CHANDRA DHAN SINGH Vs. STATE OF BIHAR

JUDGEMENT

(1.) THIS is an appeal by the plaintiff under Section 39 (1) (iv) of the Indian Arbitration Act (hereinafter referred to as "the Act"). The plaintiff had filed a petition in the court of the Special Subordinate Judge, Ranchi, under Section 20 of the Act praying that the four agreements entered into between the plaintiff and the: defendants be directed to be filed in Court. By the impugned order dated the 23rd of July, 1970 the learned Subordinate Judge has dismissed the plaintiff-appellant's application under Section 20, being aggrieved by which the plaintiff has preferred this appeal.

(2.) THE short facts relevant for the disposal of the appeal are these. THE appellant in his petition under Section 20 of the Act filed in the court below stated that he carried on the business of contract and an agreement dated the 4th of September, 1964. was executed by the appellant on one side and the then Superintending Engineer, Chota Naepur Waterways Circle, Ranchi (respondent No. 2), on the other. THE number of this agreement was F2-49 of 1964-65. This was in relation to earth work to be done bt the appellant in Seraikela Branch canal from Chainage 994 to 1209 in Rore Irrigation Scheme in the District of Singhbhum. THE tender of the appellant was accepted at Ranchi and the agreement was entered into in pursuance thereof and the value of the work to be done was about Rs. 3,17,592/-. THEre were three other agreements, all dated the 5th of March 1965, bearing Contract Nos. F2-57, F2-58 and F2-59 of 1964-65 for construction of some structures in the said canal. THE appellant's further case was that there was a dispute regarding structure work and the appellant had stacked huge quantities of ballast, boulders and chips near the work site and had paid advances to the labourers totalling Rs. 20,000/-. THE work regarding structures could not be executed due to the fault and laches of the State of Bihar and/or its employees regarding the dispute for payment of the dues for the work done under the first agreement, in respect of the work done under the first agreement, it was asserted that the work as scheduled was changed from place to place due to the change in the alignment of the work. THE first 'on account bill' was submitted for Rs. 35,878/- which was paid to the appellant. But this did not include certain work done for hard rock and Mica Schist. THE second 'on account bill' was for more than Rs. 1,50,000/-, which was duly noted in the Measurement Book prepared by the then Sectional Officer and the Sub-Divisional Officer also signed the same but later on the officers of the Department resiled from the position and cancelled the original entries made in the Measurement Book. When the appellant came to know all these, he protested and moved the higher authorities in the matter. Numerous pieces of correspondence followed thereafter, according to the appellant, by him with the authorities in the various hierarchies of respondent No. 1. It seems, however, without going into all the other details of the matter, that according to the appellant the disputes in relation to the matters covered by the four agreements, aforesaid, were still outstanding and since all the agreements are incorporated in one of the clauses the usual arbitration clause, it was prayed in the application filed under Section 20 of the Act that the four agreements be directed to be filed in Court.

(3.) MR. S. B. N. Singh, learned counsel for the appellant, submitted rather half-heartedly that the provisions of Article 299 (1) of the Constitution should not be held to be of such a mandatory effect as to disentitle the appellant of the benefits of the arbitration clause in the agreements which had been entered into on the representation of the Superintending Engineer, who was undoubtedly the competent authority. It should, in the circumstances, it was submitted, be taken as a mere lack of formality that the Superintending Engineer in spite of his oral agreement had not appended his signature to the three agreement deeds in question. With regard to the fourth agreement, learned counsel submitted that it had been duly executed by the Executive Engineer, the validity of which has correctly not been rejected by the learned Subordinate Judge. Regarding this aspect of the matter, suffice it to say that so far as the fourth agreement involving a sum less than Rs. 50,000/- is concerned, learned Standing Counsel No. 1 appearing for the State could not combat the position that it was free from any blemish regarding compliance with the provisions of Article 299 (1) of the Constitution and indeed the finding of the learned Subordinate Judge to that effect could not be assailed by any party. But with regard to the validity of the other agreements involving a sum of Rs. 50,000/- or more, the submission of learned Counsel for the appellant has been stated merely to be rejected. It is settled law now that in view of Article 299 (1) of the Constitution there is no scope for any implied agreement or contract between the Government and any other person as has been held by the Supreme Court in the case of K.P. Chowdhry v. State of Madhya Pradesh, (AIR 1967 SC 203). If the contract between the Government and another person is not in compliance with Article 299 (1) of the Constitution, it would be no contract at all and could not be enforced either by the Government or by the other person as a contract. Assuming, therefore, that all the negotiations up to the stage of incorporating the terms in the agreement had been done between the appellant and the Superintending Engineer, who was the competent authority, in the absence of the formal deed having been executed by such a competent authority, the agreement must be held to be non est in law. That being so, there is no contract in so far as the three agreements involving a sum of Rs. 50,000/- or more are concerned and there being no contract there is no clause of arbitration to be enforced.