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Niranjan SwaIn Vs. State of Orissa and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 371 of 1979
Judge
Reported inAIR1980Ori142; 49(1980)CLT319
ActsArbitration Act, 1940 - Sections 8 and 8(2)
AppellantNiranjan Swain
RespondentState of Orissa and ors.
Appellant AdvocateDevanand Misra and ;R.K. Sahu, Advs.
Respondent AdvocateAddl. Govt. Adv.
DispositionPetition allowed.
Cases ReferredUnion of India v. Mangaldas N. Varma
Excerpt:
.....to concur in the appointment of an arbitrator and if within fifteen clear days after service of notice appointment is not made, the court has power, if moved by the party who gave notice to make an appointment in which event, the appointment shall be deemed to be by common consent, from the very nature of the provision in section 8, it must follow that the party who gave notice for appointment of arbitrator has to be communicated, in case an appointment is made, with due haste that the notice has been complied with; if the appointment was not made within the time indicated by law, the petitioner is well within his rights to ask the court to make the appointment of an arbitrator and the chief engineer would have no jurisdiction to make an appointment and take away the jurisdiction of..........to concur in the appointment of an arbitrator and if within fifteen clear days after service of notice appointment is not made, the court has power, if moved by the party who gave notice to make an appointment in which event, the appointment shall be deemed to be by common consent, from the very nature of the provision in section 8, it must follow that the party who gave notice for appointment of arbitrator has to be communicated, in case an appointment is made, with due haste that the notice has been complied with; otherwise he would be justified in. taking action under sub-section (2) of section 8 of the act. it would, therefore, follow that the notice under section 8(1) if complied with has to be communicated with utmost expedition to the notice-giver. if the appointment was not.....
Judgment:
ORDER

N.K. Das, J.

1. The petitioner, an 'A' class contractor had undertaken construction of Distribution System of a canal in the district of Phulbani. For the said work, he entered into an agreement under the F2 contract. As disputes arose between the petitioner and the opposite parties, the petitioner requested the Department to settle the disputes and as the opposite parties did not pay any heed to the request of the petitioner, the peitioner communicated with the Chief Engineer to appoint an arbitrator for settlement of the disputes, as provided in the agreement. The Chief Engineer was duly served with a registered notice on 23-1-1979 who received the same on 24-1-1979. Notice was also served on the concerned Executive Engineer, As no arbitrator was appointed within, the prescribed period of fifteen days, the petitioner filed the case in the court of the Subordinate Judge, Bhubaneswar for appointment of an arbitrator after expiry of the statutory period.

A counter was filed by opposite party No. 3, the Executive Engineer, M.I. Division, stating that the Chief Engineer, R. E. O. had already appointed one D. Patra, Superintending Engineer, Planning & Designs, R. E. O., as arbitrator to decide the disputes and the same was communicated to the petitioner on 15-2-1979. After hearing both parties, the learned Subordinate Judge held that as the arbitrator had already been appointed by the opposite parties, he did not feel it expedient to cancel the appointment of the arbitrator. Accordingly, he dismissed the application of the petitioner. This revision is directed against the aforesaid order of the learned Subordinate Judge.

2. The short point for consideration in this revision is if no arbitrator is appointed within the statutory period of 15 days, as provided under Section 8 of the Arbitration Act, whether the court has jurisdiction to appoint an arbitrator. In the instant case, admittedly no arbitrator was appointed within the statutory period, after service of notice by the petitioner on the opposite parties. After expiry of the statutory period, an intimation was sent to the petitioner stating that an arbitrator was appointed by the opposite parties. It is contended on behalf of the petitioner that as no arbitrator had been appointed within the statutory period, it is for the court to exercise jurisdiction under Section 8(2) of the Arbitration Act and to appoint an arbitrator.

It is apparent from the order of the learned Subordinate Judge that the order is vitiated by misconception of law. The learned Subordinate Judge has not applied his mind to the position of law and has superficially disposed of the petition.

3. In the case of Banabehari Das v. Executive Engineer, R. E. Division, Puri (1979) 48 Cut LT 241, it has been held that a bare analysis of Section 8 of the Act clearly indicates that Sub-section (1) authorises a party to the contract containing an arbitration clause to give written notice to concur in the appointment of an arbitrator and if within fifteen clear days after service of notice appointment is not made, the court has power, if moved by the party who gave notice to make an appointment in which event, the appointment shall be deemed to be by common consent, From the very nature of the provision in Section 8, it must follow that the party who gave notice for appointment of arbitrator has to be communicated, in case an appointment is made, with due haste that the notice has been complied with; otherwise he would be justified in. taking action under Sub-section (2) of Section 8 of the Act. It would, therefore, follow that the notice under Section 8(1) if complied with has to be communicated with utmost expedition to the notice-giver. If the appointment was not made within the time indicated by law, the petitioner is well within his rights to ask the court to make the appointment of an arbitrator and the Chief Engineer would have no jurisdiction to make an appointment and take away the jurisdiction of the Court under Section 8(2) of the Act.

This Court also relied on the decision in Tradax Export S. A. v. Volkswagen-wark A. G., (1970) 1 All ER 420, and Keshavsingh Dwarkadas Kapadia v. Indian Engineering Co., AIR 1972 SC 1538. Also the position has been explained in the case of Fertiliser Corporation of India Ltd. v. Ravi Kumar Ohri, AIR 1979 Orissa 19. In that case, notice to the General Project Manager of the Fertiliser Corporation of India who was the principal administrative officer of the Corporation was held to construe notice to the Corporation. In paragraph 8 of that decision, reliance was placed on a decision of the Patna High Court (Union of India v. D.P. Singh, AIR 1961 Pat 228) and some previous decisions of this Court. In view of the consistent decisions of this Court, it is abundantly clear that if within the statutory period afer service of notice the opposite parties do not appoint an arbitrator, it is well within the rights of the petitioner to move the court under Section 8(2) of the Arbitration Act for appointment of an arbitrator and the court assumes jurisdiction to appoint another arbitrator on the petition of the claimant. Reliance has been placed by the opposite parties on Union of India v. Mangaldas N. Varma, AIR 1958 Mad 296. This case has no application to the facts and circumstances of the present case. In that case, the arbitrators had already been appointed within the statutory period, but the umpire had not been appointed by the arbitrators. In view of the fact that the arbitrators had already been appointed within the statutory period, the aforesaid decision is of no help to the opposite parties.

4. On the aforesaid analysis, I hold that the decision of the learned Subordinate Judge is completely wrong in law and he has illegally exercised jurisdiction and the order is not sustainable.

5. In the result, the civil revision is allowed with costs. The hearing fee is assessed at Rs. 100/-. The impugned order of the learned Subordinate Judge is set aside and he is directed to take steps for appointment of an arbitrator after due notice to the parties.


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