KASHMIR HILL FORESTS Vs. STATE OF J&K

JUDGEMENT

(1.) THIS is an application under section, 33/11 of the Jammu and Kashmir Arbitration Act (thereinafter to be referred as the Act) made by the firm petitioner through Bickham Chand the holder of General Power of Attorney for adjudging the arbitration agreement as void and unenforceable and for setting aside the award made pursuant to the said agreement or in the alternative for removal of the Arbitrator.

(2.) IT is averred that the petitioner firm was constituted under a deed of partnership dated 16 -5 -1968 and it had six partners namely Shri Des Raj, Smt. Lila Rani, Smt. Thakari Devi, Shri Girdhari Lal, Sh. Om Parkash and Smt. Durgi Devi. The firm was granted lease in Dudu Range, District Udhampur which has since been worked and all dues have been paid to the Government. Another firm bearing the same name but consisting of almost different partners (excepting one common partner also obtained a lease in 1964 in the Forest Compartments Nos. 89(b), 90 and 91 in Lander Range Ramban Division and an agreement for working the said lease was executed by that firm on 31 -5 -1964. The said agreement was signed by the respondent No. 2 Conservator of Forests who had no authority to sign it on behalf of the Sadrar -i -Riyasat (now Governor). The aforesaid agreement is, therefore claimed as void and illegal as the same was made in contravention of section 122 of the Jammu and Kashmir Constitution. It is further averred that in the course of operation of the aforesaid lease certain disputes arose between the said firm and the department. The matter was therefore referred to the arbitration of the Chief Conservator of Forests under the Arbitration Agreement. The Arbitrator who was biased against the said firm arbitrarily found that an amount of Rs. 27800/ - was due from the said firm and he consequently made the award. Recovery proceedings have been initiated although the firm is under no obligation to pay the claim. The petitioners have urged that no award could be made on a void agreement and no claim found due on the said agreement could be enforced against the petitioner firm. The award be therefore set aside and the arbitration agreement declared void and the petitioner firm absolved of the liability to pay the amount in question.

(3.) THE respondents have resisted the application on the ground that the application is not maintainable and is incompetent because the disputes that were referred to the arbitrator have already been resolved by him. He has given the award which award was made rule of the court on 18th of September 1972. The arbitrator having become functuts officio the prayer of the petitioner that he may be removed is misconceived and is not maintainable. The award having been made rule of the court cannot be challenged more so when the decree has followed the award. At the appropriate stage opportunity for filing objections against the award was given to the firm and its partners but they failed to file the same within the statutory period. Now it is too late in the day for the petitioner to come forward after two years to object to the validity of the award as also challenge the legality of the agreement as being in contravention of the provisions of the Constitution. It is denied that the agreement is void. The petitioner firm has no locus standi and cannot dispute the liability to pay an amount of Rs. 27800/ - which is now payable under the decree of the court. In view of this it is submitted that the application be dismissed. The following issues have been raised in the case: - 1. Is the present petition maintainable when admittedly the disputes which arose out of the contract were referred for arbitration and when the arbitrator passed an award which has already been made rule of the court? O.P.P. 2. In case the petition is held maintainable, is the contract containing arbitration clause void? If so, how? O.P.P.