AND KUMAR Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS appeal has been placed before me for hearing on account of difference of opinion between H. L. Agrawal, J, and C. a Sinha, J. While the appeal was allowed by H. L. Agrawal, J., it was dismissed by C Section Sinha, J. Both the Judges, however, agreed that they would make no order as to costs In favour of the successful party.

(2.) THE facts of the case are elaborately stated In the judgment of H. L. Agrawal, J. and I do not consider it necessary to restate them in any detail. As it appears the appellant submitted a tender in the prescribed form which was accepted by the respondent and thus there was a contract between them dated 16th of December, 1956 according to which the appellant was required to manufacture and supply certain furniture to Garrison Engineer, M.E.S. (Independent) Dinapore at Ramgarh at the rates mentioned in the document. THE contract contained an arbitration clause according to which the parties were to refer all disputes as required by condition 36 to the sole arbitration of an Engineer/Officer to be appointed by the Chief Engineer, Eastern Command, whose decision was to be final, conclusive and binding, Condition No. 36 read as follows:--

(3.) AFTER having given anxious consideration to the judgments of the learned. Judges on the point they have differed and to the arguments advanced by learned counsel fox the parties, I am inclined to agree with the view taken by C. S. S. Sinha, J. As already stated, both the learned Judges are agreed that the contract was not invalid. Therefore, the award of the arbitrator cannot be held to be invalid on the ground that he has not said a single word on that question in his award. The fact that the arbitrator has given an award in favour of the respondent for a sum of Rupees 21,535/- shows that the arbitrator proceeded on the assumption that the contract was valid and as I shall show hereafter he was right in doing so. The appellant, though it sent a letter to the arbitrator challenging the validity of the contract, did not ask him to decide that question, rather challenged, his jurisdiction itself to proceed with the arbitration proceeding. Thus, there was no question on which the appellant wanted a decision from the arbitrator. The only question which the arbitrator had to decide was one raised before him by the respondent and it is well settled that an arbitrator while giving an award on any dispute raised before him need not give his reasons for the award. The award cannot be held bad for want of reasons or, in other words, a finding that the contract was a valid one. C. W. E., Ranchi, on behalf of the respondent had written a letter dated 31st of July, 1957 informing the appellant that the respondent would get the work done through other agency at the risk and cost of the appellant. Nothing was pointed out to me to show that the appellant challenged the power of the respondent to do so except that it had already informed the respondent that by an earlier letter it had repudiated the contract itself. However, it has not been the case of the appellant either before the arbitrator or the court below or this Court that it admitted its liability to pay to the respondent extra cost incurred by the latter for the work done through other agency. It is obvious that had such been the case of the appellant, then it could not be allowed to challenge the claim of the respondent to realise extra cost incurred in getting the work done through other agency. Thus, there was, in my opinion, a dispute between the appellant and the respondent on this question. The language of Clause 36 is wide and reference of such a dispute to the arbitrator by the respondent was within its ambit. Even H. L. Agrawal, J. admits this position when he observes: "It is no doubt true that in the arbitration agreement there may be an agreement to submit present or future difference to arbitration." As pointed out by C. S. Simha, J., though the arbitrator wrote to the appellant on 6th of Oct., 1959 that it could move a court of law challenging the jurisdiction of the arbitrator, the appellant did not choose to do so. The arbitrator had also written to the parties that on failure on their part to submit a joint statement as to the disputes between them, either of the party could state the dispute separately and send a copy of it to the other side. In the circumstances, it must be presumed that the respondent must have sent to the appellant a copy of the letter which it wrote to the arbitrator claiming Rs. 21,535/-. The appellant did not challenge the correctness of the amount claimed by the respondent before the arbitrator. AFTER the respondent made the claim before the arbitrator and sent a copy of it to the appellant, though the latter had challenged the jurisdiction of the arbitrator to proceed with the arbitration, in the alternative, it should have either admitted the claim or repudiated it, If it is assumed that the appellant admitted the claim, then once it Is held that the contract was valid and all disputes relating to it could be referred for arbitration, the award of the arbitrator has also to be held as valid as an award on admission. On the other hand, if one proceeds on the, assumption that the appellant repudiated the claim of the respondent to claim extra cost incurred by it for getting the work done through other agency, then there was a dispute between the parties on that question and the award of the arbitrator will be valid.