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Panchanan Dey Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 74 of 1956
Judge
Reported inAIR1959Cal84,63CWN382
ActsArbitration Act, 1940 - Sections 14, 14(2), 15, 16, 17 and 18; ;Code of Civil Procedure (CPC) , 1908 - Section 151
AppellantPanchanan Dey
RespondentUnion of India (Uoi)
DispositionAppeal allowed
Cases ReferredKumbha Mawji v. Union of India
Excerpt:
- p. chakravartti, c.j. 1. this appeal arising out of an application under section 14(2) of the arbitration act raises a question to which the act furnishes no answer. the learned trial judge, sarkar j., thought that the matter was concluded by a decision of the supreme court, but i do not think that it is. 2. the facts are as follows: the appellant, panchanan dey, entered into several contracts with the respondent, union of india, for the supply of steel-made stores of various kinds. the contracts apparently contained an arbitration agreement, although it has not been printed in the paper book, that in the event of disputes and differences arising over the performance of the contracts, the same would be referred to the arbitration of two arbitrators one to be nominated by each party, and.....
Judgment:

P. Chakravartti, C.J.

1. This appeal arising out of an application under Section 14(2) of the Arbitration Act raises a question to which the Act furnishes no answer. The learned trial Judge, Sarkar J., thought that the matter was concluded by a decision of the Supreme Court, but I do not think that it is.

2. The facts are as follows: The appellant, Panchanan Dey, entered into several contracts with the respondent, Union of India, for the supply of steel-made stores of various kinds. The contracts apparently contained an arbitration agreement, although it has not been printed in the paper book, that in the event of disputes and differences arising over the performance of the contracts, the same would be referred to the arbitration of two arbitrators one to be nominated by each party, and that if the arbitrators failed to agree, the matter would be referred to the decision of an umpire. Disputes did arise about several of the contracts and they were referred to the arbitration of one Sri Niranjan Chatterjee, a pleader, nominated by the appellant and one Sarkar Bukshi Siv Charan Singh nominated by the Union of India. For the purposes of the reference, the relevant contracts were divided into two groups and a consolidated reference with respect to each group was made, so that there were two references, each covering a number of contracts. The arbitrators failed to agree and thereupon the disputes were referred to the arbitration of the late Mr. A.N. Sen, a retired Judge of this Court, as umpire. He made his awards on the 9th of March, 1954, and sent notice of his having made them to the parties. The appellant received the notice addressed to him on 15-3-1954 and the respondent on the 10th. The umpire held his proceedings at Delhi.

3. Both the awards were in the appellant's favour. By one of them he was awarded a sum of Rs. 55,412-8-0, together with interest and by the other, a sum of Rs. 11,037-13-0. The Union of India accepted the second and the smaller award and informed the appellant of their acceptance by a letter, dated the 19th of April, 1954. As there was no intimation about the Union's decision regarding the first award, the appellant made an enquiry by a letter dated the 29th of April, 1954 and was informed in reply by a telegram that the award was not acceptable to Government. The original telegram is on the record, but no date can be found on it.

4. Thereafter, by a letter dated the 20th of May, 1954, a solicitor, acting for the appellant, made a request to the umpire to file the first award for Rs. 55,412-8-0 in this Court as it had become necessary to obtain a judgment on it. On the next day, the same solicitor addressed a letter to the Union of India in which he stated that he understood from his client that the umpire had sent the original award to the Union for filing the same in the High Court at Calcutta and that they should file it immediately so that this Court might be asked to pronounce a judgment on the award. The two letters were hardly consistent, because, according to the first, the award was with the umpire and he was not filing it, while, according to the second, the umpire had sent the award to the Union of India for filing it in this Court and it was the Union of India who were withholding it.

5. On the 22nd of May, 1954, the umpire replied to the letter addressed to him. He did not say that he had already sent the award to the Union of India for filing it, but said only that he found two difficulties in the way of complying with the appellant's request. In the first place, he felt some doubt as to whether it would be this Court or the Civil Court at Delhi which would be the proper Court to file the award in, though he personally thought that the appropriate Court was the latter and in those circumstances he said that the parties ought to obtain an order on him from a Court to file the award. He added that although the Union of India had taken a stamped receipt from him in respect of his dues on an assurance that the money would be forthcoming at once, they had not yet paid him anything. This statement obviously had reference to the provisions of Section 14(2) of the Act and those of Section 38, under which an arbitrator or umpire is entitled to refuse to deliver the award except on payment of his dues. No reply was received by the appellant to the letter addressed by his Solicitor to the Union of India.

6. Thereafter, on the 1st of June, 1954, the appellant took out a Notice of Motion for an order under Section 14(2) of the Act that the award be filed in this Court by the umpire or, alternatively, that a true copy thereof be filed by the appellant himself and that judgment be pronounced on the award after the issue of the usual notices to the parties. In the body of the application the appellant stated that he had obtained from the respondent a copy of the original award which had been certified to be a true copy.

7. The application pursuant to the Notice of Motion was noted as made on 1-6-1954 and made returnable on the 22nd of June following. Before that date arrived, the umpire died on the 4th of June, 1954.

8. In the affidavit-in-opposition filed on behalf of the Union of India, it was stated that the dues of the umpire had been sent to him on the 9th of June, 1954, which, it will be seen, was after his death. A point taken that the application could not be made in this Court as it had no jurisdiction in the matter to which the reference related, does not appear to have been pressed at the hearing. Of the two other points taken, one which related to the date on which the appellant had received the notice of the filing of the award was easily disposed of and is no longer of any importance. The real controversy between the parties raged round the other point taken in the affidavit-in-opposition. It was said that, in view of the death of the umpire, the application could no longer be continued, because being dead, the umpire could no longer be directed to file the award and the appellant himself also could not legally be allowed to file a copy thereof, as prayed for by him in the alternative.

9. The application was heard by Sarkar, J., who has stated in his judgment that in view of the death of the umpire, the argument before him turned solely on the alternative prayer contained in the petition. This observation is not easy to follow, because the alternative prayer was that an order might be made for the filing of a true copy of the award by the appellant, but what the bulk of the learned Judge's judgment discusses is, whether the Union of India could be ordered to file the original award which they had received from the umpire and which they admittedly had in their possession. In the learned Judge's view, that question was concluded by the decision of the Supreme Court in the case of Kumbha Mawji v. Union of India, : [1953]4SCR878 (A), where it had been laid down that under Section 14(2) of the Act, a party could not file an award or a signed copy thereof unless he had been authorised by the arbitrator or umpire to file it on his behalf. The learned Judge pointed out that in the case before him, neither the appellant, nor the respondent had been so authorised.

10. We were pressed by Dr. Gupta to hold that the reasonable conclusion to be drawn from the circumstances of the case would be that the umpire had handed over the original award to the Union of India for the purpose of its being filed in Court. I am unable to accept that contention. Section 14(2) of the Act provides that an arbitrator or umpire shall cause the award or a signed copy of it to be filed in Court at the request of any party to the arbitration agreement or any person claiming under him or if so directed by the Court. This is in accordance with plain common-sense, because after making an award, an arbitrator or umpire can have no reason to think of filing it in Court of his own motion, because he can have no reason to presume that although the parties had agreed to abide by his decision, the party against whom the award had been made would not accept it and the party in whose favour it stood would require a judgment upon it in order to enforce it against his adversary. It is true that the appellant's solicitor did say in his letter of the 21st of May, 1954 to the Union of India that his client's instructions were that the award had been sent by the umpire to the Union of India for filing it in this Court, but such instructions could not possibly have been given or, if given, could not possibly have been true, because, if they were, the same solicitor could not have, while writing to the umpire himself on the previous day, complained that he had not filed the award, instead of complaining that although he had sent the award to the Union of India for filing it, they had failed and neglected to do so. The umpire also, if he had really sent the award to the Union of India with a request that they should file it in Court, would certainly have said so when replying to the letter of the appellant's solicitor, dated the 20th of May, 1954. Indeed, it appears from the umpire's reply that he could not have sent the award for filing it, and filing it in this Court as alleged, because he said he was in doubt as to the Court in which the award could appropriately be filed, although his own view was that the Civil Court at Delhi would be the appropriate Court. In one of the subsequent affidavits which the learned Judge allowed the appellant to file, he stated that the original award had been sent by the umpire to the Union of India with a forwarding letter requesting them to file it in this Court and that it was being deliberately withheld by the Union of India. This statement was affirmed by the appellant as true to his knowledge. I cannot but regard that statement as palpably false, because the facts stated were incapable of being true to the appellant's knowledge and because, if the appellant knew that the umpire had sent the award to the Union of India with a request to file it in Court, he could not have caused the solicitor to write to the umpire on the 20th of May, 1954, in the manner he had done. In an affidavit filed on behalf of the Union of India, one Siv Charan Singh, Deputy Secretary in the Ministry of Defence, who, by the way, had himself been one of the arbitrators, stated that the umpire had sent him the original award on or about the 9th of March, 1954, without any covering letter or any request to file the same or get the same filed. If the award was sent by post or by a messenger, it is strange that there should not have been a forwarding letter, but since the date when the award was sent is given as 'on or about the 9th March', the very dale on which the award was made and since the arbitration was held at Delhi, it is possible that the award was handed over to Siv Charan Singh personally. Be that as it may the appellant's allegation that the award was sent by the umpire to the Union of India for the purpose of its being filed in Court, or filed in this Court, was not proved, but on the other had, stands disproved.

11. The learned Judge, as I have already stated, has held that in those circumstances the Union of India could not be directed under Section 14(2) of the Act to file the award in Court. Thus far no exception can be taken to the decision of the learned Judge. Put he has also held that if the Union of India could not in law themselves file the award under Section 14(2) of the Act, not having been authorised to do so by the umpire, the Court could not order them to do so and that even if it did and the award was filed, the order would be an ineffective order, because such filing would not be a filing under Section 14(2) of the Act and no judgment could be pronounced on an award so filed. It is this view of the learned Judge which requires serious consideration.

12. If the learned Judge had dismissed the appellant's application on the ground that his only alternative prayer was that he himself might be allowed to file a copy of the award, but no such order could be made since he had not been authorised by the umpire to file the award on his behalf and since the copy in his possession was not even a signed copy, there would perhaps be an end cf the matter. The learned Judge might have declined to allow the scope of the application to he enlarged, but he did allow the parties to go to trial on the question as to whether the respondents, who had admittedly the original award in their possession, could be directed to file it and that is the question with which his judgment mainly deals. I am accordingly of opinion that the question whether the respondent Union could be directed to file the award, even if they could not be so directed under Section 14(2) of the Act, can properly be gone into in this appeal.

13. As to that question, I do not think that once it is found that the Union of India had not been requested by the umpire to file the award in Court on his behalf, further consideration of the matter would be useless in view of the decision of the Supreme Court, as the learned Judge appears to have thought. In the case before the Supreme Court, the umpire had made out his two awards in duplicate and then supplied them to each of the parties in the original. Both this Court and the Court at Gauhati had jurisdiction in the matter to which the references related. One of the parties, the Union of India, made an application in the Court of a Subordinate Judge at Gauhati under Section 14(2) of the Arbitration Act for an order on the umpire to file the awards in Court. On receipt of a notice of that application, the umpire sent to the Court signed copies of the awards and thereafter, under the direction of the Court, the Union of India filed their set of the original awards. In the meantime, the other party, namely, Kumbha Mawji, who also had in his possession awards in the original, filed his set in this Court through his solicitors. The Union of India filed their set of the original awards in the Gauhati Court after KumbhaMawji had filed his set in this Court. In those circumstances, a question, being raised in this Court as to whether this Court had any jurisdiction to make any order on the awards, the parties proceeded on the assumption that under Section 14(2) of the Act, a party could file an award or a signed copy of it in Court only if he had been authorised by the arbitrator or umpire to do so. Proceeding on the same view which was not questioned before them, the Supreme Court held that Kumbha Mawji, the applicant before this Court, not having been authorised by the umpire to file the awards in Court, much less to file them on his behalf, the filing of the awards in this Court could not amount to filing by the umpire as contemplated by Section 14(2) of the Act and that even assuming that the awards had been filed in this Court in accordance with the section, still, the filing of the signed copies by the umpire himself in the Gauhati Court having also been a proper filing and such filing having been earlier in time, it was the Gauhati Court and not this Court which had jurisdiction to deal with the awards under Section 31(3) of the Act. The Court expressly mentioned that the parties had proceeded before them on the assumption stated in the judgment and that it had not been contended that the filing of an award into Court by a party himself, though without the authority of the umpire to do so on his behalf, would be sufficient compliance with the terms of Section 14(2), do not, however, place much reliance on this reservation, because immediately before recording it, the Court said that Section 14(2) clearly implied that a party filing an award in Court should have the authority of the arbitrator or umpire for doing so on his behalf and later in the judgment, they explained the section to mean that the authority must be not merely an authority to file the award in Court, but also authority to file it on behalf of the arbitrator or umpire. That requirement cannot certainly be said to have been satisfied in the present case. Yet I venture to think that the decision of the Supreme Court is limited to an interpretation of Section 14(2) of the Act and the Court only lays down in what manner an award may be legally filed in Court when there is an arbitrator or umpire to file it or cause it to be filed. The decision is conclusive only as respects cases where the facts are such that Section 14(2) can apply. What the Supreme Court really decided was a competition between original awards filed in Court by a party without the authority of the umpire who had made them and signed copies of the awards filed by the umpire himself. The facts of the case were within the ambit of Section 14(2) and the decision is undoubtedly conclusive that where there is an umpire or arbitrator to file the award, no party can file it within the meaning of Section 14(2) unless he files it with the authority of the arbitrator or umpire given to him to file it on his behalf. It is not conclusive as regards cases where the facts exclude the operation of Section 14(2) and where the question is, whether apart from Section 14(2), an award may be filed in Court or directed to be filed. That question remains to be considered.

14. Section 14(2), so far as is material, provides that the arbitrators or umpire shall, at the request of any party to the agreement or any person claiming under such party or if directed by the Court, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. Obviously, the section presupposes that the arbitrator or 'umpire is alive and available or, at the most, if he is dead or not available, he has before his death or departure from the place authorised a party or someone else to file the award in Court on his behalf. But whereas here, the arbitrator dies before filing the award and without authorising anyone to file it on his behalf, the section can have no application, I think it is pertinent in this connection to examine the frame of the section and its obvious objective. It is addressed to laying down not in what circumstances an award may or may not be filed in Court, but what the duty of an arbitrator or umpire in regard to filing his award is. In order that the terms of the section may be complied with, it is obviously necessary that the arbitrator or umpire should be in existence, because it is he who is enjoined by the section to perform a particular duty, or at least that before his death, he should have done all that was necessary on his part to do for the filing of his award. The Act, however, makes no provision for a case, either in Section 14(2) or elsewhere where the arbitrator has died without filing the award or authorising anyone to file it on his behalf and in that regard there is, it appears to me, a clear lacuna in the Act. In those circumstances, the question is, must the Act be taken to mean and intend, that the only legal way in which an award may be brought up before the Court for being filed is that prescribed by Section 14(2) and that where the terms of that section cannot be applied and even where its provisions cannot possibly be complied with, the award can be of no use and no judgment on it can he obtained, although there may be no dispute about either its existence or its authenticity?

15. I can find no compelling reason to construe the Act in that stringent sense and, I think, it would be unreasonable to do so. Where Section 14(2) could apply, it may be entirely proper to insist on the strict observance of all its terms, but there is nothing in the Act to indicate that it intends the provisions of the section to be exhaustive and thereby to enact that where Section 14(2) cannot apply, the award cannot be filed at all. To ascribe that meaning to the Act would be to make it contemplate that although protracted arbitration proceedings may have been held in a particular case in accordance with an agreement between the parties, although an award may have admittedly been made, and even although there may be no difficulty about getting the award and filing it in Court, if allowed, still, if the arbitrator has died without filing it or authorising anyone to do so on his behalf, all the proceedings had before the forum which the parties had chosen for themselves and which had resulted in an award, must come to nothing. This situation may arise even in a case where immediately after making the award, the arbitrator or umpire is suddenly struck down by death without really getting an opportunity for filing it in Court or authorising someone to do so. In my view, Section 14(2) of the Act is not at all concerned with such a case, because it only enjoins an arbitrator or umpire who has made an award to cause it to be filed, if requested by one of the parties or a representative of his or if ordered by the Court to do so. But it does not purport to make any provision, whether of a positive or a negative character, as to whether an award, admittedly made, may be filed in Court where the arbitrator or umpire who made it is no longer alive or available to file it. If, I may say so at the risk of repetition, it is not the scope of Section 14(2) to lay down in what circumstances an award may or may not be filed and its only scope is to make it the duty of the arbitrator or umpire who has made the award to file it in Court in the circumstances stated in the section. I am accordingly of opinion that where Section 14(2) of the Act cannot apply, it constitutes no bar to the filing of an award otherwise than by the arbitrator or umpire concerned or a person authorised by him, if such filing can be directed by some other provision of law and if the circumstances of a case justify such direction. The ground covered by Section 14(2) must undoubtedly be trodden along with the track laid by it, but to the ground lying outside, that track does not extend and there other tracks may legitimately be sought.

16. In my view, where Section 14(2) of the Arbitration Act cannot apply, the Court may in a proper case make an order for the filing of the award under Section 151 of the Code of Civil Procedure. Section 41(a) of the Arbitration Act provides that subject to the provisions of the Act and of the rules made thereunder, the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court and to all appeals under the Act. It is true that the Code is made applicable subject to the provisions of the Act, but if Section 14(2) does not apply in a case where the arbitrator or umpire has died before causing the award to be filed, as in my view it does not, there can be no conflict with that section if the Code is applied in such a case. The proceedings before the Court have, however, to be proceedings 'under this Act.' There may, therefore, be some difficulty in a case where even before an application is made to the Court for an order for the filing of the award, the arbitrator or umpire is already dead, because it may be said that, in such a case, the application is not an application under Section 14(2) of the Act and there being no other provision authorising such an application, it is not an application under the Act and, therefore, the Code cannot be imported under the provisions of Section 41(a). I need not consider such a case on the present occasion, because the present case is not such a case. Here, the umpire was alive at the time when the application was made and, therefore, the application for an order on him to file the award was an application under Section 14(2) of the Act and the proceeding initiated by that application was a proceeding under the Act. By reason of the events which happened subsequently, the substantive provisions of Section 14(2) ceased to be applicable and, in my view, the Court having before it a proceeding under the Act, could then resort to Section 151 of the Code to make an order for filing the award, since no other provision in the Act applied, if, however, it was possible on the materials before the Court to make such an order and if justice required that it should be made.

17. The learned Judge was of opinion that an award filed otherwise than under Section 14(2) could be of no use, because the provisions of Sections 15 to 18 could apply only after a filing in terms of Section 14(2) and that on an award not filed under that section, no judgment could be pronounced. It was probably because of that view taken by him that he did not consider if he could proceed under Section 151 of the Code. None of the subsequent sections, however, make a filing under Section 14(2) a condition precedent to a recognition or entertainment of the award. The only basis on which they proceed is that there is an award before the Court. It is only Section 14(2) itself which first refers to the filing of the award by the arbitrator or umpire and then it says that 'thereupon'' the Court shall give notice of the filing of the award, but this provision cannot be relied on as making it indispensable that the award shall be caused to be filed by the arbitrator or umpire himself, even in a case where, there is no arbitrator or umpire to file it, because in such a case Section 14(2) does not apply at all or ceases to be applicable after the death of the arbitrator or umpire. It is true that there is no other provision in the Act for the issue of a notice of the filing of the award, but if the Court can make an order for the filing of an award under Section 151 of the Code, it can, I think, implement that order by directing notice to be given of the filing under the same section. I am accordingly of opinion that the learned judge was not right in holding that the whole law as to the filing of an award was contained in Section 14(2) of the Act and in declining to consider any other mode of filing an award or any other power of the Court to order a filing, in the view that both by reason of the provisions of the Act and the decision of the Supreme Court, such consideration would be fruitless. We may, however, in the Court of Appeal proceed to consider if, in the facts of the case, an order otherwise than under Section 14(2) can be made.

18. If there is jurisdiction to proceed under Section 151 of the Code, which I have held there is, the next question is whether there are sufficient materials for making an order for filing the award end whether it is just and proper that an order should be made. I have no doubt in my mind as to the justice and propriety but as we were in doubt as to whether the depositions recorded by land the documents filed before the arbitrators and the umpire were available, we directed the parties to make an enquiry and state to us the result by affidavits. The appellant misunderstood our direction and filed a lengthy petition on 19-2-1958, supported by an affidavit affirmed on the 17th, for the reception as additional evidence of the documents filed by him before the arbitrators which had subsequently been returned to him, as also copies of proceedings which had been served upon him by the arbitrators and the umpire. There can be no question of our taking additional evidence in the case and it is surprising that such an application should have been made. The application, however, disclosed that the documents filed by the appellant were in his possession and it also stated that the documents filed by the respondent, Union of India, and indeed the whole of the rest of the record, including the original award, had been handed over by the umpire to the respondent. The Union of India filed an affidavit in opposition to the appellant's application for the reception of additional evidence, but, as the application itself was misconceived, we did not deal with that affidavit & directed the respondent to give us what we wanted, that is to say, to state by an affidavit what papers were in their possession. They did so by an affidavit affirmed by one Sailendra Nath Neogy, Assistant Director of Litigation, on 2-4-1958, in which they set out under twelve heads the documents in their possession. On examining that affidavit, Mr. G. P. Kar, who was appearing for the Union of India, stated to us quite frankly that except the documents filed by the appellant himself, the Union of India was in possession of the rest of the entire record of the proceedings, including the documents filed by the respondent and the original award.

19. The position, therefore, is this: An arbitration proceeding was admittedly held in accordance with the arbitration agreement between the parties, first by two arbitrators and then by an umpire. The umpire admittedly made an award. He did not file the award or authorise anyone to file it, instead, made it over to the respondent, together with the entire record of the proceedings, except only the documents filed by the appellant which he returned to him. Why the umpire parted with the original award and the record of the proceedings without waiting to see whether he would be requested by a party or ordered by the Court to file the award, is not clear. Since he did not say in his letter of 22-5-1954, that he was not in a position, to file the award in Court, it may be that he had kept with him a copy which he would sign and file in Court, if required, but even then he would not be able to comply fully with the provisions of Section 14(2), since he had parted with the record of the proceedings and the documents filed before him. Section 14(2) requires the arbitrator or umpire to file along with the award 'any depositions and documents which may have been taken and proved' before the arbitrators or the umpire. Be that as it may, between them, the two parties now have in their possession the original award, the entire records of the proceedings and the documents filed respectively by them before the arbitrators and the umpire. At the date when the application under Section 14(2) was made the umpire was alive, but before the application came up for hearing he died and, consequently, no order could any longer be made on him to file the award, nor could any order be made under Section 14(2) for the filing by the appellant of his own-copy, since he had not been authorised by the umpire to file the award in Court and since his copy was not a signed copy. If no order can be made, the arbitration proceedings will come to nothing. In these circumstances, it seems to me that this is pre-eminently a case where the Court ought to proceed under Section 151 of the Code and make an order for the filing of the award under that section, instead of allowing the award to come to nothing or to be stifled, seeing that not only the original award, but also the entire record of the proceedings, including the depositions and the documents filed is available, the bulk of it being in the custody of the respondents themselves and since there is no dispute as to the genuineness of any of the papers.

20. For the reasons given above, this appeal is allowed and the order of the learned Judge is set aside. In the events which have happened, the appellant's application for an order for filing the award is allowed in terms of prayer (e) of the petition and it is directed under Section 151 of the Code of Civil Procedure that within a month from to-day, the respondent, Union of India, do file in Court the original award, together with the files and papers disclosed by and set out in the affidavit of Sailendra Nath Neogy, affirmed on 2-4-1958 and that within the same time, the appellant do file in Court the documents specified in Schedule 'Y' to his application filed on 19-2-1958 and this upon the award being filed as directed above, the Court below do serve notice of the filing of the award and proceed to deal with the award in accordance with law.

21. In view of the difficulty of the question involved and the untrue character of the affidavits affirmed by the appellant, there will be no order as to costs.

22. No orders are necessary as regards the application of the appellant filed on 19-2-1958 except that in filing in Court the documents filed by him before the arbitrators, he will follow the list set out in Schedule 'Y'' to that application.

23. Let the documents filed in this Court as annexure to the appellant's application of 19th of February, 1958, be returned to the appellant

S.C. Lahiri, J.

24. I agree.


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