- (1.) IN the present case, the reference was started under an order of Court made on 6th May 1983 in Special Suit No. 77 of 1983 instituted by the M/s. Hind Builders under S.20 of the Arbitration Act. The Union of INdia duly filed its affidavit-in-opposition in the said special suit and contested the said proceeding. Thereafter the parties prosecuted the arbitration proceeding and an award was made in favour of Hind Builders on 26-3-1984. IN this application, the Union of INdia has prayed for setting aside the said award on several grounds mentioned in the petition.
(2.) DURING hearing, the petitioner's counsel, however, pressed five grounds only which are as follows:- 1. The order of reference D/-6-5-1983 was made without jurisdiction. Hence the reference was bad and the award is non est. 2. In the course of the arbitration proceeding it was agreed between the parties that the final measurement accepted by the parties would form the basis of the adjudication by the Arbitrators. The Joint Arbitrators misconducted themselves in not proceeding on the basis of the said agreed measurements. 3. At the arbitrators" meeting on 2-3-1984, the petitioner had prayed for time to adduce evidence against respondents" claim for additional works. The Arbitrators refused the said prayer and did not record the same in the minutes of the meeting. At the next sitting on 7-3-1984, the petitioner made a formal application for time to adduce evidence. It is alleged that the representatives of the petitioner, who attended the meeting on 7-3-1984 were led to believe by the Arbitrators that the joint arbitrators would not entertain the respondents" claim for additional work and as such the said representatives gave a declaration that the petitioner had completed its submissions. But the arbitrators entertained the said claims and misconducted themselves. 4. The Arbitrators awarded general damages for breach of contract twice and this error appears on the face of the award. 5. The arbitrators misconducted themselves in awarding interest in the manner mentioned in the award. The counsel for the petitioner submits that under clause 62 of the contract, the respondent was bound to refer all the disputes first to the Railway for decision. If the Railway would fail to give decision within a reasonable time, or the respondent was dissatisfied with the decision, then and then only it could invoke the arbitration clause and not otherwise. This was a condition precedent which ought to have been fulfilled before a reference could be made. In the present case the respondent did not refer the disputes to the Railway before making the application under S.20 of the Act. The condition precedent not being fulfilled, the respondent was not entitled to enforce the arbitration clause on the date of the application. Under the circumstances, the Court also did not have the jurisdiction to pass the order D/-6th May 1983. The reference was therefore bad and the award null and void. In support of his contention, the counsel for the petitioner relies on AIR 1945 Oudh 1 at p. 3 (Sher Bahadur Singh v. Ram Narain Singh). The facts of that case were that a civil court, after passing a decree in a partition suit, entertained an application for referring the disputes to arbitration in suit. There was an order for reference and an award was made. The award was challenged on the ground that the reference was without jurisdiction because the application for arbitration was not made in any pending suit. It was held that the reference was without jurisdiction as the court, after the decree was passed, entertained the application and started the reference. The respondents" counsel submits that the facts of that case were entirely different from the facts of the present Special Suit No. 77 of 1983 and as such this case has no application. In that case due to the passing of the partition decree, the court lost jurisdiction to entertain the application for reference. But in this case the condition precedent mentioned above, is nothing but one of the terms of the contract for the benefit of the petitioner and as such it must be treated as waived by the petitioner as it did not take this point while contesting the Special Suit No. 77 of 1983. The petitioner had waived its known right available under the contract by not challenging the said order and by contesting the said reference without any objection. The petitioner is, therefore, debarred from agitating this ground on the principle of waiver. According to the petitioner's counsel the point raised is a question of lack of jurisdiction and as such the principle of waiver or res judicata will not apply. The respondents" counsel on the other hand submits that even the question of jurisdiction can be res judicata. He relies on 58 Ind App 381 at pages 390-391, (Louis Dreyfus and Co. v. Arunachala Ayya). In this case, an award made by an umpire was set aside. There was an appeal and by an order D/-20-7-1922, the appeal court upheld the order of the trial court for setting aside the award and remitted the matter back to the Umpire. An appeal to the Privy Council from the order D/-20-7-1922 was dismissed due to default. The umpire thereafter made the award which was again challenged. In the petition it was alleged inter alia that the agreement of arbitration was made by a person without having any authority, to do so and as such the petitioner was not bound by the said arbitration agreement and the whole proceeding was bad. The Umpire had no jurisdiction to make the award. On these facts it was held at p. 391 (of IA.) :- "............their Lordships, are of opinion that the question of the Umpire's jurisdiction is res judicata between the parties under order D/-20-7-1922, the appeal from which to His Majesty in Council was dismissed and the matter was remitted to the Umpire. This could have been done only upon the footing that the respondent was bound by a submission to arbitration."
(3.) ACCORDING to the respondents" counsel the order D/-6-5-1983 is binding on the petitioner and the question of jurisdiction cannot be agitated at this stage. I accept the submission of the respondents" counsel and hold that this point is hit by the principle of waiver as well as by the principle of constructive res judicata due to the order D/-6-5-1983. AIR 1963 Cal 140 (Sree Bajrang Jute Mills Ltd. v. Fulchand Kanhaiyalal Co.) is another authority on this point.;