Case: The State Of Bihar Vs. M/S. Karam Chand Thapar &amp; Brothers Ltd

accordance with the provisions of the Arbitration Act 1 of 1940. You are, therefore, requested to please attend the Divisional Office immediately to execute necessary agreement for the purpose."Pursuant to this letter, the respondent joined in the execution of the agreement dated February 6, 1948, along with the Executive Engineer for referring the dispute to arbitration. On February 25, 1948, the Secretary informed the arbitrator that the draft agreement had been slightly modified in consultation with the Government Pleader, and he also wrote to the Executive Engineer that certain formal corrections should be made in the agreement and signed by both the parties. And that was done.3. Having carefully gone through the correspondence, we agree with the learned Judges of the High Court that the Executive Engineer had been authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration. It will be seen that it was the Secretary who from the very inception took the leading part in arranging for arbitration. He was throughout speaking in the name of and on behalf of the Government and he did so "as directed." The subject-matter of the arbitration was a claim which concerned the Government. The proposal at the earlier stages to amend cl. 23 of the original contract so as to include an arbitration shows that the intention of the parties was to treat the agreement for arbitration a part and parcel of that contract. Even after the agreement was executed, the Secretary made corrections and modifications in the agreement on the basis that it was the Government that was a party thereto. The conclusion from all this is, in our judgment, irresistible that Y. K. Lall, the Executive Engineer had been authorised to execute the agreement dated February 6, 1948.4. It was suggested that the Secretary was possibly labouring under a mistaken notion that the agreement to refer to arbitration was covered by item 2 and acting under that misconception he directed Y. K. Lall to execute the agreement. Even if that were so, that would not make any difference in the position, because the Secretary undoubtedly did intend that Y. K. Lall should execute the agreement and that is all that is required under S. 175 (3).5. It was further argued for the appellant that there being a Government notification of a formal character, we should not travel outside it and find authority in a person who is not authorised thereunder. But S. 175 (3) does not prescribe any particular mode in which authority must be conferred. Normally, no doubt, such conferment will be by notification in the Official Gazette, but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person, and when that is established, the requirements of the section must be held to be satisfied. In the result, we hold that the agreement dated February 6, 1948, was executed by a person who was authorised to do so by the Governor, and in consequence there was a valid reference to arbitration.6. It is next contended that as the copy of the award in court was unstamped, no decree could have been passed thereon. The facts are that the arbitrator sent to each of the parties a copy of the award signed by him and a third copy also signed by him was sent to the court. The copy of the award which was sent to the Government would appear to have been insufficiently stamped. If that had been produced in court, it could have been validated on payment of the deficiency and penalty under S. 35 of the Indian Stamp Act, 1899. But the Government has failed to produce the same. The copy of the award which was sent to the respondents is said to have been seized by the police along with other papers and is not now available. When the third copy was received in court, the respondents paid the requisite stamp duty under S. 35 of the Stamp Act and had it validated. Now the contention of the appellant is that the instrument actually before the court is, what it purports to be, "a certified copy", and that under S. 35 of the Stamp Act there can be validation only of the original, when it is unstamped or insufficiently stamped, that the document in court which is a copy cannot be validated and "acted upon" and that in consequence no decree could be passed thereon. The law is no doubt well-settled that the copy of an instrument cannot be validated. That was held in Rajah of Bobbili v. Inuganti China Sitaramasami Garu, 26 Ind App 262, where it was observed :"The provisions of this section (section 35) which allow a document to be admitted in evidence on payment of penalty, have no application when the original document, which was unstamped or was insufficiently stamped, has not been produced; and, accordingly, secondary evidence of its contents cannot be given. To hold otherwise would be to add to the Act a provision which it does not contain. Payment of penalty will not render secondary evidence admissible, for under the stamp law penalty is leviable only on an unstamped or insufficiently stamped document actually produced in Court and that law does not provide for the levy of any penalty on lost documents"7. Therefore, the question is whether the award which was sent by the arbitrator to the court is the original instrument or a copy thereof. There cannot, in our opinion, be any doubt that it is the original and not a copy of the award. What the arbitrator did was to prepare the award in triplicate, sign all of them and send one each to the party and the third to the Court. This would be an original instrument, and the words, "certified copy" appearing thereon are a misdescription and cannot have the effect of altering the true character of the instrument. There is no substance in this contention of the appellant either.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]3. Having carefully gone through the correspondence, we agree with the learned Judges of the High Court that the Executive Engineer had been authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration. It will be seen that it was the Secretary who from the very inception took the leading part in arranging for arbitration. He was throughout speaking in the name of and on behalf of the Government and he did so "as directed." The subject-matter of the arbitration was a claim which concerned the Government. The proposal at the earlier stages to amend cl. 23 of the original contract so as to include an arbitration shows that the intention of the parties was to treat the agreement for arbitration a part and parcel of that contract. Even after the agreement was executed, the Secretary made corrections and modifications in the agreement on the basis that it was the Government that was a party thereto. The conclusion from all this is, in our judgment, irresistible that Y. K. Lall, the Executive Engineer had been authorised to execute the agreement dated February 6, 1948.4. It was suggested that the Secretary was possibly labouring under a mistaken notion that the agreement to refer to arbitration was covered by item 2 and acting under that misconception he directed Y. K. Lall to execute the agreement. Even if that were so, that would not make any difference in the position, because the Secretary undoubtedly did intend that Y. K. Lall should execute the agreement and that is all that is required under S. 175S. 175 (3) does not prescribe any particular mode in which authority must be conferred. Normally, no doubt, such conferment will be by notification in the Official Gazette, but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person, and when that is established, the requirements of the section must be held to be satisfied. In the result, we hold that the agreement dated February 6, 1948, was executed by a person who was authorised to do so by the Governor, and in consequence there was a valid reference tofacts are that the arbitrator sent to each of the parties a copy of the award signed by him and a third copy also signed by him was sent to the court. The copy of the award which was sent to the Government would appear to have been insufficiently stamped. If that had been produced in court, it could have been validated on payment of the deficiency and penalty under S. 35 of the Indian Stamp Act, 1899. But the Government has failed to produce the same. The copy of the award which was sent to the respondents is said to have been seized by the police along with other papers and is not now available. When the third copy was received in court, the respondents paid the requisite stamp duty under S. 35 of the Stamp Act and had itcannot, in our opinion, be any doubt that it is the original and not a copy of the award. What the arbitrator did was to prepare the award in triplicate, sign all of them and send one each to the party and the third to the Court. This would be an original instrument, and the words, "certified copy" appearing thereon are a misdescription and cannot have the effect of altering the true character of the instrument. There is no substance in this contention of the appellant either.