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PETITIONER: HARI DUTT BHARDWAJ

       Vs.

RESPONDENT: HARYANA STATE AGRICULTURE MARKETING BOARD,PUNCHKULA & ANR.

DATE OF JUDGMENT01/05/1989

BENCH: PATHAK, R.S. (CJ) BENCH: PATHAK, R.S. (CJ) NATRAJAN, S. (J)

CITATION:  1989 AIR 1670            1989 SCR  (2) 849  1989 SCC  (3) 130        JT 1989 (2)   333  1989 SCALE  (1)1443

ACT:     Arbitration Act, 1940: Sections 14 and 30--Award--Wheth- er  arbitrator   had   jurisdiction--Dispute   referred   to Superintending  Engineer  Agricultural  Marketing   Board--A State  Government officer on deputation to the  Board--Award made   when   arbitrator   was   on   transfer   to   parent department--State Government ordering continuance on deputa- tion--Salary  paid by Marketing Board--Held  arbitrator  had jurisdiction to make award.

HEADNOTE:     The respondent--Marketing Board, entered into a contract with  the  appellant for the construction  of  their  office building.  The agreement stipulated that the  Superintending Engineer  of the Marketing Board would be appointed  as  the sole Arbitrator in case of a dispute.     A  dispute  arose  in regard to the  completion  of  the construction,  and  it was decided to refer  the  matter  to arbitration.  On 11th March, 1983 the  respondent  appointed Shri  Gupta, Superintending Engineer of the Marketing  Board as  Arbitrator. While the Arbitrator was seized of the  dis- pute,  the  Chairman  of the Marketing  Board  purported  to revert him to his parent department.     On 6th April, 1984, the Arbitrator made his award  which was in favour of the appellant. On 2nd May, 1984 the  appel- lant applied to the Sub-Judge for making the award a rule of the  Court. In the meanwhile, on 24th May, 1984,  the  State Government  passed an order confirming that Shri Gupta  con- tinued  in  the  post as Superintending  Engineer.  On  28th February,  1985,  the Marketing Board  passed  a  resolution giving  effect to the said direction of the  Government  and extending the deputation tenure of Shri Gupta to 3rd Septem- ber, 1985. On 30th July 1985, the Trial Court made the award a rule of the Court.     In the appeal to the High Court it was urged that on 6th April, 1984 the date on which the Arbitrator made his Award, the  Arbitrator  had  lost jurisdiction since  he  had  been transfered on 4th April, 1984 from the post of  Superintend- ing Engineer of the Marketing Board to his 850 parent  department in the State Government. The  High  Court

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accepted this plea and reversed the order of the Trial Court and set aside the Award.     In  the  appeal  by the contractor to  this  Court,  the question was; whether the Arbitrator, Shri Gupta had  juris- diction  to  make the award on 6th April, 1984 or  had  lost jurisdiction  because  of the order dated  4th  April,  1984 reverting him to his parent department. Allowing the appeal,     HELD: 1. Shri Gupta was on deputation with the Marketing Board  up to September 4, 1984. He was prematurely  required by  the Chairman of the Marketing Board by order  dated  4th April,  1984 to revert to his parent department.  The  State Government,  however,  ordered on 24th May, 1984  that  Shri Gupta would continue on deputation with the Board. In  fact, Shri Gupta did not even resume a post in his parent  depart- ment. [852A-B]     2. The necessary consequences of the order of the  State Government  continuing  Shri Gupta on  deputation  with  the Marketing  Board was to nullify the order dated  4th  April, 1984 passed by the Chairman purporting to revert him to  his parent  department. It is clear from the records  that  Shri Gupta  was  paid his salary by the Marketing Board  for  the entire month of April 1984, a circumstance which establishes that  he  was  continuing with the Board when  he  made  the Award. Shri Gupta must, therefore, he deemed to have enjoyed jurisdiction  as Arbitrator on 6th April, 1984 when he  made the Award. The deputation of Shri. Gupta with the  Marketing Board did never terminate. [852B-D]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2591  of 1989.     From  the  Judgment  and Order dated  12.3.1986  of  the Punjab and Haryana High Court in F.A.O. No. 986 of 1985.     Rajinder  Sachar,  E.S. Agarwala,  H.D.  Bhardwaj,  J.S. Manhas and R.K. Kapoor for the Appellant.     Dr. Y.S. Chitale, K.B. Rohatgi and Baldev Atreya for the Respondents. The Judgment of the Court was delivered by 851 PATHAK, CJ. Special leave granted.     This  appeal  by special leave is directed  against  the order of the High Court of Punjab and Haryana setting  aside an arbitration award.     The Haryana State Agricultural Marketing Board (referred to shortly as the "Marketing Board") entered into a contract with  the  appellant for the construction  of  their  office building  at  Panchkula near Chandigarh. It  was  stipulated that  the work would be completed within six months. It  was also  stipulated that in case of a dispute between the  par- ties,  the  Superintending Engineer of the  Marketing  Board would be appointed as sole Arbitrator.     A dispute arose between the parties in regard to comple- tion  of the construction, and it was decided to  refer  the matter  to  arbitration. On 11 March,  1983  the  respondent appointed  Shri D.P. Gupta, Superintending Engineer  of  the Marketing  Board  as Arbitrator. While  the  Arbitrator  was seized  of the dispute between the parties, the Chairman  of the  Marketing Board purported to revert him to  his  parent Department. On 6 April, 1984 the Arbitrator made his  Award. Under   the  Award  the  appellant  was  held  entitled   to Rs.55,242.66  with  interest. On 2 May, 1984  the  appellant applied  before  the learned Subordinate Judge,  Ist  Class,

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Chandigarh, for making the Award a rule of the Court.     Meanwhile,  on 24 May, 1984 the State Government  passed an  order confirming that Shri D.P. Gupta continued  in  his post  as Superintending Engineer of the Marketing Board.  On 28  February, 1985 the Marketing Board passed a  resolution, giving  effect to the direction of the Government  extending the  deputation tenure of Shri D .P. Gupta to  3  September, 1985. On 30 July 1985 the Trial Court made the Award a  rule of the Court. In appeal to the High Court, it was urged that on 6 April, 1984, the date on which the Arbitrator made  his award,  the  Arbitrator had lost jurisdiction since  he  had been  transferred  out  on 4 April, 1984 from  the  post  of Superintending Engineer of the Marketing Board to his parent Department in the Haryana Government. The High Court accept- ed  the plea and reversed the order of the Trial  Court  and set aside the Award.     The  sole question before us is whether the  Arbitrator, Shri  D.P.  Gupta, had jurisdiction to make the Award  on  6 April,  1984 or had lost jurisdiction because of  the  order dated 4 April, 1984 reverting him to his parent  Department. The material before us shows that Shri D.P. 852 Gupta  was  on  deputation with the Marketing  Board  up  to September  4, 1984 and that he was prematurely  required  by the Chairman of the Marketing Board by order dated 4  April, 1984  to revert to his parent Department. The State  Govern- ment, however, ordered on 24 May, 1984 that Shri D.P.  Gupta would  continue on deputation with the Board, and it is  not disputed  that Shri Gupta rejoined the Board. He did not  in fact ever resume a post in his parent Department. The neces- sary  consequence of the order of the State Government  con- tinuing  him on deputation with the Marketing Board  was  to nullify the order dated 4 April, 1984 passed by the Chairman purporting to revert Shri Gupta to his parent Department. It appears from the record that Shri Gupta was paid his  salary by the Marketing Board for the entire month of April 1984, a circumstances  which establishes that the Board itself  con- sidered  him  as continuing on deputation when he  made  the Award.  That  being so, he must be deemed  to  have  enjoyed jurisdiction as Arbitrator on 6 April, 1984 when he made the Award. The deputation of Shri Gupta with the Marketing Board did never terminate.     In  the result the appeal is allowed, the  judgment  and order  of the High Court are set aside and the judgment  and decree  of  the  Trial Court are restored. No  Order  as  to costs. N.V.K.                                Appeal allowed. 853