( 1 ) WHETHER the Union could be said to be "carrying on business", within the meaning of Section 20 of the Code of Civil Procedure, at the principal seat of the Central Government, in New Delhi so as to give territorial jurisdiction to this Court to entertain proceedings on an arbitral award made in the dispute arising in connection with the execution of civil work for modernisation and augmentation of an ordnance factory, is the only question that calls for decision at the present stage of the proceedings.

( 2 ) PLAINTIFF prays for a decree in terms of the Award. made on October 28, 1980, by Brig. Joginder Singh, in the dispute between the plaintiff and the Union, arising out a contract entered into between them in connection with the execution of civil work for modernisation and augmentation of an ordnance factory at Moradnagar. The contract between the parties was admittedly executed at Barreily and the work was to be executed at Moradnagar, both within the State of Uttar Pradesh. No part of cause of action arose within this jurisdiction. By 1. A. 697181, Union objects to the Award being made a rule of this Court, inter alia, on the above ground. Issues were framed on September 24, 1981 and the question of jurisdiction was tried as a preliminary issue.

( 3 ) ON behalf of the Union, jurisdiction was sought to be ousted on two grounds. In the first instance, it was urged that on a combined reading of Sections 2 (c) and 31 (1) of. the Arbitration Act, 1940, for short, the Act, it must be held that the situs of cause of action alone was determinative of the jurisdiction of a Court in matters of arbitration and since no part of the cause of action arose within jurisdiction, this Court could not entertain the present proceedings. Council for the Union was apparently relying on some of the earlier decision of this Court, as indeed, some of the other High Courts, based on the view that the test of situs of the defendant had been excluded from the criterion laid down in the Act for jurisdiction. This question has, for the present, been settled with the decision of the Full Bench of this Court in the case of Shri Ram Rattan Bhartiya vs. The Food Corporation of India and another (1 ). The question, if the scheme of the Act incorporates both the tests with regard to jurisdiction of a Court to my mind, is not free from difficulty primarily because reading into the Act, the test of situs of the defendant would introduce an indeterminate factor depending on which of the parties may initiate proceedings, forming subject matter of the reference, but I am bound by the decision of the Full Bench, and I say so with utmost respect.

( 4 ) THE second contention urged on behalf of the Union to justify exclusion of jurisdiction is that clause (a) of Section 20 of the Code of Civil Procedure, sought to be invoked, would be inapplicable to the Union, in that, neither of the three expressions "actually and voluntarily resides", "carries on business" or "personally works for gain" in the said clause could be considered to be appropriate to the Union, having regard to its composition and functions.

( 5 ) THIS is how Section 20 runs : "20. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, as the time of the commencement of the suit, actually and voluntarily resides, or carries on business or personally works for gain; or (b) any of the defandants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business or personally works for gain provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain; an aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Explanation A corporation shall be de