JUDGMENT : S. Acharya, J. - The opposite party, a contractor, had entered into an agreement in F-2 form with the State of Orissa for certain construction work. Some dispute arose between the parties and the contractor on 4-7-1979 issued a letter to the Chief Engineer. National Highway Division, Bhubaneswar, invoking Clause 23 of the agreement for appointment of an arbitrator. This letter evidently was issued in accordance with the provisions of Section 8(1)(a) of the Arbitration Act (hereinafter referred to as the Act), and so this was the 'written notice' contemplated under the said provision. The Chief Engineer on receiving the said notice on 5-7-1979 appointed an arbitrator on 17-7-1979 in accordance with the provisions of Clause 23 of the agreement. After making the said appointment a registered letter was posted to the contractor on 18.7-1979. The fact of posting of the said letter is established by the production of the postal receipt Ext. E. The learned Government Advocate states that the said letter posted on 18-7-1979 was received by the opposite party, contractor on 26-7-1979, as it appears from the letter of the Sub-Postmaster, Burla, dated 18-10-1979. The said letter, of course, has not been proved in accordance with law, and so Mr. Misra appearing for the opposite party states that reliance may not be placed on the said letter. On 21-7-1979 the opposite party filed an application purporting to be one u/s 8(2) of the Act praying for the appointment of an arbitrator by the Court on the allegation that the Chief Engineer did not appoint any arbitrator within 15 clear-days of the notice u/s 8(1)(a). The Court below has allowed that application on the finding that the intimation of the appointment made by the Chief Engineer was not received by the opposite party within 15 clear days from the date of the receipt of the notice u/s 8(1) of the Act by the Chief Engineer, though the Court in the same order finds that the Chief Engineer appointed the arbitrator in accordance with Clause 23 of the agreement on 17-7-1979 i.e. within 15 days of the receipt of the notice dt. 5-7-1979 to that Effect from the opposite party. 2. The basis and reasoning on which the Court below appointed the arbitrator in this case are incorrect and illegal.
5-7-1979 to that Effect from the opposite party. 2. The basis and reasoning on which the Court below appointed the arbitrator in this case are incorrect and illegal. There is nothing in Section 8(1)(a) or in the Act which provides that the appointment of the arbitrator u/s 8(1) must not only be made within 15 days of the receipt of the notice but also should actually be communicated and made known to the other side within that period. Sub-section (2) of Section 8 of the Act is as follows: If the appointment is not made within fifteen clear days after the service of the said notice (the notice u/s 8(1)(a), 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 do make an award as if he or they had been appointed by consent of all parties. Therefore, the Court gets the jurisdiction to appoint the arbitrator only if it finds as a matter of fact that the appointment of the arbitrator under the provisions of Section 8(1)(a) was not made within 15 clear days after the service of the notice contemplated in the said Sub-section. There is nothing in Sub-section (2) of Section 8 or in any other provision in the Act which says or even suggests that the appointment of the arbitrator u/s 8(1)(a) has to be communicated and made known to the other side within 15 days, as held by the Court below and submitted by the learned Counsel for the opposite party. Of course steps should be taken to inform the other side about the appointment of the arbitrator u/s 8(1)(a); but that does not mean that notice of that fact should actually be served on the other side within the said 15 days. If appointment is made and steps for notifying that fact as stated above is taken by the concerned person within 15 clear days of the receipt of the notice u/s 8(1)(a), then he has done his job in accordance with law, and in that case the Court will, not have the jurisdiction to appoint an arbitrator of its own choice under Sub-section (2) of Section 8.
Only when the Court finds that no appointment was made u/s 8(1)(a), then only the Court can assume jurisdiction to appoint the arbitrator u/s 8(2) of the Act. 3. In this case from the undisputed facts it is evident that the Chief Engineer received the notice u/s 8(1)(a) for appointment of an arbitrator on 5-7-1979, and in accordance with that notice he appointed an arbitrator on 17-7-1979 and issued a registered letter on 18-7-1979 to intimate that fact to the opposite party. That being so, on the proof of these facts the Court did not have jurisdiction to appoint the arbitrator u/s 8(2) merely because the said registered letter was not received by the opposite party within 15 days from 5-7-1979. So the appointment of the arbitrator by the Court below is without jurisdiction, and is accordingly set aside. The appointment of the arbitrator by the Chief Engineer being in accordance with law and Clause 23 of the F-2 agreement, the said appointment is perfectly legal and nothing other than the above-mentioned untenable ground is urged against this appointment. Accordingly, this arbitrator shall proceed to deal with and dispose of the matter in accordance with law. 4. The Civil Revision is accordingly allowed. No costs. The L.C.R. be sent back immediately. Final Result : Allowed