Decided on December 29,1954

UNION OF INDIA Respondents


- (1.) The petitioner Jagdish Rai Jain agreed to supply fresh fruits and potatoes to the military authorities under two separate agreements, dated the 20th April, 1948. It appears that according to the military authorities the contractor did not supply these goods and they had to purchase them from the open market resulting in loss of Rs. 57,647/15/11 in the contract for supply of fresh fruits and the loss of Rs. 50,588/5/11 in the contract for the supply of potatoes. In the agreement between the parties there is an arbitration clause which reads : "Any dispute or difference arising out of the contract, settlement of which is not hereinbefore provided for, shall be referred to the arbitration of the officer sanctioning the contract, whose decision shall be final and binding." Under this clause these two disputes were referred to the arbitration of Major General J.C. Katoch who entered upon the reference and while proceedings were going on before him the contractor Jagdish Rai Jain filed two separate applications with respect to each contract under section 33 of the Indian Arbitration Act in the Court of the Senior Sub-Judge, Jullundur, for an order that the arbitration clause is invalid and has no existence in law and the arbitrator be removed. The two petitions were heard together by the trial Judge who held that the arbitration agreement was valid and that there was no ground for removal of the arbitrator, but in the course of his judgment he observed that Major General Katoch had been transferred and his successor could arbitrate upon the dispute. The petitioner had filed two petitions for revision (Civil Revision Nos. 142 and 143 of 1954) in this Court against the decision of the Senior Sub-Judge, Jullundur.
(2.) The learned counsel for the petitioner has argued various points before me and I shall deal with them in seriatim.
(3.) It was first argued that the arbitration clause did not bind the parties inasmuch as the agreement in which the arbitration clause finds its place was not signed by the sanctioning authority. It appears that the agreement relating to fresh fruits was signed by Mr. K. K. Verma, for the sanctioning authority while the agreement relating to potatoes was signed by the sanctioning authority. Therefore no objection can be taken on this score in the application relating to potatoes agreements. As far as fresh fruits agreement is concerned, it is clear that Mr. Verma does not sign as sanctioning authority but for sanctioning authority. It was open to the sanctioning authority to authorise Mr. Verma to sign it on his behalf and in the absence of any evidence to the effect that Mr. Verma has no authority to do so, I must hold that the agreement is signed by the proper authority and binds both the parties and therefore, the arbitration clause is binding on the petitioner.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.