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of <h1>Supreme Court affirms arbitration agreement validity and award admissibility under Government of India Act.</h1> The Supreme Court upheld the validity of the arbitration agreement dated February 6, 1948, as it was executed by a person authorized by the Governor, ... - Issues Involved:1. Validity of the agreement of reference to arbitration.2. Admissibility of an unstamped copy of the arbitration award for passing a decree.Detailed Analysis:1. Validity of the Agreement of Reference to Arbitration:The appellant contended that the agreement for reference to arbitration did not comply with the requirements of Section 175(3) of the Government of India Act, 1935, making it void and rendering the award a nullity. Section 175(3) stipulates that contracts made in the exercise of the executive authority must be expressed to be made by the Governor-General or Governor and executed by authorized persons.The agreement in question was expressed to be made between the Governor of Bihar and the respondents and was executed by Y. K. Lall, Executive Engineer, Ranchi Division. The key issue was whether the Executive Engineer was authorized by the Governor to execute the agreement.The appellant relied on a notification dated April 1, 1937, which detailed the classes of deeds and contracts that could be executed by various officials. The notification distinguished between instruments relating to the execution of works (item 2) and other instruments (item 12). Both lower courts concluded that the arbitration agreement did not relate to the execution of works and thus fell under item 12, which did not authorize the Executive Engineer to execute it.However, the High Court also found that Y. K. Lall had been specifically authorized to execute the arbitration agreement based on correspondence between the Secretary to the Government and the arbitrator, Col. Smith. The Supreme Court agreed with this conclusion, noting that the Secretary acted on behalf of the Government and directed the Executive Engineer to execute the agreement. The Court held that the authorization under Section 175(3) could be conferred ad hoc and did not require a formal notification in the Official Gazette.Conclusion: The agreement dated February 6, 1948, was valid as it was executed by a person authorized by the Governor, satisfying the requirements of Section 175(3).2. Admissibility of an Unstamped Copy of the Arbitration Award:The appellant argued that no decree could be passed on the unstamped copy of the award filed in court. The facts revealed that the arbitrator sent signed copies of the award to both parties and a third copy to the court. The copy sent to the Government was insufficiently stamped, and the copy sent to the respondents was seized by the police. The third copy in court was validated by the respondents by paying the requisite stamp duty.The appellant contended that under Section 35 of the Indian Stamp Act, 1899, only the original instrument could be validated, not a copy. The Supreme Court acknowledged that secondary evidence of an unstamped document could not be validated. However, the Court determined that the award sent to the court was an original instrument, not a copy, despite being labeled as a 'certified copy.'Conclusion: The award sent to the court was considered an original instrument and was validly stamped and acted upon. Therefore, the decree could be passed based on it.Final Judgment: The appeal was dismissed with costs, affirming the validity of the arbitration agreement and the admissibility of the award for passing a decree.
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