Skip to content


Mangal Prasad Vs. Lachhman Prasad - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 57 of 1961
Judge
Reported inAIR1964All108
ActsArbitration Act, 1940 - Sections 8, 8(1), 11, 11(1), 20 and 20(1)
AppellantMangal Prasad
RespondentLachhman Prasad
Appellant AdvocateA.P. Agarwal and ;R.K. Srivastava, Advs.
Respondent AdvocateM.M. Lal, Adv.
Excerpt:
arbitration - arbitrator not making award - sections 20(1), 8 and 11 of arbitration act, 1940 - whether application under section 20(1) can be maintained - arbitrator not proceeding with arbitration after reference has been made - application has to be for removal of arbitrator under sections 8 or 11 - after reference has been made application under section 20(1) cannot be maintained. - - - whether an application under section 20 of the indian arbitration act can be made in a case like the present one where the arbitrator had started to function and had entered upon the reference but at a later stage could not proceed with the same? then there is section 11 under which the court may on a party's application remove the arbitrator on the ground that he has failed to use all reasonable.....desai, c.j.1. the following question has been referred to this bench by our brothers jagdish sahai and mithan lal:-'whether an application under section 20 of the indian arbitration act can be made in a case like the present one where the arbitrator had started to function and had entered upon the reference but at a later stage could not proceed with the same?'a conflict among decisions dealing with this question necessitated this reference to a full bench'. the parties to this appeal are brothers and had disputes regarding partition of joint property. on 9-12-1955 they entered into an agreement to refer the question of partition of all their joint property to the sole arbitration of sri baij nath prasad. no time was fixed for his making an award and, therefore, under section 3 of the.....
Judgment:

Desai, C.J.

1. The following question has been referred to this Bench by our brothers Jagdish Sahai and Mithan Lal:-

'Whether an application under Section 20 of the Indian Arbitration Act can be made in a case like the present one where the arbitrator had started to function and had entered upon the reference but at a later stage could not proceed with the same?'

A conflict among decisions dealing with this question necessitated this reference to a Full Bench'. The parties to this appeal are brothers and had disputes regarding partition of joint property. On 9-12-1955 they entered into an agreement to refer the question of partition of all their joint property to the sole arbitration of Sri Baij Nath Prasad. No time was fixed for his making an award and, therefore, under Section 3 of the Arbitration Act (which will henceforth be referred to as the Act) Clause 3 of the 1st Schedule attached to the Act applied and the arbitrator had to make his award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court might allow. The agreement was filed with the arbitrator and he entered upon and proceeded with the reference, but the appellant non-co-operated and the arbitrator thought that, he could not make an award.

On 7-11-1958 the appellant filed a suit for partition of the joint property in the Court of the Civil Judge, Bahraich. Thereupon an application under Section 20 of the Act giving rise to this appeal was presented in the Court of the Civil Judge, Malihabad, by the respondent with the prayer that the agreement be filed in Court, that on order of reference to the arbitrator Sri Baij Nath Prasad be made and that on the award to be given by him a decree should be passed. The application was opposed by the appellant, who pleaded that he had signed the agreement, under pre-sure, that the agreement became null and void because no award was made within four months, that the arbitrator was in collusion with the respondent, that the application was barred by time, that it was not maintainable because the arbitrator had already proceeded with the reference and that the agreement was not the one contemplated by Section 20.

The appellant's allegations were denied by the respondent in his replication and he asserted that the arbitrator had nearly completed the proceeding and could make an award within a fortnight. He admitted that the appellant had filed a suit and contended that he had applied under Section 34 of the Act for its stay. On 17-12-1958 the Court (e. g., that of Civil Judge, Malihabad) ordered the arbitrator to file the agreement and other papers in Court, which he did. The respondent's application under Section 34 was rejected by the Civil Judge, Bahraich, and his order is under appeal in this Court. The application under Section 20 was allowed by the Court and this appeal is preferred from its order. It seemsthat an award has been made by the arbitrator and its operation has been stayed by this Court during the pendency of the appeal.

2. Section 20, so far as is relevant, reads as follows: -

'(1) Where any persons have entered into an arbitration agreement ............ 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 ............... thatthe agreement be filed in Court.

(2) ....................................

(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement ......... requiring them toshow cause ......... why the agreement should notbe 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 ..................

(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act ,..............'

3. Chapter II deals with arbitration without intervention of a Court. Section 14 of it provides that where the arbitrator has made his award he shall sign it and give notice to the parties of the making and signing thereof, that he shall at the request of any party or on being directed by the Court cause the award or a signed copy of it to be filed in Court and that the Court will then give notice of the filing to the parties. Section 15 provides that the Court may modify or correct the award, Section 16, that it may remit it and Section 17, that when it sections no cause to remit it or to set it aside it will pronounce judgment according to it and a decree upon the judgment. An award can be set aside only on the grounds specified in Section 30 and Section 33 empowers any party to apply to the Court to decide the question of existence or validity of an award.

Section 8(1)(b) lays down that if the arbitrator

'neglects or refuses to act ......... and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties ............ do not supply the vacancy',

any party may serve the other party with a written notice to concur in the appointment in supplying the vacancy. Section 8(2) provides that if the appointment is not made within fifteen days, the Court may on the party's application appoint an arbitrator to fill the vacancy. Then there is Section 11 under which the Court may on a party's application remove the arbitrator on the ground that he has failed to use all reasonable dispatch 'in entering on and proceeding with the reference''. Where the Court removes the sole arbitrator it may under Section 12 on a party's application appoint another person to act as sole arbitrator or order the agreement to have ceased to be effective. There is no provision in Chapter II governing a sole arbitrator's inability to make an award on account of a party's non-co-operating with him; it seems to me that when he does not make an awardon this ground it is a, case of his neglecting or refusing to aqt within the meaning of Section 8(1) or of failing to use all reasonable dispatch in proceeding with the reference within the meaning of Section 11 and the Court may, on a party's application, appoint another arbitrator in his place.

It is difficult to understand what the arbitrator in this case meant by saying that he was unable to make an award on account of the appellant's non-co-operating with him. There was no difficulty in his making an ex parte award. He could always make an award on the basis of evidence and materials supplied to him by the respondent; it would be the appellant's fault if he did not rebut the evidence produced by the respondent and supply his own materials and evidence. The arbitrator's jurisdiction to make an award did not at all depend upon co-operation by both the parties. When the arbitrator did not make an award, even though he could make it, it could be said that he neglected or refused to make it and action could have been taken under Section 8.

It may be said that Section 11 applies when the failure is to use all reasonable dispatch in entering on and proceeding with the reference and not when it is to use all reasonable dispatch in only proceeding with the reference. The word used in Section 11(1) is 'and' and net 'or' but 'and' can be used in the sense of 'or'. The provision may mean that an arbitrator who fails to use all reasonable dispatch in entering on the reference or in proceeding with the reference can be removed, i. e., the failure in respect of entering on the reference or of proceeding with the reference justifies removal. It would be like 'who fails to use ............ entering on the reference andwho fails to use ......... proceeding with the reference may be removed.' The legislature could nothave meant that the failure must be in respect ofboth entering on and proceeding with; failure inregard to either would be enough. In this casethere might not have been failure in respect ofthe entering on the reference but there was failurein respect of the proceeding with the referenceand the arbitrator could be removed under Section 11.

4. An application under Section 20(1) has to be for the agreement being filed in Court and the cause of action for making it accrues when a difference to which the agreement applies has arisen. On the agreement being filed the Court has to order the difference to be referred to the arbitrator. These provisions show that an application under Section 20(1) has to be made before the arbitrator has entered upon the reference. If ha has already entered upon the reference there would be no necessity of the Court's ordering the difference to be referred to him; nothing more would be achieved by the simple fact that the Court has ordered the difference to be referred to him. What he can do after such an order can be done by him even without such an order. Such an order would be necessary only if he has not entered upon the reference. If he has already entered upon the reference but neglects or refuses to proceed further or fails to use all reasonable dispatch in proceeding with the reference be can be removedunder Section 8(1) or under Section 11(1). I do not think that the words 'instead of proceeding under Chapter II' necessarily indicate that the arbitrator has not entered upon the reference.

There are some proceedings in Chapter II which apply even after the arbitrator has entered upon the reference, for instance those under Section 8(2), Section 11(1) and (2) and Section 12(1). The words in italics themselves suggest that Section 20(1) contemplates a case in which a proceeding can be taken under Chapter II, and do not support the contention that Chapter II applies when the arbitrator has entered upon the reference and Chapter III, when he has not.

5. When the arbitrator has entered upon the reference the agreement must have been filed with him. A notice of the application under Section 20(1), which is to be registered as a suit between the parties is to be given only to the parties and the arbitrator has not to figure as a party to it. It is not understood how the agreement can be ordered to be filed when it is with him and he is not under the Court's jurisdiction. The provision pre-supposes that the agreement is with one party or the other who can bo ordered by the Court to file it. This would be the position when the arbitrator has not entered upon the reference.

Sub-section (5) suggests that the arbitration has not proceeded in accordance with and has not been governed by, the other provisions of the Act prior to the Court's ordering the difference to be referred to the arbitrator. 'Thereafter ......shall proceed' is inconsistent with his having already proceeded in accordance with the other provisions of the Act.

6. I do not see much force in the appellant's contention that Section 20(1) applies when a difference arises after an arbitration agreement has been entered into. Not only is this the sequence of the events mentioned in the provision but also the immediate cause of action for an application is that a difference has arisen to which the agreement applies. The provision contemplates a case in which the parties entered into an arbitration agreement providing for a reference of a difference and then a difference arises between them. So long as no difference has arisen between them there is no question of invoking the services of the arbitrator. It is only when a difference arises that his services have to be invoked and Section 20(1) lays down the procedure.

A party or the parties could itself or themserves, without intervention of the Court, call upon the arbitrator by notice in writing to make an award, vide clause 3 of the 1st Schedule. But the remedy given by Section 20(1) is an alternative to that provided by Chapter II, which means that Chapter II also applies to a case in which a difference arises after the agreement has been entered into. It cannot be disputed that the Act governs an arbitration agreement preceding a difference and also an arbitration agrement following a difference and if Chapter II does not exclusively deal with a difference preceding an agreement it cannot be said that Section 20(1) exclusively deals with a difference arising after an agreement.

7. It was contended on the respondent's behalf that since the arbitrator expressed his inability to go on there were no arbitration proceedings pending when he applied under Section 20. The respondent's prayer is for referring the difference to Sri Baij Nath Prasad arbitrator and not for his removal or appointment of another arbitrator. He has, therefore, not treated the case as one of refusal and neglect to act or of having become incapable of acting. If the respondent was aggrieved by his not making an award within a reasonable time his remedy was different. As I said earlier, nothing was to be gained by the Court's ordering the difference to be referred to him.

8. There is no authority dealing exactly with the question that we have to answer. There are however, certain authorities in respect of para 17 of Schedule 2, Civil Procedure Code, since abolished. The paragraph read as follows:-

'(17) (1) ...... the parties to the agreement or anyof them, may apply to any Court having jurisdiction ...... that the agreement be filed in Court.

(2) Same as paragraphs (2) and (3) of Section 20

(3) of the Arbitration Act.

(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 in accordance with the provisions of the agreement or, if there is no such provision ......'

In Sheo Narain v. Bala Rao : AIR1932All348 Mears, C. J. and Sen, J., stated that the scope of para 17, schedule 2 is no move than this that where an agreement has been entered into, but: the arbitrators have not so far functioned, the Court has power to enforce the agreement where the arbitrators are ready and willing to act. According to their interpretation the provision predicated that the arbitrators have the jurisdiction to act on the reference. No part of this observation can be said to be obiter. This case supports that an application under para 17 could be made only if the arbitrators had not entered upon the reference.

In Ahmad Noor Khan v. Abdur Rahman Khan AIR 1919 All 48 Lindsay and Ryves, JJ. held that if an arbitrator, who had entered upon, the reference, refused to proceed further on the ground that one of the parties died during the hearing of the reference and that he had no jurisdiction to make his legal representatives parties ' before him, an application under para 17 could not be made.

It was held in Narayanappa v. Ramchandrappa AIR 1931 Mad 28 by Anantakrishna Ayyar and Sundaram Chetty, JJ., that where one arbitrator died before the completion of the proceeding and the agreement did not make any provision for filling up the vacancy, the Court had no jurisdiction to appoint an arbitrator in place of the deceased and could not make an order of reference to the surviving arbitrators. The learned Judges also observed at page 30 that para 17 dealt with agreements to refer to arbitration 'existing as well as future differences.

9. The respondent relied upon 'the following decisions. In Bhagwan Das v. Gurdayal AIR 1921 All 188 Waist and Wallach, JJ., observed

'the mere tact that the objecting party has gone to arbitration as though an order of reference had been made without insisting upon, the order of reference, is conclusive against him if hisopponent should at any later stage require an,order of reference in order to file an application for some further step to be taken by the Court.'

In this case it was alleged by Bhagwan Das,a party to the agreement, that one of the arbitrators had refused to act. This learned Judges observed that Bhagwan Das had a right to secure asubstitute in place of the arbitrator in order that the arbitration might proceed and that, because the Court had an authority to appoint a substituteonly in a case in which it had made an order of reference under para 17, Bhagwan Das had to apply under para 17 for such an order. The position under the Arbitration Act is, however, different and, as I pointed out, the respondent had a remedy by way of an application under Section 8 or under Section 11 and, since he was not obliged to make an application under Section 20, it cannot be contended that Section 20 applies even after the arbitrators have entered upon the reference.

In Fazal Ilahi v. Prag Narain AIR 1922 All 133 the facts were similar to those in the case of Bhagwan Das, AIR 1921 All 188 (supra), and thesame view was taken as in that case. In the instant case Sri Baij Nath Prasad has not clearly refused to act; he only expressed his inability to proceed further on account of the appellant's attitude, but was willing to proceed and make anaward within a short time. The respondent didnot want an order from the Court for the appointment of another arbitrator in his place and, therefore, even if the matter had been governed by para 17, it could not be said that he was bound to make an application under the paragraph.

Datta Mal v. Amar Nath AIR 1938 AH 414 decided by Bennett and Verma, JJ., was again acase of refusal by one arbitrator to act. Moreover, in that case practically nothing had been done bythe arbitrators and, therefore, the question thatwe are discussing did not arise there.

In Balika Devi v. Kedar Nath Puri : AIR1956All377 a partition deed contained an arbitration clause for reference of disputes arising in future to an arbitrator. Disputes that arose laterwere referred to the arbitration of one Sri Vaish.Sri Vaish entered upon the reierence and commenced proceedings, but ultimately refused to give an award. One party called upon the other to agree to the appointment of Sri Halwasiya as the arbitrator and on her refusal made an application under Section 8 and the Court allowed itand appointed another arbitrator. Mootham, C.J., and Chaturvedi, J., held that the applicationwas maintainable and that the plaintiff had theoption to apply either under Section 8 or under Section 20. The learned Judges certainly observedthat the plaintiff could apply under Section 20 even though the arbitrator had entered upon the reference and proceeded to some extent, but it was the argument of the defendant that the plaintiff's remedy was to apply only under Section 20and the learned Judges observed that even if theplaintiff could apply under Section 20 he could alsoapply under Section 8 and that the choice was his.The learned Judges were never called upon to decide whether an application under Section 20 can be made after the arbitrator has entered upon the reference; it was assumed that it could be made. Further, the application that could be made under Section 20 in that case would have been not for making an order of reference to Sri Vaish but for making an order of reference to another arbitrator.

The application that the respondent made in the instant case was for an order of reference to Baij Nath Prasad. The respondent, therefore, cannot derive any support from this decision.

Thawardas Pherumal v. Union of India : [1955]2SCR48 is an authority only for the proposition that if one party is not prepared to submit a difference to arbitration in spite of there being an agreement for arbitration, the other party must have recourse to Section 20 and then the former party would be compelled to submit the difference under Sub-section (4). It does not follow that an application under Section 20 is necessary when an arbitrator after having acted upon the reference finds himself unable to make an award because one party does not co-operate with him. Clearly the Supreme Court assumed a case in which the difference had not been referred to the arbitrator at all and he had not entered upon the reference; what should be a party's remedy if the arbitrator found himself in the same position as Sri Baij Nath Prasad in the instant case was not discussed by the Supreme Court.

Godhu Mal v. Smt. Ganga Hasso Mal Indani AIR 1958 AH 26 to which our attention was drawn contains nothing helpful. It does not deal with the question under consideration.

9a. My answer to the question is 'No'.

S.N. Katju, J.

10. I agree with the view expressed by Hon'ble the Chief justice.

N. U. Beg, J.

11. The question arising in this case does not appear to be free from difficulty. Having heard the learned Counsel for the parties and given consideration to the judgment of my Lord the Chief Justice, I regret my inability to agree with the conclusions arrived at by him.

12. The appellant Sri Mangal Prasad and therespondent Sri Lachhman Prasad are own brothers.A dispute having arisen between them regardingthe partition of the joint family property theyentered into an arbitration agreement on the 9thof December, 1955, referring their disputes to thesole arbitration of one Sri Baij Nath Prasad. SriBaij Nath Prasad was a lawver, and had beenattending to the Income-tax cases as well as othercases of both the parties. It is probably for thisreason that he was specifically named in the arbitration agreement, and both the parties had nominated him for the purpose of finally settling thedisputes between them. The parties had also agreed to pay his remuneration. The deed in question was written out on a stamped paper signed byboth the parties, and duly attested by the witnesses.

The arbitrator, entered on the arbitration, and carried it on for some time. Before, however, he could complete it, Sri Mangal Prasad started avoiding the proceedings and adopted an attitude ofnon-co-operation towards him. He did not pay his expenses or remuneration. In this situation, the arbitrator expressed his inability to proceed further with the matter. Thereafter Sri Lachhman Prasad preferred an application under Section 20of the Arbitration Act (Act No, X of 1940), (hereinafter called the Act), in the Court of the Civil Judge, Malihabad, Lucknow. In this application he stated the facts mentioned above, and prayed that the agreement in question be filed in Court, and the plaintiff be given a decree in terms of theaward which might be given by the arbitrator.

13. This application was resisted by the defendant Sri Mangal Prasad on a number of grounds. The defendant alleged that the arbitration agreement was signed by him under undue Influenceand pressure, that the arbitrator was a fast friendof the plaintiff, that he had been woa over by the plaintiff, that he (the defendant) had lost all confidence in him, that the arbitrator had failed to give his award within time, that a partition suit had already been filed by him in the Court of theCivil Judge, Bahraich, against the plaintiff, that the application in question was barred by limitation and, finally, that the application in question was not maintainable under Section 20 of the Act, as the arbitrator had already entered on the arbitration and started proceedings therein.

14. The learned trial Judge framed a large number of issues covering the various pleas raised try the defendant. He rejected all of them, and finally decreed the suit with costs.

15. Dissatisfied with the said decree, the defendant Mangal Prasad filed the present first appeal in the High Court. In this Court the defendant appellant concentrated his attention on the legal plea relating to the maintainability of the application under Section 20 of the Act. A number of cases were cited by both the parties before the Division Bench that heard the case. In view of the conflict of decisions of this Court on the point that was sought to be canvassed before the Bench, the following question was referred to a Full Bench:

'Whether an application under Section 20 of the Indian Arbitration Act can be made in a case like the present one where the arbitrator hadstarted to function and had entered upon the reference but at a later stage could not proceed with the same?'

16. On behalf of the appellant, it was argued before us that once an arbitrator enters upon the reference an application under Section 20 of theAct is not maintainable. On the other hand, onbehalf of the respondent, it was argued before us that an application under Section 20 of the Act would be maintainable even after the arbitrator had entered upon the reference, if for some reason or the other the arbitration proceedings come to a stand-still at a subsequent stage.

17. At the very outset, it is worthwhile quoting Section 20 in extenso. Section 20 of the Act runs as follows:

'20. Application to file in Court arbitration agreement.--- (1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matterof 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 wilting and shall be numbered and registered as a suit between one on 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 the 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 arbitrates 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 should proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.'

18. A perusal of Section 20 of the Act would indicate that Sub-section (1) of Section 20 defines the conditions necessary for filing an application in Court. Sub-section (2) relates to the form o the application, Sub-section (3) provides for the issue of notice by the Court to all parties to the agreement other than the applicants requiring them to show cause why the agreement should not be filed. Sub-section (4) provides that where no sufficient cause is shown, the Court shall order the agreement to be filed and make an order of reference to the arbitrator. Sub-section (5) deals with the procedure to be followed in the arbitration proceedings before the arbitrator after the application is filed and notice issued to the parties and the law governing the same. The answer to the question that confronts the Full Bench, in the present case would, however, be found in Subsection (1) of Section 20. As already observed, this is the sub-section which defines the prerequisites of an application under Section 20. The other sub-sections, namely Sub-sections (2) to (5), either relate to the form of the application or to the procedure and law to be followed therein after the said application has been filed.

19. An analysis of Sub-section (1) of Section 20 would indicate that, according to it, four conditions are necessary to be fulfilled before an application under that section can be entertained by the Court, They are:

(1) That some persons should have entered into an arbitration agreement.

(2) That the said arbitration agreement should have been entered into 'before the institution of any suit with respect to the subject-matter of the agreement or any part of it'

(3) That a difference should have arisen in respect of the subject matter of agreement.

(4) That the Court where the application is filed should have jurisdiction in the matter to which the agreement relates.

20. The above four conditions are also enumerated in the judgment of a Division Bench case of the Allahabad High Court in : AIR1958All26 decided by M. L. Chaturvedi and Chowdhry, JJ. At page 28 of the report after referring to Section 20 of the Act, the judgment contains the following observations:

'Before a person applies under that section thai the agreement be filed in Court four conditions must be satisfied, namely (1) that he has entered into an arbitration agreement with some person or persons, (2) that the agreement has been entered into before the institution of any suit with respect to the subject-matter of the agreement or any part of it, (3) that a difference has arisen between the parties to which the agreement applies and (4) that the Court to which the application is made has jurisdiction in the matter to which the agreement relates. If any of these conditions is absent, the filing of an application under that section and the passing of orders by Court that the agreement be filed in Court and a reference to arbitration be made would be barred'.

21. The argument on behalf of the appellant is that in addition to the above-mentioned four conditions, a fifth condition is also necessary for making an application under Section 20 of the Act entertainable, and that condition is that the application should be filed before the arbitrator has entered upon the arbitration proceedings. I find myself unable to accept this argument. The legislature has laid down four and four conditions only for the purpose of determining the maintainability or entertainability of an application under Section 20.

It is significant in this connection to note that the legislature has, in the above section, provided that the application should be filed 'before the institution of any suit with respect to the subject-matter of the agreement or any part of it...........' This is the second condition mentioned aboye. If the argument of the learned Counsel for the appellant is correct, then there is no reason why the legislature should not have similarly added some such condition in respect of the initiation of arbitration proceedings by the arbitrator. It could have added similar words in respect of the arbitration proceedings, and stated that the application can be given only 'before the initiation of any arbitration proceedings by the arbitrator in respect of the subject-matter of the agreement or any part of it' or made some such provision in similar words. No such condition is laid down by the legislature in Sub-section (1). In Sub-section (1) the legislature has applied its mind to the conditions that are necessary to be fulfilled before an application under Section 20 can be entertained and minutely defined the same. Condition No. 5 sought to be inserted in this sub-section is conspicuous by its complete absence.

22. According to the ordinary canons of construction, it is not permissible on the part 61 the Court to add any words to the Statute, unless it is necessary to do so for the purpose of removing an absurdity or an ambiguity. There is nothing ambiguous or absurd in Sub-section (1) of Section 20. The addition of a further condition as condition No. 5, would not only be unwarranted by the terms ,of the statute, but also be contrary to its intendment. Further it cannot be done without violating the fundamental canons of interpretation of statutes that govern such a situation.

23. A similar argument was advanced before their Lordships of the Supreme Court in British India General Insurance Co. Ltd. v. Captain Itbar Singh : [1960]1SCR168 . In that case the Solicitor-General argued that the word 'also' might be added after the word 'grounds' in the relevant section. Dealing with this argument their Lordships observed as follows:

'The learned Solicitor-General concedes this and says that the only word that has to be added is the word 'also' after the word 'grounds', But even this the rules of interpretation do not permit us to do unless the section as it stands is meaningless or of doubtful meaning, neither of which we think it is.'

In the present case what is sought to be added is not one word, but one whole clause consisting of a number of words.

24. The same rule of interpretation is stated in Craies on Statute Law (Fifth Edition) at page 103in the following words:

'If the meaning of a statute is not plain. It is permissible in certain cases to have recourse to a construction by implication, and to draw inferences or supply obvious omissions. But the general rule is 'not to import into statutes words which are not to be found there', and there are particular purposes for which express language is absolutely indispensable. Words plainly should not be added by implication into the language of a statute unless it is necessary to do so to give the) paragraph sense and meaning in its context.'

In the present case Sub-section (1) of Section 20 of the Act is a self-contained section, and exhaustively enumerates the conditions precedent necessary for the filing of an application. The acceptance of the argument of the learned counsel for the appellant involves the addition of a fifth condition which is not contained therein. ; Far from removing any absurdity or difficulty in the application of this provision qf law, on the contary the importation of this condition, in my-opinion, would defeat the very object of the statute and would be subversive of its policy.

In addition it might result in consequence which are unreasonable, unjust and inconvenient to the parties. The object of the Act in the present case is to promote arbitration and not to hamper it. There may be cases in which a party might deliberately adopt tactics for the express purpose of making the arbitrator disinclined to go on with arbitration. Once, therefore, the arbitrator has entered on the arbitration, a party may, by putting obstacles in the way of arbitration drive him into a positron where he becomerebellious and declines to proceed further with itwithout a mandate from the Court. Such a result would be against the concept of reason and justice, and would result in practical inconvenience to an innocent party who wants to implement the terms of the agreement solemnly entered into between the parties.

In this connection it would be relevant to quote the following observations of their Lordships of the Supreme Court in the State of Punjab v. Ajaib Singh : 1953CriLJ180 :

'If, however, two constructions are possible, then the Court must adopt that which will ensure smooth and harmonious working of the Constitution and eschew the other which will lead to absurdity or give rise to practical inconvenience or make well established provisions of existing law nugatory.'

The principle enunciated above with regard to the interpretation of the Constitution is of universal application, and applies to all statutes. The present case, in my opinion, is a stronger one, because, so far as the contents of Sub-section (1) of Section 20 of the Act are concerned, there is no question of any ambiguity. Even if there were any such ambiguity, in view of the fact that the interpretation sought to be placed on behalf of the respondent promotes the smooth and harmonious working out of the purpose of the enactment, it would be entitled to preference.

25. Similarly, in Maxwell's book on the Interpretation of Statutes (10th Edition) the same rule of interpretation is stated at page 191 as follows:

'In determining either the general object of the legislature, or the meaning of its language in any particular passage, it is obvious that the intention which appears to be most in accord with convenience, reason, justice and legal principles, should, in all cases of doubtful significance, be pre-summed to be the true one.'

At page 229 of the same book it is stated as follows:

'Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.'

The present case again is a stronger one because no modification is necessary for the purpose of putting a, construction on Sub-section (1) of Section 20 of the Act for the purpose of removing any inconvenience, absurdity, hardship or injustice. In fact, the acceptance of the contrary view involves certain amount of modification, and results in creating the evil results of hardship, inconvenience and injustice.

26. At page 81 of the same book it is stated as follows:

'Before adopting any proposed construction of a passage susceptible of more than one meaning, it is important to consider the effects or consequences which would result from it, for they oftenpoint, out the real meaning of the words. There are certain objects which the legislature is presumed not to intend, and a construction which would lead to any of them is therefore to be avoided.'

At page 68 of the same, book it is stated as follows:

'It is said to be the duty of the judge to make such construction of a statute as shall suppress the mischief and advance the remedy.'

The contrary interpretation sought to be placed on Section 20(1) of the Act on behalf of the appellant would, on the other hand, advance the mis chief created by the delinquent party and suppress the remedy sought by an innocent party by means of the application.

27. In Kanai Lal Sur v. Paramnidhi Sadhu khan : [1958]1SCR360 it was held that when the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the Courts would prefer to adopt the latter construction. In the present case the construction sought to be placed on Section 20 on behalf of the respondent would promote the avowed policy of the Act which was to encourage arbitration proceedings.

28. In Commr. of Income-tax Delhi v. S. Teja Singh : [1959]35ITR408(SC) it was laid down that a construction which would defeat the object of the legislature must, if possible, be avoided.

29. Similarly in Maxwell on Interpretation of Statutes (10th Edition), while referring to the rules of interpretation applicable in such cases, it is stated as follows at pages 275-276:

'Among them is the rule that that sense of the words is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the legislature.'

30. On behalf of the appellant, it is strenuously argued that the application under Section 20 of the Act is not maintainable in the present case because the circumstances of the present case indicate that it is a case in which the arbitrator neglected or refused to act. The proper remedy, therefore, would be an application under Section 8(1)(b) of the Act. I find myself unable to accept this contention. Under Section 8(1)(b) of the Act, it is no doubt open to a party to make an application thereunder where an arbitrator 'neglects or refused to act' In the present case, however, the situation is a peculiar one. It cannot be said that the arbitrator has neglected or refused to act. On the other hand, in the present case the admitted facts indicate that the arbitrator did enter on arbitration proceedings, and was keen on continuing the same until an awkward situation was created for him by the appellant. The attitude of the defendant-appellant in the present case and the pleas taken by him in the trial Court indicate further that he started levelling all kinds of wild and baseless charges of favouritism and partiality against the arbitrator. He also stopped paying the expenses of arbitration as well as the remuneration of the arbitrator and further adopted an attitude of complete non-co-operation. This created an atmosphere which put the arbitrator in an embarrassing position.

The arbitrator being obviously a responsible and a respectable lawyer thought that it would not be consonant with his dignity and position to go on with the arbitration unless the matter was clarified in a Court of law and his position cleared up. This could only be done by making an application under Sub-section (1) of Section 20 of the Act, having a notice issued against the recalcitrant party under Sub-section (3) to show cause against it, and, after having the matter thoroughly thrashed out, obtaining a final order under Sub-section (4) of Section 20 thereby clearing up the position of the arbitrator and arming him with a mandate from the Court enabling him to smoothly go on with the arbitration proceedings.

In this situation, an application was given by the plaintiff Sri Lachman Prasad who wanted to have the arbitration agreement implemented. In the written statement filed by Sri Mangal Prasad the charges levelled by him against the arbitrator were repeated and all kinds of pleas, good, bad and indifferent, were taken against the plaintiff. They were all found to be flimsy and without foundation by the trial Court which decreed the suit. The arbitrator appears to be perfectly willing to go on with the arbitration in case he receives an order from the Court. The plaintiff did not allege that the arbitrator in the present case had neglected or refused to act. Even the defendant did not allege that this was a case where the arbitrator had neglected or refused to act. No issue was framed on this point nor was any evidence led on it. No finding was given by the trial Court on this point. The entire case in the trial Court proceeded on the assumption that the arbitrator was perfectly willing to act after an order was received by him from the Court. Even the question framed for reference to the Full Bench does not relate to a case of neglect or refusal on the part of the arbitrator. It relates only to a case of his inability to proceed with the arbitration.

Section 8, in my opinion, contemplates a case of final refusal on the part of the arbitrator, that is, a case where the arbitrator is not willing to act in any case, thereby causing a vacancy, and the applicant, therefore, wants another arbitrator to be appointed in his place. In the present case, the plaintiff has not prayed for the appointment of another arbitrator. He wants the same arbitrator to go on functioning. Nor can the present case be said to be a case of neglect on the part of the arbitrator. On the other hand, the allegations of the plaintiff indicate that the arbitrator is keen to go on with the arbitration and would have completed the award within a fortnight or so, had the defendant not brought about a situation which resulted in the arbitrator staying his hand and waiting for an order from the Court.

31. In Kanchhed Mal v. Ganga Prasad, : AIR1937All582 the facts were that an arbitrator had intimated to a Court that he did not wish to carry out the duties of an arbitrator, if the parties did not desire him to, do so and because of the fact that he had little leisure to do so. He, however, informed the Court that he was willingto arbitrate if he was asked by it. It was haldin that case that such a communication by thearbitrator could not be regarded as a flat refusalon his part to act. It is difficult to find a caseon all fours with the present case but the analogybetween the present case and the facts in theabove case is a somewhat close.

32. There is another reason why Section 8(1)(b) of the Act would be inapplicable in the present case. Section 8(1)(b) would be applicable only to a case where a party wants an arbitrator to be replaced by another one on account of his neglect, refusal or death or some such reason, as a result of which a vacancy is created. In the present case the plaintiff did not want the appointment of a fresh arbitrator. He wanted the same arbitrator to continue. This was not a case of vacancy at all.

33. The third reason why Section 8(1)(b) might not be applicable in the present case is that the parties had specifically named a particular person to act as the arbitrator for special reasons. The arbitrator had acted as their own lawyer in income-tax and other cases, and was fully cognizant with the personal affairs of the parties They had, therefore, reposed special trust and confidence in him, and had considered him to Be peculiarly suited for the settlement of their disputes. If an application under Section 8 were to be given, it might be argued in that case that the dominant intention of the parties in the present case was not to appoint an arbitrator but to appoint the particular person, named therein as the arbitrator and an application for the appointment of fresh arbitrator under Section 8 would not, therefore, be maintainable. It is, however, not necessary for me to express any opinion on the merits of any such argument. Whatever view might be taken on this aspect of the case, it appears to me that Section 8 of the Act would not be applicable to the circumstances of the present case and that is why no application was given by the plaintiff under that section.

34. Even presuming for a moment that a relief under Section 8 of the Act was available to the plaintiff, although I do not think it to be so, there is nothing to prevent the plaintiff from giving an application under Section 20 of the Act if the law allows him to do so. The one does not exclude the other. In fact, both these sections are supplementary to each other. The provisions of Sub-section (5) of Section 20 of the Act would indicate that the other provisions of the Act so far as possible would be applicable to a proceeding under Section 20 also. The Other provisions of the Act include Section 8 and, therefore the application of one section would not exclude the application of the other. All that can be said is that there is an alternative remedy. The use of the words 'instead of proceeding under Chapter II' in Sub-section (1) of Section 20 also suggests that the remedy provided therein is an alternative to that provided in Chapter II in which Section 8 finds a place. The present application under Section 20 cannot, therefore, be thrown out whatever view is taken regarding the applicability of Section 8.

35. The next argument on behalf of the appellant was that there was no point in securingan order from the Court referring the case to arbitration. It was open to the arbitrator to go on with the arbitration even though the defendant had refused to co-operate with him. Any order passed by this Court would, therefore, be futile and purposeless. This argument, in my opinion, misconceives the real situation. In the present case the position adopted by the arbitrator is neither of complete refusal nor of unconditional consent. He appears to be prepared to go on with the arbitration proceedings on securing an order from the Court to that effect.

No doubt an order from the Court is not necessary to enable him to go on. It is, however, not for the Court to determine the reasons that actuate the present attitude of the arbitrator. For some reason or other he has adopted the position that he would go on with the arbitration only after the matter is clarified by an order of the Court. He might be under a wrong impression about his jurisdiction. Even if he has a correct idea of his own jurisdiction, he might still have preferred to go on with the arbitration only after his position was clarified and the charges levelled against him cleared up. Whatever the reasons behind this attitude of the arbitrator might be, it cannot be said that the order of the Court passed in such a situation would be futile. Such an order would have the effect of clearing up the position of the arbitrator and setting him into activity again.

36. The next argument on behalf of the appellant was that the provisions of Sub-section (1) indicate that at the date of the application the agreement should be in the possession of the party making the application. When the arbitrator enters upon the reference the agreement is filed with him. This would indicate that the provisions of Section 20(1) can come into play only before the arbitrator has entered upon the arbitration and not after. I am unable to accept this contention. Section 20 only requires that the plaintiff may apply to a Court having jurisdiction in the matter to which the agreement relates that the agreement be filed in Court. The section does not say that the agreement should be in the possession of the applicant on the date of the application or should be filed along with it. The agreement might have been handed over by a party to the proposed arbitrator or to a third person. It might have got into the custody of another person. The fact that the plaintiff has been deprived of its custody would not and should not deprive him of his right to make the application under Section 20(1). In such a case there is no reason why the party making the application should not be able to apply for summoning the arbitration agreement from the custody of the party in whose possession it is.

Again, it may be observed that if the intention of the legislature was that the agreement should be actually in the possession of the party applying at the date of the application, there is no reason why the legislature should not have stated that. Moreover, I may again observe that the contrary opinion would result in inconvenience, hardship and injustice. A party has only to deprive his opponent of the custody of the agreement to take away the right of relief from himand to reduce him to a position of utter helplessness. The agreement might be stolen from the possession of a party. It might be delivered by him to another person. It might be snatched away from him by force. I do not see why in such a case the party should be deprived of his legal right to enforce the terms of the agreement, just because he happens to have been deprived of it for the time being. In such a case it should be open to the applicant to requisition the agreement in Court from the possession of any person who holds it in his custody. In the present case the agreement happened to be with the arbitrator. It must have been summoned from him. I do not see anything against this procedure in the provisions of Section 20(1) of the Act.

37. A Division Bench case of the Lahore High Court in Firm Duni Chand Ram Parkash v. FirmPrem Chand Maya Dass, AIR 1945 Lah 264 goes even to the extent of holding that a party who wishes to enforce an agreement should be able to prove it by secondary evidence when evidence ot that nature is permissible under the Evidence Act. It is however, not necessary for me for the pur poses of this case to go so far or to express any opinion on this point. It is enough for the purr poses of the present case to observe that where the agreement in question is not in the actual possession of the applicant, there is nothing in Section 20 to bar the applicant from requisitioning it in Court from any person in whose possession it happens to be.

38. Strong reliance was, however, placed by the learned Counsel for the appellant on the provisions of Sub-section (5) of Section 20 of the Act. The learned Counsel argued that the word 'proceed' in this sub-section indicates that the arbitrator has not entered on the arbitration. According to him, the use of this word indicates that no arbitration proceedings have taken place up to that stage. I am unable to accept this contention. The word 'proceed' would cover not only a case where no arbitration proceedings have taken place but also a case where arbitration proceedings have already taken place and are meant to be continued.

In Murray's New English Dictionary, Volume VII, at page 1406, the meaning of the word 'proceed' is expounded in detail. According to the meaning as expounded therein the word 'proceed' owes its origin to the Latin word 'procidere' which means 'to go forward, advance, go on.' At No. 3 the meaning of the word 'proceed' is given as follows:

'3. Intr. With stress on the progress of continuance of the action: To go on, advance, to continue acting; speaking etc. in various shades of meaning a. To go on with or continue what one has begun; to advance from the point already reached, go further, pursue one's course; to go on after interruption, renew or resume action or speech,'

It would appear that Chapter II of the Arbitration Act deals with arbitrations without the intervention of a Court and consists of Sections 3 to 19, which govern this type of arbitration.. Chapter III deals with arbitration with the intervention of a Court and consists of a solitary section, viz., Section 20, Chapter IV deals with arbitration in suits and contains Sections 21 to 25 which deal with this particular type of arbitration. Chapter V contains general provisions applying to all types of arbitration save as otherwise provided in the Act. The purpose of having Sub-section (5) to Section 20 was to indicate that in an arbitration proceeding initiated on an application under Section 20, the other provisions of the Act should, so far as possible, be applicable. If no application is given in Court, then the provisions of Chapter II and other provisions of the Act in so far as they are made applicable to arbitration without the intervention of a Court would apply.

The purpose of Sub-section (5) was to clarify the position by stating that even if an application is given under Section 20, the provisions of Chapter II as well as the other provisions of other Chapters of the Act would, as far as possible, apply to arbitration under Section 20 as well. Its purpose was to put an arbitration under Section 20 as far as possible on a par with other types of arbitration dealt with in other Chapters of the Act. 1 do not think that the purpose of Section 20(5) was to exclude cases where the arbitrator has entered on an arbitration. If this was the intention of the legislature, then, as I have already observed above, this condition should have been inserted in Sub-section (1) of Section 20, which is the basic sub-section defining and stating exhaustively the conditions necessary for making an application under Section 20 maintainable and entertainable by a Court.

Moreover, the use of the word 'thereafter' in the very beginning of Sub-section (5) shows that it begins to operate only after the application is given and not before. On the other hand, the conditions that govern the maintainability of an application under Section 20 are conditions precedent and not conditions subsequent. Sub-section (5) relates to a stage that is subsequent and is, therefore, independent of Sub-section (1) and separate from it. The purpose of Sub-section (5) was, therefore, to clarify the position that the other provisions of the Act would be applicable so far as possible in a proceeding initiated on an application under Section 20. The question whether an application under Section 20 is entertainable in a case where the arbitrator has entered upon the arbitration is foreign to the ambit and purpose of Sub-section (5). Even if the contention advanced on behalf of the appellant is accepted, all that can be said is that in a case where the arbitrator has entered upon the arbitration but subsequently there is a statement the arbitration proceedings would start de novo. For the above reasons. I find it difficult to accept the contention that the effect of Sub-section (5) is to preclude the entertainability or maintainability of the application itself under Sub-section (1) of Section 26 in a case where the arbitration had already started functioning.

39. In any case, so far as the facts of the present case are concerned, the arbitrator having expressed his inability to go on, the position is that the arbitration proceedings had ceased for the time being. The question framed for reference to the Full Bench also presumes that the arbitration has,at least for the time being, come to a standstill on that date. It cannot, therefore, be said that, on the date of the application, the arbitration was continuing. It must, therefore, be taken at any rate, that on the date of the application there were no arbitration proceedings actually pending. Whatever view might be taken of the legal position so far as the application of Sub-section (5) is concerned, I am of opinion that it cannot have the effect of making an application under Sub-section (1) non-maintainable merely on the ground that the arbitrator has started functioning some time in the past even though be had subsequently ceased to function, and was actually not function ing on the date of the application.

40. On behalf of the appellant, it was also argued that a difference might be made between cases where the arbitrator has merely done some preliminary acts at an early stage, and other cases in which the arbitration has reached an advanced stage. In the present case the arbitration proceedings had reached an advanced stage, and therefore Section 20 would not be applicable. I find it difficult to accept this argument as well. Once the arbitrator has entered upon on arbitration, either an application under Section 20 is maintainable or not. I do not think it is possible for lay down law to the effect that the question of maintainability would depend on the degree or the extent to which the arbitration proceedings have advanced. There is no warrant at all in this section for any such, line of demarcation. Moreover, any such distinction would result in utter confusion, because it would be difficult to define where the early stage ends and the advanced stage begins.

41. There does not appear to be any case exactly parallel to the present one. A reference may, however, be made to the cases cited by theparties.

42. Reliance on behalf of the appellant was placed on the case of AIR 1919 All 48. It was a case under paragraph 17 of Schedule II of the Code of Civil Procedure. This was a case in which, while the proceedings were going on before the arbitrator, one of the parties died. The arbitrator took the view that, as a result of the death of the party, he lost all jurisdiction to go on with the arbitration. In this situation, at page 48, column No. 2, the learned Judges observed as follows:

'In the course of his deposition he (the arbitrator) stated clearly that he had refused to go on with the arbitration his reason being that one party to the reference having died, he considered that he had no authority to continue the proceedings. Whether or not the arbitrator was right in supposing that in these circumstances he had no authority to continue to act, is a matter with which we are not concerned. The fact remains that he definitely refused to act and that at the time this application was filed under para 17, his refusal was still in force......... The result therefore is that we have before us an application to enforce an agreement to refer a dispute to the arbitration of a gentleman who had already decline to act, and in these circumstances we hold that it would be quite impossible for the plaintiffto have an order such as he sought in the Courtbelow.'

This case provides no analogy to the present one. As already observed above, the present case is not a case, of complete, refusal on the part of the arbitrator at all. On the other hand, the arbitrator in the present case is quite willing and ready to act if an order to that effect is received from the Court.

43. Another case relied on by the appellant is : AIR1932All348 . In this case two persons A and B entered into an arbitration agreement. A revoked it. Thereupon B filed an application, tinder Schedule II paragraph 17. In the meantime the arbitrator gave his award. As a result of it. B withdrew his application under Schedule II paragraph 17, and filed an application under Schedule II paragraph 20, praying that the award be filed in Court. This was resisted by A on the ground that the effect of B's application under Schedule II paragraph 17 was to oust the jurisdiction of the arbitrator.

While dealing with this argument, the learned Judges observed:

'The scope of para 17, Schedule 2, is no more than this: that where an agreement of reference to arbitration has been entered into by the parties feat the arbitrators have not so far functioned, the Court has power to enforce, the agreement against the parties where the arbitrators are ready and willing to act in terms of the reference. Para 17, Schedule 2, far from implying an ouster of jurisdiction, predicates that the arbitrators have the Jurisdiction to act on the reference and that the Court should step in and ask them to exercise their powers as arbitrators if they are agreeable to do so.'

In the above case the present question did not arise at all. There is only a passing reference to a case where an arbitrator has not so far functioned. In fact, it was not necessary for the purposes of that case to express any opinion on the question that has arisen before us, nor does it appear to have been the intention of the Judges to decide this particular point Moreover, the case is quite distinguishable from the present case. In the case cited the arbitrator was functioning throughout. On the other hand, in the present case the arbitrator has expressed his inability to proceed and has ceased to function for the time being.

44. The third case relied on behalf of the appellant is AIR 1931 Mad 28. In this case one of the arbitrators had died before the completion of the proceedings, and there was no provision in the agreement for filling up the vacancy. In this situation, the Court held that it had no jurisdiction to appoint an arbitrator in place of the deceased and could not make an order of referenceto the surviving arbitrators. There is nothing inthis case to support the contention of the appellant in the present case.

45. On the other hand, on behalf of the respondent also a number of cases have been cited. The first case cited is AIR 1921 All 188. This was a case in which the arbitration had been going on for a very long time, and then an application under paragraph 17 of Schedule II of the Code of CivilProcedure corresponding to Section 20 of the Indian Arbitration Act was moved on the ground that one of the arbitrators had refused to act. At page 190, Column I, the learned Judges observed:-

'In our opinion the fact that the respondent has already consented to arbitration which has been going on for a very long time, entitles the applicant and did entitle the applicant in the Court below absolutely to an order of reference under paragraph 17 ......................'

46. On behalf of the appellant it is argued that in the present Arbitration Act there is Section 8 under which an application for the appointment of arbitrator can be given where the arbitrator has refused to act, whereas there was no such provision in the second Schedule under which such as application could be given. As already observed by me, I do not think that the maintainability of an application under Section 20 depends upon the existence of the provisions of Section 8. If there is a concurrent remedy, it would merely provide an alternative relief, and cannot have the effect of barring the relief under Section 20. Moreover, asI have already pointed out above. Section 8 is inapplicable to the present circumstances. So far as the legal proposition to the effect that there was no provision under the second Schedule for making an application in case of refusal by the arbitrator is concerned, this would be met by a reference to paragraph 5 of the Schedule as well as to sub-paragraph (4) of paragraph 17 of the Schedule. Further under para 19 the provisions of para 5 were made applicable to proceedings under para 17 as well.

47. In AIR 1922 All 133 it was held that even under paragraph 17, sub-paragraph (4) of ScheduleII the Court has power to appoint a fresh arbitrator where the arbitrator had refused to act. This power was possessed independently of paragraph 5. The words of sub-paragraph (4) of paragraph 17 are general and would cover all cases where difficulty arises in the conduct of arbitration proceedings in the absence of an order of the Court. The words of sub-para (4) being general would cover not only a case of refusal but also a case where the difficulty arises as a result of the arbitrator's expression of inability to go on with the case.

48. Both the above cases were relied upon by another Bench of the Allahabad High Court in : AIR1938All414 . This case was sought to be distinguished on behalf of the appellant on the ground that, although the arbitrator had entered en the arbitration, he had done practically nothing in the case. As I have already observed above, it is not correct to say that the criterion for that determination of the question should be the degree or the amount of work done by the arbitrator.

49. The last case to which reference might be 'made is the case of : AIR1956All377 . This was a case in which an agreement of arbitration was entered into between two persons, namely one B.N. Kochar and K.N. Puri. B. N. Kochar subsequently died and differences arose between his widow Balika Devi who was one of his legal representatives and K.N. Puri. The dispute was referred to the arbitration of one Sri Vaish. Subsequently Sri Vaish refused to go on with the arbitration. Thereafter K. N. Puri suggested the nameof one Sri Halwasiya. Balika Devi did not agree to Sri Halwasiya's acting as the arbitrator. Hence K.N. Puri filed an application under Section 8. In this connection, at page 382, column 2, the learned Judges made the following observations:-

'Since the applicants had refused to concurin the appointment of an arbitrator under Clause 12of Ex. 1, Kedar Nath Puri had the option eitherto move the Court under Section 8, ArbitrationAct or under Section 20 of the Act. There is nothing in Section 20 to compel Kedar Nath Puri notto take recourse to Section 8 of the Act. It wasKedar Nath Pun's concern whether to apply underSection 8 or under Section 20 and his applicationunder Section 8 cannot in our opinion be rejectedmerely on the ground that Section 20 was perhapsmore appropriate.'

In this case, the Bench also referred to a case of their Lordships of the Supreme Court in Thawardas Pherumal v. Union of India : [1955]2SCR48 . The remarks cited above no doubt support the respondent's contention. On behalf of the respondent, it is argued that the above case clearly lays down the law on the point in his favour. I am, however, of opinion that the question that confronts us did not specifically arise in the case. The above remarks, however, indirectly go to support the contention of the respondent.

50. As I have already stated above, there is no case which can be said to be on all fours with the present case, I have, therefore, approached the matter as one of first impression. I have already given in the earlier portion of my judgment the reasons that impel me to adopt the interpretation sought to be placed on Section 20 of the Arbitration Act on behalf of the respondent and to incline me to overrule the arguments adduced on behalf of the appellant.

51. For the above reasons, my answer to the question referred to the Full Bench would be in the affirmative,

THE COURT

52. In accordance with the opinion of the majority, the question referred to the Bench is answered in the negative.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //