Oil and Natural Gas Commission vs Sohan Lal Sharma

Datta, J.—This is an application by the Oil and Natural Gas Commission u/s 20 of the Arbitration Act, inter alia, for an order that the agreement dated July 23, 1966, being annEx. G hereto, be filed and an order of reference be made accordingly, (b) Mr. Prakash Chandra Mallick, a retired Judge of this Hon''ble Court, or such other person be appointed Arbitrator as to this Hon''ble Court may seem fit and proper.

The application was resisted on several grounds. One of them was that the Oil and Natural Gas Commission, being in essence an agent or a limb of the Union of India, must comply, in entering into contracts, with Article 299 of the Constitution.

At the time of the arguments on this point it struck me that there might be a more fundamental and underlying constitutional objection to the formation or incorporation of a Commission like the Oil and Natural Gas Commission for there was room for the contention that the Parliament could not divest the Union of India of its executive powers which ordinarily vest in the President and place them in charge of independent corporation, with or without the control by Parliament which, according to the Union of India, is not an integral part of the Central Government, being an independent corporation. Thereafter, a notice was issued to the Attorney-General of India in terms of the provisions of the Constitution of India. The Attorney-General of India appeared through Mr. Subimal Roy. Mr. Roy made submissions on behalf of the Union of India to support the validity of the Corporation.

The Learned Counsel who appeared for the Oil and Natural Gas Commission made further elucidations of the points raised by the Learned Counsel appearing for the Commission. Mr. Sinha, learned Advocate for the Respondents, submitted that the Act was clearly ultra vires and illegal offending as it does many of the provisions of the Constitution.

The Oil and Natural Gas Commission Act, 1959, was enacted to provide for the establishment of a Commission for the development of petroleum researches and the production and sale of petroleum and petroleum products produced by it and for matters connected therewith. The sections of the Act clearly indicate two opposing features. They may be illustrated by the more important provisions in the Act.

Section 3 establishes and incorporates the Commission having perpetual succession and a common seal with power to acquire hold and dispose of property and to contract and shall by the said names sue and be sued.

Section 11 provides that the Chairman or any other member authorised by the Commission in his behalf authenticate all orders and other instruments of the Commission. Section 15 gives in its first paragraph. wide powers to the Commission. Section 9 vests the management in the members of the Commission who are directed to hold meetings and decide all important questions by a majority of the votes of the members present, unless there is equality of votes when the President shall have a casting of vote. Section 19 makes provision for dealing with the funds of the Commission. Section 20 gives borrowing power to the Commission. Sections 21, 22 and 23 refer to a separate budget of the Commission, an annual report and accounts. Section 26 enables the Commission to delegate its powers and duties to any person specified in this behalf in an order in writing. Section 29 makes the Commission liable to pay taxes and fees. This is one side of the shield.

The incorporation of the Commission springs from the Act itself. The Commission starts with the assets and employees transferred to it under the Act from the Central Government. The entire capital of the Commission is provided by the Central Government and the Central Government may again provide further capital'', if necessary. There are no shareholders. The members of the Commission who are in the place of the Board of Directors are appointed by the Central Government. The service of a member of the Commission may be terminated by the Central Government. The Chairman or any other member presiding at a meeting of the Commission may in his discretion refer any matter f6r the consideration of the Central Government. The powers mentioned in Section 15 can be only exercised by the Commission after obtaining the previous approval of the Central Government. The Commission cannot exercise its borrowing power without the previous approval of the Central Government. The budget must be approved by the Central Government, the accounts must be subjected annually to the audit by the Controller and Auditor-General of India and must be certified by him or on his behalf. Section 24 enables the Commission to take recourse to compulsory acquisition of land for the Commission. Sections 27 and 28 give certain protection to the members of the Commission and employees as if they were Government servants. Section 30 of the Act enables the Central Government to dissolve the Commission from such date as may be specified in the order and thereupon the Commission shall be deemed to be dissolved accordingly, and on and from the said date all assets and liabilities and obligations acquired or for any other purpose referred to in this Act shall vest in the Central Government and all members shall vacate their office as members of the Commission. The Central Government reserves the power to make rules. The Central Government also retains the power to approve or disapprove regulations made by the Commission. The Central Government may, if it thinks fit, may vary or rescind any regulation which has been approved. This is the other side of the shield.

Therefore, on the one hand, it is a legal personality u/s 3. Its separate managing body, with defined functions and powers including powers to borrow monies, make its own budget, deal with its own funds, delegate its powers and pay taxes and fees which indicate that it is in reality a legal personality which has been brought into existence. On the other hand, there are provisions which clearly indicate that it starts with the assets and financial liabilities of the Central Government, its employees. There is no outside contributor in kind or money towards the capital of the company, that during the whole course of its existence it is controlled or may be controlled by the Central Government even in its day-to-day functions. Its members who occupied more or less the position of the Board of Directors have a perilous existence and the Commission itself exist at the mercy of the Central Government.

There is another way of approach to this matter.

The Central Government exercised the functions through a Secretary and other subordinate officers which are now vested in the Commission. The result in view of the provisions which retains control over the Commission at all stages in effect bisects the executive functions into two parts which was exercised originally by one, that is to say, the ''Central Government. The Minister and/or its Secretary still remains the brain and the guiding hand. It, however, leaves certain matters of detailed management to the Commission. Here again it directly or indirectly exercises control from its inception and during the course of its existence and if the Central Government so chooses till its death.

The rival contentions based primarily on the opposite side of the sheet may now be shortly summarised. The validity of the Act was supported on these grounds.

The Court should, in a welfare state, abhor rigidity in interpretation of the Constitution so as not to block the path of progress but attempt to uphold the validity of an enactment whenever it promotes the welfare of the state. It should be considered as living organic and dynamic and not one that is static and cannot keep pace with times.

This mode of exercising executive functions of the state through public corporation is conducive to the welfare of the state and its citizens. The administrative machinery of the Central Government is not suitable for research and trade in mineral products. The vesting of such executive functions in a public corporation moreover keeps it free from political changes. This machinery of corporation again enables it to receive the concentrated attention of some specialized persons. Hence, the course has been taken in England after the First World War and increasingly after 1947 in carrying on particularly basic industries and public utilities. See in this connection Wade and Phillips Constitutional Law, 7th ed., p. 282. In India also the impact was soon felt and there have been legislation after legislation to vest the functions of the Central Government in public corporations. There are about more than 30 such corporations at the present moment. They have proved useful and beneficial. Hence, the Court should give such a construction to the Constitution so as to give validity to legislative measures initiated by the executive or otherwise and approved by the Parliament and the President of India.

The powers of the Parliament are supreme. It cannot only override the executive but also the Judiciary because it can nullify by legislation the judgment or decision of the highest Court of India. Hence, when the Parliament does it, the legality is patent. Even assuming that, the Parliament cannot override the Judiciary, it is clear that the fields of the Parliament and the Judiciary are more or less defined. Hence, the residuary power goes to the Executive, Sri Ram Jawan v. State of Punjab AIR 1954 S.C. 550 the residuary power of the Executive is not a fixed quantity for it may be widened or narrowed by legislation of our Parliament. Hence, in this background it is idle to attack the validity of an Act like Oil and Natural Gas Commission Act.

The Parliament under Articles 245 and 246 is competent to legislate and set up corporations for minerals and mining products under items 43, 44 and 54 of the 7th Schedule, if not only under item 54. The pith and substance of the Act throws it within the fold of item 54 and, in any event, within the fold of items 44 and 54. Hence, there is no scope for challenging the validity of the Act.

Article 54 empowers the Parliament to divest the President of its executive power and set up an independent authority to carry on the executive function of the President which was exercised through its own officers. Hence, again there cannot be any objection under the Constitution as to the validity of this Act. If the rival contention is pushed to its logical conclusion then the Executive Government has to directly bear the entire burden of the widened field of activities which goes with a welfare state, however inadequate and inappropriate the machinery may be. Hence, the Court should avoid such a construction.

The opposite point of view may be summarised as follows:

Ours is written Constitution. The ordinary rules of construction should prevail even in the interpretation of the Constitution. The Constitution was framed by the people of India. The Constitution can only be changed by the people of India in an appropriate manner. The task of changing or amending the Constitution to keep pace with changing times is not a matter for the Court. It is a matter for the people of India or the Parliament in ordinary cases. The words ''people of India'' have been used advisedly in view of the latest decision of the Supreme Court of India. In certain cases another Constituent Assembly of the people of India can change it and in other matters the Parliament may change it in the manner indicated in our Constitution.

There may not be unanimity of opinion as to what is for the benefit of or welfare of the state or its citizen in every matter. Therefore, if it is left to the Court it will be guided not by the voice of the people but by the particular approach of the presiding Judge or Judges of the Court. That was not intended under a written Constitution.

There is a certain amount of screening from political fluctuations when a public corporation is incorporated. The degree of its immunity depends on the approach of the Central Government or those who are in charge of it and the extent of control retained by the Central Government under the provision of a particular Act. It is, however, very difficult to resist the encroachment by a determined Central Government. So the advantage on this ground is not significant. The word ''incorporation'' has a definite meaning. A commission is not the same thing as a corporation. The word ''commission'' has been used in several Articles of the Constitution. Article 315 which deals with Public Service Commission, Article 324 which deals with Election Commission, Article 340 which deals with Commission for backward classes and Article 349 which deals with Language Commission. Therefore, the word ''commission'' has acquired a definite meaning under the Constitution. The common characteristic of a commission is that it springs from the Constitution itself. A company or a corporation ordinarily does not spring from the Constitution itself. It is incorporated under a parent Act, such as the Indian Companies Act. Therefore, the word ''incorporation'' has also acquired an ordinary meaning. The word ''incorporation'' in the present case whether it springs from the Act itself is, not in consonance with the common idea of incorporation. The corporation or a company, according to ordinary concept, presupposes more than one person and management or the ultimate management in more than one person. It also presupposes that the: ownership is in more than one person. Here under this Act, the Central Government is the Commission for there is no other outsider or participant in the assets or liabilities of the Commission. Hence, it may be said that the incorporation of such a corporation under an Act does not fall within the pith and substance of item 54 of the 7th Schedule.

The item 55 no doubt gives power to the Parliament to make regulation and laws for minerals mentioned therein. It is one thing to legislate on this subject, it is quite a different thing to divest the Executive of its functions or a part of it and place it in charge of an independent body. Hence again it is said that the pith and substance of item 54 of the Schedule does not attract the Act. There is no doubt the Parliament, in our Constitution, has the widest measure of power. It is the supreme body. But none-the less its powers are not independent and unrelated to other provisions of the Constitution. Article 245 starts with the words ''Subject to the provisions of this Constitution''. Therefore, the Parliament is not supreme in that sense that it has uncontrolled and unfettered powers.

Article 53B provides that nothing in this Article, that is to say, in Clause (1) and (2) shall prevent the Parliament from conferring by law functions on authorities other than the President. The words ''authority'' or ''authorities'' have been used in several Articles of the Constitution. Articles 53A, 149, 307, 311, 356C and 375 may not bear identically the same meaning, but one thing is clear that it is a person or a body of persons who can either as an executive body or as judicial or qua-judicial body decide matters and rights of the parties or as between the parties and the State. Therefore, it may be said that the Commission is not an authority in the sense in which the word ''authority'' has been used in Sub-clause (b) of Clause (3) of Article 53. Again, the word in this Sub-clause (b) is not ''authority'' but ''authorities''. But assuming the Commission which consists of more than one person constitutes the ''authorities'', these authorities have no such powers except in their own internal management. There is also room for saying having regard to the other clauses in Article 53 that ''authorities'' here means existing authorities, that is to say, existing on the day on which the Constitution came into force and not future authorities. There is also room for the argument that the executive power cannot be necessarily equated with functions. There are several Articles in which the words ''executive power'' and ''functions'' have been used. They are Articles 53(l)(2)(3b), 70, 73, 257, 258, 260, 290 and 353. They suggest prima facie that executive power is the same as functions of the Executive. Even if it be so it may be said that nonetheless the Constitution does not permit the vesting of the executive function or power in the authority who is not subject to the Constitution. For in that case the executive power will be exercised without the checks which have been imposed under the Constitution as regards finance, contract and so forth. If the validity of these public corporations is upheld then the Courts will allow the Executive and/or Parliament to bypass the constitutional provisions made for financial checks, safeguards for contract, safeguards for Government servants. When such rights are being encroached and taken away they should not be taken away by mere implication in the name of the welfare of the state. If the Parliament has this power of parting with the executive functions of the Government, then it is theoretically possible to denude the Central Government of all its executive activities excepting defence and the President''s power to grant pardon, reprieve, respite or remission of punishment or to suspend, remit or commute the sentence of any person convicted of any offence. There is no reason why the Railways, the Post Office, the Revenue Departments and other departments cannot equally be parted with. Article 298 which makes clear '' what was previously implicit does not widen the legislative function or authority or power of the Parliament. It is clear that this point did not arise in this manner at any rate in any reported judgment or in any event none was shown to me. It could not have arisen in England, for there Constitution is unwritten and flexible.

At a late stage of the argument Mr. Subimal Roy pointed out that under the Rules of our High Court such an important matter relating to the Constitution should be referred by me to a Bench. Therefore, the Rule does stand in the way of proceeding further with these points relating to the Constitution. In my opinion it is time that the Rules should be modified so as to leave the matter to the discretion of the presiding Judge for in many cases questions of Constitution now arise in one form or another with a view to avoid delay and to minimize the further accumulation of cases. It may be incidentally noticed that in the past in many cases in which constitutional points arose the matters were disposed of by a single Judge for no reliance was placed on the Rules. Be that as it may, the point has been taken in this matter. Hence, it is not possible for me to overlook the relevant Rules. But, for my present purpose it is not necessary for me to express a firm opinion in the matter. It is sufficient to say that the constitutional question raised is, in my opinion, beset with difficulties. This is, in my opinion, an adequate reason for not directing the filing of the agreement. More so, when it appears to me prima facie without expressing any firm opinion, that the Oil and Gas Commission Act is ultra vires the Constitution and is invalid. Section 20(1C) of the Arbitration Act gives a discretion to the Court whether it shall direct the filing of the agreement even though the conditions are fulfilled. In this connection reference may be made to the case of Abdul Kadir Shamsuddin Bubere Vs. Madhav Prabhakar Oak, . The second point relating to the Constitution which was actually raised in the affidavit-in-opposition is whether Article 299 of the Constitution is applicable on the ground that the Commission is an agent or a limb of the Central Government. At any rate some of the points which have been indicated without discussion the first controversy have a bearing on this point.

In England this question has arisen with the emergence of the public corporations after the First World War as to whether the corporation is a servant of the Crown or not. In Tamlin v. Hannafort (1950) 1 K.B. 18 the Court of Appeal held that the Transport Commission was not the agent of the Crown. In Bank Voor Hendel En Sheepvaart v. Administrator of Hungarian Property (1954) A.C. 584 it was indicated that the custodian of the enemy property was not an agent or limb of the Government. In Bank Voor Hendel En Sheepvaart v. Administrator of Hungarian Property Lord Reed was of definite opinion that the custodian was the servant of the Crown. In Earl Fitzwilliams Wentworth States Company v. Minister of Town and Country Planning (1051) 1 K.B. 203 (211) Barkett, J. observed that Central Land Board may be regarded from most point of view as a new Government Department. In an appeal against this judgment, Denning LJ. expressed the view that the Central Land Board was a Government Department: Earl Fitzwilliam''s Wentworth Estate Company Ltd. v. Minister of Town and Country Planning (1951) 2 K.B. 284 (311, 314). In a later case, Glasgow Corporation v. Central Revenue (1956) S.L.T. 41 the House of Lords decided that the Central Land Board was an agent of the Crown. Viscount Simonds said in that case that the Board represented the Crown ; Lord Normond said that the Board was the Crown ; Lord Radcliffe said that the Board was an agency of the Crown; Lord Keith said that the Board was at least a servant of the Crown. Therefore, the question taxed the minds of the learned Judges in England. The English cases show that no one test can be decisive to determine whether the public corporation is an agent or a servant of the Crown. It depends on the provisions of the particular statute which brings into existence the particular public corporation. One of the tests however, that has been considered practically by all the learned Judges is the degree of control exercised by the Crown or its Minister or its Secretary over the activities of the corporation and in particular its day-to-day administration of its functions and/or the possibility of exercising close control over the activities of the corporation by the Minister or his Secretary or other officer of the Government. In India, the question has been discussed in various cases, one of the earliest being a, judgment of P. B. Mukharji, J. in M. Verghese Vs. Union of India (UOI) and Others, . He referred to the English decisions. It seems that according to him also whether or not a corporation is an agent or a limb of the Government depends upon the provisions of the questioned statute. There are also decisions of the Supreme Court bearing on this subject. There are the decisions which clearly indicate that in taxing statutes the veil of incorporation may be pierced through by the Court. This is clear from State Trading Corporation v. Commercial Tax Officer (1963) S.C. 1811 and The Commissioner of Income Tax, Madras Vs. Sri Meenakshi Mills Ltd., Ors., . There are also observations in the decisions of the Supreme Court that even in matters not relating to tax evasion the veil of incorporation can be lifted by the Court. This is clear from State Trading Corporation v. Commercial Tax Officer ( Supra ) where Hidayatullah, J. observed inter alia that...the State Trading Corporation is really a department of the Government behind the corporate veil. The more salient features of this Act are that the ownership of the assets, the obligations to pay the liabilities remain with the Central Government, the control during its life-time remains throughout with the Central Government and the Commission itself exists at the mercy or sufferance of the Central Government. It is born of the womb of the Central Government and it goes back, if ever it is closed, to the womb of the Central Government without any ceremony whatsoever. Hence, the constitutional question as to the applicability of Article 299 is also a difficult question. In view of the provisions of our Rules it is not for me to express any firm opinion on the matter, but it seems to me prima facie that the Oil and Natural Gas Commission Act is really an integral part of the Central Government, though a thin screen of muslin veil has been used by constituting it as an artificial legal personality. Hence again this controversy is a sufficient ground not to direct the filing of the arbitration agreement.

This takes us to the other points which do not relate to the Constitution. The arbitration agreement dated July. 23, 1966, was in these terms:

In accordance with the decision of the Standing Committee taken in its sixteenth meeting held on 18th July, 1966, a meeting was held between the Oil and Natural Gas Commission represented by Member (Finance) and the Assam Road Link represented by their General Manager. It was agreed that the parties would go for arbitration on the outstanding claim and counter claim. The agreement for arbitration would be formally drawn up and signed by the partners of Assam Road Link and sent to the Commission. It was suggested that the arbitrator would be a retired Judge of the Calcutta High Court and the proceedings would be held in Calcutta.

(2) The above would be confirmed formally in a legal document which would be drawn by a legal officer of ONGC and sent to Assam Road Link.

Sd. A. P. B. Nayar Sd. V.N. Nayar 28,7.66 23.7.66 Member (Finance) General Manager Oil & Natural Gas Commissioner Assam Road Link In the petition the material paragraph is as follows:

By an agreement in writing dated July 23, 1966, and entered into by and between your Petitioner and the Defendants above-mentioned at Tel Bhawan, Dehra Dun, outside the said jurisdiction it was agreed that all matters in dispute and difference between the parties should be referred to the arbitration of a retired Judge of this Hon''ble. Court. The agreement in writing is duly signed by your Petitioner and Defendant No. 5 and/or their respective agents duly authorised in that behalf. The said agreement dated July 23, 1966, is annexed hereto and marked G. This agreement was denied in the affidavit-in-opposition. But no specific point was raised as regards the authority of Mr. Nambiar or the Manager of the Respondent firm. In the affidavit-in-reply, however, having regard to the denial in the opposition the Petitioner disclosed certain documents or resolutions to support the authority of Mr. Nambiar. At the time of the argument it was contended that Mr. Nambiar did not sign in terms of the provisions of the Act. Mr. Roy Chaudhury contended that this point should not be allowed to be agitated because no specific point was taken. In my opinion, in the facts of this case, having regard to the denial, the anticipation of the point in the affidavit-in-reply and, what is more, the fact that it arises out of an admitted document, it should be allowed. I, however, gave leave to the parties to use further documents if they were so advised as a matter of abundant caution. In fact, further documents were filed before me. Section 26 of the Oil and Natural Gas Commission Act enables the Commission to delegate its functions. Therefore, the Commission can delegate its functions or function in accordance with the terms of the section to one or more persons including a ''Standing Committee''. The Commission, however, did not delegate the power to Mr. Nambiar to enter into contracts. The Standing Committee did it. Section 26, however, does not empower the Standing Committee, the delegates of the Oil and Natural Gas Commission, in their turn to delegate their powers or functions to another person, though he may be a member (Finance).

Hence, this delegation has no legal force. Therefore, the resolution of the Standing Committee dated July 18, 1966, cannot help the Petitioner for in law, Oil and Natural Gas Commission was incompetent to enter into the arbitration agreement through Mr. Nambiar.

In this case, with my leave further affidavits were filed and documents were disclosed. Thereupon, a document under the heading ''62nd meeting�August 7, 1965'' followed by the words ''Agenda item No. 27'' which in turn is again followed by the words ''subject: delegation of financial powers'', was filed. In item 11 of the said document it is stated inter alia as follows:

The following new items are to be included: (1) 67�Powers to execute contracts and agreements....

Consequent to the above suggestion the note on page 27 would be created to include the new items 67....

There is an annEx. A to the aforesaid document with the heading ''62nd meeting�August 7, 1965''. This annexure is under the heading additions to the book of financial powers (May 19, 1965). There are several columns underneath this heading giving number which obviously mean serial number, nature of power, authority and extent of power. The first entry under the respective heads appear as follows:

67A�To enter into and to execute contracts and agreements on behalf of the Commission.

(1) Member�Full powers in respect of all contracts and agreements with the Government of India, State Governments, Foreign Government, Companies incorporated in or out of India, Corporations and other bodies and individuals in India.

The originals of the said documents were not produced though asked for by the Court. Therefore, no reliance can be placed on these documents. Assuming that reliance can be placed on these documents let us consider the position.

The 62nd meeting was held on August 7, 1965. The incorporation to the book of financial powers, prima facie, must have been done after May 1965. In Clause 11 and 12 or items 11 and 12 of the said 62nd meeting reference is made only to 67 and not to 67A, 67B(1) 8c B(2) and so forth. In the annexure under the heading additions to the book of financial powers�May 1965, the items appear as 67A, 67(a), 67(b). 67A refers not only to members but also to chief of divisions, heads of departments. In 67B there are four sub-clauses referring to different authorities. Hence, prima facie the minute of the 62nd meeting and the records of the additions to the book of financial powers�May 1965 do not agree in terms with each other. Hence, again no reliance can be placed on these documents.

The subject-matter of the 62nd meeting dated August 7, 1965, was delegation of financial powers. The annexure to the" said document appearing in the 62nd meeting--August 7, 1965, refers to entering into and executing contracts and agreements on behalf of the Commission. In my opinion, this delegation of final powers to a member to enter into agreements or contracts on behalf of the Commission is not wide enough to include the power to enter an arbitration agreement on behalf of the Commission.

Again Mr. Nambiar purported to enter into the said arbitration agreement dated July 23, 1966, on the basis of the authority given to him by the Standing Committee on July 18, 1966, and did not choose to rely or derive his authority from the 62nd meeting dated August 7, 1965. Hence, the Petitioner cannot be allowed to rely on the alleged authority given to him on August 7, 1965.

The said document dated July 23, 1966, stated, inter alia, that it was agreed that the parties will go for arbitration on the outstanding claim and counter claim the agreement for arbitration would be formally drawn up and signed by the partners of Assam Road Link and sent to the Commission. It was suggested that the Arbitrator should be a retired Judge of the Calcutta High Court and the proceedings will be held in Calcutta. 2. The above will be confirmed formally in a legal document which would be drawn up by a legal officer, O.N.G.C., and sent to Assam Road Link.

The arbitration agreement in Clause (a) of Section 2 of the Arbitration Act means a written agreement to submit present and future differences whether the Arbitrator is named therein or not.

It will be noticed that first sentence used a past tense where it states ''a meeting was held''. In the second sentence the agreement was that the parties would go for arbitration. Therefore, prima facie they do not enter into an arbitration agreement. They contemplated that in future they would enter into an arbitration agreement. That this is so, is clarified by the first part of the next sentence or the third sentence, namely, the words ''the agreement for arbitration would be formally drawn up''. The third sentence again suggests that an agreement for arbitration had been agreed to but that it would be formally drawn up and signed by the partners of Assam Road Link and sent to the Commission. Therefore, what remains to be done was only the execution of a formal document, the agreement having been concluded. Hence, this sentence suggests that there was a present agreement or an arbitration agreement previously agreed upon by the preceding sentences. This receives some support again from the second paragraph where it says, inter alia, that the above will be confirmed formally in a legal document. Therefore, arises a difficult question of law, whether the agreement was conditional upon the execution of such a formal document or whether there was a concluded agreement subject to a formal document being executed. In this connection reference may be to Chhabildas Nandlal and Co. Vs. Damodar Khetsey and Co., , AIR 1946 97 (Privy Council) and Branca v. Cobarro (1947) 1 K.B. 354. Hence, this also raises a difficult question of construction. Be that as it may, in my opinion, on a true construction of the said agreement it is clear that there was a concluded contract having regard to the principle that the Court should try to give effect to an arbitration agreement where two opposing constructions are possible.

The said document dated July 23, 1966, provided that the Arbitrator should be a retired Judge of the Calcutta High Court and the proceedings will be held in Calcutta.

The name was not mentioned, but the limited class of persons from whom the Arbitrator should be selected is clearly indicated. Hence, it may be said that the arbitration agreement is valid for a valid arbitration agreement does not require the naming of the Arbitrator. On the other hand, it may be said that here the Arbitrator was named, but the naming was uncertain and indefinite. Hence, this clause being an integral part of the arbitration agreement, the arbitration agreement is void for uncertainty for no one can foretell who will be the retired Judge amongst many who will be named as Arbitrator. Hence again it gives rise to a difficult question of law.

Be that as it may, I hold that the arbitration agreement is not uncertain on this ground.

On July 26, 1966, the four partners of Assam Road Link in their firm name wrote a letter to the Secretary, Oil and Natural Gas Commission to this effect:

With reference to the minutes of the meeting held on 23rd July, 1966, at Dehra Dun, we confirm, we have no objection of referring all matters of our pending claims for arbitration as Suggested.

In my opinion, if there was a concluded and binding agreement on July 23, 1966, this attempt on the part of the partners of the Assam Road Link to get out of the agreement would have been of no avail to them, for this was not a kind of confirmation which was called for by the document dated July 23, 1966. The said document dated July 23, 1966, called for confirmation in a legal document. In case the agreement was subject to the execution of the formal agreement, the parties were at the stage of negotiations. Hence again, the letter dated July 26, 1966, being another subject in the course of negotiations would not have affected the matter in any way.

In view of the fact that the petition raises difficult questions of law relating to the interpretation of the Constitution of India, besides other difficult questions of law, and further in view of my finding that Mr. Nambiar was incompetent to enter into a binding arbitration agreement on behalf of the Oil and Natural Gas Commission, this application must be rejected.

This application is dismissed with costs. Certified for two counsel.