UNION OF INDIA (UOI) Vs. KHEM CHAND RAJ KUMAR
LAWS(CAL)-1970-9-41
HIGH COURT OF CALCUTTA
Decided on September 18,1970

UNION OF INDIA (UOI) Appellant
VERSUS
Khem Chand Raj Kumar Respondents

JUDGEMENT

Deb, J. - (1.) This suit was filed by Union of India on October 9, 1969, for a declaration that the decree, dated April 20,1969, passed by the Original Side of this Court in terms of an award dated February 4, 1969, in Award Case No. 67 of 1969, is without jurisdiction and is null and void and not binding on the Government; for adjudging the said decree to be void and directing the same to be delivered up and cancelled; for an injunction restraining the Defendant Contractor from executing the said decree against the Plaintiff, hereinafter referred to as the Government, and for costs.
(2.) Material averments made in the plaint arc that by a written contract dated January 2,1963, containing an arbitration clause and entered into at Lucknow, the Defendant, hereinafter referred to as the Contractor, agreed to carry out some constructional works for extension of a bar and rod mill of the metal and steel factory of the Government situate at Ichhapur outside the jurisdiction of this Court. The said contract was entered into by the Chief Engineer, Eastern Command of the Army, for and on behalf of the President, Disputes between the parties relating to claims and counter -claims in relation to the said works were referred to an arbitrator who made the said award in favour of the Contractor for Rs. 10,16,380 -17 P. which was filed in this Court. The Contractor's cause of action forming the subject -matter of the said Reference arose wholly outside the jurisdiction of this Court and this Court had no jurisdiction to decide the question forming the subject -matter of the said Reference. In these circumstances, the said award could not be filed in this Court and the said decree was passed without jurisdiction and is a nullity.
(3.) The Contractor in its written statement admitted that the contract in suit was signed at Lucknow but said that the invitation to submit the tender having been received by the Contractor at Calcutta within the jurisdiction of this Court and the Contractor having sent its tender from Calcutta a part of the Contractor's cause of action had arisen within the jurisdiction of this Court though the formal contract was signed at Lucknow. Main defence pleaded is that after the contract was entered into the office of the Chief Engineer, Eastern Command, was shifted to Fort Williams at Calcutta which is situate within the jurisdiction of this Court, and the Chief Engineer, Bengal Zone of the Eastern Command, did various matters in relation to the said contract from Fort Williams and many orders relating to deviation from works and extra works beyond the limits prescribed by the contract were issued from Fort Williams, and in pursuance of those orders the Contractor carried out those deviated and extra works. The Government had paid diverse sums of money to the Contractor against running account bills by means of account -payee cross cheques which were drawn on the Calcutta branch of the Reserve Bank of India, situate within the jurisdiction of this Court, and those cheques were cleared by the Contractor through its bankers at Calcutta whose offices were situate within the jurisdiction of this Court. All those facts constituted several parts of the Contractor's causes of action and they had arisen within the jurisdiction of this Court. In the said Reference the Contractor made an application in this Court under the Arbitration Act for restraining the Government from withholding the payment of Rs. 5 lacs payable to the Contractor under a different contract and an order being made in favour of the Contractor an appeal was referred by the Government which was allowed on merits and the costs of those proceedings were left to the decision of the arbitrator. The Government did not question the jurisdiction of this Court in those proceedings and, thereafter, the Government referred its claim for costs of those proceedings before the arbitrator. On the application of the arbitrator this Court had also issued subpoenas on several persons for production of some documents before the arbitrator. In these circumstances, this Court had acquired an exclusive jurisdiction over the award under the Arbitration Act. The Contractor denied that this Court had no jurisdiction to pass the said decree as alleged by the Government and further pleaded that in spite of service of notice under Sec. 14(2) of the Arbitration Act, the Government did not make any application to take the award off the file on the ground of alleged lack of jurisdiction of this Court and the said decree is binding on the Government. Plea of res judicata and estoppel were also taken in the written statement.;


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