Central Coal Field Limited, Darbhanga House, Ranchi v. Bhardwaj Construction Company, Hazaribagh
1993-12-20
G.C.BHARUKA
body1993
DigiLaw.ai
Judgment C. C. Bharuka and J JJ. 1. This appeal has been preferred under Sec.39 of the Arbitration Act, 1940 (hereinafter the Act only) against the order dated 26-7-1993 passed by Subordinate Judge-I, Hazaribagh in Title (Arbitration)Suit No.30 of 1992 by which one Shri Satya R. Kar Roy of Doranda has been appointed as sole arbitrator for resolving the disputes between the parties. 2. The appellant Central Coal Fields Limited had entered into an agreement with the respondent No.1 Bhardwaj Construction Company for transportation of coal from West Bokaro Group of Mines to Giddi washari pursuant to Tender document No.91 of 1976-77. Clause 9 of the said agreement provides for arbitration in the following terms : - "if any dispute, question of contrary, the settlement of which is not herein specifically provided for shall any time arise between the central Coal Field Limited and the Contractor/contractors touching this agreement or any clause or anything herein contained on the construction thereof or any matter connected with this agreement or the operation of the same of the rights of duties or liabilities of either party then and in ever such case either party shall forthwith give to the notice to the either party of such difference or such dispute or difference shall be referred to an arbitrator nominated by the Managing Director of the central Coal Field Limited and the action of such arbitrator shall be final and binding on the parties. Progress of the work shall not be suspended or delayed on account of reference of any dispute or difference to arbitration under this clause. " 3. It appears that some dispute had arisen between the parties in relation to payment with respect to works undertaken under the agreement and the same having not been settled, the respondent sent a registered letter dated 12-2-1992 invoking the provisions of the aforesaid arbitration clause calling upon the Managing Director of the appellant to appoint an arbitrator in terms of the aforesaid arbitration clause for settlement of all the disputes and differences. Admittedly the said request remained unattended. Accordingly, the respondent Contractor filed an application in the Court under section 8 (2) of the Act praying therein to appoint an arbitrator for early settlement of the dispute referred to in schedule to the said application, which was registered as Title Suit No.30 of 1992 and notices were sent to the appellant. 4.
Admittedly the said request remained unattended. Accordingly, the respondent Contractor filed an application in the Court under section 8 (2) of the Act praying therein to appoint an arbitrator for early settlement of the dispute referred to in schedule to the said application, which was registered as Title Suit No.30 of 1992 and notices were sent to the appellant. 4. The Court below after hearing the contesting parties and after giving certain opportunities for amicable settlement, having felt that the appellant does not seem to be willing to |take any positive step for resolving the dispute, has passed the impugned order appointing an arbitrator. Admittedly neither of the parties have any objection to the appointment of Mr. Satya Kar Roy as arbitrator. But Mr. Debi Prasad, learned counsel appearing for the appellant while assailing the impugned order has raised a question touching upon the very jurisdiction of the Court below. According to him, the impugned order would not have been passed under any provision of the Act. To substantiate his submissions he has referred to the provisions of Sections 8 and 20 of the Act, which read as under : 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 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 to make an award as if he or they had been appointed by consent of all parties.20. Application to file in Court arbitration agreement - (1)Where any person have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court. (2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants. (3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than applicants requiring them to show cause within the time specified in the notice why the agreement should not be filed. (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. (5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provision of this Act so far as they can be made applicable. 5. It has been submitted by Mr. Debi Prasad that under sub-section (2) of Sec.8 of the Act, the Court gets jurisdiction to appoint arbitrator only in either of the three exigencies which have been contemplated under sub-section (1) thereof.
5. It has been submitted by Mr. Debi Prasad that under sub-section (2) of Sec.8 of the Act, the Court gets jurisdiction to appoint arbitrator only in either of the three exigencies which have been contemplated under sub-section (1) thereof. According to him none of the aforesaid three prerequisites exist in the present case to clothe the Court with the jurisdiction to appoint an arbitrator. According to the learned counsel, the only relevant clause which can have some bearing in the present case is clause (a) of section 8 (1) of the Act, but that too cannot be of any avail to the respondent because under the arbitration clause referred to above, there is no contemplation for appointment of any arbitrator with the consent of the parties. According to him, on a plain reading of the arbitration clause, it is clear that arbitrator has to be appointed by the Managing Director of the appellant Company and, therefore, the question of giving consent by the appellant Company never arises. Mr. Debi Prasad has further submitted that the orders like the impugned one could not have been passed by the court below even under Sec.20 of the Act since it ought to have a preceded by another order directing the parties to file agreement, which has not been done in the present case In support of his submissions, Mr. Prasad has relied on various decisions, viz in the case of M/s. Rai Bahadur Basakha singh and Sons (Contractors) Pvt. Ltd. V/s. M/s. Indian Drugs and Pharmaceuticals ltd. , (AIR 1979 Delhi, 220), in the case of Union of India V/s. Prafulla Kumar sanyal, ( AIR 1979 SC 1457 ), in the case of S. Ranjan V/s. State of Kerala and another, [ (1992) 3 S C. C.608] and in the case of The Union of india V/s. M/s, Dev and Company, (AIR 1978 Gauhati, 91 ). 6. In reply to the above submissions made on behalf of the appellant, mr. N. K. . Prasad appearing for the respondent, has submitted that the managing Dir.
6. In reply to the above submissions made on behalf of the appellant, mr. N. K. . Prasad appearing for the respondent, has submitted that the managing Dir. of the Appellant Company is its representative and since he has failed to act on the resquest of the repondent Contractor for appointment of an arbitrator as per the arbitration clause, in law, it has to be taken as non-according of consent to the proprosal for appointment of arbitrator and, as such, the Court has jurisdiction to appoint arbitrator under sub-section (2)of Sec.8 of the Act. In support of his submissions he has placed reliance on a decision in the case of Union of India V/s. D. P. Singh (AIR 1961 Patna, 228 ). Mr. Prasad has also taken an objection to the maintainability of the prese t appeal before this Court on the ground that since the. impugned order, in truth and substance, is one under Sec.8 (2) of the Act, no appeal lies before this Court in terms of Sec.39 of the Act. 7. In the present case, as is apparent from the arbitration clause 9 of the agreement, as quoted above, that in case of any difference or dispute, the same has to be referred to an arbitrator who was to be nominated by the managing Director of the Appellant Company. In view of this stipulation, the Managing Director having agreed to act on behalf of both parties for the purpose of nomination of an arbitrator, can well be said to be a party to the agreement for the purpose of Sec.8 (1) (a) of the Act, and if he fails to act a concur in accordance with the arbitration clause for appointment of an arbitrator as per the request made by the aggrieved party, then the Court can definitely exercise its jurisdiction under Sec.8 (2) of the act. It is well settled that the statutory provisions should be construed in a manner which may subserve the object of the legislation and can be made workable in all situations without causing any violence to its language. 8. The above view of mine is fortified by a binding precedent of this court in the case of Union of India V/s. D. P. Singh, (AIR 1961 Patna 228 ).
8. The above view of mine is fortified by a binding precedent of this court in the case of Union of India V/s. D. P. Singh, (AIR 1961 Patna 228 ). In this case the arbitration clause provided for the appointment of a sole arbitrator who was to be nominated by the General Manager of the northern Railways. The request made by the Contractor to the General manager for appointment of an arbitrator remain unattended. As such, pursuant to an application made in this behalf, the Court appointed an arbitrator. This order was challenged before this Court on various grounds including one that on the facts of the case, the Court below had no jurisdiction to pass such an order since keeping in view the provisions in the arbitration clause there was no occasion for any "consent of the parties. " This court repelled the contention by holding that : "it is inherent in the arbitration agreement itself, in the instant case, that the nomination of the arbitrator by the General manager shall be deemed to have been made by the consent of both the parties. There may be express provision to such an effect, but even in the absence of any express provision, such a provision much be taken to be necessarily implied". 9. No contrary decision has been brought to my notice by the learned counsel for the appellant having any direct bearing on the questions involved. Therefore, for the sake of brevity I forbear from discussing the decisions cited by him. 10. In the above view of the matter, in my opinion, the impugned order does not suffer from any jurisdictional infirmity as sought to be urged on behalf of the appellant. In view of my above finding that the impugned order has been passed under Sec.8 (2) of the Act, the submissions made in the Bar for construing the same as one under the provisions of Section 20 of the Act has to be rejected outright. Consequently, it has also to be held that since no appeal under Sec.39 of the Act lies against an order passed under Sec.8 (2) of the Act either appointing or refusing to appoint an arbitrator, therefore, this appeal is even otherwise not maintainable. 11. For the reasons as above, the appeal is dismissed being devoid of any merit with cost assessed at Rs.1100/- (Rupees one thousand one hundred) only.
11. For the reasons as above, the appeal is dismissed being devoid of any merit with cost assessed at Rs.1100/- (Rupees one thousand one hundred) only. Appeal dismissed.