Baldev Raj vs Lala Krishan Lal

Jaswant Singh, J.

(1) This appeal which is directed against an order dated May 2nd 1972, of the learned District Judge, Jammu arises out of a matter referred to

arbitration with the intervention of the court.

(2) Briefly the facts leading to this appeal are :

In civil suit No, 17 of 1968. entitled Baldev Raj Vs. Krishen Lal instituted on July 15th, 1968, for dissolution and rendition of accounts of the

partnership firm carrying on business under the name and style of M/s Krishen Lal Baldev Raj, the District Judge, Jammu, passed a preliminary

decree on March 25th 1969, declaring the shares of the parties in the partnership and appointing Shri Vishwa Bandhu. Advocate, as

Commissioner to go into accounts and submit a report The Commissioner accordingly went into the accounts and submitted his report on June

17th, 1970, stating therein that the plaintiff (appellant herein) was liable to pay to the defendant (respondent herein) a sum of Rs 13,226 and 1/2

paisa. Whereas on August 3rd, 1970, Krishen Lal defendantrespondent applied to the court for passing a final decree in terms of the report of the

Commissioner, Baldev Raj, plaintiffappellant submitted his objections to the report. Thereupon the court directed the latter to adduce evidence in

support of his objections. While the evidence of the plaintiff appellant was still going on, the parties made an application to the court on May 17th,

197L, stating therein that the matter in controversy between them be referred to the arbitration of Shri Dwarka Nath Advocate. Though the

learned District Judge was only seized of Civil suit No. 17 of 1967, it was stated in the application by the parties that the arbitrator would also be

competent to settle the matters in controversy between them in the following two cases also namely :

(1) Civil suit No. 77 of 1966 entitled Shri Krishen Lal Vs. Shri Baldev Raj and another for recovery of Rs. 3583/ wherein the Sub Judge, Jammu,

had passed a decree in favour of Shri Krishen Lal against Baldev Raj for Rs. 1944.88 on December 10th, 1969, which was upheld in appeal by

the District Judge Jammu, vide his judgment and decree dated March 3lst, 1971. It may here be stated that in this case on the decreeholders taking

out execution of the decree on March 30th, 1972, the Sub Judge, issued a warrant for attachment on the same date but subsequently on an

application of the judgment debtor stayed the proceedings vide his order dated April 28th, 1972.

(2) Civil suit No. 84 of 1966 entitled Krishen Lal Vs. Baldev Raj and another, for dissolution of accounts of the firm known as Amar Natb,

Krishen Lal wherein the Sub Judge, Jammu, had passed a preliminary decree in favour of Krishen Lal against Baldev Raj on June 29th, 1968 and

appointed Sardar Avtar Singh, Advocate, as Commissioner to go into accounts regarding ""the contractors of the firm'' and wherein on appeal, the

District Judge; Jammu, while upholding the preliminary decree, had by his judgment dated March 25th, 1969, appointed Shri Vishwa Bandhu, as

Additional Commissioner, as agreed to by the parties.

(3) There upon the learned District Judge, without going into the tenability of the application in view of the fact that one of the suits had long since

been decreed and the other was not pending before him proceeded to pass a somewhat vague order appointing Shri Dwarka Nath, as arbitrator

and asking him to submit his report by May 31, 1971.

(4) Pursuant to this order, Shri Dwarka Nath entered upon the reference and conducted the proceedings for considerable length of time but was

relieved of his obligations as arbitrator vide District Judge's order dated March 28, 1972, on his reporting that he was unable to proceed with the

arbitration.

(5) Thereafter the plaintiffappellant served a written notice on the defendantrespondent calling upon the latter to the appointment of a new

arbitrator in place of Shri Dwanka Nath and on his failing to do so, approached the District Judge for appointment of a new arbitrator. The request

was vehemently opposed by the respondent.

(6) It was urged before the District Judge on behalf of the appellant that the appointment of a new arbitrator was necessary as it was the intention

of the parties to get the matter in dispute between them settled by arbitration Relying upon Sections 8 and 25 of the Arbitration Act, it was also

contended on behalf of the appellant that the court could appoint a new arbitrator even if the request was opposed by the other side.

(7) In opposition, it was urged on behalf of the respondent before the District Judge that the power to appoint a new Arbitrator was discretionary

and the circumstances of the case did not warrant the appointment of a new arbitrator.

(8) On a consideration of the respective stands of the parties, the learned District Judge, rejected the prayer of the appellant on May 2, 1972

observing that if the arbitrator appointed by the parties during the trial of the suit does not want to act as such and is, therefore, removed, it was not

mandatory that the matter in dispute between the parties should be got decided by another arbitrator against the will of the other party. It is against

this order that the present appeal has been filed.

(9) Mr. Sehgal appearing on behalf of the appellant has reiterated the submissions made by him before the learned District Judge and has

strenuously urged that the order under the appeal cannot be sustained as the appointing of another arbitrator is highly expedient and necessary.

(10) We have given our earnest consideration to the submissions made by the learned counsel for the parties.

Though by virtue of Section 25 of the Arbitration Act the power conferred by Section 8 (2) of the Act is also available in case of an arbitration

with the intervention of the court and it cannot now in view of the decision of their Lordships of the Snpreme Court in M/s Prabhat General

Agencies etc. Vs. Union of India and another, AIR 1971 SC 2298, be gainsaid that if the agreement is silent as regards supplying any vacancy in

the office of the arbitrator the law presumes that the parties intended to supply the vacancy, it is also clear that the power both under section 8 (2)

and Section 25 of the Arbitration Act is discretionary. Reference in this connection may usefully be made to the decisions reported in AIR 1963

Calcutta, 149 AIR 1959 Punjab, 593, AIR 1957 Patna. 712 and AIR 1956 Rajasthan, 129.

(11) It was also held in AIR 1959, Punjab, 539 (Supra) that Section 25 of the Arbitration Act gives a wide discretion to the Court and if the

discretion has been exercised one way or the other, the High Court should not lightly interfere with it.

(12) In the present case not only a preliminary decree was passed in the case as far back as March 25th, 1969, but the Commissioner also after

going into the accounts of the parties submitted his report more than three years ago and even close relatives of the parries like Shri Dwarka Nath,

and Shri Sodagarmal, Advocates and Shri Bishan Dass Bazaz, have failed to settle the outstanding disputes between the parties In view of all this,

we think no useful purpose would be served by appointing a fresh arbitrator and protracting the matter further. The learned District Judge, was, in

view of all the material facts and circumstances, right in rejecting the prayer of the appellant for appointment of a fresh arbitrator and directing that

the matter shall proceed in court from the stage where it was left.

(13) For the foregoing reasons, we see no cogent ground to interfere with the order passed by the District Judge and dismiss the appeal.

(14) Taking into consideration the fact that the appellant has dexterously succeeded in prolonging the proceeding not only in civil suit No. 17 of

1968 but also in the other two cases, we would also direct him to pay costs to the respondent both of this appeal as well as those incurred by the

other side in opposing the application for appointment of a fresh arbitrator.