UNION OF INDIA Vs. NARINDER SINGH KANWAR

JUDGEMENT

(1.) THE defendants are the appellants. On a reference made under an arbitration agreement, the arbitrator gave an award. After the award was filed in Court, the contractor filed an application under Section 30 of the Arbitration Act (the Act) for setting aside the award and the same was registered as Title Suit No. 11 of 1976. Union of India filed an application for making the award rule of the Court and that was registered as Title Suit No. 56 of 1975. By the impugned order the Court below has set aside the award. As two title suits arose out of the same award, Union of India have filed two appeals, Miscellaneous Appeal No. 168 of 1977 (R) arising out of Title Suit No. 11 of 1976 and Miscellaneous Appeal No. 143 of 1977 (R) arising out of Title Suit No. 56 of 1975.

(2.) ADMITTED facts are that the respondent and appellant entered into written agreement by and under which the former agreed to execute certain civil engineering works. There was clause for referring all disputes to sole arbitration of persons appointed by the Chief Engineer (C. E.) C. P. W. D. in charge of the work at the time of dispute. Disputes arose between the parlies and by letter dated 15-11-1971 the contractor (respondent) submitted his claim and requested the C. E. to refer the same to arbitrator. The C. E. by letter dated 4-2-1972 referred some of the claims of the contractor and the claims of the department to the sole arbitrator of Shri M. D. Iyengar. By letter dated 5-7-1972 Shri Iyengar resigned from the case and the C. E. by letter dated 19/21-7-1972 appointed Shri B. S. Sekhon as the sole arbitrator. Shri Sekhon in his award held that the appellant was entitled to Rs. 68,453/- from the respondent. By the impugned order the Court below has set aside the award.

(3.) ON point No. (ii) it was submitted by Shri D. Prasad appearing on behalf of the appellants that for challenging the award on the ground of invalidity of reference, application under Section 30 of the Act was not maintainable. According to him the respondent ought to have filed the application under Section 33 of the Act. He urged that Court below, therefore, could not have set aside the award on the ground of invalidity of reference. Reliance was placed in Basant Lal v. Surendra Prasad (AIR 1957 Pat 417); B. S. Co-op. Bank v. Phosphate Company (AIR 1975 Pat 63) and Ashlok Singh v. Jugeshwar Singh (1980 BBCJ (HC) 457) : (AIR 1981 NOC 68). In Basant Lal's case a Bench of this Court held that Section 30 of the Act speaks only of invalidity in making the award and invalidity of an arbitration reference is neither contemplated by nor included in the words of Section 30 (c) "or is otherwise invalid". In B. S. Co-op. Bank's case a Bench of this Court agreed with that interpretation of "or is otherwise invalid" and held that invalidity of reference can be subject matter of an application under Section 33 of the Act but not Section 30 of the Act. Basant Lal's case was again referred in Ashlok Singh's case and the Bench held that the words "or is otherwise invalid" do not include invalidity of reference. In Deep Narain Singh v. Mt. Dhaneshwari (AIR 1960 Pat 201) and Bahadur Singh v. Fuleshwar Singh (AIR 1969 Pat 114) also it was held that invalidity of reference cannot be challenged under Section 30 of the Act.