Haryana State vs Radhey Sham Contractor and Another

N.K. Kapoor, J.—This revision petition is against the order of Sub Judge 1st Class, Hissar, dated 10 10.1991, whereby the petitioners application u/s 8(1)(b) of the Arbitration Act for appointment of an arbitrator has been dismissed.

Briefly put, the petitioner filed an application u/s 8(1)(b) of the Arbitration Act to appoint an arbitrator through the Court. It was pleaded that the matter was earlier referred to an arbitrator who, however, could not announce the award within the prescribed period of four months and thus applied for extension of the time. The arbitrator withdrew the application for extension of time and consequently the same was dismissed vide order dated 25.2.1985. In these circumstances, the petitioner prayed that another arbitrator be appointed.

The respondent put in appearance and raised the objection with regard to the maintainability of the petition. On merits, it was stated that the present dispute intended to be referred to the abritrator was, in fact, cooked up after the payment of the final bill and thus prayed that, in fact, there is no dispute to refer to an arbitrator. The respondent specifically pleaded that in view of want of notice in terms of Section 8(1)(c) of the Arbitration Act, the present petition is not maintainable.

On the pleadings of the parties, various issues were framed However, for the present revision, the relevant issues are hereunder reproduced :-

(1) Whether the Arbitrator refused to act on the previous application given by the present applicant to him. If so, its effect ? OPP ?

(2) Whether the application is not maintainable as alleged in preliminary objection Nos 1, 3 and 5 of the written statement filed by respondent ? OPR ?

The learned Sub Judge on the basis of evidence led and in the light of clause 25 of the agreement came to the conclusion that the matter in dispute had already been referred to an arbitrator, who could not complete the proceedings within the prescribed period of four months, and so filed an application for extension but somehow did not press the same and consequently the same was dismissed. According to the petitioner, this act of the arbitrator tantamounts to his refusal to act in terms in Section 8(1)(b) of the Arbitration Act. However, as per case of the respondent, such an act of the arbitrator cannot come within the ambit of neglects or refuses to act in terms of Section 8(1)(b) of the Arbitration Act and thus the petition is liable to be dismissed. The Sub Judge after referring to clause 25 of the agreement and the conduct of the arbitrator whereby the application for extension of time was withdrawn, decided issue No. 1 in favour of the petitioner.

Under issue No. 3 the trial Court held that the petition is not maintainable for want of service of written notice u/s g (1) (o of the Arbitration Act.

It is the admitted case of the parties that no notice was served upon the respondents before filing the application u/s 8(1)(b) of the Arbitration Act. However, according to the learned counsel for the petitioner, even when no such written notice had been served upon the respondent yet the Court on its own can appoint another arbirrator when the earlier appointed arbitrator has refused to act. Section 8(1) (b) and (c) reads as under :-

"8 Power of Court to appoint Arbitraror or umpire :-

1 (a) xx xx xx (a) 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) xx xx xx xx any party may serve the other parties or the arbitratiors, as the case may be, with a written notice to concur in the appointment or appointments or in supplying tae vacancy."

Section 8 deals with the appointment of an aibitiator or umpire by the Court (1) where the arbitration agreement provide that reference shall be to one of the arbitrator to be appointed with the consent of the parties and all the parties in view of the difference between them concur In the appointment ; (ii) in case an arbitrator or umpire appointed neglects or refuses to act or incapable of acting etc. ; and (iii) where the parties or arbitrator are required to appoint an umpire and do not appoint it. In the all above mentioned three eventualities, section 8 envisages service of a written notice upon the other party or the arbitrator, as the case may be, Before such a vacancy can be filled, Section 8(2) of the Arbitration Act gives power to the Court to appoint an arbitrator or umpire after giving an opportunity of being heard to the other side, after expiry of 15 days after the service of the notice as per Section 8(1)(c) of ''he Arbitration Act, i e, to say unless the party has served a written notice to the other party, the Court cannot proceed in terms of Section 8(2) of the Arbitration Act. Since no written notice has been served upon the respondents, the trial Court rightly came to the conclusion that the arbitrator cannot be appointed without specifically complying with the provisions of Section 8(1)(c) of the Arbitration Act. Consequently, the impugned order does not call for any interference. The revision petition is without any merit and is thus dismissed.