The doctrine of privity of contract applies, and a third party has no standing to challenge an arbitral award under Section 34 of the Arbitration & Conciliation Act.

JUDGMENT :

A. AA No.12/2021

1. The instant appeal has been preferred by the appellants under Section 37 of the Arbitration and Conciliation Act, 1997 (hereinafter referred to as "the Act") against the order dated 15.02.2021 passed by the learned 1st Additional District Judge, Jammu in a petition filed under Section 34 of the Arbitration and Conciliation Act, 1997. Learned 1st Additional District Judge while dismissing the said petition of appellants herein held that the Chief Engineer, who was a party to the arbitration agreement and arbitration proceedings before the arbitrator, did not file the petition under Section 34 of the Arbitration & Conciliation Act, rather the same came to be filed by the Garrison Engineer, who was not a party to the arbitration agreement, as such the Garrison Engineer being an outsider cannot step into the shoes of the Chief Engineer and challenge the arbitral award.

2. The facts, as gathered from the appeal file, are that the respondent-contractor being the successful bidder was allotted a contract for construction of storage sheds and connected works including storage facility at Nagrota. A contract agreement to this effect was executed between the Union of India through Chief Engineer, Udhampur Zone and M/s. Des Raj Nagpal, Engineers and Contractors. Since a dispute arose between the parties to the contract, as such in terms of arbitration clause, one Sh. Satish Chander, Addl. Director General was appointed as the sole arbitrator to adjudicate upon the dispute between the parties to the contract. The sole arbitrator entered upon the reference, made and published the award dated 12.09.2016, which was amended on 22.10.2016, whereby some claims of the contractor were partly sustained and some of them were rejected. Appellants/petitioners feeling aggrieved challenged the award under Section 34 of the Arbitration & Conciliation Act before the 1st Additional District Judge, Jammu. However, the court below vide order dated 15.02.2021 dismissed the same holding that the Chief Engineer, who was a party to the arbitration agreement and arbitration proceedings before the arbitrator, did not file the petition under Section 34 of the Arbitration & Conciliation Act, rather the same came to be filed by the Garrison Engineer, who was not a party to the arbitration agreement, as such the Garrison Engineer being an outsider cannot step into the shoes of the Chief Engineer and challenge the arbitral award. Hence, the present appeal under Section 37 of the Arbitration & Conciliation Act, 1997.

3. Learned counsel appearing for appellants argued that the contract was not between the Chief Engineer and the contractor, but between the contractor and Union of India although through the Chief Engineer. He further argued that under Article 229 of the Constitution of India, all contracts made in the exercise of the executive power of the Union shall be expressed to be made by the President though, in the present case, the same has been signed by the Chief Engineer for and on behalf of the President, which does not make it a contract between the contractor and the Chief Engineer. The finding of the Court below to this effect, as such, is fallacious and unconstitutional and is liable to be set aside.

4. Learned counsel further argued that while Article 299 of the Constitution of India applies only to the execution of contracts in exercise of executive powers of the Union, the authority to sign pleadings is governed by Order XXVII Rules 1 & 2 CPC. He also argued that vide Notification No. G.S.R. 167 dated 14.02.1990 read with Rules 1 & 2 of Order XXVII of the First Schedule to CPC, the Garrison Engineer being one of the authorized officers, specified in the Schedule, has been duly competent and authorized to sign the pleadings and to act for the Union of India. He further argued that the contract-in-question was governed by General Conditions of Contract and in terms of Condition 69 thereof, all notices to be given on behalf of th