G.R. Majithia, J.
1. This appeal is directed against the order of the Subordinate Judge 1st Class, Chandigarh, dated 28-4-1987 whereby he allowed the petition filed under Sections 14(2) and 17 of the Arbitration Act, 1940, by respondent No. 1. He made the award the rule of the Court and passed a decree in terms of the same.
2. The facts briefly are that a dispute arose between respondent No. 1 and the appellants in respect of Contract Agreement C E J K 37/76-77, for providing married accommodation for,, JCOs/HAVs/QRs at, Udhampur. In terms of the agreement the dispute was referred for adjudication to the sole arbitrator Lt. Col. K. B. Sethi. The arbitrator gave the award and sent a copy of the same to respondent No. 1. Respondent No. 1 moved the petition before the Subordinate Judge, Chandigarh for a direction to the arbitrator to file the award in the Court and after the award is filed the same may be made the rule of the Court and a decree in terms thereof may be passed.
3. The appellants filed reply to the application. They did not dispute the correctness of the allegations made in the petition, The only dispute raised was that since the work under the contract was executed at Udhampur the Subordinate Judge at Chandigarh had no jurisdiction to entertain the application.
4. The learned Subordinate Judge from the pleadings of the parties framed the following issues : --
1. Whether this court has jurisdiction to try this petition? OPA
2. If issue No. 1 is decided in favour of the petitioner, whether the award dated 21-8-1985, can be made rule of the court? OPA
3. Relief :Under issue No. 1 it was held that the Civil Court at Chandigarh had jurisdiction to entertain the application. Under issue No. 2, it was found that objections were not filed to the award and there was no legal impediment for making it a rule of the Court.
5. The appellants have come up in appeal and have raised only one objection that the Civil Court at Chandigarh had no jurisdiction to entertain the petition giving rise to this appeal.
6. The learned counsel for the respondents has raised a preliminary objection relating to the maintainability of the appeal. He submitted that under Section 14 of the Arbitration Act 1940 (for short referred to as the Act) the arbitrator has to file the award in Court when directed and when the award is filed the Court has to give notice to the parties of the filing of the award. After the provisions of Section 14 of the Act have been complied with and the Court finds no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court after the time for making an application to set aside the award has expired shall pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow. Section 17 of the Act further postulates that no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award. The order under challenge reveals that the learned Subordinate Judge has made the award the rule of the Court and passed a decree in terms of the award The appeal could only He if the decree was not in accordance with the award. The learned counsel submits that in view of the mandatory provision of the award the appeal is not competent. There is a substance in the plea raised. Section 39 of the Act provides that all orders of the nature specified in the section will be open to appeal irrespective of the fact whether they are final orders in the case and dispose it of finally, or are merely interlocutory. Against an order under Section 17 of the Act passing a decree in terms of the award no appeal lies under Section 39 of the Act but it lies under the last part of Section 17 on only two grounds viz. --(i) that the decree is in excess of the award; and (ii) that the decree is not in conformity with the award. In the instant case, I do not find that the learned Subordinate Judge has not passed the decree in conformity with the award or that it is an excess of the award. Clauses A to C of Section 30 of the Act set out the grounds on which an award could be set aside; and Section 33 further adds that the challenge could be also with reference to the existence of the validity of an arbitration agreement or an award. If no steps are taken to set aside the award under Sections 30 and 33 of the Act an unassailable reason must follow under Section 17 of the Act and a decree is not open to challenge except by way of an appeal under the two grounds mentioned in the said section; Whatever may, be the ground of impeachment it has got to be agitated under Sections 30 and 33 of the Act and if there is an omission to do so one cannot avoid the bar created by Section 17 of the Act. Resultantly, I hold that the appeal is not competent.
7. However, in the circumstances of the present case, I have decided to treat this appeal as a revision petition for the reasons that the learned Advocate General has contended that the Civil Court at Chandigarh had no jurisdiction to entertain the petition. In order to appreciate the exact question raised by the learned Advocate General, it is necessary to advert to the pleadings of the parties. Para No. 5 of the petition filed by respondent No. 1 reads as under : --
'That the reference to the Arbitrator, respondent No. 4, was made by the petitioner from Chandigarh, where the same has its Head Office, the acceptance of the contract agreement, out of which the arbitration proceedings originated and now award has been made by respondent No. 4, was conveyed by the respondents at Chandigarh, and proceedings under Section 28 of the Arbitration Act in respect of the extension of time for the making of the award by respondent No. 4, referred to above, were also initiated at Chandigarh in the Court of Shri Jagroop Singh, SJIC and, therefore, this Hon'ble Court has the jurisdiction to entertain and try the present petition.'
Corresponding reply to this para filed by the appellant No. 1 is in the following terms : --
'Contents of para 5 are incorrect. The case for making award Rule of the Court is considered beyond the jurisdiction of Chandigarh Court. The work under the caption contract was located and executed at Udhampur. The accepting officer and executing officer i.e. GE(P) 6351 are located at Udhampur. The proceedings of arbitration were held at Udhampur. The Arbitrator Lt. Col. K. B. Sethi published the award somewhere in Field area C/O 99 APO, As such no cause of action has arose at Chandigarh'. Merely because the residence of the other party is at Chandigarh does not change jurisdiction of the Court. It is submitted that petitioner had earlier submitted similar application in the Court of Senior Sub Judge 1st Class Chandigarh for enlargement of time and since there was no necessity of filing the application on that ground when both the parties agreed to enlargement of time: no further proceeding had taken place on that application.'
8. Respondent No. 1 has specifically pleaded that the acceptance of the contract agreement out of which the arbitration proceedings were originated and now award has been made by respondent No. 4 was conveyed by the respondent at Chandigarh.'
This plea s not controverted. An inference can be draw that a plea which has not been controverted was admitted to be correct. If the offer was accepted by the appellant at Chandigarh then part of the cause of action has arisen at Chandigarh.
9. Section 41 of the Act provides that the provisions of the Code of Civil Procedure (for short the Code) shall apply to all proceedings before the Court and to all appeals under this Act. The Code in its entirety applies to proceedings under the Act. Section 20 of the Code prescribes jurisdiction of the Civil Courts and will be applicable to arbitration proceedings. The jurisdiction of the Courts under the Act to entertain the application for filing an award is accordingly governed by the provisions of the Code. See in this connection Hakam Singh v. Gammon reported as AIR 1971 SC 740.
10. Clause (c) of Section 20 of the Code deals with 'cause of action'. In the suit based on a contract the cause of action will consist of the making of the contract and of its breach at the place where it is to be performed. An action, therefore, for breach of a contract at the option of the plaintiff can be brought either at the place where the contract was made or the place where the breach was committed. In deciding the question as to where the contract is made, the Court must take into consideration the provision of Section 4 of the Contract Act. A contract is made when an offer of one party is accepted by the other party. In the present case, as is specifically alleged by respondent No. 1 the acceptance of the agreement was conveyed to him at Chandigarh. Thus, part of the cause of action arose at Chandigarh and the Civil Court at Chandigarh had the jurisdiction to entertain the petition, In Bhagwandas Governdhandas Kedia v. Girdharilal Parshotam Dass reported as AIR 1966 SC 543 (at p. 547), the Apex Court observed as under : --
'making of an offer at a place which has been accepted elsewhere does not form part of the cause of action in a suit for damages for breach of contract. Ordinarily it is the acceptance of offer and intimation of that acceptance which result in a contract. By intimating an offer, when the parties are not in the presence of each other, the offerer is deemed to be making the offer continuously till the offer reaches the offeree. The offerer thereby merely intimates his intention to enter into a contract on the terms of the offer. The offerer cannot impose upon the offeree an obligation to accept, nor proclaim that silence of the offeree shall be deemed consent. A contract being the result of an offer made by one party and acceptance of that very offer by the other, acceptance of offer and intimation of acceptance by some external manifestation which the law regards as sufficient is necessary.'
Reference may usefully be made to State of Maharashtra v. Ranjeet Construction reported as AIR 1986 Bom 76 (at p. 77), where the learned Chief Justice held as under : --
'That the tender was accepted by the Govt. and communicated to the applicant at his Pune address where he carries on business is admitted. Though the contract itself was formally executed at Kolhapur, that was in pursuance of the acceptance of the tender communicated to the applicant at Pune. The contract itself does not specify any Court in particular as having jurisdiction in respect of any dispute arising under that contract. In the absence of any such specific stipulation in the agreement, the Court within the jurisdiction of which part of the cause of action arises, has jurisdiction to entertain the petition. Cause of action comprises of a bundle of facts and ail these facts may not necessarily occur within the jurisdiction of the same Court. Part of the cause of action may arise within the jurisdiction of one Court and part within the jurisdiction of another court. Section 20 of the C.P.C. lays down that subject to the limitations in Sections 15, 16, 17, 18 and 19 of C.P.C., every suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain or the cause of action, wholly or in part, arises. V/hen the acceptance of the tender was communicated by the opponent Government to the applicant at Pune, it must be held that the part of cause of action arose at Pune and, therefore, he could have filed a suit at Pune.'
11. The learned Advocate General strongly relied upon Bakhtawar Singh Balkrishna v. Union of India reported as AIR 1988 SC 1003. In that case the question of jurisdiction arose in the following circumstances : --
The contractor who was an appellant before the Apex Court entered into a construction contract with the military engineering service for making some additional construction in the ordnance factory at Muradnagar in the State of Uttar Pradesh. The contract was entered into at Bareilly in Uttar Pradesh. A dispute arose in regard to the execution of the contract between the contractor and Union of India. An arbitrator was appointed who in due course rendered an award in favour of the contractor. The contractor initiated proceedings for making the award a rule of the Court on the original side of the Delhi High Court. The Union of India raised a plea to the effect that the Delhi High Court had no jurisdiction to entertain the petition. The single Judge negatived the plea but on appeal by the Union of India the division Bench upheld the plea of Union of India holding that the Union of India was not carrying on any 'business' in Delhi so as to attract Section 20 of the Code which 'inter alia' provides that the suit may be instituted where the defendant 'carries on business or works for gain'.
12-13. The conclusion of the High Court was as under : -- (at p. 1005)
'The next question is whether the Union of India carried on business or worked for gain through the Director of Supplies and Disposals, New Delhi to confer jurisdiction on the courts at Delhi. The answer has to be in the negative. The expression 'voluntarily resides' in Section 20 is significant. It necessarily refers to natural persons and not to legal entities. Likewise, the expressions 'carries on business' or ''personally works for gain' do not refer to functions carried on by the Union of India in discharge of its executive powers conferred by Article 298 of the Constitution. While Article 299 of the Constitution provides that all contracts made in the exercise of the executive power of the Union shall be expressed to be made by the President, Clause (2) of this Article states that the President shall not be personally liable in respect of any contract or assurance made or executed on his behalf. The President, therefore, cannot be said to be personally working for gain within the meaning of Section 20 of the Code of Civil Procedure. Mr. Justice Prithvi Raj in Suit No. 394 of 1967. Insortex Pvt. Ltd. v. Union of India'; decided on 4th May, 1971, relying on R. J. Wyllie and Co. v. Secy of State, AIR 1930 Lahore 818, Dominion of India v. R. C. K. C Nath and Co. Khulna, AIR 1950 Cal 207 and Azizuddin and Company v. Union of India, AIR 1955 Mad 345 has taken the same view.
Reference in this connection may also be made to the observations in Badrinarayan v. Excise Commr. Hyderabad, AIR 1962 Andh Pra 382 with which we respectfully agree in so far as they go in relation to suits other than suits against Railway. On page 383 of the report, the Bench observed :'Section 20, C.P.C. has in contemplation people dwelling, within the territorial limits of a Court and persons indulging in commercial activities within that area even if they do not dwell therein. This section in plain and unmistakable language conveys that idea. The words 'actually and voluntarily' cannot reasonably apply to legal entities. That being so, it is difficult to bring the Government within the import of the expression 'the defendant.' .....actually and voluntarily resides.'
The decision of the Delhi High Court restedon the interpretation of Clause (b) of Section 20 of theCode which was finally approved by the ApexCourt with the following observations :-- (atp.' 1006)
'We are in full agreement with the reasoning and conclusion of Delhi High Court reflected in the aforesaid passages.'
Clause (c) of Section 20 of the Code did not come up for consideration before the Apex Court. No opinion was expressed whether any part of the cause of action had arisen within the jurisdiction of Delhi High Court. The entire arguments concentrated on Clause (b) of Section 20 of the Code. In the instant case, the contractor has solely relied upon Clause (c) of Section 20 of the Code. Consequently, the ruling has got no applicability to the facts of the instant case and the case is squarely covered by the decision reported as Bhagwandas Goverdhandas Kedia v. Girdharilal Parshotamdas, AIR 1966 SC 543.
14. For the reasons above stated, I do not find any merit in the petition and dismiss the same. However, I must record my disapproval for the very unfair and the legally untenable stand taken by the Union of India. It is not expected that the appellant Union of India should adopt this type of attitude towards a citizen. No costs.