UNION OF INDIA Vs. K P MANDAL

JUDGEMENT

(1.) A great many points were canvassed in this case in the Court below, but of them only one was canvassed in the appeal. The respondent, against whom an arbitrator had made an award on a claim submitted by the Union of India and also on a counter-claim submitted by himself, challenged it before Sarkar J., on several grounds, all of which, except one, failed. The one ground which succeeded was that the arbitrator who had made the award was not competent to act as arbitrator under the provisions of the arbitration agreement. The Union of India sought to resist that ground by contending that the respondent was estopped from taking it, but the learned Judge overruled the contention and declared the award to be void. Dissatisfied with that decision, the Union of India has preferred the present appeal.

(2.) The facts of the case are somewhat extraordinary. On 25-6-1943, the respondent entered into a contract with the then Government of India, as represented by the Superintending Engineer, Eastern Aviation Circle II, for the execution of thirteen pieces of work. The contract contained an arbitration clause which said that except where otherwise provided in the contract, all questions and disputes arising out of or relating to the contract would be referred to the arbitration of the "Superintending Engineer of the Circle for the time being." The respondent did some work, but disputes soon arose between him and Government as regards the amounts payable to him. According to Government, the respondent had been over-paid, whereas the respondent's case was that a large amount was due to him from Government. On some date in 1949, which It does not appear, the respondent served a notice on Government under Section 80 of the Code of Civil Procedure by which he Informed them, of a claim of Rs. 1,60,000/-. On 19-10-1948, ft pleader, acting on his behalf, wrote to the executive Engineer, Aviation Division, O. P. W. D. and called attention to the fact that his notice under Section 80 had not been attended to and he also made a request that the dispute should be settled, if possible, before the 25th of October, next. Thereafter on 17-10-1950, one Sri C. P. Malik wrote to the respondent that the Chief Engineer, Civil Aviation Wing, Central P. W. D., had appointed him to act as arbitrator in the dispute between him and Government regarding the work of construction of Gopali Benapur Road and, along with that letter, Sri Malik enclosed a copy of the statement of facts which he had received from Government. The letter ended with a request that the respondent should submit his reply or a counterstatement of facts within a fortnight of the receipt of the letter.

(3.) The respondent replied on 31-8-1950, in the form of a petition addressed to Sri C. P. Malik. He called himself "this humble petitioner" and, in language brimming over with politeness and humility, submitted that while Government had laid a claim against him and full opportunity to reply to the claim had been offered, he too had a claim against Government which could be decided by arbitration. Clause 25 of the contract, he recalled, provided for arbitration regarding "all questions and disputes" between the parties. He, therefore, asked Mr. Malik's intervention for including his case also in the arbitration and wanted to know if he was right in thinking that the claim would be admissible for arbitration under Clause 25 of the contract. He did not file his reply to Government's statement of facts at once, because he said that the form and contents of his reply would depend upon whether his counter-claim also was going to be adjudicated on. "So far as this second party is concerned," he added, "this humble petitioner believes and agrees to arbitration of dispute relating to claim and counter-claim between 1st and 2nd parties."