AVADH BEHARI ROHATGI, J.

( 1 ) IN this arbitration case the question referred to the Full Bench is one of jurisdiction. Two questions arise on the reference. One whether the Union of India "carries on business" within the meaning of section 20 of the Code of Civil Procedure. Second whether the Delhi Courts have Jurisdiction to entertain an application under sections 14 and 17 of the Arbitration Act against the Union of India not on the ground that the cause of action arose here but solely on the ground that the Union of India has its central seat of power at New Delhi.

( 2 ) THESE are the facts. Gupta Sanitary Stores, petitioner, entered into a contract with the respondent, Union of India, for "improvement of water supply at Joshimath" in 1969-70. There was an arbitration clause in the contract. Disputes arose between the parties. They were referred to the sole arbitration of K. S. Sil, Commander Works Engineer, Bareilly Cantt. He made the award on 31-10-1979. Of the making of the award he gave notice to the parties.

( 3 ) THE petitioner made an application under sections 14 and 17 of the Arbitration Act (registered as Suit No. l358-A of 1979) on the original side of this court praying that the arbitrator be asked to file the award and the award be made a rule of the court.

( 4 ) ON notice from the court the arbitrator filed the award and the proceedings conducted by him. This was separately registered as Suit No. 50-A of 1980. Both the suits were consolidated. Substantially there is only one issue in these proceedings and that is about the validity of the award. But at the moment we are not concerned with this.

( 5 ) ON receipt of the award the court issued notice to the parties of the filing of the award by the arbitrator. The petitioner did not file any objections. The Union of India, on the other hand, has filed objections to the award, the preliminary objection being that this court has no jurisdiction to try the suit. The Union of India has also separately made an application under O. 7 r. 11, Code of Civil Procedure being IA 576 of 1982 praying that the petition be returned to the petitioner for presentation to the proper court on the ground that this court has no territorial jurisdiction to try the suit.

( 6 ) THE court framed the following preliminary issue on 18-2-1982 :

"whether this court has no jurisdiction to entertain this petition ?"

( 7 ) BEFORE the learned judge (S. S. Chadha J.) the Government s case was that the Union of India does not carry on business and that as no part of the cause of action had arisen within the Union Territory the Delhi Courts have no jurisdiction to entertain the suit. it was submitted, and it has not been. disputed before us, that in this case the contract was entered into between the parties in U. P. , and the work was executed in U. P. It was said that the Union of India in the contract was represented by Commander Works Engineer (P) Pithoragarh,whose headquarters were at Pithoragarh and head office at Bareilly and no part of the cause of action had arisen at Delhi. It is maintained that U. P. courts alone have jurisdiction to try the suit. The Government before the learned judge relied on a division bench ruling in Binani Bros. (P) Ltd. v. Union of India, ILR (1975) II Delhi 196 (DB) (1 ). The petitioner, on the other hand, cited a decision of H. L. Anand J. in Bakhtawar Singh Bal Krishan v. Union of India, AIR 1983 Delhi 201 (2 ).

( 8 ) THE learned judge found that the division bench (S. N. Shankar and F. S. Gill JJ) ruling in Binani Bros. had been doubted by H. L. Anand J. in Bakhtawar Singh. By his referring order dated 3-1-83 he referred the question of jurisdiction to a full bench for an authoritative pronouncement. This is how the case has come to us.

( 9 ) BEFORE I deal with the question of Jurisdiction it is convenient to set out the provisions of section 20, Code of Civil Procedure;

"20. Other suits to be instituted where defendants reside or cause of action arises. Subject

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