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Union of India (Uoi) and anr. Vs. Himatsingka Timber Ltd. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberAppln. in Award No. 129 of 1963
Reported inAIR1964Cal91
ActsArbitration Act, 1940 - Sections 15, 16 and 30
AppellantUnion of India (Uoi) and anr.
RespondentHimatsingka Timber Ltd.
Appellant AdvocateD.K. De, Adv.
Respondent AdvocateA.C. Bhabra and ;Padma Khastgir, Advs.
DispositionPetition dismissed
Cases ReferredThe President of India v. Ourselves.
- .....was foolish though to give the cause title in his state of facts as under:'in the matter of indian arbitration act -- the president of india v. ourselves.'in the counter state of facts filed on behalf of the government, however, the mistake has been corrected and it has very rightly been pointed out that the disputessubsisting between the parties is between messrs. himatsingka timber ltd., claimant on the one hand and the union of india the respondent on the other. there wasno manner of doubt that the claim was being made by the contractor against the union of india as representingthe indian railways and there is no manner of doubt either that the arbitrator by his award made the government of india liable. he, however, in his award directedthe president of india through the.....

P.C. Mallick, J.

1. This is an application to set aside an award. The dispute is between the contractor and the Government. The contractor entered into a contract with the Government en March 14, 1951, for the sale of certain sleepers. The sleepers were supplied not within the data provided in the agreement. The contractor was paid for the goods at a rate lower than what is provided in the contract The contractor claimed that it was entitled to more. This was disputed. The dispute was referred to arbitration under the arbitration clause in the contract. The arbitrator in the instant case Mr. A. K. Gupta, Government Inspector of Railways give his award on December 26, 1961. The award is very short end is set out below in extenso:


'Whereas a dispute in connection with the supply of first class Sal sleepers to the Sleeper Control Officer. S. E. Rly., under agreement No. 14/MSM/51 has been referred to my arbitration And Whereas I have heard the representatives of the parties, considered the statements and documents filed and/or produced before me and having taken everything into consideration carefully, I hereby award that the respondent, the President of India (through the Sleeper Control Officer, S. E. Rly., Calcutta) do forth with, pay to the claimant, Himatsingka Timber Ltd., the sum of Rs. 3024.00 and Rs. 260.00 being the amounts of theft claim and costs therein respectively, aggregating to Rs. 3284.00.

Dated, Calcutta, this 26th day of December, 1961.

Sd. Illegible.

Government Inspector of Railways, Calcutta

Now Known As

Additional Commissioner of Railway Safety, Calcutta,


This Award is being challenged by the Government.

2. Mr. Debt De, learned counsel appearing for the Government, contended first that this award ought to be set aside because the arbitrator has made an award of a time barred claim. It is alleged in the petition that final payment was received by the contractor as far back as 1953 and that more than seven years after the receipt of such payment and eight years after the supply of the sleepers this reference was made upon which an award in favour of the contractor was given. In the affidavit in opposition it is contended that subsequent to the payment of the sum at the rate of Rs. 56/- per sleeper there has been a large number of correspondence between the parties. According to the contractor, in the course of the correspondence there has been acknowledgment of liability so as to extend the period of limitation. The point was debated before the arbitrator who held that the claim was, alive and not time-barred. No point is made that this error of law is apparent on the fact of the award. No reason is given either in the award or in any connected paper so that the error of law if any may be apparent on the face of the award. Mr. Debi Dey therefore did not challenge the award on that ground. Mr. De contended that the arbitrator mis-conducted in the proceeding in making an award of a time-barred claim. In order to sustain this argument Mr. De has to establish first that the claim is time-barred. In the Award Cash No. 252 of 1962 Union of India v. Salween Timber and Construction Co. Ltd., : AIR1963Cal307 , I made the following observation:

'The decision of the arbitrator right or wrong is notliable to be set aside, unless the error of law is apparent on the face of the award. As stated before, the error of law, if any, is not apparent on the face of the award. In my judgment, it is not for the Court to ransack the whole record for the purpose of finding out whether in fact there is or is not an acknowledgment in the documents filed before the arbitrator. The letters were placed before him and he might well have construed the document or any one of them to amount to an acknowledgment so as to take the claim out of the Statute of Limitation, it cannot therefore be contended that the arbitrator must have made the award of a time-barred claim contrary to the provisions of the Indian limitation Act. The award is not liable to be set aside on this ground.'

On the same ground I reject Mr. Dey's contention in the instant case.

3. It is next contended by Mr. De that the arbitrator bad no jurisdiction to decide the dispute. The arbitration clause even though couched in the widest possible language, contains exceptions, and takes certain disputes out of the arbitration clause. It is provided in the agreement as under:

'The reference to arbitration shall not however embrace or be referable to any matter in respect of which the sole power, discretion, liberty, decision or jurisdiction lies with the Sleeper Passing Officer, the Sleeper Control Officer, or President, Eastern Group, of any one of them under the agreement, terms of contract or specification hereof.'

The contract provides that if the contractor delayed in the supply of the materials so as to necessitate an extension of the time provided in the Schedule, he shall apply in writing to the Sleeper Control Officer, Eastern Group, who, if reasonable grounds be shown to his satisfaction, shall grant such extension in writing as he in his absolute discretion may think fit, and for this purpose his decision in writing shall be considered final, and If any such extension shall be granted the dates for delivery specified in the schedule or such of them as shall be affected by such extension shall be postponed accordingly. It is further provided that a reduction of 21/2 per cent in rates will be made on supplies made and accepted for each month of delay after the stipulated date provided no extension of time is granted.

4. Mr. De contended that in terms of the clause above referred to, a reduction of 21/2 per cent in rates has been made from the contractor's original bill. That being so, the discretion exercised by the Sleeper Control Officer cannot be the subject-matter of arbitration. The contention of the contractor is that the reduction of 21/2 per cent for each month's delay would be permissible only if no extension of time was granted. In the instant case there has been an extension of time and, therefore, no reduction was permissible. The dispute, therefore, is whether there was an extension of time granted by the Sleeper Control Officer. If, in fact, an extension of time was granted, no reduction of 21/2 per cent per month, from the original date of delivery would be permissible. If, on the other hand, time was not extended, such a reduction would be permissible. That was the dispute and, in my judgment, such dispute is covered by the arbitration clause. It cannot, therefore, be said thatthe dispute between the parties is taken out of the arbitration agreement by reason of the exception clause set out above, in the facts and circumstances of this case. In that view of the matter, the second point taken by Mr. De also cannot be sustained.

5. The next point taken by Mr. De is that no award can be made against the President and an award made against the President of India is a nullity. This indeed is Mr. De's main ground for challenging the award, Under Article 299(2) of the constitution of India the President is not personally liable in respect of any contract entered into by him on behalf of the Union. Article 300(1) provides that the Government of India may sue or be sued in the name of the Union of India. And Article 361(4) provides, that no civil proceedings in which relief is claimed against the President, shall be instituted during his term of office in any Court. It is, therefore, submitted by Mr. De that there is absolute immunity granted to the President both in respect of his official acts and in respect of his personal acts and he is not liable to te sued in any court so long as he occupies the office of President. Mr. De submitted that the words 'may sue or be sued' in Article 300(1) should be given an extended meaning and should not be restricted to suits for or against the Government. I am in complete agreement with Mr. De that no suit can be instituted against the President, and no decree can be passed against the President, directing him to make any payment whatsoever. I also agree that the award of the arbitrator directing the President of India to make payment of the amount due to the contractor cannot be made in law. It is not necessary for me to decide In this application whether Article 300(1) was intended to cover only cases which come before the Court, that is, whether it covers only suits and applications pending in Court or whether it Is wide enough to cover proceedings before the arbitrator as well. It is not necessary for me to decide that question in this application having regard to my findingthat the award made against the President is a bad award and cannot be made in law. Mr. De contended that in that view of the matter I have no other option than toset aside the award. The reason why I am not doing it will appear from what is stated hereunder.

6. There is no question in this case that the subject-matter of the arbitration is a contract between the Union of India on the one hand and the contractor on the other. The contract, however, has been entered into in the name of the President of India as provided in the Constitution. It appears that because of this, the contractor was foolish though to give the cause title in his State of Facts as under:

'In the matter of Indian Arbitration Act -- The President of India v. Ourselves.'

In the counter State of Facts filed on behalf of the Government, however, the mistake has been corrected and it has very rightly been pointed out that the disputessubsisting between the parties is between Messrs. Himatsingka Timber Ltd., Claimant on the one hand and the Union of India the respondent on the other. There wasno manner of doubt that the claim was being made by the contractor against the Union of India as representingthe Indian Railways and there is no manner of doubt either that the arbitrator by his award made the Government of India liable. He, however, in his award directedthe President of India through the Sleeper Control Officer, South Eastern Railway, to pay the claimant's dues amounting to Rs. 3024.00 and Rs. 260.00 on account of costs.

7. I am satisfied, in my mind, that the arbitrator intended to make the award as against the Union of India representing the Indian Railways and the form of the award is clearly a mistake. Now, the question is, whether such an award which on the face of it is bad, cart be corrected by the Court. The power of the Court to correct an award is given in Section 15 of the Indian Arbitration Act. Section 15 provides:

'The Court may by order modify or correct an award


(b) Where the award is imperfect in form or contains an obvious error which can be amended without affecting such decision, or

(c) Where the award contains a clerical mistake or error arising from an accidental slip or omission.'

8. In the instant case I have not the least doubt that the intention of the arbitrator was to make me Union of India liable. The arbitrator was not called upon by either party to decide whether the Union Government or the President of India would be liable. That question was never before the arbitrator. Nobody had even dreamed of making a claim against the President and no such claim was ever made even though through error the cause title was stated as stated above. In my judgment while making the award the arbitrator did not intend to impose a liability or obligation on the President but he intended! to impose a liability on the Union of India. Mrs. Khastgir the learned junior counsel appearing for the respondent with Mr. Ghabra has drawn my attention to the fact that the President through the Sleeper Control Officer, South Eastern Railway has been directed to pay. This is an indication of the fact that the arbitrator did not intend to make the President of India liable. In my judgment the mistakes in the award can be corrected either under Clause (b) or Clause (c) of Section 15 of the Indian Arbitration Act. The form of the award is wrong. The arbitrator while intending to make the Union of India liable has through mistake made the President of India liable and has thereby committed an obvious error. Alternately, I hold that it is a clear case of an accidental slip on the part of the arbitrator in not making the Union of India liable. On this ground I am apt to think that the Court has got power to correct the award. This very point was raised by Mr. Debi De before me in another case of Salween Timber noted above, : AIR1963Cal307 . In that case I took the view that the Court had power under Section 15 of the Indian Arbitration Act to correct such award and I did correct the award accordingly. I am told that an appeal has been taken against the decision and it is still pending.

9. Subsequent to my decision the point came up for consideration before Ray J. In a case between the same parties in Award Case No. 463 of 1962 (CaI). My learned brother Ray J. has taken the view that the Court had no such power. The view expressed by Ray J. is that the award is a nullity and cannot be corrected. I am told by Mr. Debi Dei that this decision of Ray J., also is appealed against and the appeal is pending.

10. At first I was inclined to defer delivering Judgment till the authoritative decision on the point is givenby the Appeal Court. There are objections to such procedure and I was pressed to deliver judgment now.

11. Having regard to the contrary opinion expressed to Ray J., I gave my anxious consideration to the question. Even after such anxious consideration I do not find any reason to revise the opinion already expressed by me.

12. In the result the application fails and is dismissed. There will be no order for costs.

13. It pass judgment in terms of the award as corrected with the usual costs. Interest on judgment debt at the rate of 3 per cent per annum. The Government will get three months for payment before the expiry of which no execution is to be levied.

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