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Hidnstan Steel Works Construction Ltd. v/s Raj Kumar

    Civil Revision 66 Of 1994

    Decided On, 08 March 1995

    At, High Court of Bihar


    For the Appearing Parties: M.M. Banerji, D.K.Chakravarty, R.Mukhopadhyaya, M.Y. Eqbal, S. Akhtar, D.C. Ghosh, Advocates.

Judgment Text

(1.) GURNSHARAN SHARMA, J.-The petitioner has challenged the order dated 14-2-1994 passed by the Second Subordinate Judge, Chaibasa in Misc. Case No, 12 of 1993, whereby it has been held that Mr. Justice Uday Sinha. a retired Judge of this Court, now practising as an Advocate in the Hon'ble Supreme Court of India was not finally appointed as an Umpire, and another person has been appointed as Umpire.

(2.) Admittedly, the opposite party entered into an agreement with the petitioner for carrying out certain contract works in connection whereof certain disputes arose and the same was referred to Arbitration. Both parties nominated one Arbitrator each. The two Arbitrators were required to appoint Umpire proceeding with the arbitration. Accordingly, on 4-7-1993, both held discussions on the nomination/appointment of Umpire. On 5-7-1993, Opposite Party's Arbitrator wrote a letter to the petitioner's Arbitrator that he agreed to the name of Justice Uday Sinha (Retd) as Umpire and gave his secood option in favour of one Sri B.B. Prasad. Accordingly, on 12-8-1993, the petitioner's Arbitrator wrote a letter to Justice Uday Sinha (Retc) regarding his appointment as Umpire. In reply thereto, Justice Sinha by his letter dated 31-8-1993 informed the petitioner's Arbirator that he had no Abjection to act as Umpire,in the disputes, provided both sides are agreeable to it and opposite party's Arbitrator also writes to him accepting him as Umpire and, if the parties agree and write to him, both sides shall have to deposit Rs. 5000/-which would be non-refundable and that he would charge Rs, 5,500/-per day as fee to be borne half by each of the parties, besides secretarial expenses. Thereafter, on 7-9-1993 the Opposite Party wrote a letter (Annexure-B) to both Arbitrators that he was not in a position to bear the expenses of the Umpire. Thereafter, on 13/19th, September, 1993, both the Arbitrators held siting in which the Arbitrator of the opposite party stated that the appointment of Umpire was not made ; rather only consent was invited and hereupon it was reporued by the arbitrators on 19-9-1993 (Annexure-C to the counter-affidavit of the Opposite Party) that it was not possible to proceed further with the hearing and both the parties may take such appropriate action in the matter as they may deem fit.

(3.) Thereafter on 29-9-1993, the Opposite party filed a petition before the First Subordinate Judge. Cbaibasa in Misc. Case No. of 1993 stating, inter alia, therein that the Arbitrators did not reach an accord in the matter of appointment of Umpire and no appointment of Umpire could be made by them and as such both the Arbitrators have left the matter of appointment of Umpire to be solved by the parties. In the circumstances, let an Umpire be appointed by the Court. The petitioner filed rejoinder thereto stating, inter alia, that both the Arbitrators had already appointed Justice Uday Sinha (Retd) as Umpire. Subsequently, the Opposite Party was not agreeable to Justice Sinha, being the Umpire. In such circumstances, there was no occasion of appointment of another Umpire. The Court below by order dated 14-2-1994 has been pleased to hold that Justice Uday Sinha (Retd) was not finally appointed as Umpire and therefore, it was the option of the Court to appoint any other Person as Umpire in this case and appointed one Sri Sukhdeo Chandra Sinha (Senior Advocate) as Umpire.

(4.) Mr. M M. Banerjee, appearing on behalf of the petitioner submitted that the court below has erred in law in holding that the Umpire was not finally appointed. According to him, both the Arbitrators on 4-7-1993 agreed on the name of Justice Uday Sinha (Retd.) as Umpire, which is evident from the letter dated 5-7-1993 (Annexure-1) written by the Arbitrator of the Opposite Party to the Arbitrator of the petitioner. The appointment of Umpire in this case, therefore, was final. In support of his contention, Mr. Banerjee cited a decision of the Hon'ble Supreme Court of India in Keshavsinh Dwarkadas Kapadia v. M/s. Indian Enginerring Company [AIR 1972 S.C. 1533]. wherein it was categorically laid down that the scheme of Asbitration Act indicates that the appointment of Umpire and acceptance of Office were two separate matters and it is not necessary to obtain consent of the proposed,appointee first and then to make appointment.

(5.) Mr. Eqbal, appearing on behalf of the opposite party, submitted that even if he presumed that the Arbitrator on behalf of the Opposite Party consented to the appointment of Umpire on 4-7-1993, but subsequently since the Umpire's conditions were not acceptable so the Opposite party was not in a position to bear such huge expenses as demanded by the Umpire as per the letter dated 31-8-1993 (Annexure-A to the counter affidavit of the opposite party) he did not accept the proposal of the two Arbitrators for the appointment of Umpire. In the circumstances, the Court below rightly held that the appointment of Umpire was not final and thereafter as is evidently from the Arbirator's nothing dated 19-9-1993 (Annexure-C) they were not in a position to appoint another person as Umpire. In the circumstances, the court below has rightly appointed Sri Sukhdeo Chandra Sinha as Umpire. According to Mr. Eqbal, the impugned order is quite valid and justified and needs no in interference by this Court under Section 115 of the Code of Civil Procedure.

(6.) After bearing the parties and perusing the records, I find that on 4-7-1993, both the Arbitrators agreed to appoint Justice Uday Sinha (Retd) as Umpire in the present case. The appointment of Umpire by the two Arbitrators meant that the Arbitrators were to agree in appointing Umpire. The Hon'ble Supreme Court in Keshavsingh Dwarkadas Kapadia (supra) held that no particular method of appointment, of Umpire by the Arbitrator is in writing. The Arbitrators, who are required by the parties who appointed them to appoint an Umpire are under no obligation to obtain the approval of the choice of the personal. The Act does not say that appointment of Umpire by Arbitrators is to be made only after obtaining consent of the appointee. If any pary is dissatisfied with the choice that will not affect the validity of appointment. The appointment by Arbitrators of Umpire should be an act of the will and judgment of the two. If an Umpire declines the office the appointment is ineffectual It is, therefore, apparent that the appointment of Umpire is something different from the acceptance of office by the Umpire and are two separate matters arising at different stages in the proceedings The Arbitrator/Umpire assumes his office when he accepts appointment. It was clearly held that there was no authority for the proposition that the consent of the appointee is required before the Umpire is appointed by the Arbitrator.

(7.) It is well settled that where Arbitrators appoint an Umpire upon the condition of the Umpire's acceptance of office, the Arbitrators will have power to re-appoint an Umpire if the post is refused. Where again the Arbitrators appoint an Umpire without any -such condition of acceptance of office and the appointee declines

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the office, the Arbitrators in accordance with their powers under the Arbitration Arbitration Agreement can appoint an Umpire again. In both the cases, the appointment of an Umpire becomes effective by acceptance of office Thereupon, the power of appointment is exhausted. (8.) In the present case, the Arbitrators appointed an Umpire before entering on the reference. The appointment was not conditional upon the acceptance of appointment by the appointee. In the circumstances, following the aforesaid decision, I am of the view that the Court belew has committed an error of law in holding that the appointment of Umpire in this case was not final. (9.) In the result, the impugned order dated 14-2-1994 is set aside and this Civil Revision application is allowed. Revision allowed.