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TMI Blog1976 (9) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract and hence clause (9) provided that "superin- tendence and inspection of quality, weight and packing of sugar Shall be made by a reputable superintending agency to be approved by the Government of India, in the Ministry of Food & Agriculture" and clause (10) stipulated for delivery to be made to "authorities or parties nominated by the Ministry of Food and Agriculture". There was provision for arbitration made in clause (17) and that clause also re- ferred to the Ministry of Food and Agriculture. It was in the following terms: "ARBITRATION: All questions, disputes or differences whatsoever which may at any time arise between the parties to the agreement touching the agreement or the subject-matter thereof, arising out of or in relation thereto and whether as to construction or otherwise shall be referred to a single arbitrator for decision. Such a single arbitrator shall be nominated by the Secretary to the Government of India in the Ministry of Food and Agriculture in his absolute discretion and the decision of such arbitrator shall be final and binding upon the parties. The reference to the arbitrator shall be governed by the provisions of the Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - solved. On 13th/l4th February, 1956 the appellant addressed a letter to the respondents stating that since the Ministry of Food and Agriculture was bifurcated into Ministry of Food and Ministry of Agriculture, it was necessary to amend clause (17) of the Contract so as to provide for arbitration by "the Secretary to the Ministry, Government of India administratively dealing with the subject of contract at the time of reference to arbitration, or if there is no Secre- tary, the administrative head of such Ministry at the time of such reference" and proposed an amendment to that effect for the acceptance of the respondents. The respondents, by their letter in reply dated 26th February, 1957, declined to accept the proposal for amendment of clause (17) of the contract and once again reiterated that the arbitration agreement contained in that clause was "dead and unenforce- able". However, within a short time thereafter, another order was issued by the President under clause (3) of Arti- cle 77 of the Constitution integrating the Ministry of Food and the Ministry of Agriculture into one single Ministry of Food and Agriculture with effect from 23rd April, 1957. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espond- ents participated in the arbitration proceedings without objection or protest against the jurisdiction of the arbi- trator. The arbitrator ultimately made an award against the respondents. The appellant made an application before the Sub-Judge, Delhi to pass a decree in terms of the award. The respond- ents resisted the application of the appellant and sought to set aside the award mainly on two grounds. One ground was that Daljeet Singh, a partner of the respondents, had no power to bind the other partners by an arbitration agreement and hence clause (17) of the contract was not binding on the respondents, and the other was that the arbitrator was not validly appointed and he had, therefore, no jurisdiction to enter upon the reference and adjudicate upon the disputes between the parties. Both these grounds were rejected by the learned Sub-Judge and the award was made a rule of the court. The respondents thereupon preferred an appeal to the High Court. The same two grounds were also urged in the appeal. Out of them, the first ground relating to lack of authority in Daljeet Singh to bind the respondents by clause (17) of the contract Was negatived by the High Court and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it went against them. We will first examine whether the appointment of the arbitrator was valid, for, if it was, the second question, which raises the issue of waiver, would not arise. Now, clause (17) of the contract provided that all disputes arising out of the contract shall be resolved by arbitration. It embodied an arbitration agreement between the parties. It also laid down the machinery for appoint- ment of the arbitrator. It provided that the arbitrator shall be nominated by the Secretary in the Ministry of Food & Agriculture in his absolute discretion. There was un- doubtedly a Ministry of Food & Agriculture at the time when the contract was made and there was one and only one Secre- tary in that Ministry, so that at the date of the contract there could be no question as to who was the person autho- rised to nominate the arbitrator, The same position contin- ued to obtain also at the time when disputes arose between the parties. But before an arbitrator could be nominated by the Secretary in the Ministry of Food & Agriculture to adjudicate upon these disputes, the Ministry of Food & Agriculture was bifurcated into two separate Ministries and it ceased to exist as Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... predicated as to which Secretary was intended to exercise the power of nominating an arbitrator. We do not think this difficulty is at all real. Let us consider, for a moment, why in clause (17), the power to nominate an arbitrator was conferred on the Secretary in the Ministry of Food & Agri- culture and not on a Secretary in any other Ministry. The reason obviously was that at the date of the contract the Secretary in the Ministry of Food & Agriculture was the Officer dealing with the subject-matter of the contract. If this object and reason of the provision of clause (17) is kept in mind, it will become immediately clear that the "Secretary in the Ministry of Food & Agriculture"authorised to nominate an arbitrator was the Secretary incharge of the Department of Food who was concerned with the subject-matter of the contract. The Secretary incharge of the Department of Food filled the description "Secretary in the Ministry of Food & Agriculture" 'yen in clause (17). The respondents relied strongly on the use of the definite article 'the' before the words "Secretary in the Ministry of Food & Agri- culture" and urged that what the parties t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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