R D GUPTA Vs. NEW DELHI MUNICIPAL COMMITTEE

JUDGEMENT

(1.) THIS is an appeal against an order made by a learned Single Judge in exercise of the original civil jurisdiction of this Court, on an application under Section 20 of the Arbitration Act, 1940.

(2.) THE respondent, New Delhi Municipal Committee, had invited tenders for carrying out special repairs to roads in Connaught Place New Delhi, vide its resolution dated 22nd March, 1966. THE rates received in the tenders being high, the Committee tried to settle the rates by negotiations. On 30th September, 1966. the Committee invited the appellant who was one of the persons submitting the tender, to participate in the negotiations. By letter dated 1st November, 1966, the appellant was informed by the Municipal Engineer of the Committee that his tender for special repairs had been accepted vide Committee's resolution No. 69 dated 14-10-1966 at his tendered percentage and that he should attend the office of the Committee to complete the formal agreement within seven days of the receipt of the letter. THE appellant was also required to start the work at once. On 8th November, 1966, the appellant was asked to supply a stamp-paper for executing the " contract so that running payments for the work done by him could be made by the Committee. On 9th November, 1966, the appellant supplied the requisite stamp-paper and a formal contract was got typed by the Committee. THE appellant signed the contract on 10th November 1966.

(3.) LEARNED counsel for the appellent argued that in spite of the above observation in Ralia Ram's case the Supreme Court had nevertheless declined to set aside the award on the ground that there was no valid arbitration agreement between the parties and had even gone to the length of holding that a valid contract might as well result from correspondence. The argument proceeds on a mis-apprehension of what was held in Ralia Ram's case. The contract in that case was for "sale of war disposal goods." Section 175(3) of the Government of India Act does not in terms require that a formal document executed on behalf of the Dominion of India and the other contracting party alone is effective. It was therefore said that in the absence of any direction by the Governor-General under Section 175(3) of the Government of India Act, 1935 prescribing the manner, a valid contract might result from correspondence if the requisite conditions were rulfilled. It was found that the contracts for "sale of war disposal goods" were not directed by the Governor-General to be made by a formal document executed on behalf of the Governor-General as well as by the purchasing party. The Director of Purchases (Disposals) had issued in that case an invitation to tender. He had done so by or on behalf of the Governor-General of India. In response to the invitation the contractor had submitted his tender which was accepted in writing and the acceptance was expressed to be made in the name of the Governor-Genral and was executed on his behalf by a person authorised in that behalf. It was in these circumstances that it was held that the requirements of Section 175(3) had been met.