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1980 DIGILAW 83 (ALL)

Asian Cables Corporation Ltd. v. State of U. P

1980-01-16

K.N.GOYAL

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ORDER K.N. Goyal, J. - This revision is directed against an order of the Civil Judge, Lucknow dated -1-2-1978 returning the application of the petitioner under Sections 5, 9 and 33, Arbitration Act for presentation to the proper Court. This application was given because of the appointment of a sole arbitrator by the Director of Industries, Uttar Pradesh in connection with a dispute with the petitioner. The contention of the petitioner was that the appointment of arbitrator was made by the Director of Industries not at Lucknow but at Kanpur. The learned Civil Judge agreed with this contention raised on behalf of the Government. 2. It is not disputed that no part of the cause of action arose in Lucknow district. The only question that arises for consideration is whether the application of the petitioner could be filed at Lucknow on the ground that the Headquarters of the State Government of U. P. were situated at Lucknow. 3. The learned Civil Judge has placed reliance on Union of India v. Ladu Lal Jain, (AIR 1963 S C 1681). In para 7 of this report their Lordships observed as follows : "The expression `voluntarily resides or personally works for gain' cannot be appropriately applied to the case of the Government. The Government can however carry on business. The mere fact that the expression, carries on business, is used along with the other expressions, 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." The learned Civil Judge has quoted only the first sentence out of this paragraph. He has ignored the rest. It is true that the Government cannot be said to reside or work for gain, but the Government, as held by the Supreme Court, can carry on business. In the particular case their Lordships were considering a commercial activity (running of railways) carried on by the Government) and the suit was held to lie in the Court within whose jurisdiction the headquarters of the railway were situate. In Town Investments Ltd. v. Department of Environment, (1977) 2 W L R 450, the House of Lords has, in the context of business tenancies, construed the expression "business" as including the business of Government. In Town Investments Ltd. v. Department of Environment, (1977) 2 W L R 450, the House of Lords has, in the context of business tenancies, construed the expression "business" as including the business of Government. There seems therefore, no doubt that the State Government, which had to be sued through its Industries Secretary stationed at Lucknow, does carry on the business of Government at Lucknow, and as such could be sued at Lucknow. Accordingly, under S. 31 of the Arbitration Act the application could be filed at Lucknow. 4. I, therefore, hold that the Lucknow Court did have jurisdiction. The revision is accordingly allowed and the order dated 1-2- 1978 passed by the learned Civil Judge is set aside. The Court below shall now proceed with the hearing of the case on merits. No order as to costs.