{"id":90751,"date":"1972-02-11T00:00:00","date_gmt":"1972-02-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-others-vs-n-k-private-limited-another-on-11-february-1972"},"modified":"2015-06-13T21:24:40","modified_gmt":"2015-06-13T15:54:40","slug":"union-of-india-others-vs-n-k-private-limited-another-on-11-february-1972","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-others-vs-n-k-private-limited-another-on-11-february-1972","title":{"rendered":"Union Of India &amp; Others vs N.K. Private Limited &amp; Another on 11 February, 1972"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Union Of India &amp; Others vs N.K. Private Limited &amp; Another on 11 February, 1972<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1972 AIR  915, \t\t  1972 SCR  (3) 437<\/div>\n<div class=\"doc_author\">Author: P J Reddy<\/div>\n<div class=\"doc_bench\">Bench: Reddy, P. Jaganmohan<\/div>\n<pre>           CASE NO.:\nappointed  in  even a lower grade if  sufficient  number  of\nvacancies are not available in the grade for which he may be\nfound  fit.  In other words, even between  candidates  found\nfit for a particular grade, the recommendation may be for an\nappointment  to a lower grade.\tAs between those  found\t fit\nfor a particular grade, the preferences had to be and were,\npresumably,  determined by fair and honest appraisements  of\ntheir  merit.  Such, preferences due to honest\tassessments,\nwhich are not above possibilities of error, have never\tbeen\nheld  to  cast any reflection which, could be  equated\twith\npunishment.  If the view of the Division Bench of the  Delhi\nHigh Court is correct, as we think it is, that the rules had\nthe  effect of constituting a new service, with a  fair\t and\nreasonable procedure for entry into it, the procedure  could\nnot be characterized as a device to defeat the provisions of\nArt. 311 or a fraud upon the Constitution simply because the\nresults, of subjection to the process of appraisement of the\nmerits\tof each, candidate may not meet the  expectation  of\nsome candidates.\nArticle 311 affords reasonable opportunity to defend against\nthreatened  punishment\tto  those already  in  a  Government\nservice.   Rule 5 provides a method of recruitment or  entry\ninto a new service of persons who, even though they may have\nbeen serving the Government, had no right to enter the newly\nconstituted'  service  before going  through  the  procedure\nprescribed by the Rule.\t If the petitioner had already\tbeen\nappointed  a  permanent Government servant, there  may\thave\nbeen some justification for\n458\ncontending that Rule 5 could not be so applied as to deprive\nhim  of a Permanent Post without complying with Article\t 311\nas  such  deprivation would have been per se  a\t punishment.\nThe  mere possibility of misuse of Rule 5 could not  involve\neither its conflict with or attract the application of\tArt.\n311.  The fields ,of operation of Rule 5 and Art. 311 of the\nConstitution  are quite different and distinct so  that\t the\ntwo do not collide with each other.\nThe  learned Counsel for the Appellant then  contended\tthat\n;each\tperson\tplaced\tin  the\t category  of\tDepartmental\ncandidates  by\tRule 2 had to be treated alike, but  Rule  5\nenables the Selection Committee to treat them differently by\nassigning  different  grades to them.  In other\t words,\t the\ncontention  was\t that  Rule  5 gives too  wide\ta  power  of\nselection   to\tthe  Selection\tCommittee.   It\t  was\talso\nsubmitted,  though  not quite so clearly, that Rule  5\tmust\nitself\tbe  so interpreted as to operate  automatically\t and\nplace\tall persons  falling  within  the  definition\tof\nDepartmental candidate\" in a single class if Rule 5 is to be\nupheld\tas  valid.   It was urged  that\t the  interpretation\nplaced\ton Rule 5 by the Division Bench involved not  merely\nits   conflict\twith  the  definition  of  a   \"departmental\ncandidate\" in Rule 2(b) but also with Articles 14 and 16  of\nthe Constitution, as it meant that those treated equally  by\nRule 2(b)  could  be  treated  unequally  by  the  Selection\nCommittee.     This  argument rests on a misconstruction  of\nRule 2(b).\nThe  definition of a Departmental candidate given by Rule\n8 (b) is  :\n\t      2 (b) \"departmental candidate\" means-\n\t      (i)   a person in the Ministry of\t Information\n\t      &amp;\t Broadcasting  or any of  its  attached\t and\n\t      subordinate  offices who was holding or  would\n\t      have held, but for his absence on\t deputation,\n\t      a duty post, on the 1st November, 1957, and\n\t      who  is holding, or has a lien on a duty\tpost\n\t      in a substantive capacity at the\tcommencement\n\t      of these rules; or\n\t      who   has\t been declared quasi-permanent in  a\n\t      duty post, on, or prior to, the 1st July 1957;\n\t      or\n\t      who   was\t eligible  to  be  declared   quasi-\n\t      permanent\t in a duty post, on, or on any\tdate\n\t      prior to, the 1st July 1957; or\n\t      who   was\t appointed  to a duty  post  on\t the\n\t      basis of selection by the Commission or  whose\n\t      appointment   thereto  was  approved  by\t the\n\t      Commission,  before the commencement of  these\n\t      rules;\n\t      459\n\t      (ii)  any\t other\tperson in  the\tMinistry  of\n\t      Information  and\tBroadcasting or any  of\t its\n\t      attached\tand  subordinate  offices  whom\t the\n\t      Government may declare as such on the basis of\n\t      his qualification and experience\";\nIt  is\tclear  that  this  definition  of  a   \"departmental\ncandidate\"  is meant only as an aid in interpreting  Rule  5\nand was not intended to operate as a fetter on the functions\nand  powers of the.  Selection Committee.  We may  add\tthat\nthe  validity of Rule 5 does not appear to us to  have\tbeen\nassailed  in arguments before the High Court.  And,  in\t any\ncase, the attack on it must fail on merits.\nFifthly and lastly, it was urged that the action against the\nPetitioner  was\t visited  by mala fides.  We  find  no\tsuch\nground\ttaken either in the Writ Petition or argued  at\t any\nstage  in  the\tHigh Court or mentioned in  the\t grounds  of\nappeal\ttaken in the application for certifying the case  as\nfit  for  appeal to this Court.\t It was, however,  a  ground\ntaken by the Petitioner Appellant in his Rejoinder affidavit\nin attempting to reply to the affidavit filed in, opposition\nto the Writ Petition.\nIt  had been stated in the affidavit filed on behalf of\t the\nUnion of India that the Appellant's work was not found to be\nup to the mark even during the period of his probation which\nhad  to\t be extended thrice by two months on  each  occasion\nbefore\tthe probationary period was at last terminated.\t  It\nhad also been pointed out that the Appellant had been  given\na warning that he should improve his work.  Furthermore,  it\nwas  stated that all the facts of the Appellant's case\twere\ncarefully examined, from the point of view of his merit,  by\nthe Selection Committee.  Ile case of the Union of India was\nthat  the  post actually held by the  Appellant\t before\t his\nselection  for appointment to the newly constituted  service\ndid not automatically or wholly determine the position of  a\ndepartmental candidate who offered himself to the process of\nappraisement of his merits by the Selection Committee to  be\nmade on the totality of relevant facts.\t That Committee\t had\nto  be presided over either by the Chairman or a  Member  of\nthe Union Public Service Commission and had officials of the\nDepartment  on\tit  who\t must have been\t in  a\tposition  to\ncorrectly  evaluate the petitioner's merit and to know\tthe.\nweight\tto be, attached to such entries as  the\t Appellant's\nconfidential records contained.\nIn reply to the case of the Union of India, that the  Appel-\nlant's\t merits\t were  duly  considered\t by  the   Selection\nCommittee, the Appellant had characterized what had happened\nas  an 'attempt to create prejudice against  the  Petitioner\nand to justify its\n.RM60\n460\nmala  fide  reduction of rank of the Petitioner\".   He\talso\nsaid  that ,this amounted to \"raking up the past\" which\t had\nno relevance to \"the admitted case of the Appellant\" that he\nwas holding the temporary substantive rank of Editor when he\nwas  reduced  to  the rank of  an  Assistant  Editor.\tThis\nassertion was incorrect if it implied, as it seemed to, that\nit was admitted that the petitioner was being punished.\t The\nAppellant  had also referred to assertions made by  him,  in\nhis  representation  dated  5-4-57  (Annexure  'B'  to\tthe,\nRejoinder) to the Minister of Information land\tBroadcasting\nagainst the termination of his service by notice ,-dated 23-\n3-57, and also to those contained in another  representation\ndated  11-3-1960 (Annexure 'E' to the  Rejoinder  Affidavit)\nagainst\t the impugned order.  In these representations,\t the\npetitioner  had\t complained  that he was  a  victim  of\t the\nprejudice  and machinations of an Officer in  the  Transport\nMinistry   (not\t named\tby  him)  whose\t mistakes,  in\t the\npublications of the Transport Ministry, had been pointed out\nby  the Appellant.  He had also referred to a number of\t his\nown publications.  Thus, the Appellant's case on mala  fides\nrests  on  allegations\twhich  had  been  examined  by\t the\nDepartment  and\t may  also  have  been\tconsidered  by\t the\nSelection Committee.  The petitioner had assumed that  there\nwere some malicious reports against him which, according  to\nhim,  he had no chance to meet and on which he\tthinks\tthat\nthe  recommendations  of the Selection Committee  about\t him\nwere based.  The reply of the Union of India to this case of\nmala  fides  was that it was an after thought and  that\t the\nassessment  of\tthe  Selection Committee was  based  on\t the\nresults of the interview given to the Appellant and a  total\nassessment  of all the facts concerning the Appellant  which\nwere before the Selection Committee.\nEven if we were to assume that the Appellant had thus  taken\nup   a\tcase  of   action  vitiated by\tmala  fides  at\t its\nfoundations    and  had\t Supported    it   with\t   necessary\nparticulars  and averments, it is evident that such  a\tcase\ncould not be properly tried upon the materials on the record\nbefore\tus,  without even impleading the ,official  who\t was\nalleged\t to, be the architect of his misfortunes.  it  could\nnot,  as  it has been, argued seriously for the\t first\ttime\nbefore us.\nThe  fatal weakness in the Appellant's case arises from\t the\nfact  that he was holding only a temporary post so  that  he\ncould have no right to continue in it after it had ceased to\nexist.\tWe think that the necessary effect of setting up  of\nthe   Central\tInformation  Service,  together\t  with\t the\ndetermination of its classes and grades and their  strengths\nwas  that the temporary posts in the Department\t which\twere\nnot  shown to have been continued, automatically came to  an\nend.  The Appellant was offered a new\n461\nPost altogether after going through the process of selection\nin  accordance\twith Rule 5 to which he\t subjected  himself.\nIndeed,\t the  Appellant\t had  no option,  if  he  wanted  to\ncontinue  in  the service of the Department,  except  to  go\nthrough the procedure provided by the rules.  We are  unable\nto  hold  that the procedure contemplated by Rule  5  either\nautomatically fixed the Appellant in any particular grade or\npost or could be held to be void for any reason\t whatsoever.\nTherefore,  if the Appellant was selected for  a  particular\npost,  by  a  process which, for the purposes  of  the\tcase\nbefore\tus, must be assumed to have been fair,\thonest,\t and\nlegal, he cannot complain that he was entitled to a.  better\none.\nWe,   therefore,   dismiss  this  appeal.    But,   in\t the\ncircumstances  of  the case, we leave the  parties  to\tbear\ntheir own costs throughout.\nV.P.S.\t\t\t\tAppeal dismissed.\n462\n\n\n\nPETITIONER:\nUNION OF INDIA &amp; OTHERS\n\n\tVs.\n\nRESPONDENT:\nN.K. PRIVATE LIMITED &amp; ANOTHER\n\nDATE OF JUDGMENT11\/02\/1972\n\nBENCH:\nREDDY, P. JAGANMOHAN\nBENCH:\nREDDY, P. JAGANMOHAN\nHEGDE, K.S.\nMATHEW, KUTTYIL KURIEN\n\nCITATION:\n 1972 AIR  915\t\t  1972 SCR  (3) 437\n\n\nACT:\nConstitution  of India, Art. 299--Whether the  Secretary  to\nthe Railway Board can enter into a contract on behalf of the\nPresident of India represented by the Ministry of Railways.\n\n\n\nHEADNOTE:\nA global tender to sell surplus serviceable and scrap  rails\nwas issued to established buyers by the Government of  India\nand pursuant to this tender notice, the respondents by their\nletter\tdated  21-5-68\toffered\t to  buy  the  rails  at   a\nparticular  price  and\tShri P.\t C.  Oak,  Deputy  Director,\nRailway\t Stores, Railway Board, on behalf of the  Secretary,\nRailway\t Board,,  accepted the respondents' offer  with\t the\nterms  and conditions mentioned in the letters sent  by\t the\nrespondent on 15-7-68.\tNegotiations for the final contract,\nhowever, took place between the parties and on 15-7-68,\t the\nrespondents  complained that some of the Railways  who\twere\nholding\t stocks are selling the steel rails which they\thave\nno right to sell in view of the concluded contract; but Shri\nP.  C.\tOak  for  Secretary,  Railway  Board,  replied\tthat\nsubsequent to 15-7-68, there were negotiations for the vital\nterms and conditions of the contract and so the question  of\nthe  existence\tof a concluded contract did not\t arise.\t  At\nthis, the respondents filed a petition in Court under s.  20\nof  the\t Arbitration  Act, after setting  out  the  relevant\ncorrespondence leading upto the letter of acceptance of 15th\nJuly 1968 and it was stated that, the letter was a  definite\nacceptance  of the offer and constitute a valid and  binding\ncontract between the parties.\nIn   the   written  statement,\tthe  appellants\t  raised   a\npreliminary objection that the petition was misconceived  as\nthere  was no arbitration agreement between the parties\t and\nso  the question of enforcing the arbitration clause in\t the\nalleged\t contract did not arise.  Further, it was  contended\nby  the\t appellants that the letter of\tacceptance  and\t the\nsubsequent  letters  were  not by the  Director\t of  Railway\nStores,\t but by the Secretary to the Railway Board, who\t was\nnot a person authorized to enter into the agreement  between\nthe President of India represented by the Ministry of  Rail-\nways  and the respondents as required under Art. 299 of\t the\nConstitution.  Allowing the appeal.\nBELD  : The Secretary to the Railway Board, on whose  behalf\nthe  offer  of\tthe respondents was accepted,  was  not\t the\nperson authorized to enter into a contract on behalf of\t the\nPresident  of  India,  as  required  under  Art.  299,\t and\ntherefore,  the\t contract, if any, was not  binding  on\t the\nappellants.  Further, it was not correct to say that  Clause\n43  of\tPart  XVIII and Part XLI  empowered  the  Secretary,\nRailway Board to enter into such contracts; because Clause 9\nspecifically  provided for the contracts connected with\t the\nsale  of  scrap;  ashes coal,  dust,  empty  containers\t and\nstores;\t and repayable rails, being part of the\t stores,  it\nwas  covered by Clause 9 and the Secretary,  Railway  Board,\nwas not empowered by the President to enter into a  contract\non his behalf. [445 B]\n<a href=\"\/doc\/132533\/\">Seth  Bikhraj Jaipuria vs.  Union of India,<\/a> [1962] 2  S.C.R.\n880, referred to.\n438\n\n\n\nJUDGMENT:\n<\/pre>\n<p>CIVIL APPELLATE JURISDICTION: C.A. No. 1067 of 1971.<br \/>\nAppeal\tby special leave from the judgment and\torder  dated<br \/>\nOctober\t 30, 1970 of the:-Delhi High Court in F.A.0.  (O.S.)<br \/>\nNo. 40 of 1970.\n<\/p>\n<p>N.   A.\t Palkhivala,  D. Mukherjee, R. H. Dhebar and  A.  J.<br \/>\nRane, for the  appellants.\n<\/p>\n<p>V.   M. Tarkunde, G. L. Sanghi, B. R. Agarwala and Janendra<br \/>\nLal, for respondent No. 1.\n<\/p>\n<p>A.   K. Sen, G. L. Sanghi and B. R. Agarwala, for respondent<br \/>\nNo. 2.\n<\/p>\n<p>The  Judgment of the Court was delivered by<br \/>\nP.   Jagammohan\t Reddy, J. This appeal is by special  leave.<br \/>\nThe  question  for  consideration  is  whether\tthere  is  a<br \/>\nbinding, valid and concluded contract between the appellants<br \/>\nand  the  respondents.\t On  an\t application  filed  by\t the<br \/>\nrespondents under section 20 of the Arbitration Act a single<br \/>\nJudge  of  the Delhi High Court directed the  appellants  to<br \/>\nfile the arbitration agreement to refer the disputes between<br \/>\nthe  parties arising under the contract to arbitrators.\t  An<br \/>\nappeal against that order to a Division Bench was dismissed.<br \/>\nIn  order to understand the scope of the controversy, a\t few<br \/>\nfacts  may be stated.  On the 21st March 1968, a  notice  of<br \/>\nGlobal\tTender No. 1 of 1968 was issued by the President  of<br \/>\nIndia,\ttherein\t referred  to as the  Government  of  India,<br \/>\nMinistry of Railways<br \/>\n(Railway Board) proposing  to sell 80,000 tones of surplus<br \/>\nreleased  serviceable and scrap rails, as per details  given<br \/>\nin  the\t schedule thereto, to established buyers  abroad  or<br \/>\ntheir  accredited  agents.   It invited\t offers\t in  respect<br \/>\nthereof\t to be addressed to the President of India and\tsent<br \/>\nto  Shri  R. No. Mubayi, Director, Railway  Stores,  Railway<br \/>\nBoard.\t  With\tthis  notice  were  enclosed   the   general<br \/>\nconditions   of\t tender,  special  conditions\tof   tender,<br \/>\ninstructions   to   tenderers,\t including   proforma\t for<br \/>\nperformance  guarantee and deed bonds as in clauses  4A\t and<br \/>\n4B,  shipping terms and schedule of stocks available  as  on<br \/>\n1st  March 1968.  In the general conditions the\t seller\t was<br \/>\ndefined\t to mean the President of India acting\tthrough\t the<br \/>\nDirector, Railway Stores, Railway Board, unless the  context<br \/>\notherwise  provided.   The delivery F.O.B.  (Free  an  Board<br \/>\n\/F.A.S.\t (Free\tAlongside Ship) invoices  and  freight\twere<br \/>\ndealt  with  in clause 9. The default clause  in  clause  11<br \/>\nprovided  that where a buyer fails to execute  the  contract<br \/>\nthe seller was to have power under the hand of the Director,<br \/>\nRailway Stores, Railway Board, to declare the contract at an<br \/>\nend<br \/>\n<span class=\"hidden_text\">439<\/span><br \/>\nat  the risk and cost of the buyer.  The special  conditions<br \/>\nof tender dealt with prices, quotations, payments, terms  of<br \/>\nshipment,  weighment, basis of sales and handling at  ports,<br \/>\nforce  majeure, arbitration, legal jurisdiction,  acceptance<br \/>\nof  offers  and\t title and risk.   In  the  instructions  to<br \/>\ntenderers,  the\t tenderers  were requested  to\tquote  their<br \/>\nhighest\t  offer\t indicating  the  price\t per  metric   tonne<br \/>\ninclusive  of  export  incentive  of  5%  of  F.O.B.   value<br \/>\ncurrently applicable as guarantee by the Government of India<br \/>\nwhich  will  always be to, the sellers benefit\tfor  handing<br \/>\nover of the rails F.O.B. docks\/F.A.S.\/F.O.B. Indian Port  or<br \/>\nC.I.F. destination port.  The tenderer was required to offer<br \/>\ncomments  clause  by clause on the  &#8216;general  conditions  of<br \/>\ntender&#8217;\t and  the  &#8216;special  conditions\t of  tender&#8217;  either<br \/>\nconfirming acceptance of the clauses or indicating deviation<br \/>\ntherefrom,  if\tany.   It  was\tfurther\t provided  that\t the<br \/>\ncontract  will\tcome into force from the  date\tthe  buyers&#8217;<br \/>\nletter\tof credit is accepted by- the sellers&#8217; nominee.\t  In<br \/>\n4A  of these instructions the proforma deed bond  was  given<br \/>\nwhich  was to be signed by the tenderer and  the  acceptance<br \/>\nwas to be signed for and on behalf of the President of India<br \/>\nby the person designated for that purpose.  Similarly,\tpara<br \/>\n4B.  gave  the\tproforma performance guarantee\tbond  to  be<br \/>\naddressed to the President of India executed by the tenderer<br \/>\nand accepted for and on behalf of the President of India  by<br \/>\nthe  ,person so designated.  The terms and  conditions\talso<br \/>\nset  out the shipping terms in detail, though a few of\tthem<br \/>\nwere  also  mentioned in the special  conditions  under\t the<br \/>\nheadings  Shipment, Terms of Shipping and Receiving  Notice.<br \/>\nIt  appears that the terms and conditions enclosed with\t the<br \/>\ntender\tnotice annexed to the petition filed in\t court\twere<br \/>\nnot  full  and\tcomplete.  Consequently\t the  appellant\t has<br \/>\nannexed a true copy of the enclosures with the special leave<br \/>\npetition  and prayed that this may be admitted in  evidence.<br \/>\nAs there was no dispute in respect of the contents  thereof,<br \/>\nwe  have allowed this prayer because without them it is\t not<br \/>\npossible to arrive at a just conclusion.\n<\/p>\n<p>Pursuant  to this tender notice, the respondents,  by  their<br \/>\nletter,\t Ex.  &#8216;B&#8217;, dated 21-5-1968, offered  to\t buy  80,000<br \/>\ntonnes\tof rails at $45.1 per tonne F.O.B. Indian  Ports  on<br \/>\nthe term and conditions set out therein.  In reply  thereto,<br \/>\nby  a  letter dated 25-5-1968, the  Dy.\t  Director,  Railway<br \/>\nStores, Railway Board, P.C. Oak in para 1 (6) categorically.<br \/>\nstated\tby  reference to para 14 of the\t conditions  of\t the<br \/>\nletter of the respondents that as shipping terms have finan-<br \/>\ncial  implications  they  were requested  to  indicate\twith<br \/>\nreference to the tender which particular clauses they desire<br \/>\nto  re-negotiate and settle.  In para 2 it was\tstated\tthat<br \/>\nthe  offer  of\tthe respondents was  not  addressed  to\t the<br \/>\nPresident  of  India as required under clause  1(3)  of\t the<br \/>\nInstructions   to   the\t Tenderers   and,   therefore,\t the<br \/>\nRespondents  were required to confirm that their  offer\t was<br \/>\ndeemed to &#8216;nave been addressed to the President\t of  India<br \/>\nand&#8217; is<br \/>\n<span class=\"hidden_text\">440<\/span><br \/>\nopen  for  acceptance  on behalf of the\t President,  it\t was<br \/>\nfurther\t stated\t in para 4 that they should send  the  reply<br \/>\naddressed to the President of India through the Director  of<br \/>\nRailway\t Stores,  Railway  Board  covering  all\t the  points<br \/>\nindicated  therein, to reach them not later than  28-5-1968.<br \/>\nNo reply was, however, received by the time indicated in the<br \/>\nletter of the appellants and while so stating another letter<br \/>\nwas addressed to the Respondents on 3-6-68 by C. Parasuraman<br \/>\nfor Secretary, Railway Board, seeking further  clarification<br \/>\nin respect of items Nos. 26 and 27 of the offer contained in<br \/>\nthe  aforesaid\tletter of the Respondents  dated  21-5-1968.<br \/>\nThere  were also two other clarifications in respect of\t the<br \/>\nweight\tof  the\t tonne for which $45.1 was  quoted  and\t the<br \/>\noption\tto transfer the contract in the name of the  foreign<br \/>\nprinciples  which  it  was stated, could not  be  agreed  to<br \/>\nstraightaway  unless  and until they knew the names  of\t the<br \/>\nforeign\t principles  and their willingness to enter  into  a<br \/>\nlegal  binding guarantee of all the terms and conditions  of<br \/>\nthe  contract.\t The Respondents wrote subsequently  to\t the<br \/>\nDirector,  Railway Stores on the 15th June, 29th  June,\t 8th<br \/>\nJuly and the three letters on 10th July and one on the\t15th<br \/>\nJuly  1968,  some of which were written after  a  discussion<br \/>\nwith  the Director of Railway Stores in the presence of\t the<br \/>\nDirector  of  Finance, Mr. Datta.  On the same\tday  as\t the<br \/>\nletter\tof 15th July was sent by the Respondents, P. C.\t Oak<br \/>\nsigning\t for the Secretary of the Railway  Board,  addressed<br \/>\nthe  following letter of acceptance, No. 68\/RS(G)\/709\/10  to<br \/>\nthe Respondents<br \/>\n\t      &#8220;Subject:-Tender No. 1 of 1968 for Export sale<br \/>\n\t      of used re-rollable and repayable steel rails.<br \/>\n\t      Reference:-Your  letter Nos.  Nil dated  21-5-<br \/>\n\t      68,  15-6-68,  29-6-68,  8-7-68,\t10-7-68\t and<br \/>\n\t      15-7-68.\n<\/p>\n<p>\t      Kindly be advised that your offer (at $39\t per<br \/>\n\t      long ton F.O.B. Indian Port for export and Rs.<br \/>\n\t      458\/- per long ton for indigenous consumption)<br \/>\n\t      with terms and conditions referred to in\tyour<br \/>\n\t      above  letters  is  hereby  accepted.   Formal<br \/>\n\t      contract will be issued shortly.\n<\/p>\n<p>\t      2. Kindly acknowledge receipt.\n<\/p>\n<p>\t      Yours faithfully,<br \/>\n\t      Sd.\/- P. C. Oak.\n<\/p>\n<p>\t      for Secretary,<br \/>\n\t      Railway Board&#8221;.\n<\/p>\n<p>Thereafter,  it\t is alleged that  several  draft  agreements<br \/>\nwere.  exchanged  regarding  which there is  a\tdispute\t but<br \/>\nultimately  be,\t fore us it is not contested  that  a  draft<br \/>\nagreement,  which the appellants say is the 5th\t draft,\t but<br \/>\naccording to the Respondents is<br \/>\n<span class=\"hidden_text\">441<\/span><br \/>\nthe final draft, was handed-over to the Respondents by P. C.<br \/>\nOak on 27-8-68 but this, however, was not signed.  Clause  2<br \/>\nof  this draft agreement states. that the contract has\tbeen<br \/>\nconcluded   by\t the   issue   of   seller&#8217;s   letter\t No.<br \/>\n68\/RS(G)\/709\/10\t dated 15-7-68 to the buyers; that the\tterm<br \/>\nof  the\t contract  shall be three years\t from  1-11-1968  to<br \/>\n31-10-1971;  that the buyers reserve the right to  act\tupon<br \/>\nthe  contract any time before 1-1 1-68 and start  inspection<br \/>\nand  take  delivery of the goods but this will\tnot  in\t any<br \/>\nmanner\teffect the terms of the contract.   Even  thereafter<br \/>\nthere  was further correspondence between the  parties.\t  By<br \/>\nletter dated 18-9-68 the Respondents wrote to the  Director,<br \/>\nRailway\t Stores,  agreeing to several other  matters  to  be<br \/>\nincluded  in the final draft and requested him to issue\t the<br \/>\n&#8216;final. contract&#8217; without delay.  On the 21st September 1968<br \/>\nthe Respondents again wrote to the Director, Railway Stores,<br \/>\ncomplaining  that  the information provided by\tthe  various<br \/>\nRailways  was not complete and requested him to contact\t the<br \/>\nvarious Railways and obtain the required information as soon<br \/>\na-,  possible.\tAfter the receipt of this letter  the  Joint<br \/>\nDirector,  Railway Stores (G), wrote to the general  Manager<br \/>\n(S),  All  Indian Railways with a copy\tto  the\t respondents<br \/>\ncalling\t for the required information.\tIn that\t letter\t the<br \/>\nJoint Director stated thus :-\n<\/p>\n<blockquote><p>\t      &#8220;..  the Board have finalized  an\t export-cum-<br \/>\n\t      internal\tsale contract with M\/s.\t N.  K.\t (p)<br \/>\n\t      Ltd.,  New  Delhi\t for a period  of  3  years,<br \/>\n\t      entitling them to export stock of such surplus<br \/>\n\t      rails  available with the Railways.   The\t de-<br \/>\n\t      tailed  terms and conditions of  the  contract<br \/>\n\t      will be apprised to you when finalized&#8221;.\n<\/p><\/blockquote>\n<p>On  the 23rd October 1968, C. Parasuraman,  for\t Secretary.,<br \/>\nRailway\t Board, replied to the letter of the Respondents  of<br \/>\nthe  21st  September 1968, stating that it was\tnot  correct<br \/>\nthat  their officehas assured them that it would arrange  to<br \/>\nget  the  missing details from the concerned  C.O.Ss.  After<br \/>\nthis   letter  two  other  letters  were  written   by\t the<br \/>\nRespondents  to the Director, Railway Stores, dated 7th\t and<br \/>\n23rd November 1968.  In the first letter it was stated thus<br \/>\n\t      &#8220;In pursuance of your invitation we  submitted<br \/>\n\t      our tender for purchase of used relayable\t and<br \/>\n\t      re-rollable  steel  rails on  21-5-68.   After<br \/>\n\t      some  negotiations the terms of  the  contract<br \/>\n\t      were  finalized  and  the\t Secretary,  Railway<br \/>\n\t      Board  by his letter No.\t68\/RS(G)70910  dated<br \/>\n\t      15-7-68,. accepted our offer and concluded the<br \/>\n\t      contract.\t  We were informed that\t the  formal<br \/>\n\t      contract\twill be issued shortly.\t A draft  of<br \/>\n\t      the  formal contract was handed over to us  on<br \/>\n\t      27-8-68.\t In  our  letter  of  18-9-68,\tsome<br \/>\n\t      agreed  terms  were set out which\t had  to  be<br \/>\n\t      incorporated  in the formal  contract.   Since<br \/>\n\t      the acceptance of our-\n<\/p>\n<p><span class=\"hidden_text\">\t      442<\/span><\/p>\n<p>\t      offer  we\t have made all arrangement  for\t the<br \/>\n\t      sale  of\tthe material- We beg to\t inform\t you<br \/>\n\t      that  out\t of  the total\tquantity  of  88,936<br \/>\n\t      tonnes of Rails already offered to us for\t our<br \/>\n\t      approval we approve and shall take delivery of<br \/>\n\t      53,807  Tonnes as per list enclosed  herewith.<br \/>\n\t      The above quantity may kindly be reserved\t for<br \/>\n\t      us and arrangement be made for their  delivery<br \/>\n\t      in terms of the contract. . . . &#8221;\n<\/p>\n<p>In the second letter, the respondents complained that though<br \/>\nthe contract for sale of used rerollable and relayable steel<br \/>\nrails was concluded on 15-7-68 they regretted that they\t had<br \/>\nnot  received the formal contract so far and requested\tthat<br \/>\nit  should be sent without any further delay.  In  the\tlast<br \/>\nparagraph  of that letter, the Respondents  complained\tthat<br \/>\nthey  came  to\tknow that some of  the\tRailways  who  were.<br \/>\nholding\t storks are selling the steel rails which they\thave<br \/>\nno  right to do and requested them to stop such\t sales.\t  To<br \/>\nthis, P. C. Oak for Secretary, Railway Board, replied<br \/>\n\t      &#8220;Kindly  refer to correspondence resting\twith<br \/>\n\t      your   letters  dated  July  26,\t1968,\t18th<br \/>\n\t      September\t 1968  and  No.\t  RB\/Rails\/68\/1\/114,<br \/>\n\t      dated  2nd  December  1968.   Your  contention<br \/>\n\t      contained\t in your letter No.  RB\/Rails\/\t68\/1<br \/>\n\t      dated  23-11-68 that the Railway Board is\t not<br \/>\n\t      authorized  to  sell rails&#8217; to  other  parties<br \/>\n\t      because  of their having concluded a  contract<br \/>\n\t      with  you is factually incorrect.\t  No  doubt,<br \/>\n\t      letter   No.  68\/RS(G)\/709\/10  dated   15-7-68<br \/>\n\t      indicated\t an intention to enter into  a\tcon-<br \/>\n\t      tract  with  you,\t but  subsequent  to   this,<br \/>\n\t      discussions  had\tbeen held with\tyou  over  a<br \/>\n\t      number of sittings on 20-7-68, 12-8-68,  26-8-<br \/>\n\t      68,  27-8-67 culminating in your letter  dated<br \/>\n\t      18-9-68.\t This would amply indicate  that  no<br \/>\n\t      agreement had been reached on vital terms\t and<br \/>\n\t      conditions, and the question of the  existence<br \/>\n\t      of    a\t concluded   contract\t does\t not<br \/>\n\t      arise&#8217;. . . .&#8221;\n<\/p>\n<p>The Respondents replied to this letter by their letter dated<br \/>\n25-1-1969 expressing surprise and contesting the stand taken<br \/>\nby  the Railway Board.\tIn the petition of  the\t Respondents<br \/>\nfiled in Court after setting out the relevant correspondence<br \/>\nleading\t upto  the letter of acceptance of P. C.  Oak  dated<br \/>\n15th  July  1968,  &#8216;it was stated that\tthat  letter  was  a<br \/>\ndefinite  acceptance of the offer and constitutes a  binding<br \/>\nand valid contract between the parties.\t With respect to the<br \/>\ndraft  agreement of the 27th August 1968 handed over to\t the<br \/>\nRespondents embodying the agreement between the parties, the<br \/>\naverment was that the then Acting Director of Railway Stores<br \/>\ndesired certain additional terms to be embodied in the terms<br \/>\nthat were agreed to.  The additional terms were agreed to by<br \/>\nthe plaintiffs (Respondents) by their letter to the<br \/>\n<span class=\"hidden_text\">443<\/span><br \/>\nDirector,  Railway Stores, dated 18-9-1968.  In para  16  it<br \/>\nwas  further alleged that after the letter of acceptance  by<br \/>\nthe  appellants the then Acting Director of  Railway  Stores<br \/>\nand the Director of Finance proposed to the plaintiffs\tthat<br \/>\nthe  price  offered by them should be increased\t or  in\t the<br \/>\nalternative certain alterations be made in the agreed terms,<br \/>\nbut  the plaintiffs having justly refused to do so, the\t 2nd<br \/>\ndefendant (C.  Parasuraman) falsely wrote to the  plaintiffs<br \/>\non 15-1-1969 that no concluded contract had taken place\t and<br \/>\nthat  the Railway Board was, therefore, not  precluded\tfrom<br \/>\nselling rails to other parties.\n<\/p>\n<p>The appellants in their written statement, raised a prelimi-<br \/>\nnary  objection, namely, that the petition was\tmisconceived<br \/>\nas  there was no arbitration agreement between\tthe  parties<br \/>\nand  so the question of enforcing the arbitration clause  in<br \/>\nthe alleged contract did not arise.  It also reiterated\t its<br \/>\nstand earlier taken that the letter dated 15-7-68 written by<br \/>\nOak  on\t behalf of the Secretary, Railway Board, was  not  a<br \/>\nletter\tof acceptance of the offer of the Respondents so  as<br \/>\nto  amount to a concluded contract binding on the Union\t of<br \/>\nIndia  nor  could  it be construed as such in  view  of\t the<br \/>\nmandatory  provisions of Article 299 of the Constitution  of<br \/>\nIndia.\t The contention was that unless and until  a  formal<br \/>\ninstrument  of contract was executed in the manner  required<br \/>\nby  Article  299  of the Constitution and  by  the  relevant<br \/>\nnotifications, there would not be a contract binding on\t the<br \/>\nUnion of India and at any rate no such agreement was entered<br \/>\ninto  as  it was. alleged that though interviews  had  taken<br \/>\nplace  at  various  times between  the\tplaintiffs  and\t the<br \/>\nseveral officers of the Railway Board, no agreement had been<br \/>\nreached on vital terms and conditions.\n<\/p>\n<p>Two  submissions  were urged on behalf\tof  the\t appellants,<br \/>\nnamely :\n<\/p>\n<blockquote><p>\t      (1)   that apart from the contention  relating<br \/>\n\t      to Art. 299 of the Constitution, there was  no<br \/>\n\t      concluded\t  contract  between   the   parties,<br \/>\n\t      because  (a)  the\t essential  terms  were\t not<br \/>\n\t      agreed  to between them on the date  when\t the<br \/>\n\t      acceptance letter was issued by P.  C. Oak on<br \/>\n\t      15-7-68,\t and  (b)  even\t it  there  was\t  an<br \/>\n\t      acceptance  as  alleged, that  acceptance\t was<br \/>\n\t      conditional  upon\t a  formal  contract   being<br \/>\n\t      executed by the appellants;\n<\/p><\/blockquote>\n<blockquote><p>\t      (2)   that the three mandatory requirements of<br \/>\n\t      Art.  299 of the Constitution for a valid\t and<br \/>\n\t      binding  contract\t made  in  exercise  of\t the<br \/>\n\t      executive\t power\tof the Union have  not\tbeen<br \/>\n\t      complied\twith namely, (a) that  the  contract<br \/>\n\t      was  not\texpressed to be in the name  of\t the<br \/>\n\t      President, nor (b) was<br \/>\n<span class=\"hidden_text\">\t      444<\/span><br \/>\n\t      it executed on behalf of the President, or (c)<br \/>\n\t      by  a person authorized to execute it  on\t his<br \/>\n\t      behalf.\n<\/p><\/blockquote>\n<p>The  crucial  question\twhich arises  for  determination  is<br \/>\nwhether there was a concluded contract, and if\tthere  was<br \/>\none,  whether the mandatory requirements of Article  299  of<br \/>\nthe  Constitution  for\tentering into a\t valid\tand  binding<br \/>\ncontract  have\tbeen satisfied?\t It is now settled  by\tthis<br \/>\nCourt  that though the words &#8216;expressed&#8217; and  &#8216;executed&#8217;  in<br \/>\nArticle 299(1) might suggest that it should be by a deed  or<br \/>\nby  a formal written contract, a binding contract by  tender<br \/>\nand  acceptance can also come into existence if the  accept-<br \/>\nance  is by a person duly authorized on this behalf  by\t the<br \/>\nPresident of India.  A contract whether by a formal deed  or<br \/>\notherwise by persons not authorized by the President  cannot<br \/>\nbe binding and is absolutely void.\n<\/p>\n<p>We  do not for the present consider it necessary to go\tinto<br \/>\nthe question whether and to what extent the requirements  of<br \/>\nArt. 299 have been complied with in this case.\tWhat we have<br \/>\nto  first  ascertain is whether apart  from  the  contention<br \/>\nrelating to Article 299, a concluded contract has come\tinto<br \/>\nexistence as alleged by the Respondents.  Before us detailed<br \/>\narguments were addressed on behalf of the appellants-to show<br \/>\nthat  notwithstanding the letter of acceptance of 15th\tJuly<br \/>\n1968, no concluded contract had in fact come into  existence<br \/>\nand  though that letter accepted certain terms,\t there\twere<br \/>\nother essential terms of the contract which had to be agreed<br \/>\nto  and\t were  the subject matter  of  further\tnegotiations<br \/>\nbetween\t the  parties;\tthat it was  the  intention  of\t the<br \/>\nparties that all those terms were to be embodied in a formal<br \/>\ncontract  to  be  executed which contract alone\t was  to  be<br \/>\nbinding between the parties; and that in any case the letter<br \/>\nof  acceptance\tand the subsequent letters were not  by\t the<br \/>\nDirector  of  Railway  Stores but by the  Secretary  to\t the<br \/>\nRailway Board who was not a person authorized to enter\tinto<br \/>\nthe agreement between the President of India represented  by<br \/>\nthe Ministry of Railways and the Respondents.  On the  other<br \/>\nhand,  the stand taken by the Respondents was that  all\t the<br \/>\nessential  terms  of  the contract were agreed\tto  and\t the<br \/>\ncontract was concluded on 15th July 1968, though at the ins-<br \/>\ntance  of  the Director, Railway Stores further\t terms\twith<br \/>\nrespect\t to the execution of the contract were the  subject-<br \/>\nmatter\tof negotiations between the parties and in any\tcase<br \/>\nthese  did not pertain to the essential terms and could\t not<br \/>\non  that  account  detract  from the  binding  nature  of  a<br \/>\nconcluded  contract.  It was also contended that the  letter<br \/>\nof  acceptance by P. C. Oak though signed on behalf  of\t the<br \/>\nSecretary,  Railway Board was in fact on behalf of the\tsaid<br \/>\nBoard  which was authorized to enter into such\ta  contract.<br \/>\nIt  is\tin  our view unnecessary  to  consider\tthe  several<br \/>\ncontentions  as\t to whether all the essential terms  of\t the<br \/>\ncontract  had  been  agreed  to or  that  the  contract\t was<br \/>\nconcluded by the acceptance<br \/>\n<span class=\"hidden_text\">445<\/span><br \/>\nletter of 15th July 1968 or whether the parties intended  it<br \/>\nto  be a term of the contract that a formal contract  should<br \/>\nbe  entered into between them in order to bind the  parties.<br \/>\nIn  this case, we are of the view that the Secretary to\t the<br \/>\nRailway Board, on whose behalf the offer of the\t Respondents<br \/>\nwas accepted, was not the person authorized to enter into  a<br \/>\ncontract  on  behalf of the President of India.\t As  can  be<br \/>\nseen  from the various documents already extracted that\t the<br \/>\ntender\tnotice\tinvited\t offers\t to  be\t addressed  to\t the<br \/>\nPresident  of India through the Director of Railway  Stores,<br \/>\nRailway Board.\tUnder the general conditions the seller\t was<br \/>\ndefined\t to mean the President of India acting\tthrough\t the<br \/>\nDirector,  Railway Stores and in the default clause  it\t was<br \/>\nprovided that where the buyer fails to execute the contract,<br \/>\nthe seller shall have power under the hand of the  Director,<br \/>\nRailway Stores, Railway Board, to declare the contract at an<br \/>\nend.   In the letter written by Oak on 25-5-68,\t as  earlier<br \/>\nnoticed,  it was pointed out to the Respondents\t that  their<br \/>\noffer  was  not\t addressed  to the  President  of  India  as<br \/>\nrequired  under\t clause\t 1(3) of  the  Instructions  to\t the<br \/>\nTenderers  and, therefore, the Respondents were required  to<br \/>\nconfirm\t that  their  offer  can  be  deemed  to  have\tbeen<br \/>\naddressed  to  the President and is open for  acceptance  on<br \/>\nbehalf of the President and their reply should be  addressed<br \/>\nto  the President of India, through the Director of  Railway<br \/>\nStores, Railway Board.\tEven the draft contract dated  27-8-<br \/>\n68  in\tterms of which the Respondents were insisting  on  a<br \/>\nfinal contract to be issued to them by the appellants was to<br \/>\nbe  executed by the Respondents as buyers on ,the  one\tpart<br \/>\nand  the  President of India acting  through  the  Director,<br \/>\nRailway Stores, Ministry of Railways (Railway Board) as\t the<br \/>\nsellers, on the other.\tThere is little doubt that the\tonly<br \/>\nperson\tauthorized to enter into the contract on  behalf  of<br \/>\nthe  President is the Director, Railway Stores.\t It is\ttrue<br \/>\nthat  the  notification\t of the Ministry of  Law  issued  in<br \/>\nexercise of the powers under clause 1 of Article 299 of\t the<br \/>\nConstitution   shows   that  the  President   directed\t the<br \/>\n&#8216;authorities  named  therein to execute on  his\t behalf\t the<br \/>\ncontracts and assurances of property specified therein.\t But<br \/>\nnotwithstanding\t this, the President is fully  empowered  to<br \/>\ndirect\tthe execution of any specified contract or class  of<br \/>\ncontracts  on ad hoc basis by authorities other\t than  those<br \/>\nspecified in the said notification.  This Court had in\t<a href=\"\/doc\/132533\/\">Seth<br \/>\nBikhraj\t Jaipuria v. Union of India,<\/a> (1) earlier  held\tthat<br \/>\nthe  authority\tto execute contracts may be conferred  on  a<br \/>\nperson\tnot  only by rules expressly framed  and  by  formal<br \/>\nnotifications  issued  in  this\t behalf\t but  may  also\t  be<br \/>\nspecifically  conferred.   In this case the  letter  of\t ac-<br \/>\nceptance  dated\t 15-7-1968 was on behalf of  the  Secretary,<br \/>\nRailway\t Board,\t who  is  not authorized  to  enter  into  a<br \/>\ncontract on behalf of the President.\n<\/p>\n<p>(1)  [1962] (2) S.C.R. 880.\n<\/p>\n<p><span class=\"hidden_text\">446<\/span><\/p>\n<p>It  is contended that clause 43 of part XVIII and  Part\t XII<br \/>\nempower the Secretary, Railway Board to enter into such con-<br \/>\ntracts.\t Clause 43 of Part XVIII provides that all deeds and<br \/>\ninstruments  other than those specified in that part may  be<br \/>\nexecuted  by  the Secretary or the Joint  Secretary  or\t the<br \/>\nDeputy-\t Secretary  or the Under, Secretary in\tthe  Railway<br \/>\nBoard  or  a Director, Joint Director,\tDeputy\tDirector  or<br \/>\nAssistant  Director in the Railway Board.  It  is  submitted<br \/>\nthat as nothing has been specified in Part XVIII relating to<br \/>\nthe contract of the type we are considering, the  Secretary,<br \/>\nRailway\t Board\tis authorized to enter into  a\tcontract  on<br \/>\nbehalf\tof  the\t President.  This  submission  is  untenable<br \/>\nbecause\t clause\t 9 specifically provides for  the  contracts<br \/>\nconnected  with the sale of scrap, ashes, coal, dust,  empty<br \/>\ncontainers and stores.\tThe tender, it will be observed,  is<br \/>\nfor  rails  which  are\tscrap  as  well\t as  rerollable\t and<br \/>\nrelayable  but\tit  is urged that relayable  rails  are\t not<br \/>\nstores nor can they be considered as scrap and as these\t are<br \/>\nnot  covered  by clause 9, the Secretary, Railway  Board  is<br \/>\nfully empowered by the President to enter into a contract on<br \/>\nhis  behalf.  We cannot accept this argument because in\t our<br \/>\nview relayable rails are part of the stores.  It may be that<br \/>\nsome  of  these rails which are part of the  stores  may  be<br \/>\nconsidered  to\tbe  in a  condition  which  the\t authorities<br \/>\nconcerned  think  should  be  disposed\tof.   The  contracts<br \/>\nrelating to the goods of the nature specified in the  tender<br \/>\nnotice\tare,  therefore,  dealt with by clause\t9,  as\tsuch<br \/>\nclause\t43 will have no application.  Part XLI empowers\t the<br \/>\nSecretaries  to\t the Central Government in  the\t appropriate<br \/>\nMinistries  or\tDepartments  to\t execute  any  contract\t  or<br \/>\nassurances of property relating to any matter whatsoever and<br \/>\nis in these terms :-\n<\/p>\n<blockquote><p>\t      &#8220;Notwithstanding\t   anything\thereinbefore<br \/>\n\t      contained\t  any  contract\t or   assurance\t  of<br \/>\n\t      property relating to any matter whatsoever may<br \/>\n\t      be  executed by the Secretary or\tthe  Special<br \/>\n\t      Secretary\t or  the Additional Secretary  or  a<br \/>\n\t      Joint  Secretary or a Director or where  there<br \/>\n\t      is   no  Additional  Secretary  or   a   Joint<br \/>\n\t      Secretary or a Director, a Deputy Secretary to<br \/>\n\t      the  Central  Government\tin  the\t appropriate<br \/>\n\t      Ministry or Department and in the case of. . &#8221;\n<\/p><\/blockquote>\n<p>The  contention on behalf of the Respondents is\t that  since<br \/>\nRailway\t Board\tis  a  Department  of  the  Government,\t the<br \/>\nSecretary  to the Department is authorized to enter  into  a<br \/>\ncontract under the above provision.  This submission in\t our<br \/>\nview,  is  equally misconceived because\t reading  the  above<br \/>\nrequirement carefully it will appear that the persons  there<br \/>\nmentioned  should be Secretary.\t Special Secretary etc.,  to<br \/>\nthe  Central  Government  in  the  appropriate\tMinistry  or<br \/>\nDepartment  and not that the Secretary to any Department  or<br \/>\noffice\tof the Government of India is empowered\t thereunder.<br \/>\nIt is however contended that the Secretary to the<br \/>\n<span class=\"hidden_text\"> 447<\/span><br \/>\nRailway\t Board\tis a Joint Secretary to\t the  Government  of<br \/>\nIndia  and as such under the above Provision the  acceptance<br \/>\nletter should be considered to have been executed on  behalf<br \/>\nof the president Even this submission lacks validity because<br \/>\nas  pointed out on behalf of the appellant, at the  relevant<br \/>\ntime  the  Secretary to the Railway Board did not  have\t any<br \/>\nstatus\tas Secretary to the Central Government.\t The  status<br \/>\nof  a  Joint  Secretary\t was only  conferred  on  him  by  a<br \/>\nnotification  by the Government of India in the Ministry  of<br \/>\nRailways  for the first time on 15-9-1969 with\teffect\tfrom<br \/>\nthat  date.   An affidavit of the Deputy  Secretary  to\t the<br \/>\nRailway\t Board (Ministry of Railways) has been filed  before<br \/>\nus  setting  out  the  above fact  and\tenclosing  the\tsaid<br \/>\nnotification.\tThen again it was urged that the members  of<br \/>\nthe Railway Board were Secretaries to the Central Government<br \/>\nand   hence  the  Board\t on  whose  behalf   the   Secretary<br \/>\ncommunicated  the  acceptance  could enter  into  a  binding<br \/>\ncontract.   This  submission also is without  force  because<br \/>\nthere  is no material before us to conclude that  the  Board<br \/>\nwas  so\t authorized.  In these circumstances,  even  if\t the<br \/>\ncorrespondence\tshows that the formalities necessary  for  a<br \/>\nconcluded contract have been satisfied and the parties\twere<br \/>\nad  item  by the time the letter of acceptance of  the\t15th<br \/>\nJuly 1968 was written, about which we do not wish to express<br \/>\nany  opinion, there is no valid or binding  contact  because<br \/>\nthe letter of acceptance, on the evidence before us, is\t not<br \/>\nby  a person authorized to execute the contracts for and  on<br \/>\nbehalf of the President of India.\n<\/p>\n<p>On  the evening before the day the judgment in the case\t was<br \/>\ndue  to be delivered, an application dated 7-2-72 was  filed<br \/>\nenclosing  an  affidavit of R. N. Mubayi who  was  Director,<br \/>\nRailway\t Stores, between 18-12-1965 to 30-9-1969 as also  an<br \/>\naffidavit of R. B. Lal, Managing Director of the  Respondent<br \/>\nNo. 1 to take them in evidence and consider the facts stated<br \/>\ntherein\t before judgment is delivered, and if necessary,  to<br \/>\ncall  for the file and give a re-hearing.  The affidavit  of<br \/>\nMubayi\tstates that only after he recorded on  the  relevant<br \/>\nfile and issued instructions to his Deputy Director, Shri P.<br \/>\nC. Oak to convey the acceptance of the offer of M\/s.  N.  K.<br \/>\nPrivate Limited, that the acceptance was conveyed by Shri P.<br \/>\nC. Oak to the said company.  The affidavit of R. B. Lal says<br \/>\nthat though the affidavit filed by P. Lal, Deputy Secretary,<br \/>\nRailway Board stating that the Secretary, Railway Board, did<br \/>\nnot  have  the\tstatus\tof  Secretary,\tSpecial\t  Secretary,<br \/>\nAdditional Secretary, Joint Secretary or Deputy Secretary to<br \/>\nthe  Government of India in the Ministry of Railway, he\t has<br \/>\nnot  denied that the Secretary did not have the status of  a<br \/>\nDirector.   It is further submitted in that  affidavit\tthat<br \/>\nthe  Secretary of the Board had the status of a Director  at<br \/>\nthe  relevant  time  and as mentioned in  Part\tXLI  of\t the<br \/>\nNotification  of  the  Ministry\t of  Law,  &#8216;a  Director&#8217;  is<br \/>\nauthorized to accept offers.\n<\/p>\n<p><span class=\"hidden_text\">448<\/span><\/p>\n<p>Apart  from the question whether we should admit  additional<br \/>\nevidence  at  this  stage in this case\tand  though  we\t had<br \/>\nrejected an earlier submission to call for the files, having<br \/>\nregard\tto  the facts stated by R. N.  Mubayi,\tDirector  of<br \/>\nRailway Stores during the relevant period that it was he who<br \/>\nhad  asked P.C. Oak to accept the offer and had so  endorsed<br \/>\nit on the file, as also the affidavit of R. B. Lal that\t the<br \/>\nSecretary  to the Board was the Director of Railway  Stores,<br \/>\nwe withheld the judgment and called for the file to  satisfy<br \/>\nourselves.   The  file\thas  been submitted  to\t us  by\t the<br \/>\nappellants  along with an affidavit of R. Srinivasan,  Joint<br \/>\nDirector, Railway Board in which it is categorically averred<br \/>\nthat  at the relevant time, namely, 15-7-68,  the  Secretary<br \/>\nRailway Board did not have the status of the Director  under<br \/>\nPara  XLI of the Notification of the Ministry of Law  or  at<br \/>\nall.  A perusal of the relevant file relating to the  letter<br \/>\nof acceptance would show that on 15-7-68, Shri Oak made\t the<br \/>\nfollowing endorsement: &#8220;Reference to Board&#8217;s orders at\tpage<br \/>\n38\/N,  draft letter accepting M\/s.  N.K. (P) Ltd., offer  is<br \/>\nbeing  issued today.  D.R.S. may kindly see  before  issue&#8221;,<br \/>\nand  this endorsement was merely signed by R.N. Mubayi.\t  We<br \/>\nare not here referring to the other proceedings on the\tfile<br \/>\nas  to\twhether\t the execution of a formal  contract  was  a<br \/>\ncondition precedent and as one of the terms of the  contract<br \/>\nbut even the above endorsement does not show that the letter<br \/>\nof  acceptance\tof  15-7-68 was issued\ton  the\t orders\t and<br \/>\ndirections  of\tMubayi as alleged by him in  the  affidavit.<br \/>\nWhat  it in fact shows is that it is the Board\tthat  issued<br \/>\nthe orders of acceptance and that the acceptance letter\t was<br \/>\nonly  to be seen by him.  Even the draft letter issued\tdoes<br \/>\nnot  contain his initials or his signature in token  of\t his<br \/>\nhaving\tseen or approved it.  The letter of  acceptance\t not<br \/>\nhaving\tbeen issued on the orders of the  Director,  Railway<br \/>\nStores, there was no concluded contract as on that date,  by<br \/>\na person authorized to enter into a contract.  There is also<br \/>\nnothing\t to  show that the Secretary to the  Board  was\t the<br \/>\nDirector, Railway Board as further alleged in the  affidavit<br \/>\nof R. B. Lal.\n<\/p>\n<p>In this view the appeal is allowed and the application under<br \/>\nsection\t 20  of the Arbitration Act is dismissed  but  there<br \/>\nwill  be  no order as to costs of the  appellants.   On\t the<br \/>\nother hand, we direct the appellants to pay the costs of the<br \/>\nRespondents  because special leave was granted on  condition<br \/>\nthat the petitioner will pay the costs of the Respondents in<br \/>\nthis appeal in any event.\n<\/p>\n<pre>S.C.\t\t\t   Appeal allowed.\n<span class=\"hidden_text\">449<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Union Of India &amp; Others vs N.K. Private Limited &amp; Another on 11 February, 1972 Equivalent citations: 1972 AIR 915, 1972 SCR (3) 437 Author: P J Reddy Bench: Reddy, P. Jaganmohan CASE NO.: appointed in even a lower grade if sufficient number of vacancies are not available in the grade [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-90751","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Union Of India &amp; Others vs N.K. 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