JUDGMENT THE COURT : The petitioner entered into a contract with the respondent pursuant to the Tender No. DD/NY & AD/10 of 1980-81 for construction of various types of buildings under Baisnabghata Patuli Development Project, Group 'B'. The said contract contained an arbitration clause being Clause 25 thereof which provided that all questions and disputes relating to the said contract whether arising during the progress of the work or after completion thereof or abandonment of the same should be referred to the sole arbitration of the Director/Unit Head, C. M. D. A. not connected with the particular work as might be appointed by the Authority. Disputes and differences having arisen between the parties, Prasun Roy as the plaintiff took out the Special Suit No. 1 of 1983 under section 20 of the Arbitration Act for filing the arbitration agreement and starting a reference with the intervention of Court. In that application. Prasun Roy alleged that the director of an the units of C. M. D. A. had already expressed their opinion in respect of the disputes that had arisen between the parties and as they were the members of the Central Tender Committee, he had reasonable apprehension of bias against them. He prayed for an independent arbitrator to be appointed by Court. These allegations in paragraphs 16 and 17 of the petition were specifically denied by C. M. D. A. in its affidavit-in-opposition affirmed by one Dipak Kumar Sen, the Executive Engineer of C. M. D. A. on 25.1.83. Mrs. Khastgir, J. heard the Sp. Suit No.1 of 1983 and delivered a judgment on 19.4.83 whereby she appointed Sri Amitava Guha, a member of the Bar, as the sole arbitrator without coming to a definite finding on the aforesaid allegations made by Prasun Roy. Thereafter, Prasun Roy as the claimant filed a statement of claim before the arbitrator. The basis of the Sp. Suit No. 1 of 1983 was Prasun Roy's letter dated 15.11.82, being Annexure 'B' to the present petition. In that letter Rs. 24,10,364/- was claimed on 34 heads of disputes. Order for reference dated 19.4.83 was made for adjudication of these 34 disputes claiming relief for Rs. 24,10,364/- only. But before the arbitrator, Prasun Roy inflated his claims to the extent of Rs. 32,90,520/- on 44 heads of disputes and thereby added 10 new disputes in the reference. In that letter Rs. 24,10,364/- was claimed on 34 heads of disputes. Order for reference dated 19.4.83 was made for adjudication of these 34 disputes claiming relief for Rs. 24,10,364/- only. But before the arbitrator, Prasun Roy inflated his claims to the extent of Rs. 32,90,520/- on 44 heads of disputes and thereby added 10 new disputes in the reference. According to C. M. D. A. the appointment of Amitava Guha as the arbitrator was made in violation of the express provisions contained in section 20(4) of the Arbitration Act and is invalid and without jurisdiction. Therefore, the order of reference is bad in law. The petitioner's counsel submits that assuming that the appointment is valid, Prasun Roy's statement of claim having gone beyond the scope of the order of reference dated 19.4.83, the reference became bad and without jurisdiction. It is alleged in the present petition that the petitioner contended before the arbitrator that his appointment was invalid and his attention was drawn to the fact that Prasun Roy's claims were inflated beyond the scope of the order of reference. But inspite of the aforesaid facts, the arbitrator bad proceeded with the reference. Hence the present application under sections 5, 11, 12 and 33 of the Arbitration Act. 2. In the affidavit-in-opposition filed in the present proceeding, Prasun Roy alleged that C.M.D.A. submitted to the jurisdiction of the Arbitrator and contested the said reference without any protest whatsoever upto 76 sittings and as such it waived its right to dispute the validity of the appointment' of the arbitrator. The objection regarding the validity of the appointment was taken with ulterior motive. Regarding the allegations of Prasun Roy's making inflated claims beyond the scope of the order dated 19.4.83. Prasun Roy only craved reference to the records of the Arbitration Proceedings. The records of the case however, corroborate the allegations of C.M.D.A. that 10 new disputes had been added and the claims were inflated before the arbitrator from Rs. 24,10,364/- to Rs. 32,90,520/-. 3. The first question is whether the arbitrator had the jurisdiction to entertain the 10 new heads of disputes and the extra claims. Mr. Bhabra, appearing for Prasun Roy, invites my attention to paragraph 15 of the petition in Sp. Suit No.1 of 1983 and the prayer (c) thereof. 24,10,364/- to Rs. 32,90,520/-. 3. The first question is whether the arbitrator had the jurisdiction to entertain the 10 new heads of disputes and the extra claims. Mr. Bhabra, appearing for Prasun Roy, invites my attention to paragraph 15 of the petition in Sp. Suit No.1 of 1983 and the prayer (c) thereof. In paragraph 15 Prasun Roy had set out the disputes to be referred to the arbitrator and then added :– "Your petitioner reserves his right to submit a detailed up to date claim before the Arbitrator to be appointed herein at the appropriate time." The prayer–(c) in the said petition was as follows :– "All disputes relating to and arising out of the said contract and the work be referred to the Arbitration of the Arbitrator to be appointed herein." On the basis of these proceedings, Mr. Bhabra submits that his client reserved the right to add new disputes and claims which had arisen out of the contract but were not mentioned, in the Sp. Suit No.1 of 1983 before the arbitrator and by granting prayer (c) the learned Judge allowed him to do so. I am unable to accept Mr. Bhabra's submission. The right reserved in paragraph 15 was to make upto date claims only and not the right to add fresh disputes. There is a distinction between 'disputes' and 'claims'. The dispute is the cause of action and the claim is the relief sought for. Therefore, by order dated 19.4.83, the Court only directed the disputes mentioned in the Sp. Suit No. 1 of 1983 to be referred to arbitration and Prasun Roy was given leave to make the claims upto the date on the basis of those disputes only till the filing of the statement of claim. Under the order, Prasun Roy did not have the right to enlarge the scope of the reference by making claims on new heads of disputes and the arbitrator did not have the jurisdiction to entertain the same. Therefore, I hold, the construction of the order dated 19.4.83 as made by Mr. Bhabra, is not correct. The arbitrator had entertained the new disputes and claims made by Prasun Roy and held innumerable sittings and examined three witnesses. On the facts of the case, I am constrained to hold that the arbitrator proceeded without jurisdiction. Therefore, I hold, the construction of the order dated 19.4.83 as made by Mr. Bhabra, is not correct. The arbitrator had entertained the new disputes and claims made by Prasun Roy and held innumerable sittings and examined three witnesses. On the facts of the case, I am constrained to hold that the arbitrator proceeded without jurisdiction. It was the duty of the learned arbitrator to carefully go through the pleadings in Sp. Suit No. 1 of 1983 to understand the nature of the disputes and the scope of the reference. Unfortunately, that was not done and the arbitrator proceeded with the matter without assertaining the same. In (1) Orissa Mining Corporation Ltd. v. M/s. Pranath Viswanath Railway, AIR 1977 SC 2014 it was held that the arbitrator could not enlarge the scope of the reference and by entertaining claims not referred to by the order of reference, he exceeded his jurisdiction. 4. The next question to be decided is whether the appointment of the arbitrator is valid or not in view of the provisions of section 20 sub-section (4) of the Arbitration Act. The question of waiver will be taken up later on. For the sake of convenience, section 20(4) is set out below :– "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." The counsel for the petitioner submits that in the present case the parties bad agreed that the disputes would be adjudicated upon by the sole arbitrator to be appointed by the authority, i. e., the respondent. Hence, at the first instance, the Court should have allowed the respondent to appoint the arbitrator instead of appointing an arbitrator herself. He relies on (2) Union of India v. M/s. Grewal & Co., AIR 1968 C 333 there it was held that the direction to file the agreement coupled with appointment of a new arbitrator by Court would amount to refusal to file the agreement as it was. He relies on (2) Union of India v. M/s. Grewal & Co., AIR 1968 C 333 there it was held that the direction to file the agreement coupled with appointment of a new arbitrator by Court would amount to refusal to file the agreement as it was. He also relies on (3) Union of India v. M/s. Himco (India) Pvt. Ltd., AIR 1965 Cal 404 where a Division Bench of this Court, relying on (4) Dhumrajmal Govindram v. Shamji Kalidas & Co., AIR 1961 SC 1285 held at paragraph 14 :– ''.. ..................the procedure laid down in the arbitration agreement will prevail and will have to be followed.'' By this decision, the Division Bench reversed the decision reported in AIR 1962 C 254. He invites my attention to the case of (5) Union of India v. Prafulla Kumar Sanyal, AIR 1970 SC 1457 where the Supreme Court approved the aforesaid decisions in AIR 1965 Cal 404 and AIR 1961 SC 1285 and held in paragraph 3 :– "The sub-section requires that the Court shall make an order of reference to the arbitrator appointed by the parties whether in the agreement or otherwise. If no such arbitrator had been appointed and when the parties cannot agree upon an arbitrator, the Court may proceed to appoint an arbitrator by itself." 5. According to the petitioner's counsel, default on the part of the parties to appoint an arbitrator in terms of the agreement is a must and is a condition precedent specifically mentioned in section 20(4) of the Act to vest the Court with the jurisdiction to appoint an arbitrator. The word 'otherwise' in sub-section (4) contemplates cases where there is no named arbitrator or the named arbitrator is unwilling to act or is not in existence on the date of the order to be passed by the Court or had disqualified himself by his conduct from acting as an arbitrator. According to him, even in those cases, the parties should be given an opportunity to agree to another arbitrator and on their failure to do so, the Court's jurisdiction to appoint will arise and not before it. According to him, even in those cases, the parties should be given an opportunity to agree to another arbitrator and on their failure to do so, the Court's jurisdiction to appoint will arise and not before it. He further submits that the agreed procedure may seemingly appear a little unfair to a party, still that should be enforced as that party entered into the bargain with full knowledge of all the terms of the agreement and should not consequently be permitted to back out of it on trifling grounds. There is no law which given any power whatsoever to Court to superimpose its will on the parties. I do not think that the petitioner's counsel is right in his contention that even though no arbitrator is to be agreed by the parties or named arbitrator is non-existent or has disqualified himself to be appointed as an arbitrator, the Court still will have to give an opportunity to the parties to come to a new agreement and appoint a new arbitrator and unless a default occurs, the Court does not have the jurisdiction to appoint arbitrator under section 20(4) of the Act. In my opinion, if the Court is bound to enforce the particular agreement with which the parties come to Court, then the parties are not entitled to have any fresh opportunity in the above mentioned cases to appoint a new arbitrator as that would amount to a new agreement between the parties. In that case, Court will appoint the arbitrator after recording its findings. In (6) M/s. U. C. Chatterjee v. The Durgapur Project, AIR 1972 C 333 the named arbitrator disqualified himself from acting as an arbitrator by his own conduct. The Trial Court refused to make the reference to him on that ground. It was held by the Appellate Court that the Trial Court ought to have appointed the arbitrator itself straightway and was wrong in refusing to make the reference. But no appointment can be made by the Court on the ground of disqualification of the arbitrator without having proper materials on record and without coming to a definite finding on this point. This allegation should not be taken lightly. But no appointment can be made by the Court on the ground of disqualification of the arbitrator without having proper materials on record and without coming to a definite finding on this point. This allegation should not be taken lightly. In (7) Union of India v. S. V. Krishna Rao, AIR 1970 MP 40 the Court while construing the scope of section 20 of the Act held in paragraph 11 :– "It is the duty of the Court to satisfy itself as to why it is not just to make a reference to the arbitrator named in the agreements or to the arbitrator to he selected by following the procedure prescribed in the agreement and whether an objection to the persons named in the agreement by any party is just." It is however possible for the parties to the proceedings to appoint an arbitrator by agreement amongst themselves in respect of the matter pending before the Court. That would be a voluntary act of the parties with which the Court has nothing to do. The petitioner's counsel invites my attention to the fact that in the present case there was no named arbitrator but the appointing authority had a very wide choice to appoint one out of all the directors/unit heads of C.M.D.A. not connected with the particular work as will be evident from Cl. 25 of the contract. In Sp. Suit No. 1 of 1983, Prasun Roy alleged that all directors and all unit heads had expressed their opinion and/or had intermeddled with the disputes raised. It was further alleged that all the directors being the members of the Central Tender Committee were connected with the work and as such he had apprehension of bias against all of them. These allegations were specifically denied in the affidavit-in-opposition filed in Special Suit by C.M.D.A. why all the directors/unit heads would be biased against Prasun Roy ? Only because they are employed by C.M.D.A.? Moreover, the respondent had entered into the agreement with full knowledge of the aforesaid facts and the terms of the agreement. He submits that the allegations were absurd and improbable. There was not an iota of evidence before the Court in support of that allegation. Only because they are employed by C.M.D.A.? Moreover, the respondent had entered into the agreement with full knowledge of the aforesaid facts and the terms of the agreement. He submits that the allegations were absurd and improbable. There was not an iota of evidence before the Court in support of that allegation. Excepting the bare and bald allegation of Prasun Roy, the learned Judge did not have any reliable material evidence before her on this point to come to a finding that all directors or all unit beads of C.M.D.A. were connected with the work or intermeddled with the same in true sense of these words so as to give rise to a reasonable apprehension of bias in the mind of Prasun Roy. As a matter of fact, the learned Judge did not and/or could not come to any finding on this point in her judgment dated 19.4.83 and straight-way appointed an arbitrator of her own choice whereby she, in fact, refused to file the agreement with which the Parties came to Court. On the facts of this cases the Court had no jurisdiction to appoint an arbitrator unless there was a default on the part of the parties or unless the Court would come to a definite finding that all the persons and/or Directors/Unit Heads of C.M.D.A. out of which the respondent could appoint an arbitrator were biased against Prasun Roy. In this case, by appointing the arbitrator, the Court had superimposed its will on the parties which rendered the appointment null and void. There is a lot of force in this submission of the petitioner's counsel. It is true that there is no finding on this point in the judgment dated 19.4.83 and as such on the facts of this case, the agreed machinery for the appointment of the arbitrator should have been given effect to as held uniformly since 1961-1979 and as will be evident from AIR 1961 SC 1285 , AIR 1965 Cal 404 , and AIR 1979 SC 1457 . The appointment of the arbitrator in this case was, therefore, contrary to the provisions of section 20(4) of the Arbitration Act. 6. The question then arises whether under Chapter III of the Arbitration Act the Court has any inherent jurisdiction to appoint an arbitrator apart from the provisions contained in sec. 20 sub-sec.(4) of the Act. The answer of the respondents' counsel is 'yes'. 6. The question then arises whether under Chapter III of the Arbitration Act the Court has any inherent jurisdiction to appoint an arbitrator apart from the provisions contained in sec. 20 sub-sec.(4) of the Act. The answer of the respondents' counsel is 'yes'. In support, he, strongly relies on (8) Raja Debi Baksh Singh v. Habib Shah, 1913 (4) IA 151 and submits that in all proceedings under the Arbitration Act before the Court the provisions of the Civil Procedure Code, 1908 will apply as expressly provided in section 41 (a) of the Arbitration Act. Therefore, in a pending special suit u/s. 20 of the Act, the provisions of section 151 of the Code of Civil Procedure will be attracted. Hence the Court in a fit case can always appoint an arbitrator by exercising its inherent jurisdiction. In this case, the appointment was made under inherent jurisdiction and was perfectly valid. Non-compliance with any provision laid down in sec. 20 (4) will only amount to procedural irregularity which could be waived by the parties and in this case all objections were waived by the petitioner by participating in the proceedings before the arbitrator and by consenting to the extension of time to make the award repeatedly. But it should be noted that sec. 41 of the Arbitration Act clearly provides that provisions of the Code of Civil Procedure, 1908 will apply "subject to the provisions of this Act and the rules made thereunder". We have to consider whether the Court can exercise its inherent jurisdiction u/s. 151 of the Code in connection with appointment of arbitrator under the Arbitration Act, 1940. Our Court has repeatedly held that the Court does not possess any inherent jurisdiction in the matter of appointment of an arbitrator and this has been uniformly held from 1954 to 1978. In (9) Bharat Construction Co. Our Court has repeatedly held that the Court does not possess any inherent jurisdiction in the matter of appointment of an arbitrator and this has been uniformly held from 1954 to 1978. In (9) Bharat Construction Co. Ltd. v. Union of India, AIR 1954 Cal 606 it was held at page 611 :– "It is now well-settled that Court has no inherent or absolute power to appoint arbitrators and that its powers are only those which are expressly specified in the Act." In re : (10) Sunil Mukherjee's Case, AIR 1978 Cal 37 , a Division Bench of this Court quoted with approval the aforesaid observation of the Chief Justice Chakrabarti in AIR 1954 Cal 606 and further held in paragraph 13 at page 44 :– "It was his argument that if section could not be applied then the appointment should be held to have been made under the inherent jurisdiction which the Court possesses in such a case..........we cannot persuade ourselves to hold that the Court enjoys any inherent jurisdiction in the matter of appointment of arbitrator. The powers of the Court in the matter are regulated by the statute." It should be noted that in AIR 1978 Cal 37 the decision reported in 1913 (4) IA 151 relied on by the respondents' counsel was considered and the principle laid down in that case was negatived. Therefore, there is no substance in the argument on behalf of the respondents' counsel that the appointment of arbitrator in the present case has been made under inherent jurisdiction as the Court does not possess any such jurisdiction. 7. Then the last point to be decided is whether there can be any question of waiver in this case as submitted by the respondents' counsel. Strong reliance has been placed on behalf of the respondents on (11) Donald Campbell and Company v. Jashraj Giridharilal, AIR 1920 PC 123 in support of their contention that the petitioner had waived its objection by participating in the proceedings. The counsel for the respondents also relies on (12) Jupiter General Insurance Co. Ltd. v. Corporation of Calcutta, 60 CWN 721 on this point. In AIR 1920 PC 123, a sole arbitrator was appointed by a party without serving notice on the other side as required under sec. 9(b) of the Act. The counsel for the respondents also relies on (12) Jupiter General Insurance Co. Ltd. v. Corporation of Calcutta, 60 CWN 721 on this point. In AIR 1920 PC 123, a sole arbitrator was appointed by a party without serving notice on the other side as required under sec. 9(b) of the Act. It was held that the objection regarding non-compliance with section 9(b) was waived by participation in the arbitration proceeding without protest. It should be noted that sec.9(b) has nothing to do with Court's jurisdiction to appoint an arbitrator. As a matter of fact, sub-clause (b) of section 9 of the Act is a provision for imposition of penalty on the defaulting party for his failure to make appointment within the prescribed period. If by obstruction, evasion or gross negligence, he neglects to make the appointment, he would deserve the penalty to be imposed on him. But as the consequences of the penalty are serious, wide discretion has been given to Court to set aside the appointment of the sole arbitrator on sufficient causes being shown by the defaulting party. The proviso to sec. 9(b) empowers the Court to condone the delay on sufficient grounds as in the case of section 5 of the Limitation Act as sec. 9(b) also provides for a period of limitation. The authorities on this point are in the case of (13) Satya Narayan Agarwalla v. Baidyanalh Mondal & Ors., AIR 1972 Pat 29 and (14) M/s. Karnani Engineering v. Madhay Pradesh Electricity Board, AIR 1964 MP 268 . Therefore, the whole purpose of giving notice u/s. 9(b) to the party is to give him a warning as well as fresh opportunity to remedy the default otherwise to face the penalty. As the notice is for his benefit the defaulter has the option either to remedy the default or to accept the imposition of penalty by appointment of the sole arbitrator. If no notice u/s. 9(b) is served before the appointment of the sole arbitrator the defaulting party may assert his right by raising an objection on that ground or he may waive the objection and accept the appointment. It would be clear that sec. 9(b) has nothing to do with the question of jurisdiction of the Court. If no notice u/s. 9(b) is served before the appointment of the sole arbitrator the defaulting party may assert his right by raising an objection on that ground or he may waive the objection and accept the appointment. It would be clear that sec. 9(b) has nothing to do with the question of jurisdiction of the Court. It is merely a procedure laid down by law for the benefit of the party in default and as such the party concerned has the option either to assert this right or to waive it expressly or by implication by participating in the arbitration proceedings or otherwise. If it was a question of jurisdiction it could not have been waived as held in AIR 1968 Cal 37. In that case, the party who himself had obtained the order for appointment of the arbitrator and had participated in the arbitration proceedings, challenged the validity of the appointment on the ground that the order of appointment was without jurisdiction and that was done after the award was made. On those facts, the Division Bench held in paragraph 14 :– "It is no doubt true that the appellant himself had made the application under section 8 of the Arbitration Act on which the said order was passed. It is equally true that the appellant has participated in the arbitration proceedings before the arbitrator appointed by the learned Judge by the said order and extension of time had been granted to enable the arbitrators to make their award. These acts on the part of appellant and his conduct do not prevent him from raising these questions. The question involved in this instant else is not a question of mere irregularity. If the Court lacks jurisdiction to pass the order, the order becomes a nullity. The conduct of the appellant cannot cure the defect of jurisdiction and cannot confer jurisdiction on the Court where the Court does not possess such jurisdiction." The respondents counsel has relied on 60 CWN 721 which held the opposite view on this point from that of AIR 1968 Cal 37. That case was not cited before the Division Bench in AIR 1968 Cal 37. But 60 CWN 721, which is a Single Bench decision of this Court, must be deemed to have been overruled by implication by this Division Bench and as such is not helping the respondent in any way. That case was not cited before the Division Bench in AIR 1968 Cal 37. But 60 CWN 721, which is a Single Bench decision of this Court, must be deemed to have been overruled by implication by this Division Bench and as such is not helping the respondent in any way. Section 20(4) contains a condition precedent which must be fulfilled before the Court gets jurisdiction to appoint an arbitrator and non-fulfillment of this condition precedent will render the order of appointment by Court invalid. This principle was laid down by Lord Pearce in (15) Anismnic Ltd. v. Foreign Compensation Commission reported in (1969) 2 AC 147 :– "Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are condition precedent to the Tribunal having any jurisdiction ............. " 8. When the law is that in the matter of appointment of an arbitrator the Court has to exercise its power only in accordance with the provisions of the Act and the Court has no inherent jurisdiction to appoint an arbitrator, then the Court can appoint an arbitrator only after complying with the provisions of the Act. In this case, the Court either should have given effect to the agreed machinery for appointment of the arbitrator or it could appoint one after coming to a clear finding that all the directors/unit heads of C.M.D.A. were biased against Prasun Roy as all of them had rendered themselves disqualified from being appointed as an arbitrator. Until the Court held that all of them were disqualified, the Court did not have the jurisdiction to appoint one and was bound to follow the agreed machinery. One should not overlook the fact that in this case the appointing authority had very wide choice. Therefore, when no such finding was recorded in the judgment dated 19.4.83, the order was passed without jurisdiction and was a nullity. Hence, there could be no question of waiver on the part of the petitioner because of his taking part in the arbitration proceedings. The order dated 19.4.83 being invalid, the arbitrator had no jurisdiction to proceed with the reference. Hence, the question of revocation of his authority does not arise as he has none. In the premises, the application is allowed. The order dated 19.4.83 and the reference are declared to be invalid. The order dated 19.4.83 being invalid, the arbitrator had no jurisdiction to proceed with the reference. Hence, the question of revocation of his authority does not arise as he has none. In the premises, the application is allowed. The order dated 19.4.83 and the reference are declared to be invalid. The parties are directed to pay and bear their respective cost of this application as well as the arbitration proceedings.