1. CORNELIUS, C. J.-This appeal by special leave arises out of the filing under section 14 (2) of the Arbitration Act, 1940, by the arbitrator, of an award given by him in a dispute between the Federation of Pakistan and Messrs Amin Agencies Limited. By the award, it was directed that Messrs Amin Agencies should pay a sum of Rs.46,079 to the Federation of Pakistan, and the parties should bear their own costs. The award itself states that the parties thereto had by writing dated the 9th March 1955, extended the time for the making of the award up to the 31st March 1955, and the award was made on the 14th March 1955. It is important to note the terms in which the point of limitation was waived by the parties. This was done by a document signed by the Advocate for the Federation, but by a Director of Amin Agencies, which reads as follows ;- "The parties above named do hereby waive their objection, if any, to the delay in award. The parties also agree to extend the time for the delivery of award by 31st March 1955."
2. The reference to the arbitrator was made on the 12th June 1954, by the Government, and in the course of seeking clarifications of certain matters, by application dated the 16th August 1954, Messrs Amin Agencies made the following submission :- "That it is not the intention of the defendant to delay arbitration proceeding in any manner. Rather the defendant is as much keen to expedite the proceeding as the plaintiff is."
3. Some four months later, they appear to have had second thoughts, for an application was filed by the Advocate on the 18th December 1954, stating that they wished to file an application under section 33 of the Arbitration Act in the Chief Court, at Karachi "for declaration that the arbitration agreement between the parties was illegal and void." The application also raised the objection that the arbitrator had ceased to have jurisdiction in the case after the expiry of four months from the date when he entered upon the reference. However, these objections too were waived, for on the 29th January 1955, Messrs Amin Agencies wrote a letter to the arbitrator as below :- "This is to inform you that we are not moving the Chief Court in the above matter as we wish to have this matter settled before you. In order to provide you with the necessary proof in accordance with the arguments placed by us we should request you to kindly fix a filial hearing on the 19th of February 1955."
4. The letter was of a date long after the expiry of the period of four months aforesaid, and as has been seen, on the 9th March 1955, a positive statement was made by Amin Agencies as well as by the Government waiving the objection on the score of limitation and extending time for the making of the award up to the end of March 1955. The submission to arbitration was made in accordance with an arbitration clause included in certain docu--ments by which the Government accepted a tender by Messrs Amin Agencies dated the 25th October 1948, to supply 150 tons of ghee at Railway Stations in the Province of Sind at the rate of Rs.180 per maund, delivery to be completed "within 30th November 1948". The Government's acceptance of this tender is dated the 5th November 1948, and is signed by the Director of Purchase (Defence). The letter was supported by a number of schedules, one of which contained the particulars governing the supply and in this document clause 12 is the arbitration clause and provided that any question or dispute arising "in connection with this contract" was to be referred to the "award of a Joint Secretary of some other Ministry of the Government of Pakistan as sole arbitrator to be nominated by the Purchaser, which shall be final and conclusive and the Provisions of the Indian Arbitra--tion Act, 1940 and of the rules thereunder and any statutory modification thereof shall be deemed to apply to and be incorporated in this contract." Other schedules prescribed with great particularity, the tests which the ghee to be supplied should satisfy, the manner of its packing and marking, and in fact every matter of detail such as could ensure that material of the required quality was delivered in exact compliance with the terms of the "acceptance of tender". There can be no question but that the offer made by Amin Agencies was accepted by the Government, a contract was concluded. As to the terms aforesaid, the question of compliance with them never arose.
5. It seems also to be clear that the contractors took up without delay the task of fulfilling the contract, and that they found it beyond their capacity. On the 29th November 1948, i. e. The day preceding the last day fixed for fulfillment of the contract, they wrote a letter to the Director of Purchase (Defence) saying that "since submitting the above mentioned offer" i.e. Their offer of the 25th October 1948, they had started buying throughout Sind and adjoining States, but "unfortunately", they had been able to procure only 15 tons which was stored at five different stations. The position had become "so acute now that it is almost impossi--ble and beyond our control to secure any further quantity" and they gave the following reasons, viz. :-
(1) that the supply depot at Karachi had placed an order with another contractor for purchase or ghee at Rs.250 per --maund, with the result that no supplies were left available for them at the lower rate ; and
(2) that the local consumption in the rural areas had increased greatly on account of the influx of refugees into Sind.
6. They reported too that these conditions had resulted in all avail--able ghee being "very inferior, mixed with oils and other foreign mixtures and very badly smelling" so as to render it unsuitable for supply to Government, and they were accordingly referring the matter to the Director. They were willing to supply the quantity that had been secured provided the quality was approved by the Government. To this the reply was made by the Director that the ghee collected should be kept at one or two places to facilitate inspection and that whsle he appreciated the difficulties they had reported in procurement of ghee, he Set felt "that a little extra effort on your part will bear fruit and it will be possible for you to complete the contract placed with you." This letter is dated the 6th December 1948, and clearly has the effect of extending time for performance. However, on the 17th December 1948, Messrs Amin Agencies wrote to the Director to say that they had collected what ghee they bad bought at one place and had attempted to mix the ghee so as to produce "one average quality", but found that the ghee had greatly deteriorated and contained foreign matter, and they thought it "not advisable to supply such ghee to the Government." They had made further efforts to procure pure ghee, but had found it was next to impossible, and they expressed the hope that the Director would "find us quite justified and not blame us for the non-fulfilment of the contract for the reasons beyond our control." The reply of Government to this letter is dated the 21A January 1949, and is to the effect that on account of default by Amin Agencies, them contract had been cancelled and the required quantity of 150 tons would be purchased elsewhere at the risk and cost of Amin Agencies and the extra cost involved would be recovered from the. At the same time two sums of Rs.2,000 and Rs.5,000 respectively which the Government held in deposit were being forfeited. To this, Messrs Amin Agencies replied on the 28th January 1949, pointing out "that the circumstances had radically changed after the tender was accepted." Protesting against the forfeiture of their deposits as being "not morally, socially and legally justified" they asked for the decision to be reconsidered, saying at the same time that if it was irrevocable, the Government should "grant us an opportunity to our representative to discuss the matter before it is submitted to a tribunal for decision." No doubt need be felt by "submission to a tribunal" was meant reference to arbitration as provided by the clause aforesaid.
7. The matter hung fire for nearly five years thereafter until on the 24th December 1953, the Government wrote saying that unless payment was made, the matter would be referred to arbitration and the clause mentioned above was cited. Messrs Amin Agencies protested against this action in a letter dated the 2nd February 1,954 setting out a number of grounds, of which those relevant to the present appeal are the following :-
(1) the contract was never concluded because no deposit of earnest money was made;
(2) the claim was barred by limitation; and
(3) the contract became void when the Defence Department began making purchases independently.
8. The latter concluded with the following declaration of their position, viz. :- "We cannot agree to any arbitration under the terms of the alleged contract which was never concluded. If absolutely insisted upon by you, we will agree to arbitration under the Arbitration Act, with each party appointing its own arbitrator."
9. The latter contention was, as has been seen, expressly withdrawn later, after the Government had appointed a Joint Secretary in the Commerce Ministry to be the arbitrator, by clear expressions of submission to his arbitrator, of which the most significant is that after having declared an intention to take before the Chief Court under section 33 of the Arbitration Act the question of the validity of the arbitration agreement, Messrs Amin Agencies expressly withdrew from that position saying to the arbitrator that they wished to have the matter settled before him. At a later stage, they joined in an initiative for extending limitation to enable the award to be made.
10. The following express admissions in the written statement filed by Messrs Amin Agencies before the arbitrator are relevant for the purposes of the present appeal. It was submitted "with--out any prejudice" that "the defendant had contracted to supply 150 tons of Sind pure ghee at the rate of Rs.180 per maund by 30th November 1948," and on this point it was said that had the Government bought "Sind pure ghee," at the risk of Amin Agencies, the latter "could be asked to compensate the plaintiff for losses," but the ghee bought was not Sind pure ghee and there--fore Messrs Amin Agencies were not liable for any loss suffered by the Government. A point was made that when on the 30th November 1948, the ghee contracted for had not been supplied, "the contract stood cancelled on 1st December 1948, and not on 20th January 1949." The Government should have started purchasing the required ghee immediately without delay, and they had "acted negligently and made hopeless delay in making purchase, if it was made at all." The Government could only claim damages "according to the market rate prevailing on 30th November 1948." Certain blending charges bad been claimed by the Government and as to this the following submission was made, viz. :- "Under the terms of the contract between the plaintiff and the defendant, the inspection of ghee was to be made at Badin in Sind", and the "defendant was not required to pay any blending charges."
11. The contract for the supply of "Sind pure ghee" was also "void on the ground that it was impossible to supply (such) ghee." It is clear from a perusal of this document which covers some 26 paragraphs that the existence of the contract was nowhere denied. Such a denial cannot be construed merely from the use of the governing qualification "without any prejuaice".
12. A word may here be said concerning the terms of section 33 C of the Arbitration Act. It provides that any party to an arbitra--tion agreement which desires "to challenge the existence or validity of an arbitration agreement . . . . Shall apply to the Court and the Court shall decide the question on affidavits." There is a proviso enabling the Court to make an extended enquiry includ--ing reception of evidence under section 33, if it "deems it just and expedient" to do so. That is a provision enabling the Court upon a reference made by one of the parties, before or after proceedings have been commenced in arbitration, to examine the question of the legality and binding nature of the arbitration agreement in question. Here, it may be noted that throughout the course of the correspondence as well as the proceedings, the only grounds ever set out by Messrs Amin Agencies to call in question the legality of the arbitration agreement were those set out in their letter of the 2nd February 1954, viz. That the contract was left incomplete and never brought to the point of conclusion because no deposit of earnest money had been made. The other grounds appearing in that letter which have been cited above, namely, that the claim was barred by limitation, and that the action of the Defence Department in commencing purchases at a higher rate rendered the contract void, were raised to defeat the operation of the contract. By subsequent letters, it was made clear that Messrs Amin Agencies were aware that by section 33 of the Act, they were enabled to raise the question that the arbitra--tion agreement was itself illegal, and that after declaring that they would do so, they expressly withdrew from that position, and equally clearly declared that they intended to submit to the jurisdiction of the arbitrator, so as to have the matter settled by him.
13. When the case came before the Court as a result of filing of the award by the arbitrator under section 14 of the Act, Messrs Amin Agencies filed an elaborate written statement, in which inter aliu, the following contentions were raised which are relevant for the purpose of this appeal. They admitted having received the letter of the 5th November 1948 accepting their tender and enclos-- ing detailed schedules, but as to the latter they said that they "contained several terms and conditions and clauses . . . . . .Which were outside the scope of the offer made by the defendants and materially deviated from the terms of the offer made by the defendants.:' They did not agree to those terms and did not give a bank guarantee as required, and therefore "the contract never came in existence." In general terms, it was said that there was "no concluded contract between the parties and the alleged con--tract and the arbitration clause therein /as not enforceable as the alleged contract was incomplete anti not made in accordance with law". On this basis, viz. The absence of "a valid and enforceable contract" clause 12, namely, the arbitration clause, as well as the award made by the arbitrator thereunder, were not enforceable Clause 12 was also attacked on the ground that it was "vague, uncertain and indefinite" as well as "not enforceable for want of mutuality" since it gave unilateral power to the Govern--ment to nominate the sole arbitrator. In an affidavit filed by an attorney of Messrs Amin Agencies, some of these contentions were repeated, and a challenge was raised to the correctness of a number of the items allowed against them by the arbitrator, on the basis of fact. In a counter-affidavit, counsel for the Govern--ment raised inter alia the following plea, viz. That in the course of the arbitration proceedings, Messrs Amin Agencies had first raised and then abandoned expressly the plea provided by section 33 of the Arbitration Act, and had expressly agreed that the arbitration proceedings should continue. They had further agreed to extend the period for the making of the award. It was submitted that :- "The defendants have no right to come under the same sections or to take same objections which they have heretofore waived specifically. The defendants had as such consented to the arbitration proceedings and submitted to the jurisdiction of the arbitrator voluntarily and of their own will."
14. At the hearing before a learned Single Judge, a challenge was raised to the validity of the contract which included the arbitra--tion clause on a new ground. Viz. That there was "no contract in conformity with section 175 of the Government of India Act, 1935". The learned Single Judge decided the case upon this question alone. It was urged before him that section 175, sub--section (3) of the Government of India Act, 193 5, required that "all contracts made in the exercise of the executive authority of the Federation shall . . . . . Be expressed to be made by the Governor --General . . . . And all such contracts and all assurances of property made in exercise of that authority shall be executed on behalf of the Governor-General . . . By such persons and in such manner as he may direct or authorise". The learned Single Judge accepted the view that in order to constitute a contract between the Govern--ment of Pakistan and a private person, it should be in writing and should be expressed to be made by the Governor-General and to be executed on behalf of the Governor-General by a person duly authorised. He found that the acceptance of the tender dated the 5th November 1948 did not satisfy these conditions, which he held to be mandatory. He came to the conclusion that there was no legal contract between the parties. It is interesting also to note that the learned Single Judge observed "that the Government cannot be allowed to blow hot and cold in the same breath", and for this purpose referred to the earlier case of La Claire Pakistan Corporation (PLD 1957 Kar. 285) where it had been argued "very strenuously" by the then Attorney- General of Pakistan that the provisions of section 175 of the Government of India Act, 1935 were mandatory. On the finding that there was no legal contract, that contract itself containing the arbitration clause, the objection of Amin Agencies was allowed and the award was set aside.
15. An appeal was taken before a Letters Patent Bench by the Government, and again the sole question examined was as to whether the requirement of section 175, subsection (3) of the Government of India Act was mandatory or merely directory. A number of judgments delivered by the Courts in Pakistan as well as some judgments of tile Indian Courts were examined in the judgment, and the conclusion was eventually reached that the contract in the present case was not invalid or void, but was enforceable against Amin Agencies, and accordingly, the order of the learned Single Judge being set aside, the case was remanded for re-decision on the merits.
16. Special leave to appeal against this decision was granted by this Court by an order in which it was observed that the plea of Messrs Amin Agencies that the contract had never been concluded had not been decided, but instead the whole decision had turned upon construction of the provisions of section 175 of the Government of India Act. As there were conflicting decisions on the latter point and further the material interest involved was of high value, leave to appeal was granted.
17. We have heard Mr. Shah Jamil Alam in support of the appeal. After being taken by him through a number of the judgments which have received examination in the judgments of the Court below, we were left with the feeling that the decisions which support his view, viz. That unless a contract made by or with the Central Government during the period when the Government of India Act, 1935 was in force, was made in writing, was expressed to be made in the name of the Governor-General, and was executed in the name of the Governor-General there would be no contract in law to which the Courts could give effect, do not take sufficiently into account the important fact that section 175, sub--section (3) being in affirmative terms, it cannot be allowed the same destructive effect in respect of agreements not made in total compliance therewith as could be claimed had it been expressed in the negative. Requirements in relation to legal actions which are set out in the affirmative are ordinarily to be regarded as directory. Particularly in a case where the basic requirements of the law of contract are satisfied in relation to offer and acceptance, and where performance is shown to have been attempted and a plea has been made on factual grounds to be excused from such performance, the fundamentals of justice in such matters are apt to be thrown over board, if the conclusion is reached that, for non-fulfilment of a legal requirement, expressed in affirmative terms, there was no contract at all.
18. We do not however propose to examine that question in detail, since in our opinion, it is not necessary in this case to pronounce upon it. Section 175, subsection (3) of the Govern--ment of India Act became obsolete upon the promulgation of the Constitution of 1956, and now there is no corresponding provision to be found in the present Constitution of 19--:2. The question is thus one which is likely to arise only in a rare case for the future in the pure form in which it has been discussed in the judgments of the Court below in this case. It may well be left for fuller consideration when such a case arises again.
19. In the present case, however, Mr. Shah Jamil Alam found it impossible to avoid the charge that his clients had been blowing ---hot and cold --- in the same case. That is somewhat different from the instance pointed out in the judgment of the learned Single Judge, of the Central Government taking inconsistent stand--points on the subject in two separate cases. The rule of "approba--tion and reprobation" is confined to stand-points taken in the same case, and here it is abundantly clear from the facts which have been set out at the commencement of this judgment that there was a great deal of substance in the protest made by counsel for the Government at an early stage of the proceedings before the High Court, vie., that Messrs Amin Agencies could not be permitted to take up objections, which they had waived specifically during the proceedings before the arbitrator, to whose jurisdiction they had submitted voluntarily and after due consideration.
20. There is no question but that the proceedings which follow upon filing of an award under section 14 of the Arbitration Act before the Court are proceedings in conclusion of the same matter which was the subject of the reference to the arbitrator. The standpoint taken before the arbitrator on so fundamental a question as the legality of the agreement to refer must therefore be held to be binding at all subsequent stages of the same proceeding. Having informed the arbitrator that they intended to challenge in Court the legality and validity of the arbitration clause, Messrs Amin Agencies expressly resiled from that position and quite clearly declared their intention to submit to his jurisdiction for the settlement of the matter by him. There can be no question but that by so doing they have precluded themselves from taking up at any later stage in the same proceeding the inconsistent conten--tion that the whole reference to arbitration was void, because the arbitration clause was included in a contract which was itself void. Moreover, as is clear from the submissions made at different stages of the case, whether in letters to the Director, or in proceedings before the Arbitrator and the Court, Messrs Amin Agencies have been admitting the existence of the contract and attempting to avoid its consequences on a number of factual and other grounds. It does not lie in their mouth to take the plea at a stage when the matter had been settled by the arbitrator and it only remained for the Court to bring matters to a conclusion by the exercise of its powers under sections 15, 16 and 17 of the Act, to raise a plea which was destructive of the contract altogether. Reference to sections 15 and 16 of the Act will show that such a matter as that there was no valid agreement to refer is not included among the circumstances in relation to which action can be taken by the Court. Under section 16, the !Court may remit the award to the arbitrators for consideration of matters left undetermined or for elimination of matters determined, which were not referred to arbitration, or to render the award sufficiently definite to be capable of execution or when "an objection to the legality of the award is apparent upon the face of it" and the Court is required to fix a time within which the arbitrators shall submit their decision to the Court. A case in which the Court considers that there was no valid agreement to refer at all, is not within the contemplation of these sections. And would appear to fall exclusively under section 33 of the Act.
21. Having expressly renounced before the arbitrator an intention to invoke the provisions of section 33 and declared their intention to have the matter settled by the arbitrator, it is clearly not open to Messrs Amin Agencies to raise the matter again after the Court had become seized of the award under section 14, and its powers in relation to that award were consequently confined to those specified in sections 15 to 17 of the Act. The renunciation of the right which Messrs Amin Agencies could claim under section 33, was made in express terms, and in our opinion they could not resile from it at any later stage of the proceeding.
22. For these reasons, we consider that the final order made by the Letters Patent Bench should be upheld, and we accordingly dismiss this appeal with costs. The case will now go back to a learned Single Judge of the High Court for decision on the other questions arising.