbitration, then the provision contained in that Act would come into play. Section 4 of the repealed Act defined the Court and all applications under that Act were to be made to those Courts, but neither these two sections nor any other sections of the repealed Act made any provisions relating to the respective jurisdiction of those Court. 38. The Code of Civil Procedure, 1882, was already in existence at the time the said repealed Arbitration Act was passed and under section 525 of that Code a person interested in the award could make an application to a Court of the lowest grade having jurisdiction over the matter to which the award relates for filing the award in that Court. The relevant sections of the Code of 1882 and the Letters Patent of the High Courts of Calcutta, Bombay and Madras deal with the respective jurisdiction of the Courts and not the Arbitration Act, 1899 and an application to file an award was to be made to such a Court within whose jurisdiction a suit forming the subject-matter of the award could be filed. 39. 39. The Code of 1882 was repealed by the Code of 1908 and under paragraph 20 of the Second Schedule to the Code an application could be made to any Court having jurisdiction over the subject-matter of the award for filing it in that Court. Sections 16 to 20 of the Code of 1908 deal with the jurisdiction of the Courts other than the jurisdiction of the High Courts exercising ordinary original civil jurisdiction. The jurisdiction of the High Courts in these three Presidency towns are governed by the respective Letters Patent. An award made under the Arbitration Act, 1899, could be filed under paragraph 20 of the Code of 1908 in a Court which had jurisdiction either under sections 16 to 20 of the Code or under clause 12 of the Letters Patent to the High Courts. Section 2 of the Arbitration Act, 1899, had no bearing on the question of jurisdiction of the Courts, and so I am unable to accept the contention of Mr. Basu that by not reproducing the words 'either with leave or otherwise' in the Arbitration Act, 1940, the Legislature had intended to oust the jurisdiction of the High Courts exercising ordinary original civil jurisdiction in relation to arbitration matters. 40. Mr. Basu was unable to give any reason why the Legislature wanted to oust the existing jurisdiction in arbitration matters of the High Courts exercising ordinary original civil jurisdiction, and in fairness to him I will record here that the decisions referred to hereinafter were not cited from the Bar. A number of superior Courts were in existence when the Arbitration Act, 1940, was enacted, and it is an elementary principle of interpretation of statutes that clear language is necessary to oust the existing jurisdiction of the superior Courts. Tindal, C. J. in (10) Albon v. Pyke, 134 ER 172 (174) said–– the general rule undoubtedly is, that jurisdiction of the superior Courts is not taken away except by express words or necessary implication. In (11) Dunbar v. Scottish County Investment Co. Ltd., 1920 SC 210 (217) Lord Salvesen said : A general rule applicable to the construction of statutes is that there is not to be presumed without express words an authority to deprive the Supreme Court of a jurisdiction it had previously exercised or to extend the private jurisdiction of the Supreme Court to the inferior Courts. 41. Ltd., 1920 SC 210 (217) Lord Salvesen said : A general rule applicable to the construction of statutes is that there is not to be presumed without express words an authority to deprive the Supreme Court of a jurisdiction it had previously exercised or to extend the private jurisdiction of the Supreme Court to the inferior Courts. 41. Sir Raymond Evershed MR in (12) Goldsack v. Shore, (1950) 1 All ER 276 (277) said : The jurisdiction of the King's Courts must not be taken to be excluded unless there is a clear language in the Statute which is alleged to have that effect. Viscount Simonds in (13) Pyx Granide Co. Ltd. v. Ministry of Housing Gild Local Government & Ors., [1959] 3 All ER 1 said : It is a principle not by means to be whittled down that the subject's recourse to Her Majesty's Courts for the determination of his rights is not to be excluded by clear words. That is, as McNair, J., called it in Francis Yiewsley & West Drayton U. D. C., 1957(1) AER 825, 'a fundamental rule' from which I would not for my part sanction any departure. In (14) Secretary of State v. Mask, LR 61 IA 222 (236) Lord Thankerton said : It is settled law that an exclusion of the jurisdiction of the Civil Courts is not to be readily inferred but such exclusion must either be explicitly expressed or clearly implied. 42. In (15) Ramagathan v. Government of Madras, AIR 1955 SC 604 (609) the question was whether by incorporating the words 'or any sale held without leave of the Court of any of the properties', by Act XXII of 1936 in section 232 of the Indian Companies Act, 1913, the Legislature intended to alter the existing law so far as the secured creditors of the company were concerned, and in answering the question in the negative Bhagabati, J. speaking for the Supreme Court said : There is also a presumption against implicit alteration of law and that as enunciated by, Maxwell on Interpretation of Statutes––Edn. 10 at page 81, in the following terms : One of these presumptions is that the Legislature does not 'intend to make any substantial alteration in the law beyond what it explicitly declares, other ('other' should be 'either') in express terms or by clear implications, or, in other words, beyond the immediate scope and object of the statute. In all general matters outside those limits the law remains undisturbed. It is in the last degree improbable that the Legislature would, overthrow fundamental principles infringe rights or depart from the general system of law without expressing its intention with, irresistible clearness......... This passage from Maxwell was approved of by their Lordships of the Privy Council in Murugiah v. Jainudeen, 1954––3 WLR 682 at page 687(F), and their Lordships agreed that the law was correctly stated in the passage just cited. To the same effect are also the observations of the Court of Appeal in National Assistance Board v. Wilkinson, 1952––2 QB 648(G), where it was held that the Statute is not to be taken as effecting a fundamental alteration in the general law unless it uses words pointing unmistakably to that conclusion. In that case, at page 658 Lord Goddard, C. J. observed : But it may be presumed that the Legislature does not intend to make a substantial alteration in the law beyond what it expressly declares. In Minet v. Leman, (1855) 20 Beav 269(H) Sir John Romilly M. R. stated as a principle of construction which could not be disputed that the general words of the Act are not to be so construed as to alter the previous policy of the law, unless no sense or meaning can be applied to these words consistently with the intention of preserving the existing policy untouched. If the construction sought to be put upon the words 'or any sell held without leave of the Court of any of the properties' by the appellants were accepted, it would effect a fundamental alteration in the law as it stood before the amendment was inserted in section 232(1) by Act 22 of 1936. If the construction sought to be put upon the words 'or any sell held without leave of the Court of any of the properties' by the appellants were accepted, it would effect a fundamental alteration in the law as it stood before the amendment was inserted in section 232(1) by Act 22 of 1936. Whereas before the amendment the secured creditor stood outside the winding up and could if mortgage deed so provided, realize his security without the intervention of the Court by effecting sale either by private treaty or by, public auction, no such sale could be effected by him after the amendment and that was certainly a fundamental alteration in the law which could not be effected unless one found words used which pointed unmistakably to that conclusion or unless such intention was expressed with irresistible clearness. 43. If the Legislature had any intention to oust the existing jurisdiction of this Court, it ought to have been done so in expressed words or by necessary implication. Section (2) of the Act neither expressly nor by necessary implication takes away the existing jurisdiction of any Court in arbitration matters not to speak of the ordinary original civil jurisdiction of the High Courts established by the Charter including this Court. Language of section 2 (c) of the Act does not even suggest that the Legislature intended to make 'a fundamental alteration in the law' relating to the existing jurisdiction of the Courts and not a single word can be found in the entire Act to rebut the presumption against the alteration of the existing jurisdiction of the Courts. On the other hand, in my opinion, the Legislature in its wisdom thought it fit not to reproduce the words 'with leave or otherwise' as they were wholly redundant in view of well established existing jurisdiction of all the Courts in this country. 44. Cities of Calcutta, Bombay and Madras were and are the main commercial centres of this country and several Chambers of Commerce and other associations of the commercial people were in existence in these three cities at the time the Arbitration Act, 1940, was enacted. Standard forms of contract, containing arbitration clauses, were introduced by those associations and this modern development in relation to commercial law was mainly confined to these three commercial cities. Standard forms of contract, containing arbitration clauses, were introduced by those associations and this modern development in relation to commercial law was mainly confined to these three commercial cities. Important questions of commercial and arbitration law were being decided by the High Courts of Calcutta, Bombay and Madras and, on the other hand, the District and Subordinate Courts were mainly concerned with enforcement of land laws and they had little experience in commercial and arbitration matters. These facts were well-known to the Legislature at the time it enacted the Arbitration Act, 1940. If the contention of Mr. Basu is correct, then this Court and all other High Courts established by Charters exercising ordinary original civil jurisdiction will be denuded of their existing jurisdiction in arbitration matters and the subordinate Judiciary with little experience in commercial and arbitration clauses will have an extended jurisdiction. Moreover, in view of section 20(b) of the Code of 1908 no Courts in this country will have any jurisdiction in many arbitration matters as stated earlier. I do not find any reason to accept the contention of Mr. Basu that section 2(c) of the Arbitration Act, 1940, has ousted the existing jurisdiction of this Court in arbitration matters and overrule his contention. 45. In order to determine whether a particular Court has jurisdiction over 'the subject-matter of the reference', the first thing to be done by the Court is to convert notionally the statements of the parties filed before the Arbitrator into pleadings and then to ascertain whether on those pleadings it has any jurisdiction over 'the subject-matter' of the controversy between the parties. In this connection it is to be noticed that no particular meaning has been ascribed to the expression 'subject-matter of a suit' in the Arbitration Act and the same expression has been used in Order 23 of the Code without ascribing any meaning. In (16) Ballavdas v. Madanlal & Ors., AIR 1970 SC 987 (989) dealing with this expression used in Order 23 of the Code the Supreme Court said that the expression 'subject-matter'......includes the cause of action and the relief claimed......In other words, 'subject-matter' means the bundle of facts which has to be proved in order to entitle the plaintiff to the relief claimed by him. The same expression being used in section 2(c) of the Arbitration Act, in my opinion, shall have the same meaning given by the Supreme Court. The same expression being used in section 2(c) of the Arbitration Act, in my opinion, shall have the same meaning given by the Supreme Court. 46. An Arbitrator derives his jurisdiction from the arbitration agreement whereas this Court derives its jurisdiction from Clause 12 of the Letters Patent. It is wholly unnecessary to make any statement as to where the cause of action has arisen in a statement of claim to be filed before the Arbitrator, but that is not the case with regard to a plaint in view of Order 7, Rule 1(f) of the Code. When this Court will notionally convert the statement of claim filed before the Arbitrator into a plaint, it will not find in most cases the place where the cause of action has arisen, but that does not mean that no part of the cause of action has arisen within its jurisdiction and this Court will have to enquire whether any part of the cause of action has arisen within its jurisdiction to determine its own jurisdiction. When those Court will find that a part of the cause of action had arisen within its territorial limits then it will have to decide a further question whether it has any power to grant the relief claimed before the Arbitrator if such a relief was claimed in a suit. It is only when these two powers are combined together, then and then only this Court shall have jurisdiction 'to decide the questions forming the subject-matter of the reference'. In my opinion, if any part of the cause of action arises within the jurisdiction of this Court and this Court is competent to grant reliefs forming the subject-matter of the reference, then an award can be filed in this Court and this Court shall have jurisdiction to pass a decree in terms of the said award. 47. I will once more go back to Clause 12 of the Letters Patent of this Court. Broadly speaking, the jurisdiction of this Court under Clause 12 of the Letters Patent is divided into two main heads : (i) suits which can be entertained by this Court without any leave and (ii) suits which can be entertained with leave of this Court being first obtained.... This jurisdiction of this Court is of a fundamental character and must not be confused with the assumption of jurisdiction and its exercise. This jurisdiction of this Court is of a fundamental character and must not be confused with the assumption of jurisdiction and its exercise. This Court having jurisdiction to receive and try suits falling under these two heads assumes its jurisdiction the moment it is invoked by a suitor. When a case falls under the first head the plaint has to be presented before the Master of this Court and the moment it is done this Court assumes the jurisdiction to receive, try and determine the suit and, when it tries and decides it, it does so in exercise of his jurisdiction. Whereas in case falling under the second head, this Court assumes jurisdiction when it is invoked by a suitor by presenting a plaint before a learned Judge and asks for his leave to institute the suit in this Court and the learned Judge in exercise of his jurisdiction and after being prima facie satisfied that this Court has jurisdiction to try the suit on the averments made in the plaint permits the suitor to file the suit and if this is not the correct legal position then this Court shall have no jurisdiction even to entertain any application for leave to file a suit in this Court and it shall have no power to grant such leave. 48. It is true that a suitor coming under the first head is entitled to invoke the jurisdiction of this Court as a matter of right by presenting a plaint which he cannot do under the second head, but that does not mean that this Court has no jurisdiction to receive try and determine the suits falling under the second simply because leave has to be obtained from this Court to file such suits. It is also true that leave of this Court is a condition precedent for filing a suit falling under the second head and until such leave is granted this Court cannot exercise its jurisdiction to try and determine that cause, but the moment such leave is granted this Court receives the suit and is clothed with the authority to try and determine the suit which is the jurisdiction under Clause 12 of the Letters Patent. 49. I will now take up a simple case to test the correctness of the contentions of Mr. Basu. 49. I will now take up a simple case to test the correctness of the contentions of Mr. Basu. Two immovable properties––one is situate within the local limits of this Court and the other one is situate within the territorial limits of the ordinary original civil jurisdiction of the Bombay High Court, jointly belong to two persons. Under Clause 12 of the respective Letters Patent these two Courts have jurisdiction to receive, try and determine a suit for partition of these two properties though the whole of the subject-matter of the suit does not fall within the territorial jurisdiction of either of these two Courts but leave to institute such a suit has to be obtained from the Court in which it is to be filed. It was said by Mr. Basu that instead of filing a suit for partition if the parties refer their disputes to an Arbitrator, then his award partitioning these two properties cannot be filed at all in any of these two Courts for the reasons that this Court has no jurisdiction over the Bombay property, and in the same way the Bombay High Court has no jurisdiction over the Calcutta property. 50. The Arbitration Act, 1940, has empowered the Courts to set aside an award and also to remit an award for reconsideration of the Arbitration on the grounds stated therein and has conferred corresponding rights on the parties to make applications for setting aside an award and also for remitting the award for reconsideration of the Arbitrator. The parties to an arbitration have a right to challenge the existence and validity of the award including the determination of its effect by making appropriate applications under the Act and they are debarred from filing any suit under section 32 of the Act. Paragraph 7 of Schedule 1 to the Act has further made an award final and binding on the parties, and in the Supreme Court Sikri J. speaking for himself and Bachawat J. in (17) Satish Kumar & Ors. v. Surinder Kumar & Ors., AIR 1970 SC 833 (837, 838) said that when under this paragraph an award has become final and binding, it can hardly be said that it is a waste paper unless it is made a rule of the Court. v. Surinder Kumar & Ors., AIR 1970 SC 833 (837, 838) said that when under this paragraph an award has become final and binding, it can hardly be said that it is a waste paper unless it is made a rule of the Court. and Hegde, J. in his separate judgment said–– paragraph 7 of the First Schedule to the Arbitration Act lays down that the award shall be final and binding on the parties and persons claiming under them respectively. Therefore, it is not possible to agree with the Full Bench decisions of the Patna High Court and that of the Punjab and Haryana High Court that an award which is not made a decree of the Court has no existence in law. 51. To accept the contention of Mr. Basu as correct is to take away these statutory rights of the parties including the powers of the Court and to force upon the parties an award which may be wholly illegal or invalid. Moreover, the said contention of Mr. Basu militates against the entire scheme of the Act and nullifies all its provisions excepting section 32 of the Act. Faced with these difficulties Mr. Basu said that the original award could be filed in one of these two Courts and the copy of the award in the other Courts so that this Court having jurisdiction over the Calcutta property will be able to deal with that part of the award which deals with the Calcutta property, and in the same way the Bombay High Court will be able to deal with the other part of the award which deals with the Bombay property. Suppose the Calcutta property is allotted to A and the Bombay property to B and the Bombay High Court has passed a decree so far as the Bombay property is concerned, but this Court has remitted the other part of the award which deals with the Calcutta property for consideration of the arbitration who has failed to do so, then this part of the award will become void under section 16(3) of the Act; but B will get of the Bombay property as an absolute owner and will continue to be the joint owner of the Calcutta property with A who has ceased to be the owner of the Bombay property. Suppose this Court passes a decree on that part of the award which deals with the Calcutta property, but the award is set aside by the Bombay High Court so far as the Bombay property is concerned then the same absurd legal consequences will follow : 52. Moreover, before the award is made by the appointed Arbitrator this Court will have no jurisdiction to revoke his authority under section 5 of the Act so far as the Bombay property is concerned and similarly the Bombay High Court will have no jurisdiction to revoke his authority so far as the Calcutta property is concerned. In the same way these two Courts will be wholly incompetent to supersede the arbitration agreement. Suppose this Court revokes the authority of the Arbitrator so far as the Calcutta property is concerned and appoints an Arbitrator under section 12 of the Act, but no such order is made by the Bombay High Court so far as the Bombay property is concerned. I fail to appreciate how there can be two separate references and two awards by two different Arbitrators when the rights and obligation of the parties in respect of these two properties shall have to be adjusted and worked out simultaneously. Suppose these two properties are allotted to A only by the two Arbitrators in their two separate awards and B has failed to apply for setting aside of these two awards within the prescribed time and the decrees are passed by these two Courts in terms of those awards, it can well be imagined what an outrageous consequence will follow in such an event. Moreover no application under section 20 of the Act can be entertained by these two Courts and section 31(4) of the Act will be completely nullified. There will be a clash of jurisdiction between these two Courts including the exercise of their jurisdiction and possibility of conflicting decisions cannot be ignored at all. In my opinion, such a lack of wisdom cannot be imputed to the Legislature when the very object of section 31(4) of the Act is to avoid the simultaneous exercise of jurisdiction by two different Courts in a reference, and in all proceeding under the Act these are only some of the reasons that have compelled me to overrule the contention of Mr. Basu. 53. Basu. 53. I will not come to the question whether a Court has no jurisdiction to pass a decree in terms of an award when a part of the cause of action has arisen within and a part outside the jurisdiction of this Court, and the subject-matter of the award is not immovable properties and the parties do not reside or carry on business or personally work for gain within the jurisdiction of this Court. In (18) Coursetji Jamshedji v. R. D. Shiralee, AIR 1943 Bombay 32 (34) Kania, J. (as he then was) rejected the contention that the whole cause of action should arise within the jurisdiction of a Court before it can be said that the Court shall have jurisdiction over the subject-matter of the reference in the following terms : In my opinion the construction sought to be put on section 2(c) by the petitioner is erroneous. It does not mean that a Court has jurisdiction to receive an award only if the whole cause of action arose within the jurisdiction of the Court. Reading the subsection as worded, it is clear that any Court, which would have jurisdiction to decide the question arising from the subject-matter of the reference, would be the proper Court in which the award may be filed. To give the Court jurisdiction it is not necessary that the whole cause of action should arise there. 54. The correctness of the above statements of law was questioned by Mr. Basu, but I am unable to agree with him for reasons given hereinbefore and after. In (19) Kumbha Mawji v. Dominion of India, AIR 1953 SC 313 (314-15) delivering the judgment of the Supreme Court on section 31(1) of the Arbitration Act, 1940 Jagannadha Das, J. said as follows :–– Under section 31(1), Arbitration Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. Reference in this case arose out of a contract which as already stated, was entered into at Calcutta and had to be performed in Assam. Thus the Gauhati Court as well as the Calcutta High Court admittedly had jurisdiction over the subject-matter of the reference. In S. P. Consolidated Engineering Co. Reference in this case arose out of a contract which as already stated, was entered into at Calcutta and had to be performed in Assam. Thus the Gauhati Court as well as the Calcutta High Court admittedly had jurisdiction over the subject-matter of the reference. In S. P. Consolidated Engineering Co. (P.) Ltd. v. Union of India (supra) an application was made to this Court under section 20 of the Arbitration Act for tiling an arbitration agreement contained in a contract which was executed at Bilaspur add the works under that contract were to be and were actually executed at Bilaspur but the petitioner was entitled to receive payments at Calcutta. Mallick, J. after rejecting the contention that leave under Clause 12 of the Letters Patent was necessary for making that application allowed the arbitration agreement to be filed in this Court on the ground that a part of the petitioner's cause of action had arisen within the jurisdiction of this Court. 55. These decisions clearly show that a court has jurisdiction to deal with the arbitration agreement including the award made on such a reference even when a part of the cause of action has arisen within and a part outside the jurisdiction of that Court, and, in my opinion it does not matter in the least that leave of such a Court would have been necessary had a suit been filed in that Court. I overrule all the contentions of Mr. Basu and hold that this Court shall have jurisdiction to pass a decree on the award if a part of the cause of action forming the subject-matter of the reference arises within and a part outside its jurisdiction. 56. The contract in this case, prayed for an award in its favour for more than Rs. 50 lacs and this Court would have pecuniary jurisdiction including the jurisdiction to grant that relief had the contractor filed a suit in this Court instead of referring its claim before the said Arbitrator. Several parts of the contractors cause of action forming the subject-matter of the said reference arose within the jurisdiction of this Court and this Court had jurisdiction to grant leave and to receive, try and determine that suit. I hold that this Court had the jurisdiction to decide the questions forming the subject-matter of the said reference and overrule all the contentions of Mr. Basu. I hold that this Court had the jurisdiction to decide the questions forming the subject-matter of the said reference and overrule all the contentions of Mr. Basu. Re : Point (c) of Mr. Basu : 57. In order to appreciate the contentions of Mr. Basu it is necessary to set out below a passage from the judgment of Mallick, J. in S. P. Consolidated Engineering Company's case : It is contended by Mr. Sen that application under section 20 of the Indian Arbitration Act is a 'suit' within the meaning of Clause 12 of the Letters Patent and, unless the whole of the cause of action arises within the jurisdiction of this Court, this Court is not competent to entertain a suit unless leave is previously obtained. In the instant case, the entirety of the cause of action did not arise within the jurisdiction of this Court and no leave having been obtained the plaintiff must fail on the point of jurisdiction. Mr. Sen's argument is that a suit need not necessarily originate by the presentation of a plaint, section 26 of the Code of Civil Procedure provides that a suit shall be instituted by the presentation of the plaint or in such other manner as may be prescribed. Suit has nowhere been defined. Section 26 indicates that suit can well be instituted otherwise than by presentation of a plaint. There is therefore, no ground for contending that leave under clause 12 of the Letters Patent is imperative only in the cases of suits instituted by presentation of plaint as provided in Order 6 of the Code of Civil Procedure. Chapter 13 of the Original Side Rules prescribes the institution of a suit by taking out originating summons. After the summons is taken out, the opposite party is required to file affidavit-in-opposition. Chapter XIII, Rule 14, then provides that after an originating summons is taken out the affidavit where accepted shall be filed and numbered as an ordinary suit, and entered in the register of suits, but after the serial number the letters 'O.S.' shall be placed to distinguish it from plaints in ordinary suits. Similarly Arbitration Act, section 20 prescribes the institution of the suit by presentation of a petition. Mr. Similarly Arbitration Act, section 20 prescribes the institution of the suit by presentation of a petition. Mr. Sen's contention is that leave is necessary not merely to the ordinary suits but to the suits under Chapter 13 or suits under section 20 of the Arbitration Act. There is substance in the contention of Mr. Sen that the two kinds of suits referred to above should also be considered as suit even though it is not initiated by the presentation of the plaint. But the question is not whether the proceeding under section 20 is or is not a suit, but the question is whether it is a suit within the meaning of Clause 12 of the Letters Patent. In my judgment the test to be applied for determining whether a proceeding is a suit within the meaning of Clause 12 of the Letters Patent is not whether it is initiated by presentation of plaint or by summons or by notice. The test is whether the proceeding is intended to terminate in a final adjudication of the rights of the parties by a decree in that proceeding. An order passed by a Judge in an originating summons suit is require to be drawn up under Chapter XIII, Rule 20 as 'a decree of the Court' apparently because the rights of the parties are finally adjudicated by the judgment or order. Because of this 'O.S.' suits are treated as suits within the meaning of clause 12 of the Letters Patent. In the case of an application under section 20, however, all that the Court is required to do is to pass an order filling the agreement and making an order of reference. The proceedings come to an end by the passing of the said order. The wording of section 20(2) is the 'application shall be numbered and registered as a suit' does suggest that it is not a suit in the fullest sense of the term. It seems to me that because of this that an application under section 20 of the Arbitration Act has never been treated as a suit within the meaning of Clause 12 of the Letters Patent. No decision has been cited in which it has been held that leave is imperative in such suits when only a part of the cause of action on which the suit is founded arises within the jurisdiction of this Court. No decision has been cited in which it has been held that leave is imperative in such suits when only a part of the cause of action on which the suit is founded arises within the jurisdiction of this Court. In the absence of a compelling decision I am unable to accept Mr. Sen's contention that leave under Clause 12 is imperative in the case of an application under section 20 of the Arbitration Act even though such a proceeding may well be characterized as a suit. 53. Mr. Basu contended that no award is binding on the parties unless a decree is passed by a Court under section 17 of the Arbitration Act, and applying the test laid down by Mallick, J. he further contended that the moment an Arbitrator causes an award, under section 14(2) of the Act, to be filed in a Court, it must be held that a proceeding in the nature of a suit is automatically instituted in the Court. He said that when the jurisdiction of this Court is invoked under Clause 12 of the Letters Patent on the basis of a part of the cause of action forming the subject-matter of the reference has arisen within and a part outside the jurisdiction of this Court leave to file the award has to be obtained under Clause 12 from this Court as such a proceeding must be treated as a suit. In this case, as the Arbitrator and even the contractor did not obtain leave of this Court under Clause 12 of the Letters Patent to file the said award this Court had no jurisdiction to pass the said decree. 59. At the very outset I reject the contention of Mr. Basu to the effect that no award is binding on the parties unless it is made a rule of the Court in view of the judgment of the Supreme Court in Satish Kumar v. Surinder Kumar (Supra). The Court receives an award when it is caused to be filed by the Arbitrator either at the instance of the parties or at the direction of the Court. The Court receives an award when it is caused to be filed by the Arbitrator either at the instance of the parties or at the direction of the Court. A party to an award can apply to the Court for directing the Arbitrator to file his award in the Court and the said proceeding is terminated with the making of the order which does not adjudicate upon the rights and liabilities of the parties under the award and such a proceeding cannot be treated as a suit even according to the test laid down by Mallick, J. The Act does not make any provision for the presence of the parties at the time the award is caused to be filed in a Court by the arbitrator and the parties may be wholly ignorant about the filing of the award until the required notices under section 14(2) of the Act are served on them by the Court. The act does not lay down any procedure for making any application by the parties to the Court for pronouncing judgment in accordance with the award and the Court pronounces judgment in terms of the award suo motu even when no one appears of or the parties. Provisions of the Code of Civil Procedure so far as they relate to the appearance of the parties at the time of hearing of the suit or other proceedings and the consequences of their non-appearance are wholly inapplicable when the Court pronounces judgment in accordance with the award and no one is required to be present at that time. In these circumstances, it is destructive of all common sense to hold that the parties to the award should apply for leave of this Court at the time the award is caused to be filed by the Arbitrator or at the time the Court pronounces judgment in accordance with the award. 60. Mr. Basu then contended that the Arbitrator should apply for leave to file his award, but the Arbitrator is a judge chosen by the parties to adjudicate upon their disputes and he does not come into the arena of legal battle between the parties of the award when an Arbitrator causes an award to be filed in a Court, it can never be said that he has instituted any proceedings against the parties to the award. There cannot be any lis between him and the parties, and his presence is not at all required when the Court pronounces judgment on his award. Moreover, he ceases to be an Arbitrator after publishing his award and is wholly incompetent to make any application to the Court and I reject this contention of Mr. Basu. Moreover, in (20) Nawab Usmanali Khan v. Sagar Mal, AIR 1965 SC 1798 speaking for the Supreme Court, Bachawat J. said : a proceeding under section 14 read with section 17 of the Indian Arbitration Act, 1940, for the passing of a judgment and decree on an award does not commence with a plaint or a petition in the nature of a plaint, and cannot be regarded as a suit. (Italics are for emphasis.) 61. It is too late to urge to-day that the filing of an award is a filing of a suit. The Court's power to grant leave under Clause 12 of the Letters Patent is confined solely to suits or the proceedings which are in the nature of a suit, but if the proceedings are not in the nature or a suit then the question of obtaining or granting leave can never arise. For all these reasons I overrule the contentions of Mr. Basu and hold that no leave was necessary to file the said award in this Court. Having disposed of the above three points of Mr. Basu, it is now necessary to record my findings briefly before taking up the next point of Mr. Basu. I hold that this Court had jurisdiction to decide the questions forming the subject-matter of the said reference due to the fact that several parts of the contractor's causes of action arose within the jurisdiction of this Court. This Court acquired an exclusive jurisdiction to pronounce judgment on that award under section 31(4) of the Act due to the fact that in the said reference the contractor had made an application for injunction against the Government in this Court and this Court in exercise of its exclusive jurisdiction having pronounced the said judgment in accordance with the said award the decree in suit is not null and void as contended on behalf of the Government. Re : Point (d) of Mr. Basu : 62. Re : Point (d) of Mr. Basu : 62. The learned Counsel for both the parties have said that an award can be filed in this Court if this Court has jurisdiction over the subject-matter of the award. They further said that an award can be filed in this Court if it is made against a party who dwells or carries on business or personally works for gain within the meaning of those expressions used in Clause 12 of the Letters Patent at the time the award is filed in this Court. But Mr. Basu has contended that the Union of India cannot come within the meaning of those expressions used in Clause 12 of the Letters Patent, and so this Court can never have any jurisdiction to entertain any suit against the Union of India excepting where the whole or the part of the cause of action has arisen within its jurisdiction. 63. In Pratap Chandra Biswas v. Union of India (supra), after discussing a number of decisions of this Court and expressly differing from them it was held by the Assam High Court that the Union of India carries on business in its Railway undertakings within the meaning of that expression used in section 20 of the Code and also in Clause 12 of the Letters Patent. It was further held that the Gauhati Court had jurisdiction to pronounce judgment on the award which was filed in that Court against the Union of India as it carried on business in its Railway undertakings through its head office which was situate within the jurisdiction of that Court. 64. It was further held that the Gauhati Court had jurisdiction to pronounce judgment on the award which was filed in that Court against the Union of India as it carried on business in its Railway undertakings through its head office which was situate within the jurisdiction of that Court. 64. In (22) Burmall Champalal v. Union of India, 1958 CLJ 67, a part of the cause of action arose within the territorial limits of this Court and the suit was filed without obtaining leave against the Union of India, and after considering a number of decisions of this Court it was held by G. K. Mitter, J. that after the Constitution had come into force it can no longer be said that the Union of India does not carryon any business in its Railway undertakings and agreed with the views expressed by the learned Judges of the Assam High Court in Pratap Chandra's case but dissented from them by saying : I cannot subscribe to the view that a suit against an entity like Union of India can be filed in any Court simply because the business is carried on within the jurisdiction of that Court. If that were so the Legislature need not have used the expression 'personally works for gain' either in section 20 of the Civil Procedure Code or in Clause 12 or the Letters Patent. Therefore, although my view is that the Union of India does carryon business within the ordinary meaning of that expression it cannot be said to do so within the narrower meaning of the expression for the purpose of Clause 12 of the Letters Patent. 65. It is true that this Court, in a long catena of decisions, has held that the Government cannot come within the expression 'carryon business' used in Clause 12 of the Letters Patent, but in (23) Union of India v. Sri Ladulal Jain, AIR 1963 SC 1681 (1683-84) the Supreme Court has held : The expression 'voluntarily resides or personally works for gain' cannot be appropriately applied to the case of the Government. The Government can however carryon business. The mere fact that the expression, 'carries on business' is used alongwith the other expression, does not mean that it would apply only to such persons to whom the other two expressions regarding residence or of personally working for gain would apply. 66. The Government can however carryon business. The mere fact that the expression, 'carries on business' is used alongwith the other expression, does not mean that it would apply only to such persons to whom the other two expressions regarding residence or of personally working for gain would apply. 66. The law laid down by the Supreme Court is directly applicable to Clause 12 of the Letters Patent so far as the expression 'carrying on business' is concerned as the same expression is used in section 20 of the Code. The word 'personally' qualifies the words 'work for gain' in both the enactments and it cannot by any stretch of imagination qualify the words 'carryon business' in view of the plain language used in both the enactments. The plain language of Clause 12 of the Letters Patent and the rules of English grammar do not permit the manner in which the expression 'carryon business' was interpreted by this Court in those decisions and they are no longer good law. In this appeal the Supreme Court has laid down that the Union of India in its Railway undertaking carries on business within the meaning of that expression used in section 20 of the Code in the following terms : Private companies and individuals carried on the business of running Railways, prior to the State takings them over. The only question then is whether the running of Railways ceases to be a business when they are run by Government. There appears to be no good reason to hold that it is so. It is the nature of the activity which defines its character. Running of Railways is such an activity which comes within the expression 'business'. The fact as to who runs it and with what motive cannot affect it. (Emphasis supplied in italics.) 67. Above test laid down by the Supreme Court is not confined to the Railway undertakings of the Government but it applies in all cases whenever the question will arise as to whether the Government in a particular undertaking is carrying on business or not within in the meaning of that expression. The Court will have to ascertain 'the nature of the activity' and not the 'motive' which promoted the Government to run an undertaking. The Court will have to ascertain 'the nature of the activity' and not the 'motive' which promoted the Government to run an undertaking. After reviewing its earlier decision (23) it was further said by the Supreme Court : we are of opinion that 'profit element' is not a necessary ingredient of carrying on business though usually business is carried on for profit. 68. Considerations of 'motive' and 'profit element' being eliminated by the Supreme Court it is no longer necessary for any Court to go into them to find out whether an undertaking run by the Government is a business or not. The Supreme Court has further laid down that : the fact that the Government runs the Railways for providing quick and cheap transport for people and goods and for strategic reasons will not convert what amounts to the carrying on of a business into an activity of the State as a sovereign body. (Emphasis supplied in italics.) It is clear for the judgment of the Supreme Court that if an undertaking is a 'business' when run by an individual it must be held that in running such an undertaking the Government is also carrying on a 'business' within the meaning of that expression. In this appeal it was held by the Supreme Court that the Gauhati Court had jurisdiction to try the suit against the Union of India as it was carrying on a business in its Railway undertakings of Northern Frontier Railway within the jurisdiction of that Court and accepted the judgment of the Assam High Court in Pratap Chandra Biswas v. Union of India (supra) as a correct decision. It is now well established that if the Government carries on business with the jurisdiction of a Court then that Court has not only the jurisdiction to try the suit against the Government but it has also the jurisdiction pass a decree in terms of the award if it is made against the Government. 69. In the plaint it is nowhere stated and similarly no one has said on behalf of the Government that the Government did not carry on any business in its said undertaking of Bar and Rod Mills of the said Metal and Steel Factory and Ichhapur. 69. In the plaint it is nowhere stated and similarly no one has said on behalf of the Government that the Government did not carry on any business in its said undertaking of Bar and Rod Mills of the said Metal and Steel Factory and Ichhapur. It is a common knowledge that iron bars and rods are manufactured in a number of factories in this country and the manufacturers carry on business with those commodities. It is true that the contract in suit was executed by an Army Officer, but that does not mean that the manufactured commodities of that factory were solely used for the consumption of the Defence Department and were not sold to the public. Merely because the contract in suit was entered into by an Army Officer it cannot be presumed that the said undertaking of the Government is not a business within the meaning of that expression used in Clause 12 of the Letters Patent. Moreover, whether an undertaking run by the Government it is business or not is a question of fact in every case, but no evidence was adduced by the Government to show that the goods manufactured at that Mill were not utilized for commercial purposes. In the premises, I will not be justified in holding that the Government did not carry on any business in its said factory, but it cannot be assumed that the Government did carryon the said business within the jurisdiction of this Court as that Mill was and is situate at Ichhapur which is outside the jurisdiction of this Court. 70. In para 8(1) of the written statement as the contractor has pleaded by way of defence that at all material times the Government carried on business at Fort William, the burden of proving this fact lies on the contractor and it can only be discharged by the contractor by adducing evidence. Witnesses for the Government were completely silent on this point and not a single question was asked to them in cross-examination on the aspect of the case and, moreover, this case was not even put to them. Mr. A. C. Gupta is the only witness for the contractor and in Q. 51 he said that the Lucknow office of the Chief Engineer, Eastern Command, was shifted to Calcutta and in Q. 52 he said, "all their business were carried on in Fort William." As Mr. Mr. A. C. Gupta is the only witness for the contractor and in Q. 51 he said that the Lucknow office of the Chief Engineer, Eastern Command, was shifted to Calcutta and in Q. 52 he said, "all their business were carried on in Fort William." As Mr. Gupta was not cross-examined on his quoted statements, Mr. Bhabhra rightly contended that this evidence of Mr. Gupta should be accepted and I do so. Mr. Bhabhra then contended that, in view of this evidence of Mr. Gupta, I should hold that all 'business' of the Chief Engineer, Eastern Command, were transacted from Fort William and I find no reason to differ form him, but his contention that 'businesses' of these officer should be held to be in the nature of commercial activities is unacceptable to me. There is no evidence on record to show that the Chief Engineer, Eastern Command, or his Subordinate Officers carried on any business within the meaning of that expression laid down by the Supreme Court not to speak of that they carried on any commercial activities. These officers belonged to the Eastern Command of the Army and it cannot be said that our Army was and is carrying on any commercial activity. The businesses, of these officer were and are to look after the engineering side of our Army and not to carryon any commercial activity. Moreover, there is no evidence on record to show that the Defence Department of our country carried on any commercial activities nor there is any evidence to show that Fort William was converted into a commercial house by the Army. There is no substance in the argument of Mr. Bhabhra and I reject it. 71. Assuming, however, that the said undertaking of the Government at Ichhapur was not a business and was run by the Government in exercise of its sovereign power, still the question remains whether this Court would have any jurisdiction to entertain a suit if filed by the contractor not on the basis that a part of the contractor's cause had arisen within its jurisdiction but on the basis that the Government was carrying on other businesses within the jurisdiction of this Court. It is necessary to record here that no attempt was even made by the contractor to prove that the Government was carrying on any businesses within the jurisdiction of this Court though a little effort on the part of the contractor would have conclusively established that fact. But the parties having requested me to express my views, as there is no decision covering this point, I will do so as a pure question of law. At the very outset it should be borne in mind that a suit mayor may not be maintainable by a party against the Government for anything done by the Government in exercise of its sovereign power as it goes with the right of action of a party against the Government and it has no bearing on the question of jurisdiction of the Court excepting in those cases where the jurisdiction of the Court over the subject-matter of the litigation is expressly or by necessary implication barred by any Statute or by the principles of private and public international laws. 72. Under Clause 12 of the Letters Patent a suit can be filed in this Court if at the time of commencement of an action the defendant shall carryon business within its territorial limits. Jurisdiction of this Court in this case does not depend on the cause of action. Similarly, when the cause of action has wholly or partly arisen within its territorial limits this Court has jurisdiction to try the suit notwithstanding the fact that the defendant does not carryon any business within its territorial limits. In other words, the jurisdiction based on the cause of action and the jurisdiction based on the person of the defendant are two independent categories and they have no relation with each other. Two illustrations will make the position clear. Suppose A carries on business within the jurisdiction of this Court and he has obtained a loan which is wholly unconnected with the business from B at Patna. In this case, B can file a suit for recovery of this loan in this Court as A carries on business within its jurisdiction and though the loan is wholly unconnected with the business of A still this Court has jurisdiction to receive, try and determine the suit as A is carrying on business within its jurisdiction. In this case, B can file a suit for recovery of this loan in this Court as A carries on business within its jurisdiction and though the loan is wholly unconnected with the business of A still this Court has jurisdiction to receive, try and determine the suit as A is carrying on business within its jurisdiction. Coming now to the next illustration, suppose X carries on business at Patna and he comes down to Calcutta and obtains a loan from Y at Calcutta to meet his personal expenses wholly unconnected with the business and then goes back to Patna without repaying the loan. Y can file a suit in his Court as the cause of action has arisen within its jurisdiction though X is no longer staying within the jurisdiction of this Court and this cause of action of Y has no connection with the business of X. 73. When under clause 12 of the Letters Patent this Court has jurisdiction over a private individual who carries on business within its jurisdiction at the commencement of the action, it cannot be said this Court has no jurisdiction over the Government when it carries on business within its jurisdiction. The States and the Central Government have various departments for administrative purposes, but those departments have no legal entity. No department of the Government can sue nor be sued. No department can hold any property nor can have any legal right. Government is the owner of the properties and the undertakings managed and run through its departments. All rights in relation to those properties and undertakings are the rights of the Union of India or the States concerned. Similarly, all obligations incurred by the respective departments in relation to those properties and undertakings are the obligations of the respective Governments. It is true that every departments is provided with separate funds, but that does not mean that the right of an outsider to receive payment from the Government is confined to the funds allocated to a particular department with whom he has dealt with. The decree-holder is entitled to execute a decree against any property of the Government including any funds of the Government irrespective of the fact that a particular property or a fund is utilized by a particular department of the Government. 74. Under the Constitution all properties belonging to the Central Government belong to the Union of India. The decree-holder is entitled to execute a decree against any property of the Government including any funds of the Government irrespective of the fact that a particular property or a fund is utilized by a particular department of the Government. 74. Under the Constitution all properties belonging to the Central Government belong to the Union of India. Similarly, the Constitution has empowered the Central Government to carryon business and to enter into contracts with third parties. Under the Constitution all suits by or against the Central Government must be filed by or against the Union of India and not by or against any department of the Central Government. A suit can be filed against the Union of India for a breach of contract and for incurring other obligations under a contract. The cause of action for such a suit may either be a breach of contract or for not, discharging the obligations incurred by the Government under the contract. But, the Union of India and not a department is the defendant in such a suit. If the Union of India does not carryon any business within the territorial limits of particular Court, such a Court cannot have any jurisdiction over the Union of India unless the cause of action either wholly or partly arises within its jurisdiction. In this case, the jurisdiction of the Court is invoked on the basis of a cause of action having arisen, either partly or wholly, within the jurisdiction of the Court. But, if the Union of India carries on business within the jurisdiction of a Court it becomes wholly irrelevant to consider where the cause of action for such a suit has arisen as that Court shall have jurisdiction over the Union of India. In this connection it should also be remembered that the jurisdiction over the defendant and the jurisdiction over the subject-matter of the litigations are two independent matters. 75. In my opinion, this Court under Clause 12 of the Letters Patent has jurisdiction to receive, try and determine a suit against the Union of India if the Union of India carries on any business within its jurisdiction at the time of commencement of a suit against it irrespective of the question as to where the cause of action relating to such a suit has arisen. Evidence on record will not justify me in holding that the Government was carrying on business within the jurisdiction of this Court at the time the award was filed in this Court, but that does not mean that this Court had no jurisdiction to pass the said decree as stated earlier. Having disposed of all the contentions of the parties I hold that this Court had jurisdiction to pass the decree dated April 28, 1969, and the said decree is not null and void and I decide these two issues against the plaintiff. Issue No. 1 76. Mr. Bhabhra contended that this Court by issuing subpoenas on several persons to produce some documents before the Arbitrator has impliedly decided that it had jurisdiction over the subject-matter of the said reference and those orders should operate as res judicata on the issue as to the jurisdiction of this Court. But these orders were passed without any notice on the Government and I reject this contention summarily. Next contention of Mr. Bhabhra was that, in view of an application for injunction made by the contractor in which the Government did not question the jurisdiction of this Court, it should be held that this issue had become barred by the principle of constructive res judicata, but the Government could not prefer an appeal to the Supreme Court as the order of the Court of Appeal was wholly in favour of the Government and it is well-established that a party cannot prefer an appeal from an order or decree which is wholly in his favour and any issue which is expressly decided against him in such a proceeding cannot operate as res judicata on any subsequent proceedings, and I overrule this contention of Mr. Bhabhra. 77. Now, the question is whether the judgment pronounced in terms of the award will operate as constructive res judicata due to the fact that the Government did not choose to appear and contest the jurisdiction of this Court at the time the said judgment under section 17 of the Arbitration Act was pronounced in terms of the award though the Government was duly served with a notice under section 14 of the Arbitration Act as contended by Mr. Bhabhra. Replying on the judgment of the House of Lords in (24) New Brunswick Railway Co. v. British Branch Trust Corporation, [1939] A C 1. Mr. Bhabhra. Replying on the judgment of the House of Lords in (24) New Brunswick Railway Co. v. British Branch Trust Corporation, [1939] A C 1. Mr. Basu contended that as the said judgment was pronounced in the absence of the Government it should not operate as res judicata, but in (25) Newton Hickie & Anr. v. Official Trustee of West Bengal, AIR 1951 Cal 506 the above decision of the House of Lords was considered by our Court of Appeal and it was held by Chakravartti, C.J. that It is well-settled in this country that even if a decree be ex parte it will operate as res judicata in respect of grounds of defence against the actual claim in this suit as also all matters inconsistent with such claim which might and ought to have been raised. Moreover, the said decree cannot be called an ex parte decree as explained by S. C. Ghose, J. in (26) Soorajmull Nagarmull v. Golden Fibre and Products Ltd., AIR 1969 Cal 381 and the cases referred to. 78. Jurisdiction of a Court is a creature of the statute and it is fundamental principle that no Court can create its own jurisdiction by an erroneous interpretation of the law of the land. When a Court erroneously decides a question of jurisdiction as a pure question of law and wholly unconnected with the rights of the parties in an earlier proceeding and though the executing Court would be bound by such a decision as it cannot go behind it, still it cannot operate as res judicata in any other subsequent proceedings between the same parties or their prives. Where, however, the Court does not suffer from any inherent lack of jurisdiction and the question of jurisdiction was a mixed question of law and fact in an earlier proceeding between the same parties any decision of that Court relating to its own jurisdiction will operate as res judicata. Similarly, if a party having an opportunity to contest or the facts relating to jurisdiction of the Court does not choose to do so in an earlier proceeding and the Court does not suffer from any inherent lack of jurisdiction, he will be debarred from challenging the jurisdiction of that Court in all subsequent proceedings by the principles of constructive res judicata. And when a Court had jurisdiction to entertain an award on the basis that a part of the cause of action had arisen within its jurisdiction and was competent to grant reliefs if claimed in suit, but the aggrieved party did not appear to question the jurisdiction of that Court contending that no part of the cause of action had arisen within its jurisdiction and the Court passed a decree in terms of the award, in my opinion, it must be held that the issue as to the jurisdiction of that Court is barred by the principle of constructive res judicata in all subsequent proceedings between him and the award-holder. 79. The Government had previously questioned the jurisdiction of this Court in the contractor's application made under section 20 of the Arbitration Act which was, however, withdrawn by the contractor with the leave of this Court, but this fact leads to an irresistible conclusion that the Government ought to have appeared and questioned the jurisdiction of this Court by showing that no part of the contractor's cause of action forming the subject-matter of the said reference had arisen within its jurisdiction when this Court pronounced judgment in terms of that award. This Court had exclusive jurisdiction to pass the said decree in terms of the award and this decree being passed by a Court of competent jurisdiction will operate as constructive res judicata and the Government is debarred from questioning the jurisdiction of this Court in this suit. The decision of the House of Lords relied on by Mr. Basu cannot have any application in this case, and assuming that the decree was an ex parte decree as contended by him, still the judgment in Newton Hickie's case (supra) being binding on me I hold that the issue is barred by the principle of constructive res judicata, and to this extent this issue is decided against the plaintiff. Issue No.2. 80. In order to appreciate the contentions it is necessary to restate here that the contractor's application for injunction was dismissed by the Court of Appeal and the question of payment of costs of those proceedings was left for the decision of the Arbitrator by the Court of Appeal and the Government claimed those costs before the Arbitrator who, in his award directed that parties should bear their own costs of those proceedings. Mr. Mr. Bhabhra contended that by referring the said claim before the Arbitrator the Government has accepted the position that this Court had jurisdiction over the said reference and, accordingly, it is estopped from questioning the jurisdiction of this Court. Mr. Basu, on the other hand, contended that every Court has jurisdiction to make any order relating to payment of costs even though it may not have any jurisdiction to try the suit as laid down in section 35 of the Court of Civil Procedure. He said that as the question of jurisdiction of this Court was not decided in those proceedings, so by referring its claim for payment of those costs before the Arbitrator it cannot be said that the Government is estopped from questioning the jurisdiction of this Court. He further said that there could not be any estoppel in this case as the Government did not obtain any benefit of the said order relating to those costs due to the decision of the said Arbitrator. 81. The rule of estoppel cannot confer jurisdiction on a Court when it has none but the position is quite different when the Court does not suffer from any want of jurisdiction. It is true that those proceedings cannot operate as res judicata as held earlier and the principle of estoppel by record does not apply in this case, but the rule of estoppel is not confined to the estoppel by record. This Court had the jurisdiction to decide the questions forming the subject-matter of the said reference and the Court of Appeal in exercising its jurisdiction made the said order relating to those costs and not on the basis that it had no jurisdiction over the subject-matter of the said reference. It is true that the Arbitrator did not allow those costs to the Government, but the decision of the Arbitrator is of no moment. The said order of the Court of Appeal conferred a right on the parties to claim those costs before the Arbitrator, but the parties had option to exercise or not to exercise that right before the Arbitrator. This right of the Government to claim those costs sprang from the order of the Court of Appeal and the Government took a chance before the Arbitrator that he might award those costs in favour of the Government. This right of the Government to claim those costs sprang from the order of the Court of Appeal and the Government took a chance before the Arbitrator that he might award those costs in favour of the Government. This Court had the jurisdiction to decide the questions forming the subject-matter of the said reference and in the facts and circumstances of this case I overrule the contentions of Mr. Basu and my answer to this issue is in the affirmative. Issue No. 5 82. I am unable to accept the contention of Mr. Bhabhra that this suit is barred by section 32 of the Arbitration Act. Award has been merged in this decree and this suit is solely confined to the question as to whether this Court had any jurisdiction to pass the said decree in terms of the said award which is wholly outside the scope of section 32 of the Act and, accordingly, my answer to this issue is in the negative. Issue No. 6 83. This action fail and the plaintiff is not entitled to any relief. 84. This suit is dismissed with costs. Certified for two counsel. Interim order is vacated. Operation of this judgment and this decree will remain stayed upto November 30, 1970. Suit dismissed.