Judgement These two Rules were obtained against two orders passed by the Assistant to the Deputy Commissioner, Shillong, appointing an Arbitrator and affirmed by the Additional Deputy Commissioner, Khasi Hills, Shillong in appeal. The facts in both of the cases are common and the points of law involved are the same; as such this common judgment will dispose of both the cases. 2. The undisputed material facts may be briefly stated as follows:- The Union of India (the petitioner herein) entered into an agreement being agreement No. 5/ACC/EE/SH of 1964-65 with M/s. Dev and Company, Shillong (Opposite party herein), on July 2, 1964, for construction of additional accommodation of the Accountant General, Shillong. Clause 25 of the Agreement, which is material, is in the following terms: "Cl. 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, instruction, orders of 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 person appointed by the additional Chief Engineer, Central Public Works Department in charge of the work at the time of dispute or if there be no Additional Chief Engineer, the administrative head of the said Central Public Work Department at the time of such appointment. 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 matter to which the contract relates and that in the course of his duties as Govt. servant he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Additional Chief Engineer or Administrative head as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another terms of the contract.
The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Additional Chief Engineer or Administrative head as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by such Additional Chief Engineer or Administrative head of the C.P.W.D. as aforesaid and, if for any reason, that is not possible the matter is not to be referred to arbitration at all. The arbitrator (s) may from time to time with the consent of the parties enlarge the time of making and publishing the award. Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause." 3. Subsequently some disputes arose between the parties whereupon the Chief Engineer, C.P.W.D., as the administrative head, appointed one Shri B. S. Sekhon as arbitrator. The opposite party, then, on 2-1-73, made an application in the Court of the Assistant to the Deputy Commissioner, Shillong, praying for setting aside the order of appointment of Shri Sekhon on the ground that he was not an engineer and for appointing an engineer as Arbitrator. On 1-5-74 the Assistant to the Deputy Commissioner held the appointment of Shri Sekhon illegal and directed the petitioner to appoint an engineer Arbitrator within 15 days of the order with the consent of the opposite party, From the aforesaid order the petitioner filed an appeal in the Court of the Additional Deputy Commissioner, Shillong, who heard the appeal on 14-8-74 and fixed 22-8-74 for delivery of judgment, but which was actually delivered on 19-7-76. According to the petitioner, he was making frantic enquiries about the judgment of the Additional Deputy Commissioner in the appeal but received no reply from the office of the Additional Deputy Commissioner. He knew about the judgment only on receipt of a letter dated 17-12-76 from the Seristadar of the appellate Court. The contention of the petitioner is that under Cl.
He knew about the judgment only on receipt of a letter dated 17-12-76 from the Seristadar of the appellate Court. The contention of the petitioner is that under Cl. 25 of the Arbitration agreement the Chief Engineer, as the administrative head, had the power to appoint the Arbitrator, but in due deference, however, to the order of the Court the petitioner appointed one Shri M. K. Koundinya, who was an Engineer, as Arbitrator. The opposite party, however, was not satisfied with this appointment either. The Court on petition, by his impugned order dated 10-2-77 disapproved the appointment of Mr. Koundinya as Arbitrator and appointed a local engineer. Shri D. P. Sharma, Superintending Engineer, P.W.D. (R. and B.), Govt. of Meghalaya, as Arbitrator as prayed for by the opposite party on the ground that "to expedite the dispute local engineer will be the proper person to finalise the matter at an early date". From that order the petitioner preferred an appeal before the Additional Deputy Commissioner, Shillong, who, by its order dated 20-7-77, upheld the order of the Assistant to the Deputy Commissioner this order of the Additional Deputy Commissioner affirming the order dated 10-2-77 of the Assistant to the Deputy Commisisoner, has been impugned in Civil Revision No. 10 (H) of 1977 and the earlier order dated 19-7-76 of the Additional Deputy Commissioner affirming the order dated 1-5-74 passed by the Assistant to the Deputy Commissioner has been impugned in Civil Revision No. 11 (H) of 1977. 4. Mr. K. Pal Choudhury, learned counsel appearing for the opposite party, raises a preliminary objection to the maintainability of Civil Revision 11 (H)/ 77. His objection is that Civil Revision 11 (H)/77 is barred by limitation, as it was filed long after 90 days of the date of the impugned order of the Additional Deputy Commissioner. I shall consider the objection after the disposal of Civil Revision 10 (H)/77 which is in time. 5. The first submission of Mr. Laskar, learned Central Govt. Standing Counsel, is that the Assistant to the Deputy Commissioner had no jurisdiction to entertain the application of the opposite party and to exercise powers under S. 8 of the Arbitration Act, 1940 (hereinafter called the Act). His submission is that in the present case Cl.
5. The first submission of Mr. Laskar, learned Central Govt. Standing Counsel, is that the Assistant to the Deputy Commissioner had no jurisdiction to entertain the application of the opposite party and to exercise powers under S. 8 of the Arbitration Act, 1940 (hereinafter called the Act). His submission is that in the present case Cl. 25 gives power to the Chief Engineer as the Administrative Head of the Central Public Works Department to appoint the Arbitrator who need not necessarily be an engineer, far less a local engineer. 6. Let us examine Cl. 25 of the arbitration agreement and S. 8 of the Act, S. 8 of the Act is in the following terms: "8. (1) In any of the following cases: (a) 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 difference have arisen, concur in the appointment or appointments; or (b) If any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or (c) Where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. (2) If the appointment is not made within fifteen clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties. ... ... ..." S. 8(1) makes provision for appointment of an arbitrator or arbitratorsby consent of partieswhere such a stipulation has been made in the arbitration agreement itself (Cl. (a)), or when the parties or arbitrators do not appoint an umpire as required (cl.
... ... ..." S. 8(1) makes provision for appointment of an arbitrator or arbitratorsby consent of partieswhere such a stipulation has been made in the arbitration agreement itself (Cl. (a)), or when the parties or arbitrators do not appoint an umpire as required (cl. (b)) or when the arbitrator or umpire refuses or neglects to act or cannot act for some reason (cl. (c)). In such a situation only the jurisdiction of the Court can be invoked under sub-sec. (2). In the instant case it has not been so stipulated in the arbitration agreement. So sub-sec. (1) of S. 8 is not attracted to the present case. Sub-section (2) is attracted only when sub-sec. (1) is attracted. The question of appointment of arbitrator within 15 days after the service of notice, therefore, does not arise. Sub-sec. (2) is consequential to the operation of sub-sec. (1). The power of the Court under sub-sec. (2) cannot be invoked if sub-sec. (1) is not applicable. In the instant case there is no provision in the arbitration agreement for the appointment of an arbitrator or arbitrators by consent of the parties in terms of cl. (a) of sub-sec. (1) of S. 8 of the Act. 7. S. 4 of the Act, which is material may also be quoted: "4. The parties to an arbitration agreement may agree that any reference thereunder shall be to an arbitrator or arbitrators to be appointed by a person designated in the agreement either by name or as the holder for the time being to any office or appointment". Mr. Pal Choudhury submits that Cl. 25 has reserved all the rights in favour of the petitioner and is prejudicial to the opposite party. In my opinion the submission has no substance, inasmuch as Cl. 25 is in terms of Section 4 of the Act. It is not the contention of the learned counsel that CL 26 is illegal or unenforceable. Section 4 provides for appointment of arbitrator or arbitrators by a third party designated either by name or ex officio as the holder of a certain office, Cl. 25 of the arbitration agreement read with Section 4 of the Act gives jurisdiction to the Additional Chief Engineer or the Administrative Head of the C.P.W.D. to appoint the arbitrator.
Section 4 provides for appointment of arbitrator or arbitrators by a third party designated either by name or ex officio as the holder of a certain office, Cl. 25 of the arbitration agreement read with Section 4 of the Act gives jurisdiction to the Additional Chief Engineer or the Administrative Head of the C.P.W.D. to appoint the arbitrator. The Assistant to the Deputy Commissioner, therefore, had absolutely no jurisdiction under Section 8 (2) of the Act to entertain the application of the opposite party and to appoint the arbitrator as he did. 8. Mr. Pal Choudhury submits that even if the impugned order of the Assistant to the Deputy Commissioner be not sustainable under S. 8 (2) of the Act, his order is sustainable under Sections 5, 12, 33 and 20 of the Act. A mere perusal of these sections shows that they have no bearing at all to the facts of the present case. S. 20, on which great reliance has been taken by Mr. Pal Choudhury, provides, inter alia, for applying for filing an agreement in Court when there is a difference between the parties. In the application dated Jan. 2, 1973, made before the Assistant to the Deputy Commissioner, the opposite party made the following four material prayers to: "(i) declare the appointment of Shri B. S. Sekhon, (Respondent No. 3) as an arbitrator as invalid, (ii) alternatively, revoke the authority of Shri Sekhon, as contended in paragraph 16, hereabove. (iii) the respondent No. 1 be directed, to file the arbitration agreement in the learned court, (iv) the respondent No. 2 be directed to appoint an Engineer-arbitrator with the consent of the parties and in the absence of such consent such appointment may be effected by the learned court." Although the aforesaid 4 prayers were mentioned in the petition it appears that the opposite party abandoned prayers Nos. (ii) and (iii) and pursued prayers Nos. (i) and (iv) and ultimately abandoned these prayers also and prayed for the appointment of alocal engineer-arbitrator with the consent of the parties, which prayer was granted by the Assistant to the Deputy Commissioner. This order obviously cannot be saved by Section 20. 9. In the result Civil Revision No. 10 (H)/77 is allowed.
(i) and (iv) and ultimately abandoned these prayers also and prayed for the appointment of alocal engineer-arbitrator with the consent of the parties, which prayer was granted by the Assistant to the Deputy Commissioner. This order obviously cannot be saved by Section 20. 9. In the result Civil Revision No. 10 (H)/77 is allowed. The entire proceedings initiated before the Assistant to the Deputy Commissioner by the opposite party including the impugned orders of the Assistant to the Deputy Commissioner and of the Additional Deputy Commissioner are without jurisdiction and are, therefore, quashed. The Rule is made absolute. 10. As a result of the above conclusion, the question of the bar of limitation of Civil Revision No. 11(H)/77 does not arise as the orders impugned in this revision stand quashed. The preliminary objection of the learned counsel for the opposite party is of no use. This Rule is also made absolute. 11. Parties will bear their own costs in both the appeals. Revision allowed.