State of Bihar, represented by Saran Central Project Circle Administration through the District Magistrate v. Jamuna Singh
1985-03-15
A.K.SINHA, SANDHAWALIA
body1985
DigiLaw.ai
JUGDMENT Ashwini Kumar Sinha, J. This is defendants application against order dated 17.11.1979 holding that the application filed by the plaintiff Under sections 8 and 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') was, maintainable and also directing the parties to appoint an Arbitrator. The court further ordered that if the parties did not concur in appointing an Arbitrator. The court would appoint a sole s Arbitrator to decide the claim of the parties. 2. Whether in the absence of any clause about the reference of the dispute and the settlement thereof by the Arbitrator, the court in passing the aforesaid order, committed jurisdictional error, is the solitary question to be decided in the instant case. 3. The plaintiff-opposite party filed the application under sections 8 and 20 of the Act, against the petitioners and prayed for appointment of all Arbitrator and for the settlement of the dispute. This was registered as T.S. case no. 129/78. Admittedly, in pursuance of 8 tender called for by the petitioners for the supply of three lacs Cft. of Stone Boulders at Sasamosa. Jalalpur and Hatapura railway station the plaintiff/opposite patty submitted his tender which was accepted by the petitioners and, accordingly, a contract agreement no. 2H2 06-66-67 was entered into between the parties after depositing the earnest money. The plaintiff/opp. party further averred in the plaint that the said agreement was arbitrarily prepared against the terms and conditions as were in the offer. The plaintiff/opp. party claimed that he was legally entitled for the payment of the supply of Boulders on wagon measurement and it was wrong on the part of the petitioners to make payment according to stock measurement at the railway sidings. The plaintiff/opp. party served notice under section 80 of the Code of Civil Procedure On the petitioners for the recovery of Rs.68, 176.07. According to the plaintiff/opp. party he was forced to withdraw the notice and was persuaded to apply for the settlement of the dispute by arbitration though there was no such clause in agreement. Admittedly petitioner no.3 (the Superintending, Engineers the Saran Canel Gandak Project Circle, Bihar) agreed to settle the claim of the Plaintiff/opp. party-but according to the plaintiff he, without hearing the plaintiff, gave his decision ex parte and awarded Rs. 21,060/– to be paid to the plaintiff /opp. party.
Admittedly petitioner no.3 (the Superintending, Engineers the Saran Canel Gandak Project Circle, Bihar) agreed to settle the claim of the Plaintiff/opp. party-but according to the plaintiff he, without hearing the plaintiff, gave his decision ex parte and awarded Rs. 21,060/– to be paid to the plaintiff /opp. party. However, according to the plaintiff, the Accounts Officer (petitioner no.5) allowed payment of Rs.14,108/-only and detained the rest. In the aforesaid circumstances, the plaintiff/opp. party filed an application under sections 8 and 20 of the Act. 4. The petitioners filed a rejoinder to the aforesaid application filed by the plaintiff/opp. party and contended that, in the facts and circumstances of the case, the application under Section 8 and 20 of the Act, was not maintainable and, in that view of the matter, the suit was not maintainable. The petitioners further submitted that the only clause in the contract agreement which could referred to was clause 14 which stipulated that the decision of the Superintending Engineer, for time being, shall be final, binding and conclusive on all questions relating to the meaning of specification of materials to be collected. In other words, there was no clause about the reference of the dispute and the settlement thereof by an Arbitrator. The petitioners, further objection was that the matter in dispute had already been decided by petitioner no.3 (the Superintending Engineer) on the request in writing by the plaintiff/opp. party himself, which was binding upon the parties. 5. Section 8 of the Arbitration Act, provides 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 differences have arisen, concur in the appointment, then if the appointment is not made within 15 clear days after service of a notice by one party calling upon the other to concur in such appointment, the court is empowered upon an application of the party Riving the notice to appoint an Arbitrator.
and all the parties do not, after differences have arisen, concur in the appointment, then if the appointment is not made within 15 clear days after service of a notice by one party calling upon the other to concur in such appointment, the court is empowered upon an application of the party Riving the notice to appoint an Arbitrator. Section 20 of the Act, entitles a party to an arbitration agreement to apply to a court for the filing of the agreement in court, and the court is required, in the absence of sufficient cause shown by the other party, to order the agreement to be filed and to “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". Thus, it would appear that the province of the two provisions is quite distinct-one confers power upon the court to appoint an Arbitrator where the parties do not concur in the appointment of an Arbitrator, the other entitles a party to apply for the filing of the arbitration agreement in court and empowers the court to make an order of reference to the Arbitrator appointed by the parties, and in the absence of such appointment, to the Arbitrator appointed by it. In the former case, after the court has appointed an Arbitrator it is the parties who refer the dispute to him; in the latter case, it is the court which refers the dispute. It appears that the power of the court to make a reference of the Arbitrator is contained in section 20. There is nothing in section 8 from which such power can be spelled out. In the case of Thawar Das Pherumal, Union of India. it was observed: “A reference requires the assent of “both" sides. If one side is not prepared to submit the given matter to arbitration when there is an agreement between them that 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." 6.
If one side is not prepared to submit the given matter to arbitration when there is an agreement between them that 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." 6. This being the scope of sections 8 and 20 of the Act, it has to be seen whether, on the admitted facts of the case, the court correctly entertained the application of the plaintiff/opposite party filed under sections 8 and 20 of the Act. 7. I have already stated above that the relevant clause in the contract agreement was clause 14 which did not contain any clause about the reference of the dispute and the settlement thereof by any Arbitrator. The province of section 8 could be invoked only when the arbitration agreement provided for the appointment of an Arbitrator by consent of the parties. In the instant case, there is no arbitration agreement providing for the appointment of an Arbitrator by consent of the parties. The parties, under the agreement, had not concurred in the appointment of any Arbitrator and, in that view of the matter, section 8 was not applicable at all on the facts of the case. 8. In the present case, one thing more is also clear-that the plaintiff/opp. party withdrew the notice under section 80 of the Code of Civil Procedure and in writing requested the department to decide his claim in any manner as the department thought fit and proper; whereupon, the dispute was finally decided by the Superintending Engineer (petitioner no. 3). Thus, on plaintiff's own application, the dispute was already decided which, for some reasons, was not accepted by the plaintiff /opposite party and the plaintiff filed the application under section 8 and 20 of the Act. Under section 20 of the Act, a party was entitled to apply for the filing of the arbitration agreement in court and the court could make an order of reference to the Arbitrator appointed by the parties, and in the absence of such appointment, to the Arbitrator appointed by it. I have already stated above that there was no arbitration clause in the agreement and the parties had not concurred in appointment of any Arbitrator under the agreement.
I have already stated above that there was no arbitration clause in the agreement and the parties had not concurred in appointment of any Arbitrator under the agreement. In fact, the plaintiff/opposite party, in writing asked the department to decide his claim which was finally decided by the Superintending Engineer (petitioner no. 3). 9. Having, regard to my finding, that, in the fact and the circumstances of the case, the application under sections 8 and 20 of the Act, filed by the plaintiff/opposite party was not maintainable. I must hold that the court below had no jurisdiction at all to make the order that he did and hence this revision application must succeed. The revision application is. accordingly, allowed and the order of the curt below is set aside. However, there will be no order as to costs. (The words are underlined by me for emphasis). I agree Application allowed.