JUDGMENT S.C. Mohapatra, J. - Orders directing the appointing authority to appoint an arbitrator as per the terms of the agreement preferably a retired Engineer of the Military Engineering Service or any other retired competent Engineer as Arbitrator and directing petitioner to bear the entire expenses of the arbitration proceeding are subject matter of these two Civil Revisions, Since same question is involved in both the revisions, they are taken up together. 2. Mr. Ashok Mohanty, learned Standing Counsel of Central Government prayed for adjournment of the Civil Revision on the ground that he has not been supplied any brief as yet by the concerned officers. I find that on 8.11.1990 specific order has been passed for hearing of the Civil Revisions finally since Mr. U.C. Panda, learned Additional Standing Counsel appeared that day and submitted that he has instruction to appear on behalf of opposite partly Nos. 1, 2 and 4. Notice through special messenger has been sent on opposite partly No. 3 in view of urgency, After service of notice as well as after receipt of lower court records, the revisions have been listed. Accordingly, I am not inclined to adjourn the matter. 3. Petitioner is a works contractor who entered into two agreements with Chief Engineer for execution of work. In the two written agreements following clause has been incorporated in respect of adjudication of disputes by arbitration : "70. Arbitration - All disputes, between the parties to the Contract (other than those for which the decision of the C.W.E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Unless both parties agree in writing such references shall not take place until after the completion or alleged completion of the Works or termination or determination of the contract under Condition Nos. 55, 56 and 57 hereof. Provided that in the event of abandonment of the Works of cancellation of the contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies.
55, 56 and 57 hereof. Provided that in the event of abandonment of the Works of cancellation of the contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies. If the arbitrator so appointed resigns appointment or vacate his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place. The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence. The Arbitrator may, from time to time with the consent of the parties, enlarge the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award. The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute. The venue of Arbitration shall be such place or places as may be fixed by the Arbitrator in his sole discretion. The Award of the Arbitrator shall be final and binding on both parties to the Contract." 4. Claiming that disputes have arisen between parties, petitioner filed two applications under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') for a direction to file the agreement and appoint an arbitrator. After hearing the parties, trial court has passed the impugned orders. 5. Under the rule 2(e) made by this court under the Act an application under Section 20(1) is to be registered as regular suit. Once it is registered as a suit all formalities and procedure for trial of suit are to be followed. One of the essential requirement of contested suit is settlement of issues and the order is to be in the shape of a judgment answering all issues. 6. On the applications under Section 20(1) of the Act by the petitioner, suits were registered.
One of the essential requirement of contested suit is settlement of issues and the order is to be in the shape of a judgment answering all issues. 6. On the applications under Section 20(1) of the Act by the petitioner, suits were registered. After notice, written statements were filed by opposite party Nos. 1 and 2 as defendant Nos. 1 and 2. One of the grounds of contest is that arbitrator has been appointed as per the terms in the clause. After hearing the parties, trial court has directed appointment of an arbitrator under Section 20(4) which reads as follows : "20. Application to file in court arbitration agreement : (1) to (3) xx xx (4) 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." 7. Plain reading of Section 20(4) makes it clear that court is to make a reference to arbitrator appointed by parties whether in the agreement or otherwise. In this case as seen from the agreement, no arbitrator has been appointed by agreement. Only the power of appointment of an arbitrator is agreed. There is no material that otherwise than in the agreement, parties have appointed an arbitrator. In such circumstances, court is to appoint an arbitrator as is provided in Section 20(4). 8. Trial court having directed the appointing authority to appoint an arbitrator has exercised jurisdiction not vested in it and the order to that extent having become vulnerable is liable to be set aside. 9. On perusal of the entire order, I find no acceptable reason why the petitioner is to bear the entire costs. If the appointing authority under the agreement would have appointed an arbitrator, the expenses would have been borne by opposite parties. Thus, direction to petitioner to bear the entire cost of arbitration proceeding amounts to exercise of jurisdiction with material irregularity. 10. When court appoints an arbitrator or makes a reference to arbitrator appointed by parties in the agreement or otherwise, reference is to be made to him under Section 20(4). Reference to arbitrator under this provisions is to be made in the Statutory form (J) 47.
10. When court appoints an arbitrator or makes a reference to arbitrator appointed by parties in the agreement or otherwise, reference is to be made to him under Section 20(4). Reference to arbitrator under this provisions is to be made in the Statutory form (J) 47. It envisages that the matters in difference are to be mentioned in the order of reference in form (J) 47. Time is also to be fixed by the court for making the award as is envisaged by this statutory form. Direction is also to be given to submit the award and records under Section 14(2) within the time stipulated in the prescribed statutory form. Thus, court having fixed time under form (J) 47 is alone authorised to extend time and there is no scope for extension of time to make an award with consent of parties. Therefore, the suit shall remain pending and shall be posted from day to day till the award made. After receipt of award in a reference under Section 20(4), parties who have appeared get notice automatically and objection under Section 33 if any, is to be filed in the suit which is to be registered as Misc. Case as provided in Rule 2(e). Thereafter, judgment is to be pronounced under Section 17 of the Act. 11. In view of the aforesaid discussions, impugned orders are set aside, Trial court is directed to appoint an arbitrator keeping in mind the nature of differences between the parties. As I see differences are mostly factual and a person with efficiency to appreciate facts having sound analysis of law should be the arbitrator. Such arbitrator should be given the freedom to take assistance of technical persons where he requires such assistance. In this case, the nature of dispute is such that it should be a reasoned award. 12. Trial Court shall hear the parties list out the differences and shall incorporate the differences listed in the order of reference to the arbitrator to be appointed by him. It goes without saying that both parties are to be heard on the question of selection of person to be appointed as arbitrator. 13. Cost of arbitration proceeding shall be equally shared by both parties unless one party offers to the court to bear the entire expenses. Arbitrator shall be given the freedom to have sittings at places of his choice with consent of parties.
13. Cost of arbitration proceeding shall be equally shared by both parties unless one party offers to the court to bear the entire expenses. Arbitrator shall be given the freedom to have sittings at places of his choice with consent of parties. If there is no consent, it shall be either at Cuttack or at Bhubaneswar. 14. Trial Court shall make orders of reference latest by 15.1.1991. Both parties shall cooperative in this regard. 15. In the result, Civil Revisions are allowed. No costs. Revision allowed. *-*-*-*-*