IMPORTANT POINT
The question that arbitrators had no jurisdiction to pass the award in question as the contract is void due to violation of mandatory provisions of DMC Act and its Bye laws and because of this the arbitra tion agreement contained in said contract also fell requires to be considered by a larger 5 Judge Bench in view of some observations in AIR 1963 SC 90.

ORDER

An absolutely inequitable stand taken by the respondent (Delhi Electric Supply Undertaking) has led us to examine some fundamental questions of law. We have opened with this observation inasmuch as the respondent has challenged the award of the arbitrators made in favour of the appellant on the ground that the contract, which contained arbitration agreement, is void, because of which there is no agreement to refer the dispute to arbitration ; and so, the arbitrators had no jurisdiction to pass impugned award. Such a stand flies on the face of the respondent inasmuch as of the two arbitrators, one, namely Shri K.L. Vijh, had been appointed by the respondent itself. But as the award ultimately want in favour of the appellant, it raised the question of jurisdiction. We have no doubt in our mind that such a stand is inequitable, indeed highly inequitable. Question, however, is whether the law permits such a question to be raised.

2. The High Court accepted the contention that the contract was void inasmuch as Sections 201 and 203 of the Delhi Municipal Corporation Act read with bye law 3(1)(a) were violated. Dr. Singhvi, appearing for the respondent has urged that the contract being void, along with it fell the arbitration agreement contained in the contract, because of which the arbitrators had no jurisdiction to pass the award in question.

3. It is further submitted that in such a case appearance of the respondents in the proceeding, i.e. its acquiscence, would not alter the situation in view of what has been held by a Constitution Bench of this Court in Wayerley Jute Mills Co. Ltd. v. Raymon and Co. (India) Pvt. Ltd.1, in paragraph 21 of which it was stated that "an agreement for arbitration is the very foundation on which the jurisdiction of the arbitrators to act rests, and where that is not in existence, at the time when they enter on their duties, the proceedings must be held to be wholly without jurisdiction. An this defect is not cured by the appearance of the parties in those proceedings even if that is without protest, because it is well settled that consent cannot confer jurisdiction."

4. The aforesaid stand brings to the fore that following fundamental questions of law :-

(1) Whether the present was a case of contract being void or voidable ?

(2) Whether a mandatory provision cannot at all be waived ?

5. As we are proposing to refer the matter to a Constitution Bench, we may not dilate the questions, except stating that a perusal of "Administration Law" by Wade and Forsyth (7th Edn. pages 339 to 344) would show that in Ridge v. Baldwin2, some of the dissenting judges of the House of Lords suggested that even ultra vires action might be merely voidable. Reference has also been made to what was held in Anisminic Ltd. v. Foreign Compensation Commission3, which has dealt with the question whether there are degrees of nullity. As to of waiver of a mandatory provision, we may refer to a recent decision of this Court in Krishan Lal v. State of J&K4, in which this aspect has been dealt in paras 16 to 25. It has been pointed out that even a mandatory provision can be waived, if the provision be intended for the benefit of the concerned person, as distinguished from one which serves "an important purpose" in which case there would be no waiver.

6. In this connection we may also refer to the provision contained in Section 4 of the Arbitration and Conciliation Ordinance, 1996, which is on the subject of "Waiver or right to object". It has laid down that a party who knows (a) any provision of this Part from which the parties may derogate, or (b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay shall be deemed to have waived his right to so object.

7. Another legal aspect is also involved in the present case. The same is whether an arbitration agreement