Holding

The appeal is dismissed; a new plea concerning the validity of the arbitration agreement under Article 299 cannot be raised for the first time at the Supreme Court stage.

Summary

The appellant sought compensation for land acquired by the State of Bihar and was awarded Rs. 20,231.67, which he contested as being far below the market value of Rs. 2,80,000. The matter was referred to a three‑member arbitration board, which confirmed the compensation award. The appellant unsuccessfully moved the District Court and the High Court to set aside the award, and then applied to the High Court for a certificate of fitness to appeal to the Supreme Court, raising for the first time the contention that the arbitration agreement violated Article 299 of the Constitution. The High Court entertained this new plea and granted leave to appeal. The Supreme Court held that the question of compliance with Article 299 required factual investigation and therefore could not be raised for the first time at the appellate stage, invoking CPC Order VI Rule 8 and Order VIII Rule 2. Consequently, the appeal was dismissed as the appellant was barred from introducing a fresh point not pleaded earlier. No costs were awarded.

Issues considered

Whether a party may raise for the first time a plea challenging the validity of an arbitration agreement under Article 299 of the Constitution in a certificate of fitness application before the Supreme Court.
Whether the question of compliance with Article 299 is a pure question of law or one that depends on factual investigation.
Whether the provisions of CPC Order VI Rule 8 and Order VIII Rule 2 bar the introduction of a new point not pleaded in the trial court or High Court.

Legislation cited

Code of Civil Procedures. Order VIII Rule 2, s. Order VI Rule 8
Constitution of Indias. Article 299
Land Acquisition Acts. Section 18

Subjects

land acquisitionarbitrationArticle 299Civil Procedure Codecertificate of fitnessnew pleaprocedural lawappeal

Judgment

1043
•
NIROD BARAN BANERJEE 'A
v.
DY. COMMISSIONER OF HAZARI BAGH
February 14, 1980
[S. MURTAZA FAZAL ALI AND A. D. KosHAL, JJ.]
New Plea-A point not taken either before the trial court or before the B
!High Court when the appeal was not taken,, cannot be allowed to be raised
for the first time either in the Supren1e Court or in the application given
he/ore the lligh Court for granting a certificate of fitness-Civil Procedure
.,Code Order VI Rule 8 and Order Vlll Rule 2.
In respect of the lands acquired by the State of Bihar, the appellant
w315 awarded a sum of Rs. 9665-35 which along with sola.tium and
<:barges totalled to a sum of Rs. 20,23 Hi7. The appellant claimed a sum
other
c
of· Rs. 2,80,000/- as the market value of the land acquired. Before the Dis-
tr,ict Magistrate could take up the hearing on a reference made under
1. 18 of the Land Acquisition Act, the matter was agreed by the parties
to be referred to a Board of Arbitration consisting of three persons of whom
one wa5 appointed by the appellant. The Board so constituted gave an
award confirming the con1pensa.tion given by the Collector. The appellant
D
moved the District Court for setting aside the award. The said application
was diS!missed by the Court and an appeal to the High Court thereon was
also dismissed. Thereafter, the appellant approached the High Court for
-granting a certificate of fitness for appeal to the Supreme Court and it was
.at that stage that for the first time the appellant raised the point tha.t the
arbitration agreement was not in accordance with the provisions of Article
299 of the Constitution and that there being no arbitration agreement in E
the eye of la.w, the a\Vard was invalid and liable to be set aside. The High
Court accepted the contention and granted leave as prayed for.
Dismissing the appeal, the Court,
HELD : 1. The question \Vhether or not there was an agreement which
fulfilled the requirements of Art. 299 is not a pure question of law but is a
<iuestion which depends on investigation of facts. [1046C]
F
2. ln view of the provision of Order VI Rule 8 and Order VIII Rule '
(If the Code of Civil Procedure, the appellant would be debarred from
$ising a point for the first time before this Court or even before the High
Court. It is well settled that no evidence can be looked into by the Court
for which there is no foundation in the pleadings. [1047BJ
In the instant case, the appellant cannot be allowed to raise the plea
for the first time in the Supreme Court, in as much as : G
(a) the appellant contented himself by relying on the resolution by the
Government, treated it as a -valid arbitration agreement and never raised the
.question that the said resolution was hit by Art. 299 ot the Constitution of
India. [I047C]
(b) he fully participated in the arbitration proceedings aad having taken
the benefit of a decision by the Board in his favour made a complete somer- B
·sault only when the decision went against him, by taking the plea now under
<ixrunination, which doublless required investigation of facts. [1047D]
1044 SUPREME COURT REPORTS [1980) 2 s.c.R:.
•
· A (c) Even that plea he took neither before the Additional Sub-Judge nor
in the High Court when the appeal was heard on merits but only for the--
first time in the application which he gave for gr3nting leave to appeal to- ..("
this Court. Had he raised the plea before the Trial Court that the arbitra-
tion agreement was not in consonance with Art. 299 of the Constit11tion of
India, the rrespondent may have been in a position to rebut the plea by produc-
ing evidence a.nd circumstances to sho\v that an agreement for arbitration was
g authenticated in the form required by Art. 299 of the Cons.titution. [1047El ,
Ka/yanpur Lime Works Ltd. v. State of Bihar and Anr.; [1954] S.C.R.
958 @ 969; followed.

CIVIL APPELLATE JlTRISDICTION Civil Appcal No. 1105 of\., \
1970.
c Appeal by Certificate from the Judgment and Order datea
13-5-1968 of the Patna High Court in Misc. Appeal No. 178 of
~
1963.
Dr. Y. S. Chitale, K. N. Choubey and B. P. Singh for the Appel-
ial!t.
D Lal Narain Sinha Attorney General and S. N. !ha for the Respon-
dent.
1 he Judgment of the Court was delivered by
FAZAL ALI, J.-This appeal by certificate is directed against a
judgment of the Patna High Court dated 13-5-1968 dismissing the
E appeal filed by the appellant before the High Court.
The case arose out of land acquisition proceedings taken by the
Government in respect of the land in dispute which comprised 84.31
acres. On 21-9-1980, the Collector by his award allowed a com-
pensation of Rs. 9666.35 which along with solatium and other
F charges totalled to a sum of Rs. 20,231.67. The appellant claimed
Rs. 2,80,000/- as the market value of the land acquired. On
11-10-1960, a reference was made to the District Judge under
S. 18 of the Land Acquisition Act. Before the District Judge could-
take up the proceedings for hearing, the matter was agreed by the
parties, to be referred to a Board of Arbitrators consisting of three
G
persons of whom ane was appointed by the appellant
Accordingly, a joint petition for referring the case to the arbitrator
was made on 19-12-1961 and on the next day, dated 20-12-1961
the case was referred for arbitration to the Board. On 22-5-1962.
the Board gave an award confirming the compensation given by the
H Collector. Having thus lost his case before the Board, the
appellant moved the District Court for setting aside the award.
His application was dismissed by the Additional Sub-Judge to whom
N. B. BANERJEE V. DY. COMMISSIONER (Fawl Ali, J.) I 045
A
the case was transferred in the meantime and hence an appeal was
tiled by him before the High Court which was also dismissed. There-
aftet; the appellant approached the High Court for granting a certi-
ficate of fitness for appeal to this Court and it was at that stage that
for the first time he raised the point that the arbitration agreement
was not in accordance with the provisions of Article 299 of the B
Constitution and that thus there being no arbitration agreement in
the eye of law, the award was invalid and liable to be set aside.
The High Court appears to have been impressed by the point raised
' '· before it and granted leave as prayed for. Hence this appeal
before us.
c
Dr. Y. S. Chitale, learned counsel appearing for the appellant
submitted that on the admitted facts there was no separate arbitra-
tion agreement, that the resolution of the Government incorporating
the agreement of both the parties that the matter be referred to the
Board ot Arbitrators would be deemed to be the arbitration agree-
ment, that the resolution not having been authenticated in accordance D
with the provisions of Article 299 of the Constitution of India was
invalid and that therefore the award which followed it would also
be invalid. . In support of his argument the learned counsel relied on
a decision of this Court in the case of Mulamchand v. State o.1 Madhya
Pradesh(') where this Court while considering the scope and the
E
ambit of Article 299 observed as follows : -
"It was held by this Court that the provisions of s. 175(3)
were mandatory and the contracts were therefore void and
not binding on the Union of India which were not liable for
damages for breach of the contracts. The same principle
was reiterated by this Court in a later case- F
State of West Bengal v. M/s. B. K. Monda/ and Sons [19621
1 Supp. SCR 876. The principle is that 1he provision of s.
175 (3) of the Government of India Act, 1935 or the
corresponding provisions of Art. 299 (1) of the Consti-
tution of India are mandatory in character and the contra.
G ,
verition of these provisions nullifies the contracts and makes
them void. There is no question of estoppel or ratification
of such a case."
It was argued by Dr. Chitale that in view of the constitutional
provisions of Art. 299, this Court held that the agreement was void,
and that there could be no estoppel against a statute or constitutional H
rrovisions. To the same effect are the decisions in Laliteshwarl
(ll [t96SJ 3 s.c.R.. 214, 22t.
1046 SUPREME COURT REPORTS [1980] 2 S.C.R.

A Prasad Sa hi Y. Baseshwar Prasad & Ors.(') and Bihar Eastern
Gangetic Fisherman Co-operative Society Ltd. v. Sipahi Singh and
Ors.('). Great reliance was placed by the learned counsel for the
appellant on the decision of this Court in The Marine Cooled (Bengal)
P. Ltd. v. Union of India(') which was also a case of an arbitration
agreem~nt.
B
The Attorney General while Pcpelling the arguments of the
appellant submitted that there can be no dispute with the proposi-
tions laid down by this Court regarding the interpretation of Art.
299 of the Constitution of India but that the question whether or
.I not there was an agreement which fulfilled the requircmcn ts of Art.
c 299 is not a pure question of law but is a question which depends
on investigation of facts. He added that as the appellant did not
plead this point either before the Trial Court or before the High
Court when the appeal was heard on merits the appellant cannot be
allowed to raise it for the first time either in this Court or in his
application given before the High Court for granting a certificate
D
of fitness. It was argued by the Attorney General that if the point
had been pleaded at the initial stage, the respondent might have been
in a position to show that an agreement conforming to the provisions
of Art. 299 of the Constitution of India existed. We am of the
opinion that the contention raised by the Attorney General is sound
E and must prevail. In the case of Kalyanpur Lime Works Ltd. v.
State of B1har and Another(') a similar situation arose and this
Court refused to entertain the point relating to the applicability of
s. 30 of tho Government of India Act 1915 which corresponds to
Art. 299 of the Constitution ors. 175(3) of the Government of India
Act, on the ground that the party concerned did not raise
F the same in their pleadings. In this connection this Court observed
as follows : -
"The first question which arises in this connection is whether
the contract was to be executed by a formal document or
whether it could be spelt out from the correspondence in
G which the negotiations were carried on by the parties. We
do not think it necessary to go into this question, for
assuming that a. formal document was necessary, the plea of
secti0n 30, it is to be noted, was not raised in the plead-
ings. Objection is taken on behalf of the ::ippellant that
(1) [1966] 2 S.C.R. 63, 70.
H (2) [1978] I S.C.R. 375, 381.
(3) [1964) 2 S.C.R. 859.
(4) [1954] S.C.R. 958. @ 969.
N. B. BANERJEE v. DY. COMMISSIONER (FazaJ Ali,!.) 1047

the point not having been raised in the written statement
it was not incumbent npon the plaintiff to show that the
,contract was executed according to the provisions of sec-
tion 30, before it could be specifically enforced and reliance
was placed upon the provisions of order VI, rule 8, and
Order VIII, rule 2 of the Civil Procedure Code."
B
This Court pointed out that in view of the provisions of Order
VI Rule 8 and Order VIII Rule 2 of the Code of Civil Procedure,
the appellant would be debarred from raising the point for the first
time before this Court or even before the High Court. The facts
of the present case appear to be on all fours with facts of the case
in the decision cited above. In the instant case also, the appe11ant con- c
tented himself by relying on the resolution by the Government, treated
it as a valid arbitration agreement and never raised the question that
the said resolution was hit by Art. 299 of the Constitution of India. On
the other hand, the appellant fully participated in the arbitration pro-
ceedings and having taken the benefit of a decision by the Board in his
favour made a complete somarsault only when the decision went D
against him, by taking the plea now under examination, which doubt-
less required investigation of facts. Even that plea too he took
neither before the Additional Sub-Jrndge nor in the High Court when
the appeal was heard on merits but only fer the first time in the
application which he gave for granting leave to appeal to this Court. E
In. these circumstances it is manifest that if the appellant had raised
the plea before the Trial Court that the arbitration agreement was
not in consonance with Art. 299 of the Constitution of India, the
~espondent may have been in a position to rebut the plea by producing
,evidence and circumstances to show that an agreement for arbitra-
tion was authenticated in the form required by Art. 299 of the Con- F
~titution. It is well settled that no evidence can be looked into by
the Court for which there is no foundation in the pleadings. We
<:annot therefore allow the appellant to raise the plea for the first time
in this Court a'nd the High Court also ought not to have entertained
it at the stage of the application for a certificate of fitness to be grant-
ed for leave to appeal to this Court. No other point was pleaded G
before us.
The appeal fails and is accordingly dismissed. In the circumstances
of this case however, there will be no order as to costs.

V.D.K. Appeal dismissed. H