HARI DUTI BHARDWAJ versus HARYANA STATE AGRICULTURE MARKETING BOARD, PUNCHKULA & ANR.

Citation: [1989] 2 S.C.R. 849 · Decided: 01-05-1989 · Supreme Court of India · Bench: R.S. PATHAK, S. NATARAJAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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HARI DUTI BHARDWAJ 
v. 
HARYANA STATE AGRICULTURE MARKETING BOARD, 
PUNCHKULA & ANR. 
MAY 1, 1989 
[R.S. PATHAK, CJ. AND S. NATARAJAN, J] 
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Arbitration Act, 1940: Sections 14 and 30.-Award-Whether 
arbitrator had jurisdiction-Dispute referred to Superintending 
Engineer Agricultural Marketing Board-A State Government officer 
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on deputation to the Board-Award made when arbitrator was on trans-
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fer to parent department-State Government ordering continuance on 
deputation-Salary paid by Marketing Board-Held arbitrator had 
jurisdiction to make award. 
The respondent-Marketing Board, entered into a contract with 
the appellant for the construction of their office building. The agree-
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ment stipulated that the Superintending Engineer of the Marketing 
Board would be appointed as the sole Arbitrator in case of a dispute. 
A dispute arose in regard to the completion of the construction, 
and it was decided to refer the matter to arbitration. On 11th March, 
1983 the respondent appointed Shri Gupta, Superintending Engineer of E 
the Marketing Board as Arbitrator. While the Arbitrator was seized of 
the dispute, the Chairman of the Marketing Board purported to revert 
him to his parent department. 
On 6th April, 1984, the Arbitrator made his award which was in 
favour of the appellant. On 2nd May, 1984 the appellant applied to the 
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Sub-Judge for making the award a rule of the Court. In the meanwhile, 
on 24th May, 1984, the State Government passed an order confirming 
that Shri Gupta continued in the post as Superintending Engineer. On 
28th February, 1985, the Marketing Board passed a resolution giving 
effect to the said direction of the Government and extending the deputa-
tion tenure of Shri Gupta to 3rd September, 1985. On 30th July 1985, G 
the Trial Court made the award a rule of the Court. 
In the appeal to the High Court it was urged that on 6th April, 
1984 the date on which the Arbitrator made his Award, the Arbitrator 
had lost jurisdiction since he had been transfered on 4th April, 1984 
from the post of Superintending Engineer of the Marketing Board to his 
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849 
850 
SUPREME COURT REPORTS 
[ 1989] 2 S.C.R. 
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parent department in the State Government. The High Court accepted 
this plea and ~eversed the order of the Trial Court and set aside the 
Award. 
In the appeal by the contractor to this Court, the question was; 
whether the Arbitrator, Sbri Gupta bad jurisdiction to make the award 
B on 6th Apnl, 1984 or had lost jnrisdiction becanse of the order dated 
4th April, 1984 reverting him to his parent department. 
Allowing the appeal, · 
HELD: 1. Shri Gnpta was on deputation with the Marketing 
C Board up to September 4, 1984. He was prematmely required by the 
Chairman of the Marketing Board by order dated 4th April, 1984 to 
revert to his parent department. The State Government, however, 
ordered on 24th May, 1984 that Shri Gupta would continue on deputa-
tion with the Board. In fact, Shri Gupta did not even resume a post in 
his parent department. [852A-B] 
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2. The necessary consequences of the order of the State Govern-
ment continuing Sbri Gupta on deputation with the Marketing Board 
was to nullify the order dated 4th April, 1984 passed by the Chairman 
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purporting to revert him to his parent department. It is clear from the 
records that Sbri Gupta was paid his salary by theMarketing Board for 
E the entire month of April 1984, a circumstance which establishes that he 
was continuing with the Board when he made the Award. Sbri Gupta 
must, therefore, be deemed to have enjoyed jurisdiction as Arbitrator 
on 6th April, 1984 when he made the Award. The deputation of Sbri · 
Gupta with the Marketing Board did never terminate. [8528-D l 
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2591 
of 1989. 
From the Judgment and Order dated 12.3.1986 of the Punjab 
and HaryanaHigh CourtinF.A.O. No. 986of 1985. 
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Rajinder Sachar, E.S. Agarwala, H.D. Bhardwaj, J.S. Manhas 
and R.K. Kapoor for the Appellant. 
Dr. Y.S. Chitale, K.B. Rohatgi and Baldev Atreya for the 
Respondents. 
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The Judgment of the Court was delivered by 
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H.D. BHARDWAJ v. H.S.A.M. BOARD [PATHAK, CJ.] 
851 
PATHAK, CJ. Special leave granted. 
This appeal by special leave is directed against the order of the 
Higb Court of Punjab and Haryana setting aside an arbitration award. 
A 
The Haryana State Agricultural Marketing Board (referred to 
shortly as the "Marketing Board") entered into a contract with
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