Government arbitration authorisation and stamp validation principles: ad hoc authority and original award status sustained the award.
Section 175(3) of the Government of India Act, 1935 was treated as permitting ad hoc authorisation for Government contracts and arbitration references without any prescribed formal notification. On the facts, directions issued through the Secretary and the Executive Engineer's execution of the agreement were sufficient to show valid Government authorisation for the arbitration reference. The document also states that, under the Stamp Act, an unstamped original instrument may be validated, but a mere copy cannot; however, the award filed in court was held to be the original instrument signed in triplicate, despite being described as a certified copy, so the stamp objection failed.
Issues: (i) Whether the agreement for reference to arbitration was validly executed on behalf of the Government under section 175(3) of the Government of India Act, 1935. (ii) Whether a decree could be passed on the award filed in court when the instrument before the court was described as an unstamped certified copy.
Issue (i): Whether the agreement for reference to arbitration was validly executed on behalf of the Government under section 175(3) of the Government of India Act, 1935.
Analysis: Section 175(3) required that contracts made in the exercise of executive authority be expressed to be made by the Governor and be executed by such persons and in such manner as the Governor may direct or authorise. The correspondence showed that the Secretary to Government had throughout taken the lead in arranging arbitration, that the Government had decided to have the claim determined by arbitration, and that the Executive Engineer was requested to execute the necessary agreement. The Court held that the section did not require authorisation to be confined to a formal notification and that authority could be conferred ad hoc. The Secretary's directions, issued on behalf of the Government, sufficiently established authorisation.
Conclusion: The arbitration agreement was validly executed by a person authorised by the Governor, and the reference to arbitration was valid.
Issue (ii): Whether a decree could be passed on the award filed in court when the instrument before the court was described as an unstamped certified copy.
Analysis: Under section 35 of the Indian Stamp Act, 1899, an unstamped or insufficiently stamped original instrument may be validated on payment of duty and penalty, but secondary evidence or a mere copy cannot be so validated. The Court found that the document sent by the arbitrator to the court was not a copy in law but the original award, prepared and signed in triplicate, and the description as a certified copy did not change its true character. Since the original instrument was before the court, it could be acted upon after validation.
Conclusion: The award in court was the original instrument, and no objection based on want of stamp duty survived.
Final Conclusion: The challenge to the award failed on both grounds, and the decree in terms of the award was upheld.
Ratio Decidendi: Authorisation under section 175(3) of the Government of India Act, 1935 may be conferred ad hoc without any prescribed formal mode, and an award signed and filed in triplicate is the original instrument notwithstanding a mistaken description as a certified copy.
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