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1987 DIGILAW 49 (ORI)

BHIMSEN SUBUDHI v. STATE OF ORISSA

1987-02-03

D.P.MOHAPATRA

body1987
JUDGMENT D.P. Mohapatra, J. - The petitioner, a contractor, was entrusted with the work "Construction of Submersible Bridge over river Kusumi on Odgaon Bahadajhola road" under agreement No. 484 F-2 of 1962-63 executed by him and the State Government represented by the Executive Engineer (R&B) by Khurda Division. The petitioner filed the application dated 13-9-1982 before the Subordinate Judge, Bhubaneswar praying for appointment of an Arbitrator for adjudication of some disputes relating to the said work. In the said application he stated, inter alia, that while executing the work, he had executed some extra items and some excess quantities over and above those mentioned in the agreement. Though the work was completed in all respects, he had not been paid for the extra works executed by him. He served a notice on the Chief Engineer (R&B) by registered post with A.D. on 22-7-1982 and the same was received by the addressee in time. A copy of the said notice was also served on the opposite party No. 2 on 7-8-1982. Since the Chief Engineer failed to appoint an arbitrator within the stipulated period of 15 days of receipt of the notice, the petitioner filed the application before the court under Section 8(2) of the Arbitration Act, 1940 (for short 'the Act') for appointment of an arbitrator. The opposite parties in their counter to the petitioner's application stated inter alia, that there was no dispute between the parties to be referred to arbitration. According to them, the alleged claims of the petitioner were never put forth before the department and were not traversed at any time. In the absence of any dispute between the parties, the Chief Engineer did not think it necessary to appoint an arbitrator. The Subordinate Judge on consideration of the matter accepted the plea of the opposite parties that there was no dispute between the parties requiring reference to arbitrator and accordingly rejected the application under Section 8(2) of the Act. The petitioner filed this revision petition challenging the said order. The learned counsel for the petitioner contended that the court below was not justified in rejecting the application for appointment of arbitrator on the ground of delay, since the question of limitation was to be considered by the arbitrator and not by the court. The petitioner filed this revision petition challenging the said order. The learned counsel for the petitioner contended that the court below was not justified in rejecting the application for appointment of arbitrator on the ground of delay, since the question of limitation was to be considered by the arbitrator and not by the court. It was further contended by the learned counsel that there was no prescribed period of limitation for filing the application under Section 8(2) of the Act. The learned Additional Standing Counsel, on the other hand, supported the order passed by the learned Subordinate Judge. On persual of the impugned order, it is clear that the court below rejected the application for appointment of an arbitrator not merely on the ground of limitation, but on the ground that there was no dispute between the parties calling for reference to arbitrator. This is manifest from the observation of the court in paragraph 4 of the order : "The objection of the opposite parties that since there was no dispute regarding the contract the petitioner had not put forth any claim before the authorities, appears to be quite convincing." No doubt, the court took the circumstance that for long period of about 20 years the petitioner had not put forth any claim before the department, to support the finding that indeed there was no dispute between the parties relating to the contract in question. Section 8 under which the petitioner filed the application of appointment of arbitrator reads as follows : "8. Section 8 under which the petitioner filed the application of appointment of arbitrator reads as follows : "8. Power of Court to appoint arbitrator or umpire - (1) In any of the following cases : (a) 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 or appointments; or (b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy; (2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who give 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 to make an award as if he or they had been appointed by consent of all parties." From the provision quoted above, it is manifest that four conditions are to be satisfied before the court is called upon to exercise its power under Section 8(2) of the Act to appoint an arbitrator : (i) There must be an agreement between the parties incorporating a clause that reference shall be to one or more arbitrators to be appointed by the consent of the parties. (ii) All the parties do not after differences have arisen, concur in the appointment or appointments. (iii) The parties to the agreement seeking appointment of arbitrator has served a written notice on the other party or the authority empowered to appoint arbitrator under the agreement for such appointment; (iv) The appointment of arbitrator as contemplated under the arbitration clause has not been made within 15 clear days after service of notice. (iii) The parties to the agreement seeking appointment of arbitrator has served a written notice on the other party or the authority empowered to appoint arbitrator under the agreement for such appointment; (iv) The appointment of arbitrator as contemplated under the arbitration clause has not been made within 15 clear days after service of notice. Existence of difference between the parties is a sine qua non for exercise of jurisdiction by the court under Section 8(2) of the Act. Indeed it is the very essence of arbitration. In a decision of this Court in the case of State of Orissa v. B.C. Pasayat and another (55 (1983) CLT 67) R.C. Patnaik, J. relying on AIR 1920 Calcutta 143, held that the existence of dispute is an essential prerequisite for reference to arbitrator. Therefore, while considering the application under Section 8(2), the Court has to be satisfied that there exists dispute between the parties to the agreement and such dispute is to be referred to arbitrator for adjudication under the agreement. In the present case neither in the notice given to the Chief Engineer nor in the application filed before the court, the petitioner gave particulars of the alleged disputes between himself and the opposite parties relating to the work in question. All that was stated therein was that he had executed some extra items and excess quantities over and above those mentioned in the agreement for which no payment was made to him. No material was placed before the Court to show what were the extra items which he executed and in respect of which items of work he executed extra quantities. In these circumstances the court below committed no error in holding that the petitioner failed to establish the existence of the dispute between himself and the opposite parties calling for reference to arbitrator. The court was, therefore, justified in rejecting the application on the aforesaid grounds. A number of decisions were cited by the learned counsel for the parties on the question of limitation. It is not necessary to discuss them in detail since the court below, as noticed earlier, did not reject the application under Section 8(2) of the Act solely on the ground of limitation. Suffice it to say for the present purpose that it is well settled that article 137 of the Limitation Act, 1963 applies to an application under Section 8(2) of the Act. Suffice it to say for the present purpose that it is well settled that article 137 of the Limitation Act, 1963 applies to an application under Section 8(2) of the Act. Two recent decisions of this Court may be referred to in this connection : Ghanshyam Behera v. Orissa State Co-operative Marketing Federation and another (1984 (1) OLR 581) and Prafulla Kumar Singh Deo v. State of Orissa (62 (1986) CLT 165). The application was to be made within 3 years from the date when the right to apply accrued in favour of the petitioner. Admittedly the work was completed about 20 years before filing of the application. There is not even a statement in the application filed by the petitioner when the cause of action to file petition arose and whether the application was not barred by limitation. Therefore, the court below would not be acting erroneously in rejecting the application on the ground of limitation also. On the analysis in the foregoing paragraphs the revision petition is devoid of merit and it is accordingly dismissed. There would be no order for court of this proceeding. Civil Revision dismissed.