Case ID: 6060

Judgment:
ivil 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	 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.

Summary:
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 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]