UNION OF INDIA (UOI) Vs. BAHADUR SINGH

JUDGEMENT

(1.) THOSE two miscellaneous appeals have been filed on behalf of the Union of India and arise out of two orders passed by the Subordinate Judge, Upper Assam Districts at Jorhat refusing to set aside an award.

(2.) THE facts briefly are that Bahadur Singh, the Respondent in these appeals, is a contractor. He entered into a contract with the Union of India for the transport, of certain materials. After the contract was over the Petitioner claimed some money from the Union of India. There was an arbitration clause in the agreement. As no arbitrator was appointed by the agreement between the parties the Respondent moved an application before the Subordinate Judge under Section 8 of the Arbitration Act for appointment of any arbitrator in accordance with the terms of the agreement. It is not disputed that the application was made after due notice. On the 18th February 1955 the Court appointed the Commissioner, Shillong (1) Sub Area the arbitrator and he was to submit his award after looking into the accounts of the parties. The Respondent had claimed a sum of Rs. 50,000 and odd on the ground that the Union of India under the terms of the agreement had failed to pay him his dues. Objection was filed by the Union of India in which it was stated that by fraud the Respondent has claimed Rs. 50,000 and odd. In fact he had been over -paid to the extent of Rs. 25,000 and odd and by the objection the Union of India claimed refund from the Respondent of the sum overpaid.

(3.) SO far as the objection of Mr. Medhi relates to the claim of the Union of India, it is sufficient to point out that in, the objection filed to the application of the Respondent under Section 8, wherein he had claimed a sum of Rs. 50,000 and odd against the Union of India, the Union, of India had come forward with a definite case that they Were entitled to Rs. 25,000 and odd. Any dispute arising between the parties with regard to a contract was referable, to an arbitrator. Thus there was an agreement to refer the dispute to the arbitrator. In view of the provisions of Section 34 of the Arbitration Act the suit could not. proceed as there was an agreement between the parties and more so in the present case where the same dispute had. already been referred' to the arbitrator in proceedings under Section. 8 of the Indian Arbitration Act. The only order thus which the Court in these circumstances could pass. In. the. suit was to stay the suit sine die. But that by Itself will not make the award Illegal and invalid. Obviously in the proceedings under Section 8 both the disputes were presented before the Court and the arbitrator, under., the terms of the agreement, was competent to go into the entire dispute between the parties and thus the award given' by the arbitrator cannot be said to be otherwise invalid within the meaning of Section 30 of the Indian Arbitration Act. What should have been the proper order in the suit itself is entirely a different matter.