INTERNATIONAL AMUSEMENT LIMITEDversusINDIA TRADE PROMOTION ORGANISATION &ANR.

                  [2014] 13 S.C.R. 1281


        INTERNATIONALAMUSEMENT LIMITED                       A
                            v.
   INDIA TRADE PROMOTION ORGANISATION &ANR.
             (Civil Appeal No. 11474of2014)
                                                             B
                  DECEMBER 17, 2014
     [V. GOPALA GOWDA AND C. NAGAPPAN, JJ.]
       Arbitration and Conciliation Act, 1996
s. 11 (6) -Appointment of arbitrator-Agreement between the
appellant running amusement park and ITPO for allotment      c
of land on licence basis-As per clause 28 of the agreement,
any dispute arising out of or in connection with the agreement
was to be referred to sole arbitration of the Chairman of ITPO
or his nominee whose decision/award shall be final - After
expiry of licence period, ITPO issued a notice u/s.4A of PP D
(E of U O)Act, 1971 to the appellant to evict from the land of
its unauthorised occupation -Application for arbitration filed
by appellant - Estate Officer rejected the application on the
ground that after expiry of licence period, appellant· became
unauthorised occupant and there was no dispute between E
parties that could be agitated as raised by appellant and that
the Estate Officer exercises his jurisdiction as provided under
the provisions of PP Act - Held: s. 2(3) of Arbitration Act
protects the existing laws, both common law as well as
statutory Jaw under which some disputes cannot be made F
subject matter of arbitration - s.15 rlw s.5 and 7 of PP Act
confers exclusive jurisdiction on the Estate Officer appointed
uls.3 of PP Act to deal with the application that is filed by
 ITPO to evict unauthorised occupants from public premises
- s. 15 further bars and prohibits any court from entertaining G
 any suit or proceeding for eviction from the premises as
provided ulclauses (a) to (e) of s.15- In view thereof, clause
 28 in the licence agreement is not an arbitration agreement

                                                              H
                           1281
1282         SUPREME COURT REPORTS              [2014] 13 S.C.R.


 A between the parties - Therefore, the appointment of an
       arbitrator by the nominee of the Chief Justice was rightly
       rejected by High Court - Public Premises (Eviction of
       Unauthorised Occupants) Act, 1971-ss.2(3), 3, 5and15.
           Konkan Railway Corporation. Ltd. v. Mehul
 B         Construction Co. (2000) 7 SCC 201 : 2000 (2)
           Suppl. SCR 563 ; Konkan Railway Corpn. Ltd. v.
           Rani Construction Pvt. Ltd. (2002) 2 SCC 388 :
           2002 (1) SCR 728 ; SBP & Co. v. Patel
           Engineering Limited and Anr. (2005) 8 SCC
 c         618 : 2005 (4) Suppl. SCR 688 ; Maharshi
           Dayanand University v. Anand Coop. UC Society
           Ltd. and Am: (2007) 5 SCC 295 : 2006 (8) Suppl.
           SCR 105 ; S.N. Prasad, Hitek Industries (Bihar)
           Ltd. v. Monnet Finance Ltd. (2011) 1 SCC 320 :
 p         2010 (13) SCR 207; Andhra Pradesh Tourism
           Development Corpn. Ltd. and Anr. v. Pampa
           Hotels Ltd. (2010) 5 SCC 425 ; Kamal Pushp
           Enterprises v. D.R. Construction Company (2000)
           6 .sec 659 : 2000 (2) Suppl. SCR 20 ; Firm
 E         Ashok Traders & Anr. Ii. Gurumukh Das Saluja &
           Ors. (2004) 3 sec 155 : 2004 (1) SCR 404 ;
           Ashoka Marketing Ltd. & Anr. v. Punjab National
           Bank (1990) 4 sec 406 : 1990 (3) SCR 649 ;
           Haryana Telecom Limited v. Sterlite Industries
 F         (India) Limited (1999) 5 SCC 688 : 1999 (3) SCR
           861 ; P Dasaratharama Reddy Complex v.
           Government of Karnataka & Anr. (2014) 2 SCC
           201 ; Mysore Construction Company v. Karnataka
           Power Corporation Ltd. ILR 2000 KAR 4953 ;
G          K.K. Modi v. K.N. Modi and Ors. Chief
           Conservator of Forests, Rewa v. Ratan Singh Hans
           AIR 1967 SC 166 : 1966 SCR 158 ; Rukmanibai
           Gupta v. The Collector, Jabalpur (1980) 4 SCC
           556 ; State of Uttar Pradesh v. Tipper Chand
H
 INTERNATIONALAMUSEMENT LTD. v. INDIATRADE                1283
          PROMOTION ORGANISATION

   (1980) 2 SCC 341 ; State of Orissa v. Damodar          A
   Das (1996) 2 sec 216 : 1995 (6) Suppl. SCR
   800 ; Bharat Bhushan Bansal v. Uttar Pradesh
   Small Industries Corporation Ltd., Kanpur(1992)
   2 SCC 166 ; State of Maharashtra v. Ranjeet
   Construction AIR 1986 Born 76 ; Mallikarjun v.          B
   Gulbarga University (2004) 1 SCC 372 : 2003 (5)
   Suppl. SCR 272 ; Punjab State v. Dina Nath
   (2007) 5 SCC 28 : 2007 (6) SCR 536 - relied on.
    Russell, on Arbitration 19th Edition, page 59;
    Russell, on Arbitration (21 51 Edn.)- referred to.     c
               CASE LAW REFERENCE
2000 (2) Suppl. SCR 563       relied on.       Para 10
2002 (1) SCR 728              relied on.        Para 10
                                                           D
2005 (4) Suppl. SCR 688       relied on.        Para 11
2006 (8) Suppl. SCR 105       relied on.        Para 11
2010 (13) SCR 207 ·           relied on.        Para 11
(2010) 5 sec 425              relied on.        Para 12    E
2000 (2) Suppl. SCR 20        relied on.        Para 12
2004 (1) SCR 404              relied on.        Para 12
1990 (3) SCR 649              relied on.        Para 12
                                                           F
1999 (3) SCR 861              relied on.        Para 15
(2014) 2 sec 201              relied on.        Para 17
ILR 2000 KAR 4953             relied on.        Para 17
1966 SCR 158                  relied on.        Para 17    G
(1980) 4 sec 556              relied on.        Para 17
(1980) 2 sec 341              relied on.        Para 17
1995 (6) Suppl. SCR 800       relied on.        Para 17
                                                            H
1284           SUPREME COURT REPORTS              [2014) 13 S.C.R.


 A (1992) 2 sec 166                  relied on.        Para 17
       AIR 1986 Bom 76               relied on.        Para 20
       2003 (5) Suppl. SCR 272       relied on.        Para 23
       2007 (6) SCR 536              relied on.        Para 23
 B
         CIVIL APPELLATE JURISDICTION : Civil Appeal No.
     11474of2014.
           From the Judgment and Order dated 16. 07 .2007 of the
     Division Bench of the Delhi High Court in Writ Petition No.
c    2015of2001.
                                    With
           Civil Appeal No. 11475 of 2014.
       Ms. Prathibha M. Singh, Sr. Adv., Gaurav Sharma,
D Abhinav Muke~i, Advs. for the Appellant.
           Ravi Sikr-i, Sr. Adv., Gaurav Goyal, Ms. Madhu Sikri,
     Vishnu B. Saharya, Mis. Saharya &'Co., Mis. S. Narain & Co.,
     S. W.A. Qadri, Ms. M. Diwan, Ms. P. L. Mag am, Ms. Sushma
     Suri, Advs for the Respondents.
E
           The Judgement of the Court was delivered by
          V. GOPALA GOWDA, J. 1. Leave granted.
        2. These appeals are directed by the appellant against
F the common impugned judgment and order dated 16. 07 .2007
  passed in writ petition (c) No. 2015 of 2001 and C.M. (M)
  No.553/2007 by the High Court of Delhi, urging various facts
  and legal grounds and raising two substantial questions of
  law which read thus:-
G         a)    Whether the arbitration proceedings can be
                continued between the International Amusement
                Limited and the India Trade Promotion
                Organisation?
          b)    Whether the Estate Officer appointed as Arbitrator
H               is the correct forum?
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                    1285
 PROMOTION ORGANISATION [V. GOPALAGOWOA, J.]

       Necessary brief facts are stated hereunder with a view A
to find out whether the questions of law framed in these appeals
would arise for our consideration.
       3. The appellant herein was running a!"' amusement park
in Pragati Maidan, New Delhi since the year 1984, which was
well known as "Appu Ghar''. The land for the purpose was initially B
allotted to the appellant by India 1rade Promotion Organisation
(for short 'the ITPO) on licence basis as the lease between the
Central Government and the ITPO was still pending and as
such permanent allotment of the land could not be made in
favour of the appellant. Only as an administrative measure, C
the license agreements were entered into between the
appellant and the ITPO. The appellant claimed that it was the
 permanent allottee of the land for running the amusement park
 on the similar lines as were allotted in favour of the Statutory ·
 Corporations/Instrumentalities of the State and Central D
 Government. It was only on the assurance. of the Land &
 Development Office (for short "the L&DO"), Ministry of Urban
 Development and ITPO that the appellant made huge amount
 of investment for establishing and running "Appu Ghar". The
 last agreement entered into between the parties was on E
 6.11.1995. In the said agreement, arbitration clauses 27 and
 28 were incorporated, which are extracted hereunder:-
      "27. The licensed premises are public premises as
      defined in the Public Premises (Eviction of Unauthorised F
      Occupants) Act, 1971 and fall within the jurisdiction of
      the Estate Officer, Pragati Maidan.
      28. In case of ariy dispute arising out of or in connection
      with this agreement the disputes shall be referred to the
      sole arbitration of the Chairman, India Trade Promotion G
      Organisation or his nominee whose decision/award shall
      be final, conclusive and binding on the parties.
      Application for reference to arbitration shall be made by
      either party within two months of arising of the dispute."
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1286        SUPREME COURT REPORTS                     [2014] 13 S.C.R.


 A        4. The case of the appellant is that it being a permanent
   allottee of the land at Pragati Maidan, it had made huge
   investments for opening Water Park, in order to provide
   additional amusement facilities to the public at large. The ITPO
   being aware of the permanent status of the appellant in respect
 B of the land as well as the factum of huge investments made by
   it upon the same towards establishing the Water Park, called
   upon the appellant to vacate'the premises vide letter dated
   02.09.1999. The appellant has raised various disputes, claims
   and counter claims against the ITPO.
c           5. Immediately after the notice was received by the
      appellant, it submitted a detailed representation to ITPO with
      a requestto renew the lease of the land for further period. Being
      unsuccessful, the appellant commenced proceedings under
     the Arbitration and Conciliation Act, 1996 (for short "the
D    Arbitration Act") invoking its right under clause 28 of the
     agreement referred to supra. The arbitration notice dated
      11. 11.1999 was issued to the ITPO invoking the provisions of
     clause 28 of the aforesaid licence agreement and filed an
     application under Section 8 of the Arbitration Act before the
E    Estate Officer for referring the matter for arbitration. On
     18.11.1999 ITPO issued notice of eviction under Section 4A
     of the Public Premises (Eviction of Unauthorized Occupants)
     Act, 1971 (for short "the P. P. Act") to the appellant to evict from
     the land of its unauthorised occupation. The application for
F    arbitration filed by the appellant was rejected by the Estate
     Officer vide his order dated 28.3.2000 on the ground that the
     Estate Officer exercises his jurisdiction as provided under the
     provisions of the P.P. Act. It was further stated that it is an
     admitted case that the premises in Pragati Maidan for running
G    Appu Ghar was given to the appellant on licence basis and on
     expiry of the licence period the appellant becomes an
     unauthorised occupant as defined under Section 2(g) of the
     P. P. Act and therefore, it was required to vacate the premises
     and hand over the same to ITPO, hence, the appellant cannot
H
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                      1287
 PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

take up the plea that it was a permanent allottee of the premises A
involved in this case and that there was no dispute at all between
the parties, which could be agitated as raised·bythe appellant.
      6. Being aggrieved by the order of Estate Officer, the
appellant filed W.P. (C) No.1425 of 2000 before the Delhi High
Court questioning the correctness of the order passed by him. B
Thereafter, on 08.05.2000, the appellant filed an application
being A.A. No.111 /2000 under Section 11 (6) and petition OMP
No. 63/2000 under Section 9 of the Arbitration Act before the
Chief Justice of Delhi High Court. The learned single Judge,
who is the nominee of the learned Chief Justice, vide his order C
dated 23.01.2001 allowed the application by appointing an
arbitrator for deciding the disputes between the parties through
the process of arbitration.
        7. Aggrieved by the said order, the ITPO filed Writ Petition D
(C) No.2015 of 2001 before the Division Bench of Delhi High
Court, challenging the correctness of the order of appointment
of the arbitrator by the High Court. On 12.04.2001, the High
Court stayed the arbitration proceeding which has been in force
till the disposal of the writ petition.
                                                                     E
        8. During the pendency of the above matter, some part
of "Appu Ghar" land was required by Delhi Metro Rail
Corporation for construction of Pragati Maidan Metro Station
which was handed over by the appellant to the ITPO. Thereafter,
the land of Appu Ghar was resumed by the L&DO and the F
same was allotted to the Supreme Court Registry for its
expansion plan.
      9. The High Court vide its common order dated
16.7.2007 allowed WritPetition (C)No. 2015 of2001 filed by
the ITPO holding that the matters enumerated under Section G
15 of the P. P. Act cannot be referred to arbitration for
adjudication for arbitrator. The application C.M. (M) No. 553
of 2007 filed by the appellant was also dismissed. Hence,
these appeals.
                                                              H
1288       SUPREME COURT REPORTS                  [2014] 13 S.C.R.


"A        10. It is contended by Mrs. Pratibha M. Singh, the learned
   senior counsel for the appellant that the legal position
   prevailing with respect to Section 16 of the Arbitration Act, was
   that any directions qua-jurisdiction ought to be raised before
   the Arbitrator and the same cannot be adjudicated under
 8 Section 11 of the Arbitration Act by the Judge who is a
   designate of the Chief Justice under Sections 1.1 (6) and 11 (7)
   of the Arbitration Act as per the law laid down by this Court in
   its judgments in Konkan Railway Corporation. Ltd. and Ors.
   v. Mehul Construction Co. 1 and Konkan Railway Corpn.
 C Ltd. and Anr. v. Rani Construction Pvt. Ltd. 2
         11. Further reliance was placed by the learned senior
   counsel upon the Constitution Bench decision of this Court in
   SBP& Co. v. Patel Engineering LimitedandAnr. 3 , wherein
  this Court has succinctly held that power under Section 11 (6)
D of the Arbitration Act is not an administrative power of either
  the Chief Justice of the High Court or his designate but a judicial
  power. The said position of law was re-affirmed and re-
  emphasized by this Court in Maharshi Dayanand University
  and Anr. v. Anand Coop. UC Society Ltd. and Anr.' and
E again in the case of S.N. Prasad, Hitek Industries (Bihar)
  Ltd. v. Monnet Finance Ltd. and Ors. 5 in support of the above
  said proposition of law. Further reliance was placed by the
  learned senior counsel on behalf of appellant on another
  judgment in the case of Andhra Pradesh Tourism
F Development Corpn. Ltd. and Anr. v. Pampa Hotels Ltd. 6
        12. It is further contended by the learned senior counsel
  that under Section 15 of the P.P. Act, the bar of jurisdiction
  applies only to a Court and placed reliance on the judgments
G in the cases of Kamal Pushp Enterprises v. D.R.
    (2000) 7 sec 201
     1

    (2002) 2 sec 388
     2
  3
    (2005) 8 sec 618
  4
    (2007) 5 sec 295
  5
    (2011) 1 sec 320
H 6(201 o) 5 sec 425
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                 1289
 PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

Construction Company 7, Firm Ashok Traders & Anr. v. A
Gurumukh Das Saluja & Ors. 8 and Ashoka Marketing Ltd.
& Anr. v. Punjab National Bank & Ors. 9.
      13. Without prejudice to the above legal contentions, the
learned senior counsel also contended that though in general,
licences may be governed by the P.P. Act, in the case on hand, B
the agreement and the nature of relationship between the
parties was not that of a licensee and licensor, as it is evident
from the various documents produced on record by the
appellant. There are several documents spanning from 1980s
to 1997 which reflect that the Government's intention was C
 always to raise the appellant as permanent allottee of the land.
 However, for various reasons and subsequent events, the
 permanent allotment of land was not made despite the huge
 investments made by the appellant and the appellant was
 forced to vacate the premises. It was under these D
 circumstances, the Government was conscious of the different
 nature of the relationship of parties and the arbitration clause
 was incorporated in the license agreement.
       14. On the other hand, Mr. Ravi Sikri, the learned senior E
counsel appearing on behalf of the ITPO and Mrs. M. Diwan,
learned counsel on behalf of Union of India rebutted the above
said contentions urged on behalf of the appellant contending
that arbitration clause 28 in the agreement does not deal with
the arbitration under the provisions of the Arbitration Act. The F
learned senior counsel contended that the Division Bench of
Delhi High Court after examining the provisions of Section 5
and in the light of Section 2(3) of the Arbitration Act, held that
 Section 2(3) protects the existing laws, both common law as
well as statutory law, under which some disputes cannot be G
 made subject matter of arbitration. Further, it is urged that the
 Division Bench of the High Court has rightly held that Section
 1
  (2000) 6 sec 659
 8(2004) 3  sec 155
 9
   (1990) 4 sec 406                                             H
1290        SUPREME COURT REPORTS                     [2014] 13 S.C.R.


 A 15 read with Sections 5 and? of the P.P. Act, confers exclusive
     jurisdiction on the Estate Officer appointed under Section 3 of
     the P. P. Act, to deal with the application that is filed by the ITPO
     to evict unauthorised occupants from the. public premises and
     pay the damages as provided under Sections 5 and 7 of the
 B P.P. Act respectively. Further, Section 15 of the P.P. Act bars
     and prohibits any court from entertaining any suit or proceeding
     for eviction from the premises etc. as provided under clauses
     (a) to (e) of Section 15 and thatthe general power of the Court
     under Section 9 of the Code of Civil Procedure, 1908 to
c entertain suit or proceedings is therefore ousted if a dispute
    raised by the appellant falls in clauses (a) to (e) of Section 15
    of the P. P. Act. It was further contended that the Division Bench
    of the High Court rightly held that the provisions of Sections 5
    and 7 of the P. P. Act empower the Estate Officer appointed
D under Section 3 of the P.P. Act to deal with applications that
    will be filed by the respondent-ITPO for eviction of unauthorised
    occupation and for payment of rent and damages in respect
    of the public premises against the unauthorised occupants.
    Sections 5 and 7 of the P.P. Act conferred exclusive jurisdiction
E upon the Estate Officer a11d makes it very clear that he alone
    has sole and exclusive Jurisdiction to decide such applications
   of the ITPO in respect of the dispute regarding public
   premises. The said jurisdiction conferred upon the Estate
   Officer by the statute cannot be taken away by a contract
F between the parties by incorporating arbitration clause in the
   agreement or made subject matter of any dispute in relation
   to the public premises which will be in occupation of the
   licensee for refe.rence before an arbitrator to arbitrate the
   same. It cannot be waiver of statutory provisions of the P.P.
G Act. The contract between the parties must be within the legal
  framework and parties cannot contract out of the statute.
   Further, it was contended that the Estate Officer having
  exclusive jurisdiction is not arbitrable and parties by a contract
  cannot agree to refer the matters in respect of which jurisdiction
H has been conferred upon the Estate Officer. Therefore, the
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                      1291
 PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

arbitrability of claims of the appellant covered under Sections A
5 and 7 of the P.P. Act, is excluded. To arrive at the said
conclusion, the Division Bench of the High Court rightly placed
reliance upon the Constitution Bench judgment of this Court in
the case of Ashoka Marketing Ltd. (supra), wherein the legal
question that arose was as to whether the Rent Control B
Act, 1995, which is also a Special .Act will override the
provisions of the P.P. Act. After interpreting the relevant
 provisions of the Act, the Constitution Bench of this Court in
 the above case has held that the P. P. Act, is a special statute
 relating to eviction of unauthorised occupants from public c
 premises and therefore, the same will prevail over the Rent
 Control Act. In the said case it was held that the ·1971
 enactment did away with the option of the parties and conferred
  exclusive jurisdiction on the Estate Officer in relation to the
  public premises. The power and jurisdiction of a civil court to D
  adjudicate matters enumerated under Section 15 of P. P. Act
  was withdrawn.
      15. Further, reliance was placed by the learned senior
 counsel for the respondents upon the judgment of this Court in
 Haryana Telecom Limited v. Sterlite Industries (India) E
 Limitecf0, wherein, this Court has referred to the provisions of
 the Companies Act and held that power to wind up a company
 is conferred on the Company Court. The said power cannot
 be subject matter of arbitration.
                                                                    F
       16. In view of the above rival legal contentions urged on
 behalf of the parties, to answer the aforesaid substantial
 questions of law, it is necessary for us to examine arbitration
 clause 28 of the license agreement dated 06.11.1995 entered
 between the parties, which has been extracted in the earlier G
 portion of this judgment.
       This Court must accept the contention of the learned
 senior counsel on behalf of the ITPO that the said clause in the
 licence agreement is not an arbitration agreement between
 10   (1999) s sec 688                                              H
1292        SUPREME COURT REPORTS                [2014] 13 S.C.R.


 A the parties for the reasons discussed below.
           17. The three Judge Bench decision of this Court (of
     which two of us were members) in P. Dasaratharama Reddy
     Complex v. Government of Karnataka & Anr. 11, while
    examining a similar clause of an arbitration agreement, after
 B careful consideration and interpretation of the clause, has held
    that in all the matters of dispute arising out of the agreement
    regarding quality of materials and work, etc., the decision of
    the Board of Directors of the Nagarika Yogbakashema Mathu
    Gruha Nirmana Sahakara Sangha, shall be final and binding
C on the part of the Contractor. Further, the case of Mysore
    Construction Company v. Karnataka Power Corporation
    Ltd. & Ors. 12 was discussed in P. Dasaratharama Reddy
    (supra) by this Court, at para 14, wherein, the Designated
    Judge has referred to the passage from Russell, on
D Arbitration ( 191h Edition, page 59) and the other judgments
    of this Court in K.K. Modi v. K.N. Modi and Ors., Chief
    Conservator of Forests, Rewa v. Ratan Singh Hans 13,
   Rukmanibai Gupta v. The Collector, Jabalpur14, State of
    Uttar Pradesh v. Tipper Chand 15, State of Orissa v.
E Damodar Das16, Bharat Bhushan Bansal v. Uttar Pradesh
   Small Industries Corporation Ltd., Kanpur17 and observed
   that the decisions in the abovementioned cases make it clear
   by laying down the conditions, when an agreement or a clause
   in the agreement can be construed as an arbitration agreement
F between the parties.
         18. Further, at paragraph 16 of P. Dasaratharama
    Reddy (supra), the distinction between an expert
    determination and arbitration between the parties has been
G   11 (2014) 2 sec 201
    12 ILR 2000 KAR 4953
    13
       AIR 1967 SC 166
    14 (1980) 4 sec 556

  . 15(1980) 2 sec 341
    10(1996) 2 sec 216
H 11 (1992) 2 sec 166.
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                    '.1293
 PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

spelt out as per Russell, on Arbitration (21st Edn.) in the A
following words:-
     " 16 ...... Many cases have been fought over whether a
     contract's chosen form of dispute resolution is expert
     determination or arbitration. This is a matter of
     construction of the contract, which involves an objective 8
     enquiry into the intentions of the parties. First, there are
     the express words of the dis~utes clause. If specific words
      such as 'arbitrator', 'Arbitral Tribunal', 'arbitration' or the
      formula 'as an expert and not as an arbitrator' are used
      to describe the manner in which the dispute resolver is C
      to act, they are likely to be persuasive although not always
      conclusive .... Where there is no express wording, the
      court will refer to certain guidelines.' Of these, the most
       important used to be, whether there was an 'issue'
       between the parties such as the value of an asset on D
       which they had nottaken defined positions, in which case
       the procedure was .held to be expert determination; or a
       'formulated dispute' between the parties where defined
       positions had been taken, in which case the procedure
       was held to be an arbitration. This imprecise concept is E
       still being relied on. It is unsatisfactory because some
     . parties to contract deliberately choose expert
        determination for dispute resolution. The next guideline
        is the judicial function of an Arbitral Tribunal as opposed
     · to the experti~ of the expert .... An Arbitral Tribunal F
        arrives at its decision on the evidence and submissions
        of the parties and must apply the law or if the parties
        agree, on other consideration; an expert, unless it is
        agreed otherwise, makes his own enquiries, applies his
        own expertise and decides on his own expert opinion ...." G
       19. It was further held that a clause substantially similar
 to the clauses referred to in P. Dasaratharama Reddy (supra)
 was interpreted by the three Judge Bench of this Court in the
 State of Uttar Pradesh v. Tipper Chand (supra) wherein H
1294            SUPREME COURT REPORTS                  (2014] 13 S.C.R.


 A     paras 2 and 3 of the said judgment contain the reasons for
       holding that the clause in the agreement cannot be construed
       as an arbitration clause.
             20. At para 18 in P. Dasaratharama Reddy (supra),
       the case of State of Maharashtra v. Ranjeet Construction 18
 Bhas been discussed wherein a two Judge Bench of this Court
  interpreted clause 30 of the agreement entered into between
  the parties, which is almost identical to the clauses under
  consideration, relying upon the judgment in the Tipper Chand
  (supra), and held that clause 30 cannot be relied upon by the
C parties for seeking reference of any dispute to an Arbitrator
  arising out of the contract.
        21. At para 17 )n the P. Dasaratharama Reddy
  Complex case (supra), the case of State of Orissa v.
0
  DamodarDas    (supra) has also been examined, wherein the
  three Judge Bench of this Court interpreted clause 21 of the
  contract entered into between the parties. In the said case,
  this Court referred to clause 25 of the agreement, relied upon
  the judgment in State of U.P. v. Tipper Chand (supra) and
E held that the said clause cannot be interpreted for resolution
  of the dispute by an Arbitrator, the case fell for consideration
  of this Court in the case of State of Uttar Pradesh v. Tipper
  Chand (supra) which was relied upon in the said case is
  extracted at para 20 of the P. Dasaratharama Reddy case
F (supra) as under:-
              "20 ...... (10) ...... A reading of th~ above clause in the
              contract as a conjoint whole, would give us an indication
              that during the progress of the work or after the
              completion or the sooner determination thereof of the
G             contract, the Public Health Engineer has been
              empowered to decide all questions relating to the
              meaning of the specifications, drawings, instructions
              hereinbefore mentioned and as to the quality of

H    18
          AIR 1986 Born 76
 INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                  1295
PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

    workmanship or material used on the work or as to any A
  . other question, claim, right, matter or thing whatsoever
    in any way arising out of, or relating to, the contract
    drawings, specifications, estimates, instructions, orders
    or those conditions or otherwise concerning the works
    or the execution or failure to execute the same has been B
     entrusted to the Public Health Engineer and his decision
     shall be final. In other words, he is nominated only to
     decide the questions arising in the quality of the work or
     any other matters enumerated hereinbefOre and his
     decision shall be final and bind the contractor. A clause c
     in the contract cannot be split into two parts so as to
     consider one part to give rise to difference or dispute
     and another part relating to execution of work, its
     workmanship, etc. It is settled now that a clause in the
      contract must be read as a whole. If the construction D
      suggested by the respondent is given effect then the
      decision of the Public Health Engineer would become
      final and it is not even necessary to have it made rule of
      the court under the Arbitration Act. It would be hazardous
      to the claim ofa contractor to give such instruction and E
      give power to the Public Health Engineer to make any
      dispute final and binding on the contractor. A careful
       reading of the c.lause in the contract would give us an
       indication that t.he Public Health Engineer is empowered
       to decide all the questions enumerated therein other than F
       any disputes or differences that have arisen between the
       contractor and the Government. But for Clause 25, there
       is no other contract to refer any dispute or difference to
       an arbitrator named or otherwise."
      22. Further, at paragraph 21 of the case of P. G
Dasaratharama Reddy(supra) the case of K.K. Modiv. K.N.
Modi (supra) fell for consideration, wherein this Court
interpreted clause 9 of the Memorandum of Understanding that
was signed by the two groups of Modi family. The relevant
                                                                H
1296                   SUPREME COURT REPORTS                  (2014) 13 S.C.R.


    A portion from the said judgment with regc;1rd to interpretation of
      Clause 9 of the Memorandum of Understanding between the
      parties is extracted below:-
                   "9. Implementation will be done in consultation with the
                   financial institutions. For all disputes, clarifications, etc.
    B              in respect of implementation of this agreement, the same
                   shall be referred to the Chairman, IFCI or his nominees
                   whose decisions will be final and binding on both the
                   groups."
 c       23. Further, in the decision of P. Dasaratharama Reddy
   at para 30 referred to the case of Malfikarjun v. Gu/barga
   University 19 wherein it was held that the decision of the
   Superintending Engineer of Gulbarga Circle was final,
  conclusive and binding on all parties to the contract upon all
D questions relating to the meaning of the specifications, designs
  etc. whether arising during the progress of the work or after
  the completion or abandonment thereof in case of dispute
  arising between the contractor and the Gulbarga University.
  The case of Punjab State v. Dina Nath 20 was also referred
E supporting the same view in the case of P. Dasaratharama
  Reddy (supra).
         24. In view of the aforesaid decisions and the law laid
   down by this Court in catena of cases referred to supra which
   are reiterated in the case of P. Dasaratharama Reddy (supra)
F we are of the view that the clause 28 in the agreement which is
   referred to in the case on hand is not an arbitration clause.
  Therefore, the appointment of an Arbitrator by the nominee of
  the Chief Justice has been rightly set aside in the impugned
  judgment by the Division Bench of the Delhi High Court. The
G law laid down by this Court in the above referred judgments,
  after interpretation of relevant arbitration clauses in the
  agreement in those cases, are aptly applicable to the fact

        19
             (2004) 1 sec 372
H       20
                   s
             (2007) sec 2a
  INTERNATIONALAMUSEMENT LTD. v. INDIA TRADE                        1297
 PROMOTION ORGANISATION [V. GOPALAGOWDA, J.]

situation on hand and we answer the questions of law framed         A
by this Court against the appellant and in favour of the ITPO
and Union of India.
      The other proceedings involved in this case, if any,
pending under the provisions of the P.P. Act before the Estate
Officer, the same shall be continued by him.                         B
       Accordingly, the civil appeals are dismissed as there
is no merit for consideration to int~rfere with the impugned
judgment and order. No costs.
                                                                     c
Devika Gujral                                 Appeals dismi.ssed.