Patel and Co. vs State of Gujarat

K.S. Jhaveri, J.—Mr. M.G. Nagarkar, learned Counsel on record, states that he no longer appears on behalf of the Appellant in this matter and therefore, his name may be deleted. However, when the matter was earlier listed before this Court on 29.11.2010, the matter was adjourned to today at the instance of Mr. Nagarkar. On the last date itself, Mr. Nagarkar ought to have informed the Court that he is not appearing in the matter. In view of the above and since the matter is of the year 1992, the request for adjournment is declined and the matter is decided on merits.

This appeal has been filed against the judgment and order passed by the learned Civil Judge (S.D.), Ahmedabad (Rural) at Mirzapur in Civil Misc. Application Nos. 111/1989 & 112/1989 dated 26.04.1990, whereby, the application u/s 17 of the Arbitration Act was dismissed and the award passed by the Arbitrator was quashed and set aside,

The facts in brief are that an agreement was entered into between the Appellant-Company and Respondent-State for modernization of the Bhadar Irrigation Canal project being Agreement No. LCB-1 of 1983-1984. However, some dispute arose between the parties, which led to the appointment of an Arbitrator. The Arbitrator published his award on 29.05.1989.

Thereafter, the Appellant-Company filed an application u/s 17 of the said Act before the trial Court praying for a decree in terms of the said award, which came to be numbered as C.M.A. No. 111/1989. The Arbitrator presented the award before the trial Court and it was numbered as C.M.A. No. 112/1989. Both the applications were heard together and by impugned judgment and order, the trial Court dismissed C.M.A. No. 111/1989 by setting aside the award passed by the Arbitrator.

Hence, this appeal.

It appears from the record that the issuance of Notice by the Contractor culminated into the appointment of the Arbitrator. It was not that the concerned authority in the Respondent-State had not followed the prescribed procedure for the appointment of the Arbitrator at the relevant time. The Arbitrator came to be appointed after the list of Arbitrators was sent by the competent authority to the Contractor, selection was made by the Contractor and thereafter, Arbitrator was appointed by the Respondent.

Admittedly, there is no dispute or grievance against the appointment of the Arbitrator. The only grievance is that five claims of the Contractor should have been referred to the Arbitrator but, instead only four claims were referred. However, for that the Contractor has not approached the competent Court either to get the claim included in the reference made by the Government nor has he applied before the Court for the appointment of an Arbitrator to decide the said fifth claim. The fact remains that the Contractor has not followed the procedure prescribed for the appointment of an Arbitrator. Further, Clause 52 of the Agreement does not give any right to the Contractor to make a separate appointment of an Arbitrator to arbitrate upon a dispute not included in a reference.

Considering the facts of the case, the appointment of the Arbitrator was illegal and consequently, the award passed by him also becomes bad in law and illegal. In my view, the trial Court was completely justified in setting aside the award passed by the Arbitrator. I am in complete agreement with the reasonings given by the trial Court in the impugned order and hence, find no reasons to interfere with the same.

For the foregoing reasons, the appeal is dismissed. No costs.