THE UNION OF INDIA Vs. SHRI BINOD BEHARI SINGH AND OTHERS

JUDGEMENT

(1.) This appeal is directed against the order of the First Additional Subordinate Judge, Patna rejecting the appellant's prayer for setting aside an award and ordering that the award may be made a rule of the Court. The facts involved in this case are, shortly, these. Respondent Binod Bihari Singh had entered into a contract with the Union of India (appellant) on the 10th December, 1957, for loading, unloading and otherwise handling the goods at Gaya Goods shed of the Eastern Railway. The contract was to remain in force for three years. The appellant, however, terminated the contract with effect from the 2nd August, 1960, i.e. a few months before it was due to expire. The respondents claimed damage as a result of the premature termination of the contract. There was an arbitration clause in the agreement according to which the parties had agreed that if any dispute, difference or question should arise between the Railway Administration and the contracts as to their respective rights, duties and obligations of the parties or as to the construction or interpretation of the terms and conditions of the agreement or as to its application, the same would be referred to the sole arbitration of the General Manager of the Railway or if he would be unable or unwilling to act, then to the sole arbitration of any person appointed by him in this behalf. Accordingly when the dispute arose between the parties to the contract, the General Manager of the Eastern Railway appointed Shri R. Gopal Krishnan, the Chief Commercial Superintendent, as an arbitrator in terms of the arbitration clause of the agreement.

(2.) On the 22nd August, 1961, however, the respondent filed an application under Ss. 5 and 8 of the Arbitration Act, in the Court of the Second Subordinate Judge, Patna. He had prayed in his application to revoke the appointment of Shri R. Gopal Krishnan and to appoint some suitable person as the arbitrator in his place. The application was registered as miscellaneous case no. 38 of 1961. By the order of the District Judge Patna, dated the 5th June, 1962, the miscellaneous case was transferred to the court of the First Additional Subordinate Judge Patna. By his order dated the 25th August 1962 the learned Additional Subordinate Judge allowed the respondent's prayer for revocation of the authority of Shri R. Gopal Krishnan. On the 17th September, 1962, the learned Additional Subordinate Judge passed another order appointing Shri Ajodhya Prasad Sinha retired Subordinate Judge as the sole arbitrator in the dispute. The appellant moved this court in revision against the order revoking the authority of Shri R. Gopal Krishnan. The court dismissed the appellant's prayer in civil revision no. 4 of 1963 on the 8th January 1963. The appellant had also preferred M.A. no. 326 of 1962 against the order of the learned Additional Subordinate Judge, appointing Shri Ajodhya Prasad Sinha, the sole arbitrator. The miscellaneous appeal was disposed of on compromise in this court on the 30th March 1964. Under the terms of the compromise the General Manager appointed Shri J.C. Mehta, Deputy General Manager Eastern Railway as the Arbitrator in place of Shri Ajodhya Prasad Sinha. The arbitrator gave its award on the 26th February 1965, and had sent a copy of the signed award to the parties. On the 25th May 1965, the respondent filed the award sent to him by the arbitrator in the court of the First Additional Subordinate Judge, Patna along with an application in which he prayed that the arbitrator be directed to produce the original award in court and a decree be passed in terms of the award. In pursuance of the notice issued to the arbitrator he filed the award in the Court of the First Additional Subordinate Judge on the 12th June 1965. Information with regard to the filing of the award was given to the lawyers of the parties on the 28th June 1965. Thereupon the Union of India filed an objection on the 24th July 1965 in which it prayed that the award be set aside Subsequently, the appellant filed two applications, one on the 23rd September, 1965 and the other on the 6th November 1965 for amendment of its objection petition. Both the petitions were rejected by the Additional Subordinate Judge. Thereupon the appellant moved this court in Civil Revision no. 8 of 1966 against the order of the Additional Subordinate Judge, rejecting the prayer for amendment of the objection petition. The revision application was allowed and the court below was directed to deal with the two amendment petitions on its merits in the light of observations made by this court. Eventually the prayer for amendment was substantially allowed by the Additional Subordinate Judge.

(3.) On the 18th March 1967, the appellant filed an application before the Additional Subordinate Judge in which it prayed that the postal receipt and the acknowledgement for the letter dated the 26th February, 1965 by which the arbitrator had sent a copy of the award to the respondent be called for from the arbitrator as those documents were very material to decide the question of limitation in this case. The prayer, however, was rejected by the Additional Subordinate Judge. The appellant had pleaded inter alia that the award should have been filed in this court and not in the court of the Subordinate Judge, that in any view of the mattes the award should have been filed in the court of the Second Subordinate Judge, Patna and not in the court of the Additional Subordinate Judge, Patna and that the award was bad due to error apparent on the face of it. In its application dated the 18th March 1967 and also in course of the argument before the court below, the appellant had raised the plea that the application for filing of the award was barred by limitation. The learned Additional Subordinate Judge rejected all these pleas and dismissed the appellant's application for setting aside the award. It is against this order that the appellant has come in appeal before this court. The appeal was heard by their Lordships B.N. Jha and B.D. Singh, JJ. in February 1971 and by their order dated the 12th February 1971, their Lordships remitted the record to the court below for recording its findings on the following points: