BHARAT BHUSHAN BANSAL versus U.P. SMALL INDUSTRIES CORPORATION LTD., KANPUR

Citation: [1999] 1 S.C.R. 181 · Decided: 21-01-1999 · Supreme Court of India · Bench: SUJATA V. MANOHAR, R.C. LAHOTI · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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BHARAT BHUSHAN BANSAL 
A 
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v. 
U.P. SMALL INDUSTRIES CORPORATION LTD., KANPUR 
JANUARY 21, 1999 
I 
[MRS. SUJATA V. MANOHAR AND R.C. LAHOTI, JJ.] 
B 
·• 
;.._ 
Arbitration Act, 1940: Sections 2(a) and 8. 
Arbitration agreement-Existence of-Arbitration claus~Ingredients 
of-Agreement of contract provided that in respect of questions arising from c 
or relating to any claim or right, matter or thing in any way connected with 
the colltract, the decision of Executive Engineer was final, conclusive and 
binding on both parties to the contract-In respect of the remaining claims 
the decision of the Managing Director was final, conclusive and bind-
ing-Contractor made application under S.8 for appointmellf of an Ar-
D 
; 
bitrator-Civil Judge allowed the application-In appeal,· High Court while 
x 
upholding the finding that there was an arbitration clause held that the court 
had no jurisdiction under S.8 to appoint an Arbitrator because none of the 
clauses of S.8 were attracted and, therefore, set aside the order of the Civil 
judge-Held : The agreement of contract does not contemplate a full-fledged 
arbitration under the Arbitration Act-There/ ore, application under S.8 is E 
misconceived-High Court's decision is correct though for different reasons. 
Section 2(a)-Arbitration agreement-There is a difference between an 
expert detem1ination and an arbitration. 
... 
Words and Phrases : 
F 
--< 
"Certifier" and "arbitrator''-Meaning of 
The appellant had entered into a contract with the respondent under 
which the appellant had undertaken the work of construction of factory 
G 
and allied buildings of the respondent. The agreement provided that in 
_,_ 
respect of certain claims the decision of the Executive Engineer was final, 
conclusive and binding on both the parties to the contract. In respect of 
the remaining matters the decision of the Managing Director was final, 
conclusive and binding on both the parties to the contract. The agreement 
did not mention that any dispute could be referred to the arbitration of H 
181 
RR BANSAL v. U.P. SMALLINDUS. CORPN. LTD. (SUJATAV. MANOHAR, J.) 
183 
. 
.,.._ 
K.K. Mohan for the Appellant. 
A 
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The Judgment of the Court was delivered by 
MRS. SUJATA V. MANOHAR, J. The appellant had entered into a 
contract with the respondent under which the appellant had undertaken 
• 
the work of construction of factory and allied buildings of the respondent B 
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at India Complex, Rae Bareilly. The agreement is dated 19.10.1973. Clauses 
23 and 24 of the agreement are as follows : 
"Decision of the Executive Engineer of the UPSIC to be final on 
certain matters : 
c 
Clause 23 : Except where otherwise specified in the contract, the 
decision of the Executive Engineer shall be final, conclusive and 
binding on both the parties to the contract on all questions relating 
to the meaning, the specification, design, drawings and instructions 
... 
herein before mentioned, and as to the quality of workmanship or D 
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materials used on the work or as to any other question whatsoever 
in any way arising out of or relating to the designs, drawings, 
specifications, estimates, instructions, orders or otherwise concern-
ing the works or the execution or failure to execute the same 
whether arising during the progress of the work, or after the 
completion thereof or abandonment of the contract by the con-
E 
tractor shall be final and conclusive and binding _on the contractor. 
Decision of the M.D. of the U.P.S.l.C. on all other matters shall 
be final: 
Clause-24 : Except as provided in Clause 23 hereof the decision F 
of the Managing Director of the U.P.S.l.C. shall be final, conclusive 
and binding on both the parties to the contract upon all questions 
relating to any claim, right, matter or thing in any way arising out 
of or relating to the contract or these conditions or concerning 
abandonment of the contract by the contractor and in respect of G 
all other matter arising out of this contract and not specifically 
............ 
mentioned herein." 
There were disputes between the appellant and the respondent in 
connection with the payments to be made under the terms of the said 
contract and in connection with the work of the said contract. The appel-
H 
184 
SUPREME COURT REPORTS 
[1999] 1 S.C.R. 
· A lant made an application under Section 8 of the fodian Arbitration Act ' 
1940 before the Civil Judge, Kanpur. He applied for the appointment of 
an independent Arbitrator in the place 

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