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1967 DIGILAW 79 (GAU)

Ashoka Construction Co. v. Union of India

1967-12-23

C.JAGANNADHACHARYULU

body1967
These are Civil Revision Petitions filed by the applicant in Arbitra­tion Cases Nos. 4 of 1964 to 9 of 1964 on the file of the Subordinate Judge, Tripura in Agartala against his order •under Sec. 20 of the Indian Arbitration Act (Act X of 1940 hereinafter called as the Act) directing the parties to choose either the Chief Engineer, C. P. W. D. Agartala or Additional Chief Engineer, Zone No. II C. P. W. D. as arbi­trator to decide the disputes between the parties. 2. One Shri R. D. Gupta is a contractor. He is the power-of-attorney holder of M/s. Ashoka Construction Company, Delhi. He entered into six contracts with the Union of India, firstly, construction of Central Power House in Kamalpur; secondly con­struction of roads for development of Nar-singhar-Agartala; thirdly, construction of a double storeyed building in the 300 bedded Hospital in Agartala; fourthly, construction of a Hostel for Polytechnic Institute in Nar-singhar; fifthly, construction of second run­way in Agartala air-field and sixthly, metalling of Agartala to Bisramganja road. Both the parties executed six different contracts No. 32/CADII/1956-57, F. 5 (397) EE/58, 101/EE/R/58-59 - PEO/Agar/T/7/58-59, 2/EE/ACE of 58-59 and 7/PEO 6 of 1960-61 for the execution of the works. There is a clause No. 25, which is common in all the printed agreements, under which the parties agreed to have the disputes decided y an arbitrator. It runs as follows:- "Settlement of disputes by Arbitration-• Clause 25. Except where otherwise provid­ed in the contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein­before mentioned and as to the quality of workmanship, or materials used on the work or as to any other question, claim, right, matter or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates, instructions, orders, or these conditions, or otherwise concerning the works, or the execu­tion, or failure to execute the same, whether arising during the progress of the work, or after the completion or abandonment there­of shall be referred to the sole arbitration of the Chief Engineer/Additional Chief Engi­neer, Central Public Works Department, and if the Chief Engineer/Additional Chief Engineer is unable or unwilling to act, to the sole arbitration of some other person appointed by the Chief Engineer/Additional Chief Engineer willing to act as such arbi­trator. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matters to which this agree­ment relates and that in the course of his duties as such Government servant he had expressed views on all or any of the matters in dispute or difference. The award of lie arbitrator so appointed shall be final, con­clusive ^and binding on all parties to this contract". In the agreements covered by Revision Cases Nos. 44 of 1966 and 46 of 1966 the words "Chief Engineer" were deleted. 3. As disputes arose between the parties, the petitioner issued a notice on 28-3-1962 to one Shri John Mukand ACE. C. P. W. D. who is now said to be working in Himachal Pradesh to enter upon the references. But, as Shri John Mukand did not enter upon the references, the petitioner again issued another registered notice dated 7-6-1962 to him requesting him to enter upon the 'refer­ences and informed him that, otherwise, the petitioner would treat his failure to enter upon the references as negligence to act. There was no reply from Shri John Mukand. So, the petitioner issued a notice under sec­tion 8 of the Act on 31-1-1963, to the Secre­tary, Ministry of Works and Housing, Union of India for concurrence in the appointment of an arbitrator. But, as there was no reply, the petitioner filed on 4-9-1964 Arbitration Cases Nos. 4 to 9 of 1964 in the Sub-Court in Agartala. He filed Arbitration Cases Nos. 4 of 1964 and 9 of 1964 as power-of-attorney holder of M/s. Ashoka Construction Company, Delhi and the other applications in his own name under Sections 8 and 20 of the Act to direct the respondent to file the original agreements into the Court and re­quested the Court to appoint an indepen­dent person, who is not an employee of the Union of India, as sole arbitrator to decide the disputes mentioned in the Schedules No. 1 appended to the petitions. The respondent filed agreements along with the objections in the six cases on 17-12-1964. The petitioner filed two affidavits on 4-9-1964 and on 16-1-1965 swearing to the allegation made by him in the petitions. The respondent filed agreements along with the objections in the six cases on 17-12-1964. The petitioner filed two affidavits on 4-9-1964 and on 16-1-1965 swearing to the allegation made by him in the petitions. He alleged inter alia that there are several disputes between him and the respondent with regard to some more works of contract done by him, that the respondent interfer­ed with the arbitration proceedings in the other cases, that the petitioner is put to harassment, huge financial expenditure, pro­longed litigation and delay in the adjudica­tion of disputes involving lakhs of rupees and that unless an impartial arbitrator, who is not an employee or the C. P. W. D. is appointed he will be put to heavy loss. The respondent took time on 8-2-1965 and on 20-2-1965 to file counter-affidavits. But, it did not file any counter-affidavits. The peti­tioner offered to lead evidence. The Sub­ordinate Judge, however, directed him to file affidavit and he filed a third affidavit on 9-12-1965 reiterating the same allegations. 4. After enquiry, the learned Subordi­nate Judge passed the orders in question negativing the request of the petitioner to appoint a third party arbitrator. He direct­ed the parties to choose either the Chief Engineer or the Additional Chief Engineer, C. P. W. D., Agartala as arbitrator and ad­journed the cases to enable both the parties to choose one of them. Hence the six revi­sion petitions by the petitioner. 5. The petitioner argued the cases in person. His first contention is that the arbitration agreement contained in Cl. 25 of the agreements is vague and that under Section 20 (4) of the Act the Court has to appoint its own nominee as an arbitrator to decide the disputes. Before proceeding to deal with this argument, it has to be men­tioned that in the two agreements covered by Civil Revision Petitions Nos. 44 of 1966 and 46 of 1966 arising out of Arbitration Cases Nos. 6 of 1964 and 8 of 1964, the words "Chief Engineer" were struck off and only the words 'Additional Chief Engineer" were retained. Before proceeding to deal with this argument, it has to be men­tioned that in the two agreements covered by Civil Revision Petitions Nos. 44 of 1966 and 46 of 1966 arising out of Arbitration Cases Nos. 6 of 1964 and 8 of 1964, the words "Chief Engineer" were struck off and only the words 'Additional Chief Engineer" were retained. So, according to the arbi­tration agreements contained in those two cases the parties agreed to refer the disputes to the Additional Chief Engineer, C. P. W. D. In the remaining 4 cases the parties agreed to refer the disputes to the Chief Engineer/ Additional Chief Engineer, C. P. W. D. A plain reading of the agreements clearly shows that the identity of the persons, to whom references should be made, was left very vague and uncertain. There is only one Chief Engineer in the C. P. W. D. But, there are innumerable Additional Chief Engineers in the C. P. W. D. So, even though the words "Chief Engineer" in the cases covered by Civil Revision Petitions Nos. 44 of 1966 and 46 of 1966 were scored out, still there is vagueness regarding the Additional Chief Engineer to whom the references should be made. Should they be made to the Additional Chief Engineer of the concerned Zone in charge of the works, which were to be executed, or any other Additional Chief Engineer working in the C. P. W. D.? In the remaining 4 cases there is again uncertainty and dubiousness. Did the parties agree to refer their disputes to the Chief Engineer or Additional Chief Engineer and, if the latter, who is that Additional Chief Engineer? Exactly the same questions arose for deter­mination before this Court in a batch of 7 cases between the same parties decided by one of my learned predecessors Shri T. N. R. Tirumalpad, J. C. reported in R. D. Gupta v. Union of India, AIR 1964 Tri 27. He negatived the contention of the petitioner regarding the vagueness and uncertainty about the identity of the Additional Chief Engineer, C. P. W. D., who was to arbi­trate between the parties. He negatived the contention of the petitioner regarding the vagueness and uncertainty about the identity of the Additional Chief Engineer, C. P. W. D., who was to arbi­trate between the parties. He held that there was no dubiousness because the parties must have meant the Additional Chief Engi­neer (Zone II) in charge of the particular works, though there are several Additional Chief Engineers in the C. P. W. D., as both the parties knew, when they entered into the contracts, who the Additional Chief Engineer was who should be the sole arbi­trator and that he was the Additional Chief Engineer (II) in charge of the particular works. With due respect, I am unable to agree with him in his reasoning. The terms of a covenant should be interpreted on two well-established principles. Firstly, there must be a clear intention, which is beyond the possibility of any dispute, that the part­ies intended to act according to the cove­nant entered into and as interpreted by the Court. Secondly, the construction to be placed on a deed ought to be such as to render it reasonable rather than un­reasonable and will make it just to both the parties rather than unjust to one of them. Vide Humayun Reza v. Harendra Nath Das, AIR 1945'Pat 447. There is no reason to suppose that the parties intended that the Additional Chief Engineer, C. P. W. D. Zone H should be the person to arbitrate between the parties and why they did not intend to have some other Additional Chief Engineer of the C. P. W. D. to arbitrate. It cannot be stated that the parties had the concerned Additional Chief Engineer in their mind, because the arbitration agreement states that his connection with the works is no bar. It is not known why he was not specifically mentioned in the agreement. Evidently, an officer of the C. P. W. D. was sought to be chosen as an arbitrator, because as a techni­cal person he can make a proper award on the disputes. So, there is no reason to limit the ambiguous expression of Additional Chief Engineer, C. P. W. D. to the Addi­tional Chief Engineer, C. P. W. D. Zone II i» charge of the works. 6. So, there is no reason to limit the ambiguous expression of Additional Chief Engineer, C. P. W. D. to the Addi­tional Chief Engineer, C. P. W. D. Zone II i» charge of the works. 6. My learned predecessor again held that even the expression Chief Engineer/ Additional Chief Engineer, C. P. W. D. in the other cases (as in the 4 present revision petitions Nos. 42 of 1966, 43 of 1966, 45 of 1966 and 47 of 1966) was not ambiguous, though he felt that there was some ambi­guity in the words. In the cases before him the petitioner's Advocate agreed to the arbitration of one Shri M. V. Subrahmanyam Superintending Engineer, Arbitration, Mini­stry of Works, to act as arbitrator. But, in the revision petitions filed in this Court the petitioner in person contended that his Advocate made the admission without his consent and that it did not bind him. Shri T. N. R. Tirumalpad, J. C. accepted his argument and proceeded to dispose of his contention on merits. Firstly, he held that if the contention of the petitioner that the agreement was vague was correct, then the agreement itself was void that there could not be any arbitration, but that the peti­tioner himself wanted arbitration and filed the petitions under Section 20 of the Act, that he must be deemed to be of the view that when he filed the petitions there was no vagueness or uncertainty, that otherwise he should have filed suits and that, there­fore, there was no vagueness or uncertainty in the arbitration clause. Secondly, he dis­tinguished the decision of the Punjab High Court in Delhi and Finance Housing and Construction Ltd. v. Brij Mohan Shah, AIR 1956 Punj 205 which supports the peti­tioner's contention. 7. I closely studied the judgment of my learned predecessor and I regret I am not able to agree with him. For, the first ground in his judgment that the petitioner himself thought that there was no vagueness or un­certainty and that, therefore, he filed the applications under Section 20 of the Act, that if the arbitration clause itself was vague and uncertain then there could not be any arbitration at all is, in my judgment, not correct. For, the first ground in his judgment that the petitioner himself thought that there was no vagueness or un­certainty and that, therefore, he filed the applications under Section 20 of the Act, that if the arbitration clause itself was vague and uncertain then there could not be any arbitration at all is, in my judgment, not correct. That the respondent Union Gov­ernment of India itself thought that the ex­pression "Chief Engineer/Additional Chief Engineer, C. P. W. D." is vague and un­certain is clear from the fact that it scored out "Chief Engineer" in the two agreements covered by Revision Cases Nos. 44 of 1966 and 46 of 1966 and confined the matter only to the Additional Chief Engineer, C. P. W. D., but without stating of which Zone should lie be. But, in the remaining four cases the parties simply signed the stereotyped printed agreements without ap­plying their mind to the arbitration clauses proper namely, as to the person who should be appointed as the sole arbitrator, whether the Chief Engineer or the Additional Chief Engineer of any particular Zone. The In­dian Arbitration Act X of 1940 is a self-contained Code regarding arbitration pro­ceedings. Vide also Union of India v. Mohindra Supply Co., AIR .1962 SC 256 and S. N. Srikantia and Co. v. Union of India, AIR 1967 Bom 347 . The preamble to the Act reads that it was enacted to consolidate and amend the law relating to arbitration. The Act is divided into VII Chapters and the Chapters II to IV lay down the procedure to be adopted in three kinds of arbitration. Chap­ter II relates to arbitration without inter­vention of a Court and contains Sections 3 to 19. Chapter III relates to an arbitration with intervention of a Court, when there is no suit pending. It contains Section 20. Chapter IV contains Sections 21 to 25 and relates to arbitration in suits. Chapter I is an introductory one. Chapter V is a gene­ral one. Chapter VI relates to appeals. Chapter VII relates to miscellaneous pro­ceedings. The reasoning of my learned predecessor in AIR 1964 Tri 27 that if the arbitration clause is vague, then there can­not be any arbitration at all is opposed to the definition of "arbitration agreement" in Section 2 (a) of the Act. Chapter V is a gene­ral one. Chapter VI relates to appeals. Chapter VII relates to miscellaneous pro­ceedings. The reasoning of my learned predecessor in AIR 1964 Tri 27 that if the arbitration clause is vague, then there can­not be any arbitration at all is opposed to the definition of "arbitration agreement" in Section 2 (a) of the Act. It defines an arbi­tration agreement as any written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. So an arbitration agreement is a valid agreement whether any arbitrator is named therein or not. If the expression "Chief Engineer/Additional Chief Engineer, C. P. W. D." which is admittedly vague is deleted from the agreements, even then the agreements are valid as "arbitration agree­ments", because an arbitrator can be ap­pointed under the provisions of the Act. It is not necessary that the parties should mention any arbitrator either by his name as a persona designate or by his office in the arbitration agreement. This point is crystal clear from the definition of the "arbi­tration agreement" in Section 2 (a) of the Act. A party has three remedies open to him. He can file a petition under Section 8, Chapter II of the Act requesting the Court to appoint the arbitrator and the Court can appoint one under sub-section (2) of Section 8, if the provisions of Section 8 are complied with. He has a second remedy of filing an application under Section 20, Chapter II of the Act. He has a third remedy of filing a suit and getting the dis­putes referred to arbitration under Chap­ter IV of the Act. But, the petitioner chose to avail of the second remedy under Sec­tion 20 of the Act, though he added Sec­tion 8 also in the petitions. I shall first of all consider the applicability of Section 20 of the Act to these cases. 8. Section 20 of the Act runs as follows: "Application to file in Court arbitration agreement:- 20. But, the petitioner chose to avail of the second remedy under Sec­tion 20 of the Act, though he added Sec­tion 8 also in the petitions. I shall first of all consider the applicability of Section 20 of the Act to these cases. 8. Section 20 of the Act runs as follows: "Application to file in Court arbitration agreement:- 20. (1) Where any persons have entered into an arbitration agreement before the in­stitution of any suit with respect to the sub­ject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chap­ter II, may apply to a Court having jurisdic­tion in the matter to which the agreement relates, that the agreement be filed in Court. (2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties in­terested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plain­tiff" and the other parties as defendants. (3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed. (4) Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall 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. (5) Thereafter the arbitration shall pro­ceed in accordance with, and shall be gov­erned by the other provisions of this Act so far as they can be made applicable." It ordains the Court to perform three func­tions. First of all, the Court should num­ber the applications as suits. This, the Court did. Secondly the Court should direct notices thereof to be given to all the parties to the agreement other than the ap­plicants, requiring them to show cause with­in the time specified in the notices why the agreement should not be filed. This the Court did and the respondent filed the agree­ments in all the six cases. This, the Court did. Secondly the Court should direct notices thereof to be given to all the parties to the agreement other than the ap­plicants, requiring them to show cause with­in the time specified in the notices why the agreement should not be filed. This the Court did and the respondent filed the agree­ments in all the six cases. Then the third function of the Court is envisaged in sub­section (4) of Section 20 of the Act. After the agreements are filed, the Court shall 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. In the pre­sent case the Subordinate Judge should have made an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise. But, it has so happened that in all the six agreements there is dubiousness, vagueness and uncertainty about the identity of the arbitrator. So, the expression Chief Engineer/Additional Chief Engineer, C. P. W. D. (or Additional Chief Engineer, C. P. W. D.) has to be ignored. The parties do not agree upon any arbitra­tor. The petitioner specially does not agree to the appointment of any person working in the C. P. W. D. under the respondent. So, it is the duty of the Court to appoint an arbitrator. It is very important to note that the conjunction used is "or" and not "and". Where there is an appointed arbi­trator, then the Court is bound to make a reference to him. But, where there is no appointed arbitrator and where the parties cannot agree upon any arbitrator, then the Court is bound to appoint an arbitrator. After the arbitrator is appointed the other provisions of the Act are attracted as men­tioned in sub-section (5) of Section 20 of the Act. So, it is not correct to state that because there is vagueness regarding the identity of the person, to whom the refer­ence had to be made, the entire agreement is void. The agreement is not void, but only the vague clause therein mentioning "Chief Engineer/Additional Chief Engineer, C. P. W. D." is void and is liable to be ignored. 9. So, it is not correct to state that because there is vagueness regarding the identity of the person, to whom the refer­ence had to be made, the entire agreement is void. The agreement is not void, but only the vague clause therein mentioning "Chief Engineer/Additional Chief Engineer, C. P. W. D." is void and is liable to be ignored. 9. Next, regarding an almost direct ruling on this point decided by the Punjab High Court in AIR 1956 Punj 205 referred to by my learned predecessor and distin­guished by him, the facts of that case have to be stated. There was an arbitration clause in that case that all the disputes regarding the contract were to be referred to the sole arbitration of the managing agent/Techni­cal Director, Delhi Finance Housing and Construction Ltd. The Punjab High Court held that the clause was vague and uncer­tain and that there could not be a reference for arbitration either to the Managing agent or to the Technical Director. So, this is a case similar to the present cases before m« and also the previous batch of cases before Shri T. N. R. Tirumalpad, J. C. But, he distinguished the case on the ground that in spite of the arbitration clause one of the parties filed a suit in Court when disputes arose and that the other party applied for stay of proceedings on the ground that a. contract contained a clause for reference to arbitration. My learned predecessor states in his judgment that as the arbitration clause was vague, there could not be a reference to arbitration and that, therefore, the suit could not be stayed, that in that connection the decision was given that the clause was uncertain, but that in the cases before him the petitioner himself wanted arbitration and that, therefore, the above decision did not apply to them. With respect, this is a distinction drawn without any difference. Whether the objection was taken in a suit or in a petition is quite immaterial, so long as the objection is a valid one. I do not find any real distinction at all between that case and the batches of cases in this Court. The fact that the petitioner himself filed the petitions for arbitration does not remove the vagueness in the clause re­garding the person chosen as an arbitrator. I do not find any real distinction at all between that case and the batches of cases in this Court. The fact that the petitioner himself filed the petitions for arbitration does not remove the vagueness in the clause re­garding the person chosen as an arbitrator. The petitioner wants arbitration and it can be allowed, even if there is no mention of the name of any arbitrator, provided there is an agreement between the parties to re­fer the disputes to arbitration. There is such an agreement to refer the disputes to arbitration in all the cases before me and there was such agreement even before Shri T. N. R. Tirumalpad, J. C. That agreement is sufficient to attract the provisions of the Act and the Court can ignore the fact that they agreed to have an uncertain person as an arbitrator. 16. The learned Counsel for the respon­dent drew my attention to a prior decision of the Punjab High Court in Union of India v. New India Constructors, Delhi, AIR 1Q55 Pun] 172. This was also referred to by my learned predecessor in AIR 1964 Tri 27 in connection with another point urged by the petitioner. But, the point in issue namely, whether the arbitration clause to refer the matter to the Chief Engineer/Additional Chief Engineer, C. P. W. D. was not raised in that case and decided. It was taken as granted by both the parties that either of them could act as an arbitrator. This deci­sion is, therefore, no authority for the point whether the expression "Chief Engineer/ Additional Chief Engineer, C. P. W. D." is vague and uncertain in the arbitration clauses. 11. The learned Counsel for the respon­dent contended that the decision of this Court in AIR 1964 Tri 27 must be held to operate as res judicata and that the parties are at least bound on principles analogous thereto. But, the subject-matter of refer­ences in the two batches is different. The same dispute once referred and embodied in an award cannot be the subject-matter of a fresh reference and to that extent the rule of res judicata applies to arbitration pro­ceeding. But, when the subject-matter of reference is different there can be no ques­tion of res judicata. Vide Kerorimall v. Union of India, AIR 1964 Calcutta 543. 12. The same dispute once referred and embodied in an award cannot be the subject-matter of a fresh reference and to that extent the rule of res judicata applies to arbitration pro­ceeding. But, when the subject-matter of reference is different there can be no ques­tion of res judicata. Vide Kerorimall v. Union of India, AIR 1964 Calcutta 543. 12. Thus, to summarise the applicability of Section 20 to the facts of the cases, all the agreements contain clauses for reference of their disputes to arbitration. The agree­ments were filed into the Court. But, the identity of the arbitrator appointed by the parties in the agreements is dubious and un­certain. The parties do not agree to any arbitrator. So, under sub-section (4) of Section 20 the Court has to appoint an arbitrator. 13. The petitioner purported to take steps under Section 8 (1) (b) of the Act be­fore filing the petitions and filed them under Section 8 of the Act also, as evidently S. 8 (1) (a) of the Act does not apply. The petitioner issued notices to one Shri John Mukand, ACE, C. P. W. D., who is now said to be working in Himachal Pradesh to enter upon the references. He did not enter upon them. The contention of the petitioner is that he could approach Shri John Mukand, ACE, C. P. W. D. also as an appointed arbitrator, but that he did not enter upon the references, that it was not intended by the parties that the vacancy should not be filled up and that, therefore, the vacancy has to be filled up under Sec­tion 8 (1) (b) of the Act. He relied on Gannon Dunkerley and Co. v. Union Car­bide (India) Ltd., AIR 1962 Cal 360 . In that case it was urged for the respondent that under the arbitration clause in that case the Executive Engineer, C. P. W. D. or his nominee alone could be appointed arbitrator and no other, that it was the ex­press agreement between the parties, but that as the Executive Engineer refused to act and/or appoint an arbitrator, no other arbitrator could be appointed and that no order for reference could be made. It was held that, even in a case where the agreed arbitrator is unwilling or unable to act, the Court has jurisdiction to appoint an arbitrator under Section 20 (4) of the Act and that the clause "where the parties can­not agree to an arbitrator" in Section 20 (4) of the Act should be liberally construed to make an order of reference to its own arbi­trator in all cases when the parties do not agree to an arbitrator, so that the second class of cases contemplated by the sub-sec­tion should include not only cases where, at no previous point of time, the parties agreed to an arbitrator but also cases, where the parties having agreed to an arbitrator pre­viously, do not agree to a new appointment after the arbitrator previously agreed to is unable or unwilling to act. The learned Counsel for the respondent also relied on this decision to show that the reference should be first made to the ap­pointed arbitrator and that the Court can appoint an arbitrator only after he refuses to act. But, in view of my finding that tSe identity of the alleged appointed arbitrator "Chief Engineer/Additional Chief Engineer, C. P. W. D." in the four cases or "Addi­tional Chief Engineer C. P. W. D.". in the two cases is vague and ambiguous, section 8 (1) (b) of the Act does not come into play. So, the decision relied on by both the par­ties also does not apply to the facts of the cases herein. 14. The petitioner then argued that in any case the further clause in the agree­ments that the nominee of the "Chief Engi­neer/the Additional Chief Engineer, C. P. W. D." should arbitrate, if the latter is un­willing or unable to act, is illegal and con­trary to the provisions of Section 4 of the Act. He further contended that there is a conflict between section 4 on one hand and Section 8 on the other and that where there is a conflict it should be resolved, as laid down in Raj Krushna Bose v. Binod Kanungo, AIR 1954 SG 202. He further contended that there is a conflict between section 4 on one hand and Section 8 on the other and that where there is a conflict it should be resolved, as laid down in Raj Krushna Bose v. Binod Kanungo, AIR 1954 SG 202. He further argued that under Section 4 of the Act an arbitrator appointed as a persona designate cannot appoint another arbitrator as his nominee and that, therefore, the further clause in Clause 25 of the agreement that in case the Chief Engineer/Additional Chief Engineer, C. P. W. D. is unable or unwilling to act, he can nominate another arbitrator is repugnant and void under Sections 57 and 58 of the Indian Contract Act. Thus, his contention is that if it is held that the ex­pression "Chief Engineer/Additional Chief Engineer, C. P. W. D." is not vague and is held to be a binding contract, the remaining portion in the clause that the Chief Engi­neer/Additional Chief Engineer, C. P. W. D. should nominate another arbitrator is illegal being contrary to Section 4 of the Act and is a void agreement. Section 4 of the Act lays down that the parties to an arbitration agreement may agree that any reference thereunder shall be to an arbitrator or arbi­trators to be appointed by a persona de-signata either by name or as the holder for the time being of any office or appointment. There is nothing illegal if an arbitrator ap­pointed persona designata is authorised by both the parties to appoint his own nominee and the provisions of Section 8 of the Act are not contrary to those in Section 4 of the Act. In AIR 1955 Punj 172 this contention was raised, but was repelled. It was held that in such a case the functions of the Chief Engineer are two-fold. Firstly, it is his duty to act as an arbitrator himself and, if he does not do so, he clearly refuses or neglects to perform the duties as an arbi­trator. His second function is that, if he is unable or unwilling to act as the sole arbi­trator, then he must appoint another person in his place. This second function is a function which is performed by him not as an arbitrator but as a persona designata having duties to perform not as an arbitra­tor but as a persona designata appointing somebody else to act as an arbitrator. This second function is a function which is performed by him not as an arbitrator but as a persona designata having duties to perform not as an arbitra­tor but as a persona designata appointing somebody else to act as an arbitrator. The latter case falls under Section 4 of the Act. This contention was also raised before my learned predecessor in AIR 1964 Tri 27 and he too repelled the contention of the peti­tioner. I agree with both the decisions. But, it is not necessary to decide further this point in view of my finding that the expres­sion "Chief Engineer/Additional Chief Engi­neer, C. P. W. D." is vague and so no ques­tion of either of the two vague persons ap­pointing an arbitrator arises. 15. The Subordinate Judge cannot be said to have committed any illegality in passing the orders by following the judg­ment of this Court in AIR 1964 Tri 27. But, as I find that the judgment of this Court is not correct, it follows that the order of the Subordinate Judge is also incorrect. Revi­sions lie to this Court under Section 34 of the Tripura (Courts) Order, under which the powers of this Court are wider than those of the Court under Section 115 C. P. C. and therefore this Court can certainly interfere with the order of the lower Court. 16. Then, the next question is who should be appointed as arbitrator by the Court. The word "Court" in Section 2 (c) of the Act is defined as a "Civil Court" hav­ing jurisdiction to decide the questions form­ing the subject-matter of reference, if the same had been the subject-matter of a suit. But, except for the purpose of arbitration proceedings under Section 21 of the Act, it does not include a Small Cause Court. It was held to include an Appellate Court. Vide Subramannaya Bhatta v. Devadas Nayak, AIR 1955 Mad 693 . So, it includes even a Court of revision. The petitioner filed three affidavits on 4-9-1964, 16-1-1965 and 9-12-1965 setting forth his grievances against the respondent. But, they were not controverted by any counter-affidavit. So, they have to be presumed to be correct. Vide Juggi Lai Kamla Pat v. Ram Tanki Gupta, AIR 1962 All 407 . So, it includes even a Court of revision. The petitioner filed three affidavits on 4-9-1964, 16-1-1965 and 9-12-1965 setting forth his grievances against the respondent. But, they were not controverted by any counter-affidavit. So, they have to be presumed to be correct. Vide Juggi Lai Kamla Pat v. Ram Tanki Gupta, AIR 1962 All 407 . The learned Counsel for the respondent, however, stated that until the Chief Engineer or the Addi­tional Chief Engineer entered upon the re­ferences, no question of their filing any affidavit could arise and that, therefore, he did not file any counter-affidavit. No doubt, it can be filed in the subsequent proceed­ings, if any objection is raised about the arbitrator or the award on the ground of misconduct of the arbitrator or otherwise. But, respondent took time to file counter-affidavits and did not file them. It ought to have filed counter-affidavits denying the al­legations of the petitioner. According to the petitioner, litigation is going on between him and the respondent from about a decade. He alleges that there are several similar references pending arbi­tration between him and the respondent in Assam and Nagaland, N. E. F. A., Tripura and other places. He filed certified copies of two judgments of the Supreme Court in Civil Appeal No. 163 of 1965 and Civil Appeal No. 99 of 1966 on the file of the Supreme Court disposed of on 24-3-1965 and 24-2-1966 respectively. Their Lord­ships observed in their judgment in the for­mer appeal that they must express their con­cern over the long delay which occurred in that case and their Lordships hoped that the Union of India would co-operate in the matter and see to it that the arbitration pro­ceedings were concluded within a reason­able time and relieve the respondent there­in (petitioner herein) from the suspense in which he had been placed for all those years and that in view of the enormous de­lay it would be a matter for the consideration of the Government as to whether It could not be settled by mutual agreement at an early date. But, there was no such settlement and the same matter came up again before the Supreme Court in the second case referred to above, namely, Civil Appeal No. 99 of 1966 after the Civil Court in the NEFA area appointed one Mr. Nath as an arbitrator, who subsequently died. The Court appointed one Mr. But, there was no such settlement and the same matter came up again before the Supreme Court in the second case referred to above, namely, Civil Appeal No. 99 of 1966 after the Civil Court in the NEFA area appointed one Mr. Nath as an arbitrator, who subsequently died. The Court appointed one Mr. Dutt as arbitrator in his place. The High Court refused to interfere in revision with his appointment The Supreme Court confirmed the order of the High Court and further pointed out that though the Supreme Court indicated in its judgment in Civil Appeal No. 163 of 1965 that the matter was eminently fit for settlement, nothing had happened except carrying on litigation and that it could not do credit to the Government if people, who have done work for it, have to undergo harassment to get their claims settled quick­ly one way or the other. The Supreme Court wished that the dispute would be brought to an end soon. So, this is the type of litigation that is going on from at least about a decade. As such, there is no doubt that the petitioner apprehends that justice will not be done to him, if a person work­ing in the C. P. W. D. under the respon­dent is appointed as an arbitrator. When the Court is called upon to appoint an arbi­trator, it is the duty of the Court to select an impartial person for that office. The ob­servations of the learned author Russell in his Text Book on the Law of Arbitratiom, 16th Edition, at pages 110, 111 and 112 are pertinent. To disqualify an arbitrator so appointed, it is insufficient to show that he might be suspected of partiality. But, it must be shown, that if not actually biased, at least there is a strong probability that he would be biased and that to such an extent as to be incapable of fairly and honestly giving a decision (page 110). An arbitrator, notwithstanding his suitability for that office at the date of his appointment, may become unfitted to decide judicially upon the ques­tion submitted to him by reason of events between the time of his appointment and the arbitration (page 111). A person is disqualified from acting as an arbitrator in a dispute in relation to which he is a necessary witness (page 112). A person is disqualified from acting as an arbitrator in a dispute in relation to which he is a necessary witness (page 112). Vide also Nalini Ran-jan Guha v. Union of India, AIR 1954 Gal 462. So, an independent arbitrator has to be appointed. I, therefore, appoint Mr. G. N. Dutt of Gauhati, Retired Chief Engineer (the same person who was appointed by the other Courts and referred to by the Supreme Court in its two judgments) as arbitrator. The Subordinate Judge is directed to refer the matters to him for arbitration with a direction that he should expedite the arbi­tration proceedings. 17. In the result, the revision petitions are allowed with costs and the order of the Subordinate Judge is set aside. He should act as ordered above. Pleader's fee Rupees SO/- one set in these revision cases. Petitions allowed.