Irregularity & Curable Defect Cannot Be Grounds For Dismissal Of Application U/S 34 Of Arbitration Act: J&K High Court

The Jammu & Kashmir and Ladakh High Court Bench of Justice Sanjeev Kumar and Justice Puneet Gupta held that the failure of the Chief Engineer to sign the pleadings, which were signed by the Garrison Engineer would only be an irregularity and a curable defect and would not entail dismissal of the application filed under Section 34 of the Arbitration Act without providing opportunity to the appellants to correct the irregularity. Additionally, the court held that the defect was curable and was not fatal to the maintainability of the application itself. Brief Facts: The dispute arose with respect to a contract agreement executed between Union of India through Chief Engineer and the respondent. To resolve the dispute the parties, refer the matter to arbitration and appointed a sole arbitrator. Then, the arbitrator passed an award against the appellant. Aggrieved by this, the appellant filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award passed by the arbitrator. The Single Judge dismissed the application and then the appellant filed an appeal under Section 37 of the Act challenging the impugned order. The appellant contended that the Single Judge has failed to appreciate that the contract in question was between Union of India and the respondent and that the Union of India was entitled to file an application under Section 34 of the Act through any authorized officer including the Garrison Engineer. Also, the appellant argued that Article 299 of the Constitution of India, mandates that all contracts for and on behalf of Union of India shall be made by the President through authorized signatory and that the authorized signatory, who may have power and authority to sign agreement on behalf of the President of India does not himself become party to the contract. However, the respondent contended that it was Chief Engineer and not the Garrison Engineer, who was party to the arbitration agreement and, therefore, alone competent to file application under Section 34 of the Act. Observations: The court noted that Order XXVII of the Code of Civil Procedure deals with suits by or against the Government. Rule 1 provides that in any suit by or against the Government, the plaint or written statement shall be signed by such person as the Government may by general or special order appoint in this behalf. The Government of India has, in the exercise of powers conferred by Rule 1 of Order XXVII aforesaid, issued notification authorizing different officers to sign the pleadings on behalf of Government of India in any suit by or against the Government. The Garrison Engineer is one of those officers. That being the clear position emerging from reading of the provisions of Article 299 of the Constitution of India and, it cannot be said that the Garrison Engineer was not an officer authorized to sign pleadings on behalf of the Government of India. The court observed that it is not disputed by the respondent that the Garrison Engineer, who signed the application under Section 34 of the Act on behalf of Union of India/Government of India was not the person authorized by the Government of India to represent it in civil proceedings by or against the Government. The court held that the Single Judge has totally misconstrued the nature of contract i.e. made by the President on behalf of Union of India and has erroneously treated the Chief Engineer, who had executed the arbitration agreement/contract agreement on behalf of the President, as party to the arbitration agreement. The court held that in the contract, which contains an arbitration clause, there are only two parties, one Union of India and the other the respondent. The contracts on behalf of Union of India in terms of Article 299 are expressed to be made by the President and the same are executed by such person or persons and in such manner as the President may direct or otherwise. The authority of the Chief Engineer to execute the contract containing arbitration clause on behalf of the President is not in dispute. Therefore, the court held that notwithstanding a contract by the Union of India is made by the President and executed through its authorized officer, neither the president nor its authorized officer becomes party to the contract. The party to the contract shall only be the Union of India. Finally, the court held that the failure of the Chief Engineer to sign the pleadings, which were signed by the Garrison Engineer, would only be an irregularity and a curable defect and would not entail dismissal of the application without providing opportunity to the appellants to correct the irregularity. The defect, if at all it has there, was curable and was not fatal to the maintainability of the application itself. The court allowed the appeal and set aside the impugned order passed by the Single Judge. Case Title: Union of India ...

Irregularity & Curable Defect Cannot Be Grounds For Dismissal Of Application U/S 34 Of Arbitration Act: J&K High Court

Soumya Chakrabarti

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Irregularity & Curable Defect Cannot Be Grounds For Dismissal Of Application U/S 34 Of Arbitration Act: J&K High Court

Soumya Chakrabarti

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