INDIAN OIL CORPORATION LTD. v. VIDYAWATI CONSTRUCTION CO. LTD.
2000-10-11
KRISHNA KUMAR, SUDHIR NARAIN
body2000
DigiLaw.ai
SUDHIR NARAIN, KRISHNA KUMAR, JJ. ( 1 ) THIS appeal is directed against the order dated 31. 5. 1991 passed by the Additional District judge. Varanasi directing the appellant to furnish the original agreement and submit a panel of arbitrators to choose an Arbitrator by the plaintiff-respondent to decide the dispute. ( 2 ) BRIEFLY, stated the facts, are that the Indian Oil Corporation Ltd. invited the tenders for construction of office building, road. etc. for L. P. G. bottling plant at Varanasi near Babatpur. M/s. Vidyawati Construction Company Ltd. respondent submitted its tender, which was accepted by the appellant. The respondent is alleged to have sent the agreement to the appellant which was countersigned by it. The respondent started construction work and some of the work was completed. ( 3 ) THE respondent alleged that the appellant did not provide the requisite drawings and details of the construction within the time as stipulated under the agreement with the result respondent had to suffer losses. The agreement contained arbitration clause. In pursuance to the said arbitration clause, respondent filed an application before the Court below for making reference to the arbitrator under Section 20 of the Arbitration Act. The appellant filed written-statement and took various pleas opposing the appointment of the Arbitrator. On 31. 5. 1991, the Court directed the appellant to file the original agreement and to submit the names of the panel of Arbitrators Jo choose an Arbitrator by the respondent. The appellant has filed the instant appeal against this order. ( 4 ) THE basic question is whether the appeal is maintainable against such an order after the amendment in Section 39 (4) of the Arbitration Act by U. P. Civil Laws (Reforms and amendment) Act No. 57 of 1976 w. e. f. 30. 12. 1976 (in short 1976 Act ). Section 18 of this Act amended subsections (1) (3) (4) of Section 20 and clause (4) of Section 39 of the Arbitration Act. 1940. Sub-sections (2) to (4) of Section 20 of the Act lays down the procedure to be followed by the Court when a party files an application for appointment of an Arbitrator. After the amendment of the provisions of this Act by 1976 Act, the Court is to refer the matter to an arbitrator.
1940. Sub-sections (2) to (4) of Section 20 of the Act lays down the procedure to be followed by the Court when a party files an application for appointment of an Arbitrator. After the amendment of the provisions of this Act by 1976 Act, the Court is to refer the matter to an arbitrator. Under sub-section (3) of Section 20 of the Act prior to the amendment, the notice is to be given to the opposite party to show cause "why the agreement should not be filed" but after the amendment, the notice is given to show cause "why a reference in accordance with the agreement should not be made". In sub-section (4) of Section 20 of the Act by amendment the words added are, "the Court shall make an order of reference to the Arbitrator appointed by the parties. " ( 5 ) SECTION 39 of the Arbitration Act. 1940 enumerates the appealable order which are covered by clauses (1) to (vi) of the section. Unamended clause (IV) of sub-section (1) of Section 39 provided for filing appeal against the order "filing or refusing to file an arbitration agreement". This has been amended by 1976 Amendment Act and has been substituted by the words under section 20 by the words "making or refusing to make a reference". The appeal against the order of the Court directing to file the agreement or refusing to file the agreement was appealable as held in Fertilizer Corporation of India Ltd. v. M/s. Domestic Engineering Installalion. AIR 1970 all 31 . After substitution of clause (4) by Amending Act, 1976, the appeal is maintainable only against an order making or refusing to make reference by the Court. This question was considered by a Division Bench of this Court in State of U. P. v. Hindustan Construction company Limited, Bombay, 1978 AWC 702, where the Court below had allowed the application filed by the plaintiff under Section 20 of the Arbitration Act and directed both the parties to intimate the names of two Arbitrators, one to be nominated by each one of them and the arbitrators so nominated, should select an Umpire, this Court held that after the Amending Act, 1976, the appeal was not maintainable as the Court had not made any reference to any Arbitrator. The reference can be made to the Arbitrator only after the Arbitrator is appointed by the Court.
The reference can be made to the Arbitrator only after the Arbitrator is appointed by the Court. ( 6 ) THE Court by the impugned order dated 31. 5. 1991 has only directed the appellant to file the agreement and submit a panel of the Arbitrators. This is not an order making a reference to the arbitrator hence the appeal is not maintainable and is. accordingly, dismissed. .