Judgment

BEG, J. :- These are three appeals by special leave against the judgment of a Division Bench of the High Court of Jammu and Kashmir, allowing appeals from the judgment of a learned Single Judge. The Jammu and Kashmir Government had filed three applications under Sec. 20 of the Jammu and Kashmir Arbitration Act, 2002, to refer disputes arising out of three agreements between it and the appellant company to arbitration under the arbitration clauses of agreements between the parties. The applications had been dismissed by the learned Single Judge on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly executed in accordance with the provisions of Section 122 (1) of the Constitution of Jammu and Kashmir which correspond to those of Article 299 (1) of the Constitution of India. The Division Bench had allowed the appeals of the Conservator of Forests, Jammu Circle, after holding that the provisions of Section 122 (1) of the Constitution of Jammu and Kashmir could not be said to have been infringed if contracts were signed by the Conservator of Forests in compliance with an order of the Government.

2. The main-stay of the case of the appellant company was an instruction or rule contained in "The book of Financial Powers" which reads as follows :

"5.13. The power to sanction or cancel the terms of instruments, leases, agreements is delegated in the following cases :

S. No. Nature of power To whom delegated Extent

* * * *

* * * *

9. To sell forest produce and to enter into contract for the same. Chief Conservator of Forests. Upto Rs. 7,000/- in value in each case provided the highest tender is accepted.

Conservators of Forests. Upto Rs. 3,000/- in each case provided the highest tender is accepted.

Divisional Forest Officers. Upto Rs. 1,000/- in each case Provided the highest tender is accepted".

3. The Division Bench observed that this rule existed prior to the coming into force of the Constitution of Jammu and Kashmir. It may also be pointed out that this rule deals with the powers to "sanction or cancel" leases, agreements, and other instruments which was delegated to the officers mentioned there with limitations on their powers specified there. But, the Constitutional provision, relied upon on behalf of the appellant, relates to the manner of the execution of the formal document containing the contract after its sanction. It is true that the contract could not be executed without the sanction. Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Government, as we think it could, and if some acts of the Government could fasten some obligations upon the Government, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee.

4. In the case before us, we have agreements from which the appellant company has derived benefits. And, there are contracts validly executed on behalf of the Government of Jammu and Kashmir by the Conservator of Forests. It is true that, if the appellant could take up the legal plea that the contracts were not duly executed, in accordance with Section 122 (1) of the Constitution of Jammu & Kashmir, it could urge that they did not have any effect at all as contracts whatever other legal consequences its acts or conduct may have had. But, this does not mean that, if a party obtains benefits on the understanding that it would abide by certain conditions, as the appellant company had done, it could not be compelled to observe those conditions such as the condition to refer disputes to arbitration. However, in the instant case, we need not go into that question because the plea of a violation of Section 122 (1) of the Jammu and Kashmir Constitution is itself not sustainable for the reasons indicated below.

5. As the Division Bench of the High Court had pointed out, there was a Government order and notification of 23rd February,