M.C. JAIN, J.—This special appeal under section 18 of the Rajasthan High Court Ordinance, is directed against the order of the learned single Judge, dated 5.8.1976, whereby the demand of Rs. 35,963.80 made by the Divisional Forest Officer, Udapur, in his Notice of Demand dated 5.7.72, in pursuance of the direction of the Chief Conservator of Forest, was quashed, as the same suffered from serious infirmity of not giving the appellant an opportunity of being heard It was further directed by the learned single Judge that the Chief Conservator of Forest shall now determine whether the appellant is at all liable, after giving him an opportunity of being heard. The appellant was directed through his counsel to appear before the Chief Conservator of Forest on 6.9.1976. 2. The controversy in this appeal lies in a very narrow compass as substantially the writ petition of the appellant has been accepted. The appellants only grievance is with regard to the direction given by the learned single Judge to the Chief Conservator of Forests for deciding the matter afresh. 3. Before adverting to the controversy in the present appeal, it would be proper to recall a few material facts in order to view the matter in its correct perspective. 4. The appellant is a contractor of forest produce. An auction of the bamboos in forest coupe Ramkund No. 4 Jhadol range forest division, was held on 20th of December, 1971 for the working season from 1.10.71 to 30th June, 1972. The cutting period was to expire on 31st March, 1972. The bid was finally knocked down in favour of the appellant for Rs. 50, 000/- and an agreement (Annexure 1) was duly entered into between the appellant and the State of Rajasthan. The Divisional Forest Officer, Udaipur, sent a communication dated 23.4.72 (Annexure 3) to the appellant directing him not to remove the felled material from the coupe till the enquiry into the alleged illicit felling in the neighbouring area is completed. It was informed that while inspecting his bamboos coupe Ramkund No.4 on 22.4.72 in the presence of his agents, it was noticed that there were illicit fellings of bamboos in the neighbouring area for which he is liable under clause 39 of the agreement. Thereafter, the appellant received the impugned notice dated 5.7.72 (Annexure 6) from the Divisional Forest Officer demanding a sum of Rs.
Thereafter, the appellant received the impugned notice dated 5.7.72 (Annexure 6) from the Divisional Forest Officer demanding a sum of Rs. 35, 968.35 paise, by way of compensation for illicit felling to be deposited within a period of 15 days, also recovery was to be effected in accordance with the rules. The appellant was informed that as a result of the enquiry, the forest authorities had come to the conclusion that 14065 bamboos of 5" circumference and 15820 bamboos of lesser circumference have been felled illegally by the appellant. The appellant then made a representation to the Chief Conservator of Forest on 2.9.72 (Annexure 7), in which he disputed his liability and maintained that he had not made any illegal felling. He also made a grievance that he had not been able to exploit coupe No. 4 fully and that he was not at all responsible for any damage done to the neighbouring forest area. He also submitted that no enquiry had been made in his presence and that the forest authorities had themselves permitted local inhabitants to cut trees for the domestic use and that he could not be held responsible for not checking that. His representation did not meet with success. So, he filed the writ petition challenging the aforesaid demand. 5. Before I the learned single Judge, it was contended by the appellant that no enquiry was held in his presence and all proceedings leading to the imposition of penalty or determination of compensation were violative of principles of natural justice. The learned single Judge upheld this contention and quashed the demand. The learned single Judge found that the penalty imposed on the appellant was by the Chief Conservator of Forest, which is borne out not only from the counter filed by the respondents but is also borne out from the representation of the appellant dated 2.9.72. That being so, the learned single Judge found that clause 39 of the agreement cannot be invoked by the respondents, because that only empowers the Divisional Forest Officer to forfeit the earnest money and determine the balance of amount.
That being so, the learned single Judge found that clause 39 of the agreement cannot be invoked by the respondents, because that only empowers the Divisional Forest Officer to forfeit the earnest money and determine the balance of amount. On behalf of the appellant, it was urged before the learned single Judge that as clause 39 was out of picture, the only manner in which the respondents could seek to realise any compensation, which they may claim against the appellant, was by resorting to a remedy before a court of law and that it was not open to the Chief Conservator of Forest to himself determine the amount and then seek to realise it. The learned single Judge took into consideration the view expressed by this Court in D.B. Special Appeal No. 308/1970 decided on 2.3.72 and found that this contention of the appellant cannot be accepted that the Chief Conservator of Forest was not competent to determine the compensation because power under clause 44 of the agreement clearly vests such an authority in him and this clause 44 of the agreement in question is identical to clause 46 of the agreement in the aforesaid D.B. Special Appeal. Consequently, the learned single Judge quashed the demand and directed the Chief Conservator of Forest as stated above. 6. Dissatisfied with this part of the order of the learned single Judge, the present appeal has been filed. 7. We have heard Shri C.K. Garg, learned counsel for the appellant and Shri D.S. Shisodia, Government Advocate for the State of Rajasthan. 8. Shri Garg contended that clause 44 of the agreement is an arbitration agreement and the position of the Chief Conservator of Forest under this clause is that of an arbitrator. The Chief Conservator of Forest can only exercise his power as an arbitrator when a reference is made to him by both the sides. No such reference was made by any of the parties to the agreement in the present case and without reference having been made by both the sides, the arbitrator cannot exercise any jurisdiction. The provisions of the Arbitration Act would be attracted by clause 44.
No such reference was made by any of the parties to the agreement in the present case and without reference having been made by both the sides, the arbitrator cannot exercise any jurisdiction. The provisions of the Arbitration Act would be attracted by clause 44. In the absence of reference by both the parties, the Chief Conservator of Forest will have no jurisdiction and the learned single Judge erred in giving the impugned direction to the Chief Conservator of Forest to determine the matter after giving opportunity of being heard to the appellant, Shri Garg vehemently and strenuously urged that in the absence of reference by both the sides, the only course open to the party, who wants to enforce clause 44 is by resorting to the remedy provided under sec. 20 of the Arbitration Act. He submitted that the direction of the nature given by the learned single Judge is beyond Certiorari jurisdiction and is not in consonance with the provisions of the Arbitration Act, and is thus, unsustainable in law. 9. Before dealing with the contentions of Shri Garg, we may reproduce here clause 44 of the agreement, for ready reference:— ^^bl bdjkj ukes dh krksZa dk eryc fudkyus ds fo"k; esa ;k vU; fdlh izu ds fo"k; esa tks bdjkjukes ls izR;{k ;k vizR;{k :i ls lacaf/kr gks] >xM+k ;k erHksn gksxk rks gj ,d ,slk izu phQ dUtjosVj vkWQ QksjsLV jktLFkku ds le{k isk fd;k tkosxk vkSj mudk fu.kZ; nksuksa i{kksa dks ekU; vkSj vafre gksxkA** The relevant provisions of the Arbitration Act relied upon by the counsel are these:— "2(a) "Arbitration agreement" means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. 2(e) "Reference" means a reference to arbitration. 3. An arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference. 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 of any office or appointment.
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 of any office or appointment. 20(1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to it, 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 claim-ing 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 there of 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." The first Schedule of the Arbitration Act provides for implied conditions of arbitration agreement and clause 3 thereof is to the effect that the arbitrator shall make the award within four months, after entering on the reference or having been called upon to act by notice from any party to the arbitration agreement or within such extended time as the Court may allow. 10. The first question, which arises for our determination is as to what is the nature of clause 44 ?
10. The first question, which arises for our determination is as to what is the nature of clause 44 ? A perusal of clause 44 will reveal that in case any dispute arises relating to the interpretation of any of the terms and conditions of the agreement or relating to any other question in respect of the agreement directly or indirectly, the same shall be referred to the Chief Conservator of Forest, Rajasthan, and his decision thereon shall be final and binding on both the parties. This clause envisages reference of all or any of the disputes relating to the interpretation of the agreement or other disputes arising under the agreement, to be settled by the Chief Conservator of Forest on reference being made to him. Shri Shisodia, learned Government Advocate submitted that this clause, strictly speaking, is not an arbitration agreement but is akin to the function of the valuer or surveyor when the matter is referred to him because any party to the agreement can submit the dispute before the Chief Conservator of Forest and when any such dispute is submitted, by virtue of the power conferred under this clause, the Chief Conservator of Forest is empowered to settle that dispute. Shri Shisodia urged that the dispute was very much submitted to him as the Deputy Conservator of Forest had submitted his report in connection with the alleged illicit felling of bamboos in the neighbouring area of coupe No. 4. So, the Chief Conservator of Forest was competent to decide the same under clause 44. 11. Looking to the language, in which clause 44 is couched, we have no hesitation in holding that the said clause is an arbitration agreement between the parties. According to the definition of the expression "arbitration agreement" in section 2(a) of the Arbitration Act, the requisite conditions are that there should be written agreement and the written agreement should be in connection with submission of present or future differences to arbitration, whether the arbitrator is named in the written agreement or not. Clause 44 in our opinion, fulfils the requirements of section 2(a). By clause 44, the parties agreed to submit their disputes referred of therein to arbitration. It is true that the word "arbitration" or "arbitrator" is not used in clause 44, but that is not very material.
Clause 44 in our opinion, fulfils the requirements of section 2(a). By clause 44, the parties agreed to submit their disputes referred of therein to arbitration. It is true that the word "arbitration" or "arbitrator" is not used in clause 44, but that is not very material. The parties by clause 44 have entered into an agreemont to get their disputes settled by a forum of their choice. So, the officer mentioned in clause 44 would only act as if the dispute has been referred to him for arbitration. We do not find substance in the contentions advanced by Shri Shisodia that clause 44 strictly speaking is not an arbitration agreement and the power to settle the dispute is otherwise vested in him. Reference in this connection may be made to the decision of the Supreme Court in Chief Conservator of Forests, Rewa vs. Ratan Singh Hans(l). In that case, there was a contract granting a right to the forest produce and clause 9 of the agreement was as under:— "9. In the event of any doubt or dispute arising between the parties as to the interpretation of any of the conditions of this contract or as to the performance or breach thereof, the matter shall be referred to the Chief Conservator of Forests, Madhya Pradesh, Nagpur, whose decision shall be final and binding on the parties hereto." The above clause was considered to be an arbitration agreement between the parties. However, it was held in that case that the Chief Conservator of Forest did not act as an arbitrator. In that case, the Divisional Forest Officer held an enquiry in respect of certain breaches committed by the respondents of the terms of the contract and by his order dated 30-1-1958, directed the respondent to pay Rs. 8,500/- as compensation assessed by him for damage done in the reserved forest and Rs. 500/- as penalty. Thereafter, the respondent preferred an appeal against that order to the Conservator of Forest and a revision petition to the Chief Conservator of Forest, Madhya Pradesh, but both were unsuccessful. Their Lordships of the Supreme Court observed that when a dispute arises between the contractor and the forest authorities relating to the performance or breach of the contract, there is, under the terms of clause 9, to be a reference to the officer denominated in the contract.
Their Lordships of the Supreme Court observed that when a dispute arises between the contractor and the forest authorities relating to the performance or breach of the contract, there is, under the terms of clause 9, to be a reference to the officer denominated in the contract. It was urged before their Lordships that in any event, the decision was in fact given by the Chief Conservator of Forest, in the case and that decision complied with the requirements of clause 9 of the contract. This contention was negatived and it was observed that the Chief Conservator of Forests in exercise of his revisional jurisdiction upheld the order of the Conservator of Forest. Their Lordships further observed as under:— "The Chief Conservator of Forest did not even purport to act as an arbitrator; he recorded no evidence, and expressly held that the Divisional Forest Officer was not obliged to refer the case for arbitration under clause 9 of the contract. The trial was not of a proceeding in arbitration, but of a proceeding in exercise of supervisory or revisional jurisdiction. If in truth the dispute had to be referred for adjudication to the Chief Conservator of Forests, his decision that he found no reason to interfere with the "finding of the Divisional Forest Officer" who was one of the parties to the dispute cannot conceivably be regarded as an award between two contesting parties. It must, therefore, be held that the order passed by the Divisional Forest Officer imposing liability for compensation for damage done by illegal fellings cannot be sustained." 12. A contention was advanced by the appellant before the learned Single Judge that the only manner in which the respondents could seek to realise any compensation, which they may claim against the appellant, was by resort to a court of law and it was not open to the Chief Conservator of Forest to himself determine the amount and then seek to realise it. This contention was supported by reference to a judgment in SB. Civil Writ Petition No. 319/ 1968 decided on 21-9-70, wherein apparently the view taken was that all that the Chief Conservator of Forest could do was to determine the question of penalty and then to seek to recover the reasonable compensation in a court of law.
This contention was supported by reference to a judgment in SB. Civil Writ Petition No. 319/ 1968 decided on 21-9-70, wherein apparently the view taken was that all that the Chief Conservator of Forest could do was to determine the question of penalty and then to seek to recover the reasonable compensation in a court of law. The learned single Judge took notice of the fact that the said S.B Judgment was appealed from before D B. in Special Appeal No. 308/70 decided on 2-3-72. In that case, on behalf of the State, reference was made to clause 46 of the agreement and with reference to clause 46, the Division Bench observed that the single Judge did not have the occasion to consider the effect of clause 46 and his judgment cannot be construed to lay down that the State departments only remedy is to have recourse to a court of law. The Division Bench held that there is nothing to stand in the way of the State Government to have recourse to the remedy available to them under clause 46 of the agreement. Clause 46 of the agreement in that case was identical to clause 44 of the agreement in the present case. We agree with the view taken by the learned single Judge that it cannot be accepted that the Chief Conservator of Forest was not competent to determine the question. Clause 44 clearly vests such an authority in him. 13. Thus, viewed in the light of the definition of the expression arbitration agreement and the cases referred to above, we are clearly of the opinion that clause 44 of the agreement in question is nothing but an arbitration agreement. 14. The next question, which arises for consideration is whether the learned single Judge was right in remanding the matter to the Chief Conservator of Forest for a fresh decision. In this connection, the contention of Shri Garg is that reference is required to be made by both the sides, whereas in fact, no reference was made by any party to the agreement. With regard to his contention that reference requires assent of both the sides, he placed reliance on a decision of the Supreme Court in Thawardas Pherumal vs. Union of India (2) and also on a decision of the Gauhati High Court in Union of India vs. R. C. Malpani (3).
With regard to his contention that reference requires assent of both the sides, he placed reliance on a decision of the Supreme Court in Thawardas Pherumal vs. Union of India (2) and also on a decision of the Gauhati High Court in Union of India vs. R. C. Malpani (3). Shri Garg invited our attention to section 4 of the Arbitration Act and urged that if reference is not made and assent to reference is not given by both the sides, then the only remedy available to a party to the agreement is to move the court under sec. 20 of the Arbitration Act and under sub-sec. (4) thereof, the court can order the agreement to be filed and the court is further empowered to make an order of reference to the arbitrator appointed by the parties whether in the arbitration agreement or otherwise. He urged that in the present case, no reference was made by both the sides and as such no direction could have been given to the Chief Conservator of Forest to undertake proceedings under clause 44 of the agreement. He can only proceed under clause 44 of the agreement after reference having been made to him by both the parties. 15. We have carefully considered these contentions of Shri Garg. However, we do not find any substance in them and the decisions relied upon by Shri Garg, in our opinion, do not lay down the proposition as urged by him. The word reference as defined in clause (e) to sec. 2 only means actual submission of a particular dispute under the provisions of arbitration agreement to the arbitrator contemplated thereunder. The jurisdiction of the arbitrator would depend on the terms of the arbitration clause. If under the arbitration clause or agreement, the parties have specified the nature of disputes to be referred to arbitration and if the parties have appointed a named arbitrator, then any one of the parties to the arbitration agreement is entitled to submit the dispute under the arbitration agreement to the named arbitrator and it is not necessary that to such actual submission of dispute, that, is, to the reference all the parties to the arbitration agreement should be parties.
Section 4 of the Arbitration Act only provides that parties to the arbitration agreement may agree that any reference in the arbitration agreement shall be to an arbitrator to be appointed by a person designated in the agreement either by name or as the holder for the time being of any office or appointment. Under section 4 there could be an agreement between the parties that even a third party designated in the agreement whether by name or by office may appoint an arbitrator. In our opinion, there is no warrant for the proposition that reference to arbitration has to be assented to by both the sides even when there is an agreement between the parties to make a refereace of all the disputes and differences of the nature specified in the arbitration agreement to a named arbitrator. Section 20 of the Arbitration Act makes a provision for getting the arbitration agreement filed and thereafter, to seek an order of reference from the court against the recalcitrant party to the arbitration agreement. Under sec. 20, reference to arbitration can be ordered by the court when there is no suit pending. Shri Garg placed reliance on the following passage from the decision in Thawardas Pherumals case (supra):— "A reference requires the assent of both sides. If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under sub-section (4)." We may state that the above observations have been made by their Lordships of the Supreme Court in the context of the facts of that case. In that case, the fifth head of claim made by the contractor was for Rs. 75,900/- as the price of 88 lacs of kaccha bricks which were destroyed by rain. These bricks were not the subject-matter of the conrtact Their Lordships were required to consider the question whether there was need for specific reference on a point of law though when the specific reference on a point of law is made the jurisdiction of the court is ousted. In that case, the arbitrator partially gave an award in respect of that claim.
In that case, the arbitrator partially gave an award in respect of that claim. There was clause 6 of the agreement which provided that the department will not entertain any claim for idle labour or for damage to unburnt bricks due to any cause whatsoever and the arbitrator held that the said clause was not meant to absolve the department from carrying out their part of the contract. The question arose whether his decision on this point was final despite it being wrong in law and in that connection their Lordships observed that this is not the kind of specific reference on a point of law that the law of arbitration requires. It is only an incidental matter introduced by the dominion to repel the claim made by the contractor in general terms under claim no. 5 and it was observed that this was the submission of the contractor alone. Their Lordships after making the above observations proceeded to state that in the absence of either, agreement by both sides about the terms of reference, or an order of the court under section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction. Their Lordships further proceeded to state as follows:— "Therefore, when a question of law is the point at issue, unless both sides specifically agree to refer it and agree to be bound by the arbitrators decision, the jurisdiction of the Courts to set an arbitration right when the error is apparent on the face of the award is not ousted. The mere fact that both parties submit incidental arguments about a point of law in the course of the proceedings is not enough." 16. In the Gauhati case, it was observed that reference can be made by an arbitrator either by the parties jointly or by one of them after giving a notice to the other, or on seeking help of the Court, though it was observed that without reference, the arbitrator lacks jurisdiction to undertake the job of arbitration. 17. The aforesaid two decisions in our opinion, do not lay down that assent of both the parties is necessary for making reference to an arbitrator under the arbitration agreement which specifies the referable disputes. 18.
17. The aforesaid two decisions in our opinion, do not lay down that assent of both the parties is necessary for making reference to an arbitrator under the arbitration agreement which specifies the referable disputes. 18. The question as to the necessity of assent of both the sides for making reference to an arbitrator can be examined in the light of clause 3 of the first Schedule. Under clause 3, even one party to the arbitration agreement can call upon the arbitrator to undertake the arbitration. A bare perusal of this clause makes the position abundantly clear. 19. Thus, we do not find any force in the contention of Shri Garg that in the present case for conferring jurisdiction on the arbitrator, reference requires assent by both the sides. 20. The next question to be examined is as to whether there is any reference made to the Chief Conservator of Forest in the present case, which alone will give him jurisdiction to undertake arbitration proceedings. It is true that prior to the raising of demand, no reference was made by any of the parties to arbitration agreement to the Chief Conservator of Forest but when the demand was made and a representation was submitted against the demand by the appellant, that representation dated 2-9-72 can be treated to be a reference and on that basis, direction could be given to the Chief Conservator of Forest to proceed to settle the dispute under clause 44 of the agreement. The appellant in his representation made a grievance against the imposition of penalty or compensation amounting to Rs, 35,968.30 and requested for refund of the security, amounting to Rs. 35,000/-. It may be mentioned that the Chief Conservator of Forest earlier did not act under clause 44 of the agreement and on the basis of the report of the Deputy Conservator of Forest directed imposition of penalty or compensation and pursuant to it, the Divisional Forest Officer sent a notice of demand on 5-7-72, Annexure 6 but the proceedings and the demand notice stand quashed by the learned single Judge and the Chief Conservator of Forest can now proceed to determine the dispute regarding the liability of the appellant to pay compensation on account of the alleged illegal felling of bamboos on his representation.
Where any dispute is brought before the Chief Conservator of Forest by any party to arbitration agreement in any manner or in any form, it is nothing short of reference under clause 44. In our opinion, by the aforesaid direction of the learned single Judge, it cannot be said that there has been any failure of justice. Rather from the direction given by the learned single Judge, it would be proper to observe that there has been substantial justice done to the parties. After quashing the demand, the learned judge has directed the Chief Conservator of Forest to act under clause 44 of the agreement after giving fair and reasonable opportunity of hearing to the appellant. We may also state that it would be futile to quash the direction as the Divisional Forest Officer can refer the dispute under clause 44 of the agreement for arbitration to the Chief Conservator of Forest. In this view of the matter, in our opinion, this appeal against the aforesaid direction of the learned single Judge has absolutely no merit and deserves to be dismissed as it cannot be said that the learned single Judge in any way has exceeded his certiorari jurisdiction. 21. No other point has been pressed before us. 22. In the result, this appeal fails and is hereby dismissed. In the circumstances of the case, we leave the parties to bear their own costs of this appeal.