J. B. Goel,j. ( 1 ) THESE are the objections filed on behalf of the Municipal Corporation of Delhi (respondent No. 1) for short (MCD) against award dated 5. 8. 1991 passed by Shri B. Dayal, retired Engineer in Chief of MCD as arbitrator. ( 2 ) BRIEFLY the facts are that the Executive Engineer of MCD vide NIT No. XVIII/82-83/1 dated 2. 2. 1983 invited tenders for "the construction of Approaches to Flyover atthe level of crossings to New Rohtak Road with clover leaf, slip roads and serviceroads etc. " M/s. S. A. Builders Ltd. (Petitioner) had submitted their tender on25. 3. 1983. After correspondence between the parties their tender was accepted videletter dated 10. 11. 1983 and an agreement No. 4 dated 1. 11. 1983 was also executed byexecutive Engineer (18) on behalf of the MCD and the petitioner with the approval ofthe Standing Committee of the Corporation (Resolution No. 759 dated 3. 11. 1983 initem No. 552 ). The notice inviting tenders, correspondence entered into between theparties, letter of acceptance and the agreement formed part of the contract. The estimated cost of construction was Rs. 487 lakhs and the time of completion was 24months. The respondent had given mobilisation advance of Rs. 48. 70 lakhs to thepetitioners which was to be adjusted @ 10% from the running bills during the stipulated period of completion. It carried interest @ 10% p. a. It appears that the work wasnot even started within the stipulated period, according to the petitioner, because ofdefaults on the part of the respondent Corporation for not making available the site. Before the work could he completed certain disputes arose between the parties asmcd charged interest on the mobilisation advance which was disputed. The respondent also did not allow full escalation charges for labour and material resulted due todelay in taking up the work. The contract between the parties in Clause No. 25provided for arbitration, arbitrator to be appointed by the Commissioner, MCD. Inpursuance of this power the Commissioner vide his letter dated 23. 9. 1987 appointedshri B. Dayal, Retired Engineer in Chief, MCD as the sole arbitrator subject to admissibility under the contract. The following disputes were referred to him:- (1) disputeabout interest charged on mobilisation advance, (2) dispute about labour escalationi. Inpursuance of this power the Commissioner vide his letter dated 23. 9. 1987 appointedshri B. Dayal, Retired Engineer in Chief, MCD as the sole arbitrator subject to admissibility under the contract. The following disputes were referred to him:- (1) disputeabout interest charged on mobilisation advance, (2) dispute about labour escalationi. e. whether the petitioner was entitled to 100% escalation amount under Clause10 (G), (3) escalation towards cost of material after the stipulated contract period. Thelearned arbitrator entered upon the reference. Petitioner submitted their statement ofclaim which was disputed and the respondent also submitted counter claims. Both theparties produced large number of documents and also led evidence by way of affidavits. An objection was taken on behalf of the Corporation that there was no validarbitration agreement inasmuch as the agreement was not validly executed as requiredunder Sections 201, 202 and 203 of the Delhi Municipal Corporation Act of 1957 (forshort the Corporation Act) and the Bye-laws framed under Sections 203 and 481 ofthe Corporation Act, the objections being that the contract was not executed by thecommissioner as required under Sections 202 and 203 thereof and it was not sealedwith the seal of the Corporation and in the presence of a member of the Standingcommittee nor signed by such member as required under bye-law No. 3 and as suchthe contract was void and consequently the arbitration agreement was also illegal andvoid and the appointment of arbitrator and reference of the disputes to him was notlegal and valid. This was disputed on behalf of the petitioner. Learned arbitrator afterconsidering the material before him held the preliminary issue about invalidity of thearbitration against the Corporation holding that no objection was raised at appropriate time. In short he found it barred by waiver. On merits, against recovery ofinterest on the mobilisation advance of Rs. 7,71,997,08 made by the respondent uplo23rd running bill he allowed claim to the extent of Rs. 4,95,194. 00 and awarded theamount of Rs. 2,76,803. 58 to the petitioner. Claim of the respondent for further interest amounting to Rs. 27,27,200. 00 and interest on counter claim was disallowed. On account of labour escalation respondent had deducted 10% under Clause 10 (C) of thecontract which was disallowed and the learned arbitrator allowed full 100% escalationand awarded Rs. 7,76,088. 90. Claim of the petitioner for material escalation was, however, disallowed. Claim of the parties for interest and costs of arbitration were disallowed. 00 and interest on counter claim was disallowed. On account of labour escalation respondent had deducted 10% under Clause 10 (C) of thecontract which was disallowed and the learned arbitrator allowed full 100% escalationand awarded Rs. 7,76,088. 90. Claim of the petitioner for material escalation was, however, disallowed. Claim of the parties for interest and costs of arbitration were disallowed. The net result was that claim of the petitioner was allowed in respect of twoclaims and counter claims of MCD were disallowed. The learned arbitrator made hisaward on 5. 8. 1991. ( 3 ) ON receipt of notice thereof, the petitioner filed an application under Section 14and 17 of the Arbitration Act 1940 (for short the Act) and on award being Filed incourt objections have been filed only on behalf of the Corporation (I. A. 10420/93),challenging the legality and validity of the award on various grounds. Again objectionhas been taken that there was no valid contract as the contract relied was void andnon-est and consequently arbitration agreement in question was also void and as suchthere was no valid appointment of the arbitrator and the award made is without jurisdiction and is invalid. ( 4 ) NO one appeared on behalf of the respondent at the time argument and evenafter arguments were heard and case was reserved for judgment. ( 5 ) I have heard the learned counsel for the petitioner. First question is whetherthere was no valid contract and valid arbitration agreement between the parties. Learned counsel for the respondent has contended that the Executive Engineer who. had executed the contract on behalf of the Municipal Corporation of Delhi wasauthorised to enter into the contract in view of Commissioner s authorisation given incircular dated 27/12/1979 (annexure A to the reply), also that the Commissioner himself appointed the arbitrator and as such the objection to this effect is notlegally tenable. ( 6 ) HOWEVER, it is not disputed that if the contract is void, its arbitration agreement would also be void. ( 7 ) UNDER Section 3 (2) of the Corporation Act, 1957 the Corporation constitutedthereunder is a body corporate; Under Section 201 of the MCD Act, the Corporationis competent to enter into and perform any contract necessary for the purposes of thisact. Section 202 prescribes the procedure for making contracts while Section 203, themode of execution of the contracts. Sections 202 and 203 read as under :- "202. Section 202 prescribes the procedure for making contracts while Section 203, themode of execution of the contracts. Sections 202 and 203 read as under :- "202. Procedure for making contracts :- With respect to the making of contracts, the following provisions shall have effect namely :- (a) every such contract shall be made on behalf of the Corporation by thecommissioner; (b) no such contract, for any purpose which in accordance with anyprovisions of this Act the Commissioner may not carry out without the approval or sanction of the Corporation or some other municipal authorityshall be made by him until and unless such approval or sanction has beenduly obtained; (c) no contract (other than a contract for the acquisition of immovableproperty) which will involve an expenditure exceeding ten thousand rupeesor such higher amount as the Corporation may Fix shall be made by thecommissioner unless the same is previously approved by the Standing Committee. 203. Mode of execution of the contracts : (1) The mode of executing contracts under this Act shall be prescribed bybye-laws made in this behalf. (2) No contract which is not made in accordance with the provisions of thisact and the bye-laws made thereunder shall be binding on the Corporation. ". Section 481 of the Corporation Act also empowers the Corporation to frame byelaws. In pursuance of power vested in the Corporation under Sections 203 and 481 ofthe Corporation Act bye-laws called as "execution of Contract Bye-Laws 1958" havebeen framed. ". Section 481 of the Corporation Act also empowers the Corporation to frame byelaws. In pursuance of power vested in the Corporation under Sections 203 and 481 ofthe Corporation Act bye-laws called as "execution of Contract Bye-Laws 1958" havebeen framed. Bye-law 3 so faras relevant reads as under :-"3 (1) Every contract entered into by the Commissioner on behalf of thecorporation shall be entered into in such manner and form as would bindhim if such contract were made on his of an behalf, and may in the like manner and form be varied or discharged :-Provided that:- - (a) the common seal of the Corporation shall be affixed to every contract;and (b) every contract for the execution-of any work or the supply of anymaterials of goods which will involve an expenditure exceeding onethousand rupees or such higher amount as the Corporation may from timeto time fix, and every contract or other instrument relating to the acquisitionof immovable property, shall be in writing and shall specify :- (i) the work to be done or the materials or goods to be supplied or the immovable property to be acquired, as the case may be; (ii) the price to be paid for any such work, materials, goods, or immovable property; and (iii) in the case of a contract for works or for supplies, the period withinwhich the contract or specified portion thereof shall be carried out. (2) The common seal of the Corporation shall remain in the custody of themunicipal secretary and shall not be affixed to any contract or other instrument, except in the presence of a member of the Standing Committee, whoshall sign the contract or instrument in token that the same was sealed in hispresence. (3) The signature of the said member shall be distinct from the signature ofany witness to the execution of such contract or instrument. (3) The signature of the said member shall be distinct from the signature ofany witness to the execution of such contract or instrument. " ( 8 ) THESE provisions to some extent contains restrictions similar to Section 175 (3)ofthe Government of India Act 1935 which provided; "all contracts made in the exerciseof the executive authority of the Dominion or of the Province shall be expressed to hemade by the Governor General or by the Governor of the Province, as the case maybe, and all such contracts and all assurances of property made in the exercise of thatauthority shall be executed on behalf of the Governor General or Governor by suchpersons and in such manner as he may direct or authorise". The Supreme Court inbhikraj Jaipuria v. Union of India ( AIR 1962 SC 113 ) in dealing with the validity of thecontract which did not conform to the requirement of Section 175 (3) held that theprovisions of Section 175 (3) were mandatory and if contract did not conform to the requirements prescribed by Section 175 (3) no obligation enforceable at law followedtherefrom. By S. 2 (a) of the Act "arbitration agreement" means a written agreement tosubmit present or future differences to arbitration and where Dominion of India is aparty to such agreement, the arbitration agreement being a contract must conform tos. 175 (3 ). ( 9 ) AGAIN in Union of India v. Rallia Ram AIR 1963 SC 1685 it was held that everycontract to bind the Government must comply with the requirements of S. 175 (3) ofthe Government of India Act, 1935, and waiver will not preclude the Governmentfrom pleading absence of a contract in consonance with the law. In those case it wasalso held that though the Government of India did not contend before the arbitratorthat there was in law no arbitration agreement on which the arbitrator was competentto act that would not invest the arbitration agreement with any validity. Similarprovision exists in Article 199 of the Constitution of India and same legal position hasbeen reiterated in K. P. Chowdhry v. State of Madhya Pradesh and others AIR 1967 SC203 where it was held that if the agreement has not been executed in accordance with. the provisions of Article 199, it cannot be enforced either by the Government oragainst it. Similarprovision exists in Article 199 of the Constitution of India and same legal position hasbeen reiterated in K. P. Chowdhry v. State of Madhya Pradesh and others AIR 1967 SC203 where it was held that if the agreement has not been executed in accordance with. the provisions of Article 199, it cannot be enforced either by the Government oragainst it. Regarding purpose, object and intention behind this provision in State ofbihar v. M/s. Karam Chand Thapar and Brothers 1962 I SCR 827 it was held that the intention behind this provision is that the State should not be burdened with liabilitybased on unauthorised contracts. The provision has been made in public interest. Theprovisions is mandatory and if the agreement is not signed by an authorised personany award delivered would be without jurisdiction. In UOI v. Kishon Lal Gupta andbors. AIR 1959 SC 1362 also it was held that an arbitration clause though is a collateralterm of a contract as distinguished from its substantive terms; but none the less it is anintegral part of it. If the contract is non-est in the sense that it never came legally intoexistence or it was void ab initio in such case if the original contract has no legal existence, the arbitration clause also cannot operate for alongwith the original contract, itis also void: ( 10 ) THE same principle will apply in case of the contracts entered into with the Corporation. The provisions of Section 202,203 and Bye-law 3 as reproduced above makeit clear that every contract on behalf of the Corporation should satisfy the following requirements: (1) It should be made on behalf of the Corporation, (2) it should be madeby the Commissioner (and the Commissioner could be his delegate under Section 491of the. Corporation Act); (3) the contract for the execution of work which involves anexpenditure exceeding Rs. 10,000. 00 shall be in writing, (4) the common seal of the Corporation should be affixed to such contract, (5) the common seal of the Corporationshall be affixed in the presence of a member of the Standing Committee, (6) suchmember of this Standing Committee shall sign the contract or instrument in token thatthe same was sealed in his presence, and (7 ) such signature of a member shall be dif-ferent from the signatures of any witness to the execution of the contract or instrument. Section 203 (2) specifically mandates that the contract not made in accordance with the provisions of the Act and the Bye-laws made thereunder shall not bebinding on the Corporation. The Supreme Court in Dr. H. S. Rikhy v. New Delhimunicipal Committee AIR 1962 SC 554 (at page 561) has held; "where a statute makes a specific provision that a body corporate has to actin a particular manner, and in no other, that provision of the law being mandatory has to be strictly followed. " ( 11 ) THAT was a case under the Punjab Municipal Act, 1911. It was further held thatthe meaning of expression "shall not be binding on the Committee", which was also theexpression used in that case, meant that the agreement was void and non-enforceable. The same is the position in the present case also. These provisions of the Corporationact and the Bye-laws came for consideration in two cases before this Court, onebefore Single Judge in Municipal Colporation of Delhi v. M/s. Shailagencies ILR 1981 (2) Delhi 607 and other before the Division Bench in Mis. Dodsaul Pvt. Ltd. v. Delhielectric Supply Undertaking ILR 1984 (1) Delhi 378. In Shail Agencies it was held thatas the provisions of Section 203 of the Act and the bye-laws framed thereunder weremandatory, failure to comply these provisions renders the contract void and consequently the arbitration agreement is also not legal and is void. The Division Bench alsohas held that these provisions of Sections 202, 203 and the bye-laws framed thereunderwere mandatory and where the contract did not fulfil these conditions it was not validagreement. It was further held that the arbitration Clause which is an integral part ofthe contract also is not enforceable and is void. It was further held that in such a casethere will be no bar of estoppel even if the objecting party appeared and took part inthe proceedings without raising any such objection. ( 12 ) THE principle thus is that if the contract which contains the arbitration clause isitself required to be in a particular form or is required to be signed by the parties inthe particular mode prescribed, then the arbitration clause will not be valid if the contract is not in that form or is not so signed. ( 12 ) THE principle thus is that if the contract which contains the arbitration clause isitself required to be in a particular form or is required to be signed by the parties inthe particular mode prescribed, then the arbitration clause will not be valid if the contract is not in that form or is not so signed. In view of this legal position the contract ofexecution of work between the parties and the arbitration clause contained therein arevoid and non-est and are not enforceable by or against the Corporation, the appointment of arbitrator is not valid and consequently the award is without jurisdiction andis invalid and cannot be sustained. In view of this it is not necessary to go into thequestion of validity of the award, on other grounds on its merits. In the result the abjection petition is allowed on the question of invalidity of contract and arbitration agreement and the award is set aside. ( 13 ) S. NO. 2800a/91in view of above Finding this suit under Section 17 of the Arbitration Act is dismissed. In the circumstances, parties are left to bear their own costs. I. A. 10420/93 and Suit No. 2800-A/91 are disposed of.