BANABEHARI DAS v. EXECUTIVE ENGINEER, R. E. DIVISION
1979-04-24
R.N.MISRA
body1979
DigiLaw.ai
JUDGMENT : R.N. Misra, J. - This is an application challenging the order of the learned Sub-ordinate Judge at Bhubaneswar by which he rejected an application u/s 8(2) of the Arbitration Act filed by the Petitioner. 2. Petitioner bad entered into a contract in F-2 form with the State of Orissa for execution of certain contracts. Clause 23 of the contract contained provision for arbitration in the event of dispute. Notice u/s 8(1) of the Act was served on the Chief Engineer on 24-11-1977 for appointing an arbitrator and when there was no compliance with the demand, Petitioner filed an application in Court on 27-1-1978. The opposite parties entered appearance in the proceeding and took the plea that the Chief Engineer had actually made an appointment on 5-12-1977, within the statutory period of fifteen days. It was also pleaded that notice of such appointment had been given to the Petitioner as also so the appointed arbitrator. As it seems on 28-1-1978, notice was communicated to the Petitioner by the appointed arbitrator and, reliance was placed on that feature to support the stand that the appointment as alleged had in fact been made. 3. Before the learned Sub-ordinate Judge, no oral evidence was led and on the documents placed on record, he came to hold that the Opposite parties failed to prove delivery of the letter to the Petitioner intimating appointment of arbitrator. He further held that u/s 42 of the Arbitration Act, any notice required to be served by a party to an arbitration agreement was to be delivered to the person on whom it was to be served or to be sent to him by registered post. Notice by either mode had not been proved. The learned Sub-ordinate Judge, however, took the view that there was no obligation on the part of the Chief Engineer to intimate the parties about the appointment of arbitrator. He relied upon the decision of the supreme Court in the case of Keshavsinh Dwarkadas Kapadia, etc. Vs. Indian Engineering Company where it was stated: The necessity for communication of appointment of arbitrator to the parties as also to the appointee depends often on the language of the arbitration clause....
He relied upon the decision of the supreme Court in the case of Keshavsinh Dwarkadas Kapadia, etc. Vs. Indian Engineering Company where it was stated: The necessity for communication of appointment of arbitrator to the parties as also to the appointee depends often on the language of the arbitration clause.... and as the learned Sub-ordinate Judge did not find any mandate in Clause 23 of the F-2 agreement, he did not accept the stand of the Petitioner that non-communication of the alleged appointment justified approach to the Court u/s 8(2) of the Act. 4. The Supreme Court in the reported decision was not examining the question which arises in the present matter. On the other hand, the decision at Lord Denning M.R. in the case of Tradax Export S.A. v. Volkswagenrverk AG (1970) E.L.R All 420, clearly supports the view that when notice In given for appointment of an arbitrator, appointment, if made, has to be notified. A bare analysis of section of the Act clearly indicates that Sub-section (1) authorises a party to the contract containing an arbitration clause to give written notice to concur in the appointment of an arbitrator and if within fifteen clear days after service of notice appointment is not made, the Court has power, if moved by the party who gave notice, to make an appointment in which event, the appointment shall be deemed to be by common consent. From the very nature of the provision in Section 8, it must follow that the party who gave notice for appointment of arbitrator has to be communicated, in case an appointment is made, with due haste that the notice has been complied with otherwise he would be justified in taking action under Sub-section (2) of Section 8 of the Act. It would, therefore, follow that the notice u/s 8(1) if complied with has to be communicated with utmost expedition to the notice-giver. In the instant case, no communication has at an been made to the Petitioner who gave notice. Learned Government Advocate relies upon service of notice by the arbitrator after the Court was moved as intimation of appointment. This certainly is no compliance of Sub-section (2). There is also no clear material on record to show that the appointment was as a fact, made on the 5th of December, 1977, as alleged.
Learned Government Advocate relies upon service of notice by the arbitrator after the Court was moved as intimation of appointment. This certainly is no compliance of Sub-section (2). There is also no clear material on record to show that the appointment was as a fact, made on the 5th of December, 1977, as alleged. The statement in the impugned order: ...It appears from Annexure-II filed by the O.P. that Sri A.N. Nanda has been appointed by the Chief Engineer on 5-12-1977, that is, within the statutory period of 15 days after the notice and the Arbitrator seems to have accepted the appointment as he has issued notice as per Annexure-III on 28-1-1978 to the parties to submit their claims and statements.... does not seem to be borne out by any material on the records sent to this Court by the learned Subordinate Judge. 5. It is difficult to hold in the circumstances that within the statutory period, the appointment as alleged by the opposite parties had been made. The Petitioner was, therefore, justified in approaching the Court by making an application u/s 8(2) of the Arbitration Act. If the appointment was not made within the time indicated by law, the Petitioner is well within his rights to ask the Court to make the appointment of an arbitrator and the Chief Engineer would have no jurisdiction to make an appointment and take away the jurisdiction of the Court u/s 8(2) of the Act. 6. This revision application has, therefore, to be allowed. I vacate the impugned order and direct the learned Sub-ordinate Judge to dispose of the application u/s 8(2) of the Arbitration Act in accordance with law on the footing that no appointment has been made pursuant to the notice given by the Petitioner within the statutory period. There would be no order for costs. Final Result : Allowed