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BEAS CONSTRUCTION BOARD VERSUS SH MOHINDER KUMAR JAIN

    Decided On, 07 August 1990

    At, High Court of Punjab and Haryana

    By, THE HONOURABLE ACTING CHIEF JUSTICE J.V. GUPTA

    For the Appearing Parties: Arun Nehra, D.S. Nehra, Dinesh Ghai, Advocates.



Judgment Text

(1) THIS order will also dispose of Civil Revision Petition Nos. 1663 and 1664 of 1990, as the question involved is common in all these cases

(2) THE contractor Mohinder Kumar Jain, respondent, entered into an agreement for the construction of certain quarters. A written agreement was duly executed between the parties. There was an arbitration clause in the said agreement. According to said clause 25-A, the dispute will be referred for arbitration to the arbitrator to be appointed by the Chief Engineer/electrical Beas Project Chandigarh on written request either from the contractor or from the Executive Engineer within 180 days or in six months from the date of payment of final bill to the contractor. The contractor vide notice dated February 7, 1988, through registered post requested the Chief Engineer, under Section 8 of the Arbitration Act, (hereinafter called the Act), to appoint an arbitrator within 15 days as per the arbitration agreement, but it was of no avail. Consequently, he filed the application under Section 8 of the Act in the Court for appointment of an arbitrator. The said application was resisted on behalf of the Board inter (sic) on the plea that the application was not maintainable in that form and that the arbitrator had already been appointed by the Chief Engineer, Electricity, Beas Project, Chandigarh, and, therefore, the petition had become infrunctuous. The learned Subordinate Judge came to the conclusion that since no arbitrator was appointed after notice having been given by the contractor the subsequent appointment of the arbitrator was wrong and illegal and it was now for the Court to appoint the arbitrator under Section 8 of the Act. He, further directed the parties to give names of four parsons each in order to appoint an arbitrator. The contractor gave a list, of four persons, but the Board did not file any list and consequently, idea order dated April 16, 1990, the Court appointed Shri H C. Khunger, Superintending Engineer (Retd.) as an arbitrator The said orders have been challenged on behalf of the

(3) THE learned counsel for the petitioner submitted that Section 8 of the Act, has absolutely no applicability to this case. The arbitrator was to be appointed according to the agreement by the Chief Engineer and, therefore, the Court was not competent to appoint, the arbitrator. According to the learned counsel, the proper remedy for the Contractor was to move an application under Section 20 of the Act. In support of the contention, the learned counsel relied upon Boriah B and Sons v. I. T. Industries, A. I. R. 1973 Mysore 309. M/s Alkaram v. Delhi Development Authority, A. I. R. 1981 Delhi 230. M/s D. Gobindram v. M/s Shamji K. and Co, A. L R. 1961 S. C 1285. and Union of India v. Gorakh Mohan. , A. I. R. 1964 All, 477.

(4) ON the other hand, the learned counsel for the respondent cited Girdharilal v. Chairman, B. B M. Board, (1985-1) 87 P. L. R. 413. Sate of Punjab v. Hardyal, (1985-1) 87 P. L. R 683 (S C. ). and an unreported judgment of this Court in Civil Revision Petition No. 1291 of 1988 (Haryana Housing Board v. Banarsi Dass Mittal), C. R. No. 1291 of 1988. decided on August 2, 1989.

(5) AFTER hearing the learned counsel for the parties and going through the case law cited at the bar, I am of the considered opinion that there is merit in this revision petition.

(6) SECTION 8 of the Act inter alia provides for the power of the Court to appoint arbitrator or umpire. The said section came up for interpretation in I T. Industries case (supra) before the Mysore High Court. Therein, reliance has been placed upon the judgment of the Allahabad High Court in Gorakh Mohan's case (supra), in which it was held," section 8 of the Arbitration Act provides so far as is material to this case, that where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment, then if the appointment is - not made within fifteen clear days after service of a notice by one party calling upon the other to concur in such appointment, the Court is empowered upon an application of the party giving the notice to appoint an arbitrator," As regards the present case, it is not disputed that the arbitrator was to be appointed by the Chief Engineer and not by the parties as such. Section 20 of the Act entitles a party to apply for filing of the arbitration agreement in Court and the Court is required, in the absence of any sufficient cause shown by the other party, to order the agreement to be filed and to make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or. where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court,

(7) IN M/s Alkarma's case (supra), the words "the arbitrator appointed by the parties in the agreement", occurring in Section 20 of the Act, ware held to also cover the arbitrator who, though not specifically named in the agreement, is appointed in accordance with the procedure laid down therein Therefore, when the Court decides that the agreement should be filed it can call upon the person designated in the arbitration agreement to appoint an arbitrator and reference can be Hade to the arbitrator so appointed. This would be a reference to the arbitrator ' appointed by the parties in the agreement" with in the meaning of sub-section (4) of Section 20

(8) IT is therefore, evident that unless the parties fail to appoint an arbitrator as agreed, the Court has no jurisdiction to appoint an arbitrator of its own. In the present case, when no arbitrator was appointed by the Chief Engineer on the notice issued by the contractor, his remedy was to make an application under Section 20 of the Act for filing the arbitration agreement. The provisions of Section 8 of the Act were not attracted in such a situation. The judgments relied upon by the learned counsel for the. respondent have no applicability to the facts of the present case.

(9) IN Girdharilal's case (supra), the reference of dispute was made to the named arbitrator, but he failed to give the award within the time prescribed and, therefore it was held that it was a fit case for the removal of the arbitrator and for the appointment of a new arbitrator.

(10) AS regards the unreported judgment in Bonarsi Dass Mittal's case (supra), the revison petition was dismissed on the ground that there was no justification for interference the

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revisional jurisdiction. No question of law as such was decided therein, nor any such argument was raised Therefore, the same could not be cited as a precedent in support of any proposition of law. (11) CONSEQUENTLY, this revision petition succeeds and is allowed. The impugned order is set aside and the application order Section 8 of the Act, filed by the contractor stands dismissed with no order as to costs. Admittedly, during the pendency of the application, the Chief Engineer has appointed an arbitrator, in accordance with the arbitration agreement. The said arbitrator will now proceed further in accordance with law and give his award. The parties are directed to appear before the said arbitrator on September 4, 1990.
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