judgement:
Civil Appeal No. 56 of 1971.
From the Judgment and Order dated 8.12.1969 of the Gujarat High Court in C.R.A. No. 654 of 1967.
Harish Salve, D.N. Misra and Ms. A.K. Verma for the Appellant.
S.H. Sheth and Ms. Kailash Mehta for Respondent No. 1.
M.V. Goswami and Ms. Vandana Sharma for Respondent No.2.
The Judgment of the Court was delivered by MISRA, J.
The present appeal by special leave is directed against the Judgment of the High Court of Gujarat dated 10th February 1970.
The dispute between the parties concerns a plot of land admeasuring 100 ft.
x 164 ft.
(i.e., approximately 1822 sq. yards) out of survey No. 18 in the city of Nadiad.
This plot was owned by Deviprasad Motilal Jaiswal and Vora Sunderlal Manilal was occupying it as a tenant.
He had also made certain constructions on the disputed plot.
The appellant purchased the said plot under a registered sale deed dated 18th April, 1955.
The defendant accepted the plaintiff as owner on a rent of Rs. 1325 721 per annum with effect from 18th April, 1955 under a registered rent note dated 9th June, 1955 for a period of five years.
The rent note provided (1) that the defendant shall pay to the plaintiff the amount of municipal tax at the rate of Rs. 40 per annum in respect of the rented premises, (2) that the said premises shall not be let out to anyone else, and (3) that on the expiry of the period of five years the defendant shall remove the constructions at his own expense and hand over to the plaintiff the premises in the condition in which it was let out.
It appears that the defendant No. 1 sublet a portion of the said premises to defendant No. 2, Pa Babubhai Gordhanbhai contrary to the terms of the rent note.
The period of lease contemplated in the rent note expired on 17th April, 1960 and the defendant continued as a statutory tenant on a monthly rent under the Rent Control Act.
The two sons of the plaintiff Suleman and Ganibhai are dealing in empty tins on a large scale and a spacious premises was required for the said business.
The plaintiff called upon the defendant to remove the construction erected on the land in dispute and to vacate the premises and handover the possession.
Although the plaintiff filed the suit for eviction on a number of grounds, we are concerned in the present appeal only with the plea that the premises in question had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable cause I and, therefore, the defendant was liable to eviction under s.13(1)(k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, hereinafter referred to as the Act.
The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove the bona fide requirement, and that the defendant No.2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff and, therefore, the plaintiff was not entitled to recover possession on the ground of illegal sub letting.
The plaintiff feeling aggrieved by the judgment took up the matter in appeal and the Assistant Judge allowed the appeal partly holding that the notice of termination was a valid one, that the plaintiff did not require the suit premises reasonably and bonafide for occupation for himself, and that the suit premises had not been used by the defendant continuously for a period of six months immediately preceding the date of suit with out any reasonable cause.
The defendant took up the matter in revision before the High Court and the High Court reversed the finding of the 1st appellate court on the question of user by the defendant.
It took the view that the construction of the super 722 structure on the land itself was a user and, therefore, the courts below and committed a manifest error in holding that the land in question had not been used for more than six months prior to the institution of the suit.
The plaintiff has now come to this Court by a special leave.
Mr. Harish, N. Salve counsel for the appellant strenuously urged that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause.
He also contended that the defendant would be liable to eviction even if he did not use the premises and kept it locked.
Mr. S.H. Sheth for the defendant respondent in reply has contended that the purpose of letting cannot be assumed.
It has got to be alleged and proved.
The plaintiff could seek eviction under s.13(1)(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been used for the purpose for which it was let out.
In the instant case neither the purpose of letting is indicated in the rent note nor has it been proved by evidence.
Therefore, the liability of the defendant under s.13(1)(k) does not arise.
The material portion of the rent note, Exbt.61, is as follows: .
The property of the said measurement and situate within the said four boundaries is rented by us from you and you have rented it to us.
The rent accrues from the date 18.4.1955.
It is agreed that the rent fixed is Rs. 1325 (Rupees thirteen hundred and twenty five) per year.
We shall pay the said rent to you every year in full.
If default is made in paying the rent you may get the said property vacated by us and our objection of any kind shall not be tenable in respect of the same.
The period fixed is for five years.
It expires on the date 17.4.1960.
We shall handover possession of the said property to you on the said date.
We shall not Rub let the said property to any one else.
The construction work which is made on the said 723 property belongs absolutely to us, the tenant.
And when we shall vacate the said property we shall remove the said construction work at the cost of us, the tenant.
We agree to handover the possession of the property to the owner in the same condition in which the property is rented.
Even if we use or do not use or keep the said property closed we, the tenant, are bound to pay the rent as stated above till the period fixed.
But if we the tenant, want to vacate the said property within the period fixed we can vacate the same by giving you notice before two months or if we want the said property on rent even after the expiry of the period fixed you are bound to give the same on rent and the rent is to be fixed according to the circumstances at that time and we shall pass and give a new rent note to you.
We, the tenant, are to pay Rs. 40 (Rupees forty) every year to you, the owner for municipal tax in respect of the said property in addition to the amount of rent.
If the municipal tax comes to more than forty rupees, you the owner are to pay the excess amount of tax.
A perusal of the rent note indicates that there is no specific mention of the purpose for which the premises was rented out to the defendant.
It has already been noted that the defendant had taken the premises from the predecessor in interest of the present plaintiff and had made certain superstructures on the land in question.
There is however, material on the record to show that the premises had been let out to the defendant for the purpose of business.
Indeed the premises had been taken in the name of a firm carrying on tobacco business.
The defendant admitted in his deposition that he had shifted his business to Baroda.
He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same.
In addition, in the reply given by the counsel for the defendant to the notice of termination given by the plaintiff, he definitely admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the firm Vora Manilal Chhaganlal & Co. and that his client, the tenant, was a registered firm carrying on business in .
In this situation it cannot be argued with any force that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant.
724 As s second limb to the argument Shri Sheth contended that if the plaintiff had specifically taken the plea of non user of the premises for the purpose for which it was let out he would have been able to prove the reasonable cause for not doing 80 but in the absence of such a plea the defendant has been seriously prejudiced.
This contention of the counsel also cannot easily be accepted when on the own admission of the defendant and defendant 's counsel the premises had been used for the purpose of carrying to tobacco business.
Therefore, the defendant fully knew the purpose for which he had taken the Promises as a tenant.
The stand of the defendant all through appears to be that even if he does not use the premises and have been paying rent he does not incur the liability of eviction and for this he banks upon the recital in the rent note that even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above .
This stipulation in the rent deed only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closet.
This, however, does not mean that the defendant can keep the premises closed without using it for years together before the suit.
This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns.
Even if the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without using it for years together without incurring the liability of eviction, as is sought to be contended for the respondent, it would amount to allowing the parties contracting out of law.
This leads us to the second part of the submission made by the counsel for the appellant that on a correct interpretation of s.13(1)(k) of the Act even non user of the premises for any purpose whatsoever for years together would make him liable for eviction.
The contention on behalf of the respondent, however, is that we cannot add words to s.13(1)(k) and the intention of the legislature is clear from the words used therein, and all that s.13(1)(k) contemplates is that the premises had not been used for the purpose for which they w re let out for a continuous period of six months immediately preceding the date of suit without reasonable cause.
It toes not say that mere non user of the premises will make him liable for eviction.
The scheme of the Act as it appears from the preamble is to consolidate the law relating to the control of rents and repairs 725 of certain premises, of rates of hotels and lodging houses and of evictions.
m e control had to be brought in because of the scarcity of accommodation in the cities.
If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of any reasonable cause.
The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together.
Shri Sheth, however, sought to support the finding of the High Court that the construction of a superstructure is also a user of the property and the defendant had raised superstructures on the land in question.
This argument must be repelled.
It appears from the rent note, Exbt.
61, that the defendant had taken the premises from the present plaintiff when the defendant had already built the superstructures when he had taken the land on rent from the predecessor in interest of the plaintiff appellant.
Therefore, there was no question of using the land by raising constructions by the defendant after the execution of the rent note, Exbt.61.
Shri Sheth also referred to 8. 12 and 8. 13 of the Act and contended that these are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted.
What was let out by the plaintiff to the defendant tenant was the land and not the superstructures and so Shri Sheth argues that the non user of the superstructures does not amount to non user of the land.
On the own showing or the defendant respondent he had shifted his business to Baroda and, Therefore, he is not using the land for any purpose whatsoever.
Broadly speaking a premises can be let out either for residential or for business purpose.
In the instant case on the own showing of the defendant respondent it had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda.
Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out.
The High Court in our opinion has gone wrong in holding that the construction of super structures on the land in dispute was itself a user.
As indicated earlier the super structures had already been built before the defendant took the land from the plaintiff under rent note, Exbt.61.
Therefore, there is no question of making any construction on the land in question by the defendant after the execution of the rent note.
726 As regards the sub tenancy it has been found by the courts below that it had been created long before the Act in question came into force and, therefore, there was no question of the eviction of the sub tenant as the sub tenancy was not illegal.
For the foregoing discussion the appeal must succeed.
It is accordingly allowed and the judgment of the High Court is set aside and the plaintiff 's suit stands decreed.
The parties shall however, bear their own costs.

summary/full:
The appellant plaintiff purchased a plot of land.
The respondent defendant accepted the plaintiff as owner on a rent of Rs. 1325 per annum for a period of five years, under a registered rent note.
It was further stipulated therein that the tenant was to pay the municipal tax in respect of the rented land to the plaintiff, that on the expiry of the period of five years the tenant shall remove the constructions thereon at his own expense, and hand over the premises in the condition it was let out and that the premises shall not be let out to anyone else.
The plaintiff called upon the defendant to remove the construction erected on the land, and the vacate the premises and hand over possession.
As the defendant failed, a suit for eviction was filed, on a number of grounds one of which was that the premises had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable caused and, therefore the defendant was liable to eviction under section 13(1) (k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove bona fide requirement, and that as defendant No. 2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff, the plaintiff was not entitled to recover possession on the ground of illegal sub letting.
The plaintiff took up the matter in appeal and the Assistant Judge allowed the appeal partly, holding that the notice of termination was a valid one, that the plaintiff did not 718 require the suit premises reasonably and bona fide for occupation for himself and that the suit premises had not been w ed by the defendant continuously for a period of six months immediately preceding the date of suit without any reasonable cause.
The respondent tenant took up the matter in revision before the High Court, which reversed the finding of the Ist appellate court on the question of user by the defendant, holding that the construction of the super structure on the land itself was a user and, therefore, the courts below had committed a manifest error in holding that the land in question had not been w ed for more than six months prior to the institution of the suit.
In the appeal to this Court, it was contended on behalf of the appellant landlord that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause, and that the tenant would be liable for eviction even if he did not use the premises and kept it locked.
On behalf of the respondent tenant it was contended, that the purpose of letting cannot be assumed, and that it has got to be alleged and proved.
The landlord plaintiff could seek eviction under 8. 13()(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been w ed for the purpose for which it was let out.
It was further contended that if the landlord had specifically taken the plea of non user of the premises for the purpose for which it was let out, he would have been able to prove the reasonable caw e for not doing 80 but in the absence of such a plea the defendant tenant had been seriously prejudiced, and that sec.
12 and 13 of the Act are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted .
Allowing the Appeal, ^ HELD : 1.
The judgment of the High Court is set aside and the plaintiff 's suit stands decreed.
The High Court has gone wrong in holding that the construction of super structure on the land in dispute was itself a user.
The super structures had already been built before the defendant took the land from the plaintiff under rent note, exhibit 61.
As regards sub tenancy, it has 719 been found by the Courts below to have been created long before A the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 came into force.
There was therefore no question of the eviction of the subtenant as the sub tenancy was not illegal.
[726 B; 725 G 726 A] 2.
The scheme of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it appears from the preamble is to consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions.
The control had to be brought in because of the scarcity of accommodation in the cities.
If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of a reasonable cause.
The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together.
[724 H 725 B] 3.
Neither the purpose of letting is indicated in the rent note (Ex.61) nor has it been proved by evidence.
A perusal of the rent note indicates that, there is no specific mention of the purpose for which the premises was rented out to the defendant.
The defendant had taken the premises from the predecessor in interest of the plaintiff and had made certain super structures on the land in question.
There is, however, material on the record to show that the premises had been let out to the defendant for the purpose of business.
Indeed, the premises had been taken in the name of a firm carrying on tobacco business.
The defendant admitted in his deposition that he had shifted his business to Baroda.
He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same.
In the reply given by the counsel for the defendant to the notice, of termination given by the plaintiff, it is admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the registered firm Vora Manilal Chaganlal & Co., carrying in business in Nadiad.
In this situation it cannot be argued that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant.
[723 E H] 4.
The stipulation in the rent deed to the effect that; 'even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above ' only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closed.
This, however, does not 720 mean that the defendant can keep the premises closed without using lt for years together before the suit.
This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns.
If the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without incurring the liability of eviction, as it sought to be contended for the respondent, it would amount to allowing the parties contracting out of law.
[724 D E] In the instant case, on the own showing of the defendant respondent, the premises had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda.
Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out.
[725 F]


judgement:
view Petition Nos.
571 586 & 586A of 1985.
In Transfer Cases Nos. 52 to 68 of 1982.
By Circulation.
The Order of the Court was delivered by ORDER We have considered the grounds urged in the Review Petition and since we find no substance in them.
the Review Petition are dismissed.
PER THAKKAR, J.
While it is not agreeable to disagree with the. majority.
my conscience commands.
and my sense of duty demands.
that I should disagree.
Disagree with the proposed order dismissing the Review Petitions in limine with the remark that "we find no substance in them", without affording to the Petitioners any opportunity of hearing in the Court to substantiate the grounds urged by them.
One of the grounds urged.
ground No. 8 in the Petitions, is: "8.
That during the course of arguments the parties had proceeded on the assumption that the Hon 'ble Court would 901 decide only the 7 questions framed by the then Hon 'ble Chief Justice and the individual petitions on merits would be dealt with either by the Division Benches of this Hon 'ble Court or by the respective High Courts.
It was on this assumption that the parties addressed their arguments and submissions only on those general questions.
It is for this reason that written submissions were made only in T.C. No. 55 of 1982 amongst all the Railway matters.
None of the Petitioners had been given any opportunity to argue their cases on merits.
The judgment under review dismissed all the Transferred Cases and thus all these petitions stand decided on merits also.
It is, therefore, necessary that in the interest of justice, the petitioner should be given another opportunity to argue their petitions on merits.
This has caused serious prejudice to their cases is apparent from the facts of a few cases reference whereto is made herein after.
" It is not possible to say that there is no substance in this ground because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side.
So also it is not stated in the majority judgment that the averment is factually untrue.
Reference may be made to ground number 9 in Review Petitions Nos.
57 1 to 586A of 1985 which reads as under: ' '9.
That it may be submitted 'that the petitioner Shri Narpat Singh had been served with the Office Order identical to the one reproduced in para 3 above and was charged with stoppage of work from 3.2.
1981 and missing from his place of duty and for intimidating and pressurising the loyal employees for not joining duty.
The fact is that the petitioner, Narpat Singh is a patient of Asthama and was under the treatment of the Rail way Medical Authorities between December 1980 to 1.2.1981 as outdoor patient.
On 2.2.
1981 while on duty as Shed man is DSL/Shed BGKt in shift 6 hours to 14 hours, he developed breathing difficulties and was unable to perform his duties.
He obtained sick memo G/92 on 2.2.1981 from GFO/DSL BGKt and while leaving duty proper charge was handed over by the petitioner.
He was advised complete rest and sick certifi cate No. 62 of 2.2.1981 for 27 days was submitted.
902 In these circumstances the petitioner could not be treated as on un authorised absence from work from 3.2.1981 when he had obtained G 92 on 2.2.1981 and had sent in his sick certificate and had observed all clue formalities of reporting sick as required under the rules.
Had the cases been argued on merits, the petitioner, Narpat Singh would have shown to the Hon 'ble Court as to how he could not be treated on un authorised absence and that the dismissal order has been malafidely issued in a mechanical manner and cannot be substained.
" That the matter of Narpat Singh was not argued on its individual merits is correct.
Unless the factual averments made in para 9 are shown to be untrue, these may be consid ered adequate to vitiate the impugned order on the ground that it manifests non application of mind and is built on 'no evidence '.
This is a good ground to entertain the Review Petition and issue notice to the other side for heating in the Court.
In the majority judgment ; (451) paragraph 59 the proposition of law has been enunciat ed that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under Article 309 (proviso) in the passage quoted below: "Thus, though trader Article 310(1) the tenure of a govern ment servant is at the pleasure of the President or the Governor, the exercise of such pleasure can be either by the President or the Governor acting with the aid and on the advice of the Council of Ministers or by the authority specified in the Acts made under Article 309 or in rules made under such Acts or made under the proviso to Article 309 and in the case of clause (c) of the second proviso to Article 311 (2), the inquiry is to be dispensed with not on the personal satisfaction of the President or the Governor but on his satisfaction arrived at with the aid and on the advice of the Council of Ministers . " (Emphasis supplied) Serious Constitutional questions, such as the following, arise in this context: When the Constitution advisedly invests powers in regard to the exercise of pleasure on the incumbents of highest executive office can these powers be exercised by any other official, say Divl.
Mechani 903 cal Engineer (DME)? By a process of interpretation (and not amendment) can it be so construed that what the President by virtue of Article 310 (1) can do, the DME of the Railway can do by virtue of the same Article? It would virtually amount to amending Article 310 (1) by adding the words "or by any other authority . ".
That is to say to rewrite an article in the Constitution.
Is this permissible? What is more, the power under Article 310 (1) is exercisable even by the President or the Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Ministers.
Can the same power be exercised by a D.M.E. or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the council of Ministers? Can the DME who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitutional issue which requires to be examined, but has not been examined, from this perspective though the point was debated.
This is another ground to entertain the Review Petition and to issue a notice to the other side for heating in the Court.
Another ground for entertaining the Review Petition is this: Will it not be tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer who 'bleeds ' the Nation? 5.
An extremely serious and important ground for review also arises in the context of the doctrine enunciated in the following passages ; (522,523), paragraphs 170, 173: "It may be that the railway servants went on these strikes with the object of forcing the Government to meet their demands.
Their demands were for their private gain and in their private interest.
In seeking to have these demands conceded they caused untold hardship to the public and prejudicially affected public good and public interest and the good and interest of the nation.
. . . In the context of an all India strike where a very large, number of railway servants had struck work, the railway services paralysed, loyal workers and superior officers assaulted and intimidated, the country 904 held to ransom, the economy of the country and public inter est and public good prejudicially affected, prompt and immediate action was called for to bring the situation to normal.
In these circumstances, it cannot be said that an enquiry was reasonably practicable." The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which, in the preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic".
Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon.
Nor can they be condemned as seekers of private gain for endeavouring to remove their economic distress and plight to bring about a just society.
And it cannot be said on that account that it is not "reasonably practicable" to hold the inquiry in the case of any workman if there is a country wide general strike by workers.
Article 311 (2)(b) was surely not de signed by the Founding Fathers in order to ' enable 'braking ' a strike called in support of workers ' demands for socio economic justice.
The issue therefore deserves to be exam ined in the light of this perspective and the Review Peti tions deserve to be admitted.
On these grounds and in the light of the other grounds urged in the Review Petitions, the Review Petitions deserve to be heard in the Court.
It is therefore directed that the Review Petitions be admitted, notices be issued to the Respondents, and the matters may be placed in the Court for further hearing.

dataset_name: IN-Abs

summary/full:
The petitioners, who were Railway employees, were either dismissed or removed from service without holding any en quiry for striking work, paralysing railway services, as sualting and intimidating loyal workers and superior offi cers, etc.
The writ petitions flied in the High Courts challenging the orders of dismissal or removal stood trans ferred to this Court, heard along with other writ petitions and civil appeals and by judgment dated 11th July, 1985 dismissed.
The, petitioners sought review of the said judgment alleging that during the course of arguments, parties had proceeded on the assumption that the Court would decide only the seven questions framed by the then Hon 'ble the Chief Justice, and the individual petitions on merits would he dealt with either by the Division Benches of this Court or by the respective High Courts, that the parties addressed their arguments and submissions only on those general ques tions, that written submissions were made only in transfer case No. 55 of 1982 amongst all the railway matters, that none of the petitioners had been given any opportunity to argue their cases on merits, that the judgment under review dismissed all the transferred cases and thus all these petitions stand decided on merits also, that this has caused serious prejudice to their cases and, therefore, in the interest of justice, another opportunity should he given to argue the petitions on merits.
Dismissing the Review Petitions, HELD: Per P.N. Bhagwati, C.J., V.D. Tulzapurkar, R.S. Pathak and D.P. Madon, JJ.
899 The Review Petitions are dismissed as there is no sub stance in the grounds urged.
Per M.P. Thakkar, J. dissenting.
There is good ground to entertain the Review Peti tions and issue notice to the other side for hearing.
[904E] 2.
There is substance in the grounds because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side.
In the majori ty judgment also it has not been stated that the averments are factually untrue.
[901D E] 3.
That the matter of Narpat Singh was not argued on its individual merits is correct.
Unless the factual averments made in Para 9 of the Review Petition are shown to be un true, these may be considered adequate to vitiate the im pugned order on the ground that it manifests non application of mind and is built on 'no evidence '.
[902C] 4.
In the majority judgment the proposition.
of law has been enunciated that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under the proviso to Article 309.
[902D E] 5.
The power under Article 310(1) is exercisable even by the President or Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Minis ters.
Can the same power be exercised by a Divisional Me chanical Engineer or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the Council of Ministers? Can the D.M.E. who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitu tional issue which requires to be examined, but has not been examined from this perspective though the point was debated.
[903B D] 6.
Will it not tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer, who 'bleeds ' the Nation? [903D E] 900 7.
The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which in the Preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic".
Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon.
Nor can they be condemned as seekers of private gain for endeavour ing to remove their economic distress and plight to bring about a just society.
And it cannot be said on that account that it is not "reasonably practicable" to hold the enquiry in the case of any workman if there is a country wide gener al strike by workers.
[904B 904D] 8.
Article 311(2)(b) was surely not designed by the Founding Fathers in order to enable 'breaking ' of a strike called in support of workers ' demands for socio economic justice.
The issue therefore deserves to be examined in the light of this perspective.
[904D]


judgement:
Civil Appeal No. 272 of 1972.
From the Judgment and Order dated 18.7.1972 of the Delhi High Court in F.A.O. No. 139 D of 1962.
S.S. Ray and Rameshwar Nath for the Appellant.
Anoop Singh, C.L. Itorara and H.M. Singh for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by special leave is directed against the judgment and decree passed by the learned Single Judge of the Delhi High Court on 18th July, 1972 in F.A.O.
No 139 D of 1962 whereby a decree in terms of the Award passed by the Trial Court was set aside.
Principally the view of the Full Bench rendered on the specific question referred to it and which was followed by the 571 learned Single Judge while allowing the first appeal has been challenged by the appellant before us in this appeal.
Facts, admitted and/or found by the lower courts are these: The appellant is a share broker and a member of the Delhi Stock Exchange an Exchange recognised by the Central Government under the Securities Contracts (Regulations) Act, 1956.
The respondent, a non member, had dealings in shares and securities with the appellant as principal to principal between 14th July and 27th September, 1960 in respect whereof printed Contract Notes (exhibit P. 1 to P. 31) in the prescribed form were issued by the appellant and were signed by the respondent.
These transactions were subject to the Rules, Regulations and Bye laws of the Exchange which covered transactions between a member and a non member.
Each one of the Contracts contained an arbitration clause couched in very wile terms requiring the parties thereto to refer all their disputes of claims to arbitration as provided in the Rules, Regulations and Bye laws of the Exchange and Bye law 244(a) incorporated a "Reference to Arbitration" in respect of such disputes or claims (whether admitted or not) between a member and a non member arising out of or in relation to such transactions to two arbitrators to be appointed under the Rules, Regulations and Bye laws of the Exchange.
It appears that under these transactions a sum of Rs. 5923 became due and payable by the respondent to the appellant but since the respondent raised a dispute and did not pay the claim the said dispute was referred to the arbitration of two arbitrators Mr. Prem Chand and Mr. P.S. Khambete (both members of the Exchange) after following the procedure prescribed under the Rules, Regulations and Bye laws of the Exchange, the former being the nominee of the appellant and the latter being the appointee of the Exchange on the respondent 's failure to nominate his arbitrator when called upon to do so.
The arbitrators held their proceedings in which the respondent participated though he inter alia raised a contention that he was not a party to the reference and would not be bound by the Award that might be made on the basis of such unilateral reference.
After considering the entire evidence oral and documentary produced before them and after hearing the parties the arbitrators made their Award on 18th April, 1961 whereby they allowed the claim of the appellant with costs against the respondent.
The Award was filed in Court and after notices of filing the Award were served, the respondent filed objections to the Award on several grounds such as 572 denial of the existence of the agreement of reference, that he was not a member of the Exchange, that the Contract Notes had not been signed by him, that the arbitrators had mis conducted themselves and the proceedings, that the Award had been improperly procured etc.
The learned Sub Judge Ist Class, Delhi who heard the matter negatived all the objections raised for setting aside the Award; in particular he recorded the findings that the Contract Notes bore the signatures of the respondent and as such under the arbitration clause contained in each one of them read with the relevant Bye laws there was a valid Agreement for Reference to arbitration.
Consequently, he made the Award a rule of the Court and passed a decree in favour of the appellant on 7.9.1962.
The respondent preferred an appeal being F.A.O. No. 139 D of 1962 to the High Court of Delhi.
The learned Single Judge who heard the appeal confirmed the trial court 's findings on all the issues arising in the case except on the question of validity of the reference.
Undoubtedly, he in agreement with the trial court held that the Contract Notes Exbs.
P. 1 to P. 31 which contained the arbitration clause, were signed by the respondent but even so, since the respondent had not joined in nominating his arbitrator despite service of notice asking him to do so, he entertained a doubt as to whether the respondent could be said to be a party to the actual Reference to arbitration and whether on that account the Reference to the two arbitrators could be said to be unilateral and therefore, in view of the importance of the question involved, he referred the same to a larger Bench keeping the appeal on his file pending receipt of the decision of the larger Bench on the point.
This reference order was made on 5th January, 1971 in consequence whereof the question came to be referred to a Full Bench.
The Full Bench answered the question in favour of the respondent.
It took the view that notwithstanding the fact that respondent had signed the Contract Notes and had thereby become consenting party to the arbitration agreement the actual reference to arbitration of the two arbitrators Prem Chand and P.C. Khambete required the assent of both the parties and since to such reference the respondent had not given his consent it was a unilateral reference to arbitration and as such the resultant Award would not be binding on the respondent.
In taking the view that the actual reference also required fresh 573 assent of both the parties the Full Bench relied upon some observations made by this Court in its decision in Seth Thawardas Pherumal vs Union of India.
The Full Bench rejected the submission made before it on behalf of the appellant that the relevant observations of this Court on which it sought to rely for taking such view should be confined to and must be regarded as having been made in the context of the specific question which actually arose for decision before this Court in that case.
The Full Bench expressed its final conclusion in these words: "In cases where a contract between the parties contains what may be called an arbitration clause to refer future disputes to arbitration, the agreement is merely an agreement to submit future differences to arbitration within the meaning of section 2(a) of the .
If disputes arise in the future, a reference has to be made to arbitration within the meaning of section 2(e) of the and at this stage there should be a consent of both the parties.
If the consent exists it would not be necessary to proceed under Chapter III by making an application under section 20 of the and the parties or one of the parties can proceed under Chapter II of the said Act.
" Presumably the Full Bench held that since there was no such consent at such later stage for the actual reference on the part of the respondent herein an application under section 20 was necessary to be taken out by the appellant and in the absence of such step having been taken the actual Reference was unilateral and consequently the Award made on such reference was not binding on the respondent.
When the matter went back to the learned Single Judge he naturally following the view of the Full Bench allowed the appeal of the respondent and set aside the decree passed in terms of the Award.
It is this view of the Full Bench that is under challenge in this appeal.
It is obvious that two questions really arise for our determination in this appeal.
First, whether in the facts and circumstances of the case there was a unilateral reference to arbitration of the 574 two arbitrators Mr. Prem Chand and Mr. P.S. Khambete or having regard to the terms and conditions of the Contract Notes which included an arbitration clause in very wide terms to which the respondent had become a party by signing the Contract Notes and the relevant Rules Regulations and Bye laws of the Exchange the respondent could be said to have accorded his consent to the actual Reference to arbitration of the two arbitrators? In other words whether a fresh assent on his part was necessary at the stage when the reference came to be made to the two arbitrators in accordance with the relevant Bye laws of the Exchange? And the second, whether the Full Bench has properly appreciated the true scope and effect of the relevant observations made by this Court in Seth Thawardas Pherumal 's case (supra)? It is true that the defines the two expressions "arbitration agreement" and "reference" separately.
Section 2(a) defines an "arbitration agreement" to mean "a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not" while s 2(e) defines a "reference" to mean "a reference to arbitration".
The latter expression obviously refers to an actual reference made jointly by the parties after disputes have arisen between them referring the` said disputes for adjudication to a named arbitrator or arbitrators, while the former expression is wider as it combines within itself two concepts, (a) a bare agreement between the parties that disputes] arising between them should be decided or resolved through arbitration and (b) an actual reference of a particular dispute or disputes for adjudication to a named arbitrator or arbitrators.
This will be clear form the manner in which the expression "submission" was defined in the earlier Indian Arbitration Act, 1899 because, following the English Arbitration Act, 1889, the Indian Arbitration Act 1899 defined the expression "submission" in the same words now used to define "arbitration agreement" in the 1940 Act and in Russell on Arbitration (20th Edn.) at page 44 it has been stated that this term (arbitration agreement as defined) covers both the concepts (a) and (b) mentioned above within it.
If that be so, it stands to reason that only when the arbitration agreement is of the former type, namely, a bare agreement a separate reference to arbitration with fresh assent of both the parties will be necessary and in the absence of such concensual reference resort to section 20 of the Arbitration Act will be essential but where the arbitration agreement conforms to the definition given in section 2 (a), the party desiring arbitration can straightaway approach the arbitrator or arbitrators and resort to section 20 of 575 Arbitration Act is unnecessary because consent to such actual reference to arbitration shall be deemed to be there as the second concept is included in the agreement signed by the parties, and the aspect that differences or disputes actually arose subsequently would be inconsequential because the arbitration agreement as defined in section 2(a) covers not merely present but future differences also.
In other words, in such a case there will be no question of there being any unilateral reference.
Such being the true position in law it is difficult to agree with the view of the Full Bench that "where a contract between the parties contains what may be called an arbitration clause to refer future disputes to arbitration the agreement is merely an agreement to submit future differences to arbitration within the meaning of section 2(a) of the Arbitration Act and that if disputes arise in future a reference has to be made to arbitration within the meaning of section 2(e) of the agreement and at this stage there should be a consent of both the parties.
" In every case the question will have to be considered as to whether the arbitration agreement is a bare agreement of the type indicated earlier or an arbitration agreement as defined in section 2(a) of the Act and we proceed to examine this question in regard to the arbitration agreement in the instant case.
It has not been disputed before us that the Contract Notes Exbts.
P. 1 to P. 31 issued by the appellant and signed by the respondent contain printed terms and conditions on the basis of which the transactions were put through by the parties and that such terms and conditions include an arbitration clause.
There is also no dispute that these dealings were subject to or governed by the Rules, Regulations and Bye laws and the usages of the Exchange.
The arbitration clause printed in each one of the Contract Notes runs thus: "In the event of any claim (whether admitted or not), difference or dispute arising between you and me/us out of these transactions the matters shall be referred to arbitration in Delhi as provided in the Rules, Bye laws and Regulations of Delhi Stock Exchange Association Ltd; Delhi.
This contract constitutes and shall be deemed to constitute as provided overleaf an agreement between you and me/us that all claims (whether admitted or not) 576 differences and disputes in respect of any dealings transactions and contracts of a date prior or subsequent to the date of this contract (including any question whether such dealings, transactions or contracts have been entered into or not) shall be submitted to and decided by arbitration in Delhi as provided in Rules, Bye laws and Regulations of the Delhi Stock Exchange Association Ltd; Delhi.
The provisions printed overleaf form a part of the contract.
" On the reverse of the Contract Notes are printed verbatim, Bye laws Nos. 247 to 249 and 273 and 274 of the Exchange contained in the Chapter of the Bye laws dealing with "arbitration other than between the members.
" Bye law 247 appears under the heading "Reference to Arbitration" and clause (a) thereof is relevant which runs thus: "247 (a) All claims (whether admitted or not) differences and disputes between a member and a non member or non members (the terms "non member" and "non members" shall include a remisier, authorised clerk or employee or any other person with whom the member shares brokerage) arising out of or in relation to dealings, transactions and contracts made subject to Rules, Bye laws and Regulations of the Exchange or with reference to anything incidental thereto or in pursuance thereof or relating to their construction, fulfillment or validity or relating to the rights, obligations and liabilities of remisiers, authorised clerks, employees or any other person with whom the member shares brokerage in relation to such dealings, transactions and contracts shall be referred to and decided by arbitration as provided in the Rules, Bye laws and Regulations of the Exchange".
Bye law 248 deals with "Appointment of Arbitrators" and clause (a) thereof is material which runs thus: "248(a) All claims, differences, and disputes required to be referred to arbitration under these Bye laws and Regulations shall be referred to the arbitration of two members of the Exchange one to be appointed by each party." 577 Bye law 249 deals with "Appointment of Arbitrators by the Board of Directors or President" and cl.(1) thereof which is material runs thus: "249.
On payment in advance of the minimum fees of arbitrators prescribed under these Bye laws and Regulations by any party to a claim, difference or dispute the Board of Directors or the President shall appoint an arbitrator.
(i) if after one party has appointed an arbitrator ready and willing to act and there is failure, neglect or refusal on the part of the other party or parties to appoint an arbitrator (ready and willing to act) within seven days after service of written notice of that appointment or within such extended time as the Board of Directors or the President may on the application of the other party or parties allow".
The aforesaid arbitration clause contained in the Contract Notes read with relevant Bye laws make two or three things very clear.
In the first place the arbitration clause is couched in a very wide language inasmuch as it makes arbitrable not merely the claims or disputes arising out of the transactions specified in the Contract Note but also "all claims differences and disputes in respect of any dealings, transactions and contracts of a date prior or subsequent to the date of this Contract (including any question whether such dealings, transactions or contracts have been entered into or not)" Secondly, the arbitration clause incorporates a provision that all such claims, differences and disputes "shall be submitted to and decided by arbitration" in Delhi as provided in the Rules, Regulations and Bye laws of the Exchange; this is a pointer to consensual submission in the clause.
Thirdly, Bye law 247(a) which governs these transactions in terms constitutes the actual reference to arbitration and under Bye laws 248(a) and 249 (1) the reference is to two arbitrators who would be the nominees of each one of the parties to the disputes and provision is made empowering the Board of Directors or President to appoint arbitrator in case a party fails to nominate his own; in other words once a contract is made subject to Rules, Regulations and Bye laws (framed under the rule making powers) there comes into existence a statutory submission or reference to arbitration.
On a plain reading of the arbitration clause contained 578 in the Contract Notes read with relevant Bye laws it is abundantly clear that the arbitration agreement herein is not a bare arbitration agreement but is clearly an arbitration agreement as defined in section 2(a) of the Arbitration Act of 1940.
In other words, the assent of the parties to actual reference is already there in the agreement; in addition there is a statutory reference.
Therefore the reference being consensual (and also statutory) the resultant award would be valid and binding on the parties to the transactions.
That being so it is difficult to accept the Full Bench view that this was a case of unilateral reference requiring fresh assent of the respondent at the stage when the reference came to be made to two arbitrators.
In our view resort to section 20 of the Arbitration Act on the part of the appellant before approaching the arbitrators for adjudication was unnecessary and the Award was and is binding on the respondent.
For taking the view that it was a case of unilateral reference requiring fresh assent of the respondent at the stage when the reference came to be made to Messrs Prem Chand and Khambete and that in the absence of such fresh assent from the respondent it was necessary for the appellant to approach the Court with an application under section 20 of the Arbitration Act the Full Bench relied upon the following observations made by this Court in Thawardas Pherumal case (supra): "A reference requires the assent of 'both ' sides.
If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under sub section (4).
In the absence of either, agreement by 'both ' sides about the terms of reference, or an order of the Court under section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction.
" The Full Bench has taken the view that the above observations are applicable generally to all references and are not restricted to references of specific questions of law arising in given set off acts and circumstances and lay down the wide proposition that there can be no reference to arbitration except through the Court under section 20 unless both the parties join in the actual reference.
That is why 579 the Full Bench has expressed its final conclusion in the manner and language quoted earlier.
With great respect, we would like to observe that the Full Bench has failed to appreciate the true scope and effect of the aforementioned observations of this Court.
These observations must be read in the proper perspective and not in a truncated manner or divorced from the context of specific issue which arose for determination before the Court in that case.
So considered it will be clear that these were neither intended to apply generally to all references nor to lay down the wide proposition that there can be no reference to arbitration except through the Court under section 20 unless both parties join in it.
Briefly stated the facts in Thawardas Pherumal 's case (supra) were these: Seth Thawardas, a contractor, entered into a contract with the Government for supply of two and half crores of pucca bricks to be delivered in instalments according to a fixed time schedule.
A clause in the contract required "all disputes arising out of or relating to the contract to be referred to arbitration" of the Superintending Engineer of the Circle for the time being Disputes arose about a number of matters between the parties at the same were duly referred to the arbitrator.
One of the claims (the 5th head of the claim) preferred by the contractor was a loss of Rs. 75,900 being the value of 88 lacs of katcha bricks that were destroyed by rain.
The contractor 's case in regard to this claim was that there was default on the part of the C.P.W.D. in not removing the fully baked bricks which were ready for delivery, that due to delay in removal of baked bricks unburnt katcha bricks got accumulated which could be not be fed into his kilns and in the meanwhile rains set in with the result that 88 lacs of katcha bricks were destroyed by the rains and hence he was entitled to claim the value thereof as loss.
Government 's reply was two fold.
First, it urged that the katcha bricks formed no part of the contract and even if it was at fault in not taking delivery of the pucca bricks in time all that it will be liable for would be for the breach of that contract but the loss that was occasioned by damage caused to the katcha bricks which formed no part of the contract was too remote.
Secondly, compensation for this loss could in no event be claimed because this kind of situation was envisaged by the parties when the contract was made and it was expressly stipulated that Government would not be responsible and in that behalf reliance as placed on clause (6) of the agreement which in terms stated: "the 580 department will not entertain any claim for damage to unburnt bricks due to any cause whatsoever.
" The arbitrator held that the said clause was not meant "to absolve the department from carrying out their part of Contract and so he awarded the contractor Rs, 64075 under this head.
This part of the award was challenged on the ground that it disclosed an illegality and an error of law on the fact of it.
This Court took the view that the arbitrator had clearly gone wrong in law, his construction of the terms of the contract being faulty and the award was liable to be set aside.
Even so a contention was raised on behalf of the contractor that the Court could not interfere with or set aside the award inasmuch as the question of law had been specifically referred to the Arbitrator for his adjudication and therefore, he had exclusive jurisdiction to decide it rightly or wrongly and the court could not interfere with that decision, however, erroneous in law it might be.
Therefore, the real issue that arose for determination before the Court in that case was whether the question of law arising between the parties had been specifically referred to the arbitrator or not and on the facts of the case the court expressed the view that such a specific question of law could not be expected to be referred to arbitration by reason of the arbitration clause contained in the original contract inasmuch as the question could not be known to the parties unless and until the dispute actually arose and that such a question could be specifically formulated and referred only after the dispute arose.
Since the question could not be and was not contained in the original arbitration clause it was required to be referred to arbitration by both the parties after disputes arose and since this was not done the Court held that the question of law had not been specifically referred to the arbitrator and therefore, the arbitrator had no exclusive jurisdiction to decide the same and there being an error of law apparent on the face of the award the Court could interfere with the decision and set aside the award.
It was in this context that the Court considered the necessity of either making such a reference by both the parties afresh or a Court 's order under section 20(4) so as to give exclusive jurisdiction to the arbitrator to decide the question of law rightly or wrongly and the aforementioned observations on which the Full Bench has relied were not meant for applying generally to all references.
This would also be clear if the relevant observations are read in their entirety and in proper perspective.
The relevant observations appearing at page 58 of the Report run thus: 581 "We are of the opinion that this is not the kind of specific reference on a point of law that the law of arbitration requires.
In the first place, what was shown to us is no reference at all.
It is only an incidental matter introduced by the Dominion Government to repel the claim made by the contractor in general terms under claim No.5.
In the next place, this was the submission of the contractor alone.
A reference requires the assent of 'both sides '.
If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under sub section (4).
In the absence of either, agreement by 'both sides ' about the terms of reference, or an order of the Court under section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction.
Therefore, when a question of law is the point at issue, unless 'both sides ' specifically agree to refer it and agree to be bound by the arbitrator 's decision, the jurisdiction of the Court to set an arbitration right when the error is apparent on the face of the award is not ousted.
The mere fact that both parties submit incidental arguments about a point of law in the course of the proceedings is not enough".
On reading the aforesaid observations in proper perspective it is clear that these were made in the context of the specific issue that arose before this Court and were not and are not intended to apply generally to all references.
The statement that in the absence of either, agreement by both sides about the terms of reference, or an order of the Court under s.20(4) compelling a reference, the arbitrator is not vested with 'the necessary exclusive jurisdiction ' makes it clear that the observations were confined to the references of specific questions of law.
Ordinarily the Court has jurisdiction to set aside an award if an illegality or an error of law appears on the face of it and it is only when a specific question of law has been referred to the arbitrator for adjudication that his decision thereon falls within his exclusive jurisdiction and cannot be interfered with by the Court howsoever erroneous it might be.
The true effect of these observations is that even in the case of an arbitration agreement which squarely falls within the definition of that expression as 582 given in s.2(a) (and which is not a bare arbitration agreement) there would be included in it a consensual actual reference by the parties of all their disputes including questions of law that may arise later but the arbitrator 's award on such questions of law would not be within his exclusive jurisdiction since specific question or questions of law cannot be said to have been referred to him as required by the law of arbitration but though the reference would be valid the award and his decisions on questions of law if erroneous on the face of it would be liable to be set aside by the Court.
This is far from laying down the wide proposition that there can be no reference to arbitration except through the Court under s.20 unless both the parties join afresh in the actual reference.
As we have said above the question whether fresh assent of both the parties for the actual reference is necessary or not must depend upon whether arbitration agreement is a bare agreement of the type indicated earlier or it is an arbitration agreement as defined in s.2(a) of the Act.
If it is the latter then clearly the actual reference to arbitration would be consensual and not unilateral and no fresh assent of the parties would be necessary nor will resort to s.20 be necessary.
Instead the party desirous of going to arbitration can resort to remedies available to him under Chapter II of the ; and in a case like the instant one he can, as the appellant did, proceed under the relevant Bye laws.
Having regard to the above discussion the appeal is allowed, the judgment and decree of the learned Single Judge passed in F.A.O. 139 D of 1962 following the view of the Full Bench is set aside and the decree in terms of the Award which was passed by the learned trial Judge is restored.
The respondent will pay the costs of the appeal to the appellant.
S.R. Appeal Allowed.

summary/full:
The appellant is a share broker and a member of the Delhi Stock Exchange an exchange recognised by the Central Government under the Securities Contract Regulations) Act, 1956.
The respondent, a non member had dealings in shares and securities with the appellant as principal to principal between 14th July to 27th September, 1960, in respect whereof Contract Notes (ex.
P. 1 to P. 31) in the prescribed form where issued by the appellant and were signed by the respondent.
Each one of the Contracts contained an arbitration clause couched in very wide terms requiring the parties thereto to refer all their disputes or claims to arbitration as provided in the Rules, Regulations and Bye laws of the Exchange.
Under these transactions a sum of Rs. 5923 became due and payable by the respondent to the appellant but since the respondent raised a dispute denying the claim, the said dispute was referred to the arbitration of two arbitrators Mr. Prem Chand and Mr. P.S. Khambete (both members of the Exchange) the former being the nominee of the appellant and the latter being the appointee of the Exchange on the respondent 's failure to nominate his arbitrator when called upon to do so.
The arbitrators held their proceedings in which the respondent participated though he inter alia raised a contention that he was not a party to the reference and would not be bound by the Award that might be made on the basis of such unilateral reference.
The Arbitrators made their Award on 18th April, 1961, allowing the claim of the appellant with costs against the respondent.
In response to the notice of filing the Award in the Court, the respondent filed objections to the Award on several grounds such as denial of the existence of the agreement of reference, that he was not a member of the Exchange, that the Contract Notes had not been signed by him, that the arbitrators had mis conducted themselves and the proceedings, that the Award had been improperly procured etc.
Negativing all the objections, the Sub Judge Delhi recorded the findings that the Contract Notes bore the signatures of the respondent and as such under the arbitration clause contained in each one of them read with the relevant Bye laws there was a valid Agreement for Reference to arbitration made the Award a rule of the Court and passed a decree in favour of the appellant on 7.9.1962.
568 In the first appeal preferred to the High Court, a learned Single Judge of the Delhi High Court entertained a doubt as to whether the respondent could be said to be a party to the actual Reference to arbitration even though each of the Contract Notes containing the arbitration clause was signed by the respondent, since the respondent had not joined in nominating his arbitrator despite service of notice asking him to do so, and whether on that account the Reference could be said to be unilateral, referred the same to a larger Bench on 5.1.1971.
The Full Bench answered the question in favour of the respondent, relying on certain observations made by the Supreme Court in Seth Thawardas Pherumal vs Union of India reported in (1955) 2 SCR P. 48 and took the view that notwithstanding the fact that respondent had signed the Contract Notes and had thereby become consenting party to the arbitration agreement tho actual reference to arbitration of the two arbitrators required the assent of both the parties and since to such reference the respondent had not given his consent it was a unilateral reference to arbitration and as such the resultant Award would not be binding on the respondent.
Hence the appeal by special leave.
Allowing the appeal, the Court ^ HELD: 1.1 The question whether fresh assent of both the parties for the actual reference is necessary or not must depend upon whether arbitration agreement is a bare agreement or it is an arbitration agreement as defined in section 2(a) of the Act.
If it is the latter, then, clearly the actual reference to arbitration would be consensual and not unilateral and no fresh assent of the parties would be necessary nor will resort to section 20 be necessary.
Instead the party desirous of going to arbitration can resort to remedies available to him under Chapter II of the ; and in a case like the instant one he can, as the appellant, did, proceed under the relevant Bye laws.
[582 C E] 1.2 It is true that the defines the two expressions "arbitration agreement" and "reference" separately.
Section 2(a) defines an "arbitration agreement" to mean "a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not '` while section 2(e) defines a "reference" to mean "a reference to arbitration".
The latter expression obviously refers to an actual reference made jointly by the parties after disputes have arisen between them referring the said disputes for adjudication to a named arbitrator or arbitrators, while the former expression is wider as it combines within itself two concepts, (a) a bare agreement between the parties that disputes arising between them should be decided or resolved through arbitration and (b) an actual reference of a particular dispute or disputes for adjudication to a named arbitrator or arbitrators.
If that be so, it stands to reason that only when the arbitration agreement is of the former type, namely, a bare agreement a separate reference to arbitration with fresh assent of both the parties will be necessary and in the absence of such concensual reference resort to section 20 of the will be essential but where the arbitration agreement conforms to the definition given in section 2(a), the party desiring arbitration can straightaway approach the arbitrator or arbitrators and resort to section 20 of is unnecessary because 569 consent to such actual reference to arbitration shall be deemed to be there as the second concept is included in the agreement signed by the parties, and the aspect that differences or disputes actually arose subsequently would be inconsequential because the arbitration agreement as defined in section 2(a) covers not merely present but future differences also In other words, in such a case there will be no question of there being any unilateral reference.
In every case the question will have to be considered as to whether the arbitration agreement is a bare agreement of the type indicated earlier or an arbitration agreement as defined in section 2(a) of the Act.
[574 D A; 575 A C] 2.1 On a plain reading of the arbitration clause contained in the Contract Notes read with relevant Bye laws it is abundantly clear that the arbitration agreement herein is not a bare arbitration agreement but is clearly an arbitration agreement as defined in section 2(a) of the of 1940.
In other words, the assent of the parties to actual reference is already there in the agreement; in addition there is a statutory reference.
Therefore, the reference being consensual (and also statutory) the resultant award would be valid and binding on the parties to the transactions.
This case was not a case of unilateral reference.
Resort to section 20 of the on the part of the appellant before approaching the arbitrators for adjudication was unnecessary and the Award was and is binding on the respondent.
[577 H; 578 A C] 2.2 The arbitration clause contained in the Contract Notes read with relevant Bye laws make two or three things very clear.
In the first place the arbitration clause is couched in a very wide language inasmuch as it makes arbitrable not merely the claims or disputes arising out of the transactions specified in the Contract Note but also "all claims differences and disputes in respect of any dealings, transactions and contracts of a date prior or subsequent to the date of this Contract (including any question whether such dealings, transactions or contracts have been entered into or not)".
Secondly the arbitration clause incorporates a provision that all such claims, differences and disputes shall be submitted to and decided by arbitration" in Delhi as provided in the Rules, Regulations and Bye laws of the Exchange; this is a pointer to consensual submission in the clause.
Thirdly, Bye laws 247(a) which governs these transactions in terms constitutes the actual reference to arbitration and under Bye laws 248(a) and 249(1) the reference is to two arbitrators who would be the nominees of each one of the parties to the disputes and provision is made empowering the Board of Directors or President to appoint arbitrator in case a party fails to nominate his own; in other words once a contract is made subject to Rules, Regulations and Bye laws (framed under the rule making power) there comes into existence a statutory submission or reference to arbitration.
[577 D H] 3.1 The true scope and effect of the observations of the Court in Seth Thawardas Pherumal 's case must be read in the proper perspective and not in a truncated manner or divorced from the context of specific issue which arose for determination before the Court in that case.
It will be clear that these were neither intended to apply generally to all references nor to lay down the wide proposition that there can be no reference to arbitration except through the 570 Court under section 20 unless both parties join in it.
The observations were made in the context of the specific issue that arose before this Court and were not and are not intended to apply generally to all references.
The statement that in the absence of either, agreement by both sides about the terms of reference, or an order of the Court under section 20(4) compelling a reference the arbitrator is not vested with the necessary exclusive jurisdiction ' makes it clear that the observations were confined to the references of specific questions of law.
Ordinarily the Court has jurisdiction to set aside an award if an illegality or an error of law appears on the face of it and it is only when a specific question of law has been referred to the arbitrator for adjudication that his decision thereon falls within his exclusive jurisdiction and cannot be interfered with by the Court howsoever erroneous it might be.
The true effect of these observations is that even in the case of an arbitration agreement which squarely falls within the definition of that expression as given in section 2 and which is not a bare arbitration agreement there would be included in it a consensual actual reference by the parties of all their disputes including questions of law that may arise later but the arbitrator 's award on such questions of law would not be within his exclusive jurisdiction since specific question or questions of law cannot be said to have been referred to him as required by the law of arbitration but though the reference would be valid the award and his decisions on questions of law is erroneous on the face of it would be liable to be set aside by the Court.
This is for from laying down the wide proposition that there can be no reference to arbitration except through the Court under section 20 unless both the parties join afresh in the actual reference.
[579 A C; 581 F H; 582 A C] Seth Thawardas Pherumal vs Union of India [1955] 2 SCR P. 48 discussed and explained.


judgement:
N: Criminal Appeal Nos.
844 845 of 1985.
From the Judgment and Order dated 1.12.1982 of the Delhi High Court in Crl.
(Main) No. 551 of 1982.
Anil Deo Singh, R.N. Poddar and P.K. Mukharjee for the Appellants.
Anil Kumar Gupta, Amicus Curiae for the Respondents.
The Judgment of the Court was delivered by 814 B.C.RAY, J.
The only question involved in these two appeals is whether the criminal proceedings initiated against the appellants, i.e. Balbir Singh Sub Inspector and Ram Shanker, Constable of Delhi Police Force is maintainable in the absence of any prior sanction obtained from the Lt. Governor as required under s.197 (3) of the Code of Criminal Procedure.
Section 197(1) of the Code of Criminal Procedure envisages that no court can take cognizance of any offence alleged to have been committed by a Judge or Magistrate or a public servant while acting or purporting to act in the discharge of his official duty without previous sanction of the Government.
Sub section (2) of that Section further provides that no court shall take cognizance of any offence alleged to have been committed by any member of the Armed Forces of the Union while acting or purporting to act in discharge of his official duty, without obtaining the prior sanction of the Central Government.
Sub section (3) of the said Section further provides that the State Government may by notification direct that the provisions of Sub section (2) shall apply, to such class or category of members of the Forces charged with the maintenance of public order as may be specified in the said order, and upon such notification being made, the provisions of Sub section (2) will apply as if for the expression "Central Government" occurring therein, the expression "State Government were substituted.
The appellants are undoubtedly the members of Delhi Police Force.
It is also not in dispute that these appellants do not fall within the category of officers mentioned in Sub Section (1) of Sec.
197 of Criminal Procedure Code and as such no prior sanction of the Government is necessary in order to launch a prosecution against these officers.
The only question remains to be considered is whether the appellants being members of the Delhi Police Force are entitled to get the benefit of Sub Section (3) of Section 197 of Criminal Procedure Code by virtue of the notification No. S.O. 183(E) dated 20th March, 1974 issued by the Under Secretary of India read with the notification dated 7th April, 1980 issued by the Lt. Governor, Delhi under No.
F.10/77/78 HP II.
Delhi is a Union Territory within the meaning of Article 1 read with the First Schedule to the Constitution as amended by the Constitution (7th amendment) Act 1956.
The power to administer the Union Territory is vested in the President under Article 239 of the Constitution and Clause 1 of the said Article empowers the President to administer the Union Territory through 815 and Administrator to be appointed by him.
The Administrator appointed by the President under article 239(1) of the Constitution with the designation of Lt. Governor of Delhi derives only such powers, functions and duties as are entrusted to him by the President under article 239(1).
In accordance with the provisions of this Art 239(1) the aforesaid notification dated 20th March, 1974 has been made whereby the President had directed that the Administrators of all the Union Territories other than Arunachal Pradesh and Mizoram exercise, subject to the control of the President, the powers and discharge the functions under the Code of Criminal Procedure 1973 as mentioned in Schedule annexed thereto, subject to the condition mentioned therein.
The said notification was enforced on 1st April, 1974.
In this Schedule all powers and functions of the State Government except those conferred by Sections 8 and 477 of the Code were conferred on the Administrator.
Therefore, by virtue of this notification, the President empowered the Administrator of Union Territories, i.e. Lt. Governor of Delhi to exercise the powers and functions of the State Government as provided in the Code of Criminal Procedure except the powers and functions provided in Sections 8 and 477 of the said Act.
It also appears from the notification dated 7th April, 1980 that the Lt. Governor directed that the provisions of Sub Section (2) of Sec.197 "shall apply to serving police officials of all ranks of Delhi Police Force" charged with the maintenance of public order.
This notification was made in exercise of powers conferred upon the administrator under Sub Section (3) of Sec.
197 of the Code of Criminal Procedure read with the Government of India Notification Dated March 20, 1974 mentioned before Reading these two notifications together, it is crystal clear that to start a proceeding against the members of all ranks of Deli Police Officials in a Criminal Court, previous sanction of the Lt. Governor is imperative, provided the offence alleged to have been committed by such members of the Delhi Police Force has been committed while acting or purporting to act in discharge of their official duty.
In the instant case the act of tampering of the Search Memos by the two appellants i.e. Balbir Singh and Ram Shankar cannot be said to have been done in discharge of their official duties inasmuch as the said Search Memos were in the custody of the Court.
The complaint was filed by the Special Railway Magistrate alleging that Search Memos which were signed by the Sub Inspector Balbir Singh did not bear any signature of the witness Ram Shankar at the time when the said Search Memos were in the custody of the Court.
Subsequently, it has been interpolated by getting the same signed by the accused Ram Shankar.
This 816 act of tampering and interfering with the records of the Court by the two petitioners by any stretch of imagination cannot be said to have been done or purported to have been done by the petitioners in discharge of their official duty.
It is pertinent to refer in this connection to the decision of this Court in Matajog Dobey vs HC.
Bhari, [1955] 2 S.C.R. 925, where this Court laid down the scope of the protection afforded by Sec.
197 of the Code of Criminal Procedure in the following terms : "There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.
" These observations have been followed by this Court in Pukhraj vs State of Rajasthan & Anr., ; In that case the Post Master General of Rajasthan abused and kicked a Clerk of the Head Post Office when a clerk of the Head Post Office of Jodhpur went to make some oral representations to the Post Master General.
The clerk filed a complaint against the Post Master General under Sec. 323 and 504 I.P.C. before the Additional Munsif Magistrate of Jodhpur city.
An application was filed praying that no cognizance of the offence would be taken without the sanction of the Government under Sec.
197 of Criminal Procedure Code.
It was held that the acts alleged were not done in due discharge of his official duty and so no prior sanction of the Government was necessary under Section 197 of the Code.
In Bhagwan Prasad Srivastava vs N.P. Misra, [1971] 1 S.C.R. 317, the respondent filed a complaint alleging that the appellant, a Civil Surgeon used defamatory and abusive words and got him pushed out by the cook of the hospital.
It was found that the case was not covered by Sec.
197 of the said Act as those acts were not done in discharge of his official duty.
In the case of Darshan Kumar vs Sushil Kumar Malhotra & Ors., , it was found that the acts complained of against Respondents Nos.
1,3 and 4 were purported to have been done by them in discharge of their official duties and it was reasonably connected with their official duties.
As such it was held that prior sanction of the State Government was necessary in prosecuting them in respect of the offence, if any, made out from the commission of such acts.
817 As regards scope and ambit of Sec.
197(3) of the Code of Criminal Procedure it has been rightly observed by the Division Bench of the Gujarat High Court in Bhikhaji Vaghji vs L.K Barot and Ors. , that after the issuance of the notification by the Government under Sec.
197(3) of the Criminal Procedure Code directing that the provisions of Sub Sec.(2) of Sec. 197 shall apply to the Police Officers charged with the maintenance of public order, the same could not be questioned on the ground of non application of mind as it is within the scope and ambit of Sub Sec.
(3) of Sec. 197 of the Code.
It was also observed that : "Before the protection of sub sec.(2) of Section 197 of the Code could be had and the proceedings are dropped on that count, the learned Magistrate is under an obligation to decide that the alleged acts attributed to the members of the police force are acts done in the discharge of their official duties, or at any rate, they purport to be, or bear the colour or semblance of, the acts that could be done in the discharge of their official duties.
" We have already said that the alleged acts of tampering the Search Memo while the same was in custody of the Court cannot be deemed to be an act purported to have been done by these two appellants in discharge of their official duties.
Therefore, the previous sanction of the Lt. Governor as provided in Section 197(3) Criminal Procedure Code was, in our considered opinion, not at all necessary for initiating the proceedings against these two appellants, who are members of the Delhi Police Force.
For the reasons stated hereinbefore the Appeal filed by the Delhi Administration succeeds and is allowed and the Appeal filed by the accused is dismissed.
The Judgment and Order of the High Court declaring the impugned notification dated 7th April, 1980 issued by the Lt. Governor of Delhi to be ultra vires is set aside and the learned Magistrate is directed to proceed with the case in accordance with law.
We are thankful to Sri Anil Kumar Gupta for the assistance he has rendered as Amicus Curiae.
M.L.A. Criminal Appeal 844/85 dismissed.
Criminal Appeal 845/85 partly allowed.

summary/full:
A Complaint was filed by the Special Railway Magistrate against the appellants, Balbir Singh and Ram Shankar, members of Delhi Police Force, alleging that the Search Memos which were signed by the sub Inspector Balbir Singh did not bear any signature of the witness Ram Shankar at the time when the said Search memos were in the custody of the Court and that they were interpolated subsequently by getting the same signed by the accused, Ram Shankar.
The appellants contended before the Trial Court that the aforesaid complaint was not maintainable since prior sanction as required by section 197(3) Cr.
P.C. was not obtained by the complainant to prosecute them.
The trial court rejected the contention and the High Court confirmed the same in appeal by the appellants.
The High Court, however, held that the Notification No. F.10/77/78 HP II dated 7th April 1980 issued by the Lt. Governor directing that the provisions of sub s.(2) of section 197 "shall apply to serving police officials of all ranks of Delhi Police Force" charged with the maintenance of public order, was bad in law as the Lt. Governor had no authority to issue the said Notification under sub s.(3) of section 197 Cr.
Allowing Criminal Appeal No. 845/85 partly and dismissing the other appeal, ^ HELD: 1(i) The Judgment and order of the High Court declaring the impugned notification dated 7th April 1980 issued by the Lt. Governor of Delhi to be ultra vires is set aside and the learned Magistrate is directed to proceed with the case in accordance with law.
[817 F] (ii) By virtue of the Notification No. S.O.183(E) dated 20th March 1974, the President empowered the Administrator of Union Territories, i.e. Lt. Governor of Delhi to exercise the 813 powers and functions of the State Government as provided in the Code of Criminal Procedure except the powers and functions provided in sections 8 and 477 of the said Act.
The Notification dated 7th April 1980 issued by the Lt. Governor was made in exercise of powers conferred upon him under sub section (3) of Sec. 197 of the Code of Criminal Procedure read with the Government of India Notification dated March 20, 1974 mentioned before.
Therefore, the Notification is not ultra vires the Constitution.
[815 D E] 2.
Reading the two notifications together, it is crystal clear that to start a proceeding against the member of all ranks of Delhi Police Officials in a Criminal Court, previous sanction of the Lt. Governor is imperative, provided the offence alleged to have been committed by such members of the Delhi Police Force has been committed while acting or purporting to act in discharge of their official duty.
[815 F] In the instant case, the previous sanction of the Lt. Governor as provided in Section 197 (3) Criminal Procedure Code was, not at all necessary for initiating the proceedings against the two appellants, since the act of tampering of the Search Memos by them cannot be said to have been done in discharge of their official duties inasmuch as the said Search Memos were in the custody of the Court.
[817 E F] Matajog Dobey vs H.C. Bhari, ; ; Pukhraj vs State of Rajasthan & Anr., ; ; Bhagwan prasad Srivastava vs N.P.Misra, [1971] 1 S.C.R. 317 and Darshan Kumar vs Sushil Malhotra & Ors. 1980 Crl.
L.J. 154 relied upon.
Bhikhaji Vaghaji vs L.K. Barot and Ors., 1982 Cr.
L.J. 2014 approved.