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Dhirendranath Biswal Vs. Rahas Behari Mishra and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberCivil Revision No. 544 of 1982
Judge
Reported in1984(I)OLR243
ActsArbitration Act - Sections 8(1) and 8(2)
AppellantDhirendranath Biswal
RespondentRahas Behari Mishra and anr.
Appellant AdvocateP. Mohanty, Adv.
Respondent AdvocateJ.P. Das and P.K. Patnaik
DispositionPetition allowed
Excerpt:
.....who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties. sub-section (2) of section 8 of the arbitration act in clear term provides that if the appointment is not made within 15 clear days after the service of the said notice under section 8(2) the party who gave the notice may move the court for appointment of an arbitrator and on such an application being filed the court after giving the parties an opportunity being heard appoint an arbitrator who shall have like power to act in the reference and to make an award as if he has been appointed by the consent..........11 are thoroughly inapplicable. section 5 of the arbitration act provides that the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. the provision has no application whatsoever where no arbitrator has at all been appointed, either in the arbitration agreement itself or by the order of the court. so also section 11 does not come into operation which deals with the power of the court to remove an arbitrator under certain circumstances, cannot be made applicable to the facts of the present case. thus, the only question that remains to be decided is whether section 8 of the arbitration act is applicable in this case. the arbitration clause quoted above says that if.....
Judgment:

P.C. Misra, J.

1. This revision is directed against an order dated 13. 7. 82 passed by the Sub Judge, First Court, Cuttack in Misc. Case No. 341 of 1981 directing appointment of an Arbitrator. The aforesaid Misc. Case was filed under the provisions of section 8(2) of the Arbitration Act on an application filed by the present opposite Party No. 1 who was the petitioner in the court below.

2. The facts in short as revealed from the records of the case are as follows :

The Opposite Party No. 2 is the Producer and Distributor of an Oriya Film 'Bandhu Mohanty''. The said O. P. No. 2 could not complete the production of the said picture due to Shortage of funds for which he had to borrow money both from the petitioner and O. P. No. 1. An agreement was executed between the parties on 9.5. 77 evidencing the terms and conditions regarding the payment of commission and repayment of the amount advanced by the aforesaid parties. The said agreement contained an Arbitration clause which runs as follows :-'That any difference which may arise between the parties out of this agreement or their representatives with regard of this agreement to the inter relation of these presents or any part thereof or as the rights of liabilities of either parties under these presents or with regard to the winding up or any other matter or thing relating to this agreement shall be referred to a single Arbitrator in conformity with the provisions of the Arbitration Act, 1940.'

3. It was stated in the application filed by the O. P. No. 1 under section 8(1) of the Arbitration Act that certain amounts are still due to him from O. P. No. 2 and he had made demands for repayment thereof. On the basis of the Arbitration clause application was filed before the Sub Judge. First Court which was styled as one under sections 5, 8 and 11 of the Arbitration Act. The learned Sub Judge after hearing the parties' held that' it was a fit case where he should exercise powers under section 8(2) of the Act for appointment of an Arbitrator. It is against this order the present revision has been filed.

4. Even though the application filed before the learned trial. court was styled as one under sections 5, 8 and 11 of the Arbitration Act, the provision of sections 5 and 11 are thoroughly inapplicable. Section 5 of the Arbitration Act provides that the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. The provision has no application whatsoever where no Arbitrator has at all been appointed, either in the Arbitration agreement itself or by the order of the court. So also section 11 does not come into operation which deals with the power of the court to remove an Arbitrator under certain circumstances, cannot be made applicable to the facts of the present case. Thus, the only question that remains to be decided is whether section 8 of the Arbitration Act is applicable in this case. The Arbitration clause quoted above says that if any difference arises between the parties relating to the agreement etc. it shall be referred to a single Arbitrator in conformity with the provisions of the Arbitration Act, 1940. It does not say that the Arbitrator shall be appointed by the consent of the par. ties. Section 8 of the Arbitration Act runs as follows :

'8, power of Court to appoint arbitrator or umpire-

(1) In any of the following cases :

(a) Where an arbitration agreement provided that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or

(b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of action, 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) Where the parties or the arbitrators are required to appoint an umpire and do not appoint him, any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.

(2) I the appointment is not made within fifteen clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties.'

It is clear from the language of the section itself that power of appointment of an arbitrator by the court under Sub Section (2) of section 8 cannot be exercised unless the requirements of section 8(1) of the Act are fulfilled. Section 8(1)(a) of the Arbitration Act categorically provides that if the parties do not concur in the appointment of an arbitrator after differences have arisen in the case where an Arbitration agreement provides that the reference shall be made to one or more Arbitrators be appointed by the consent of the parties, any of the parties may serve the other party a written notice to concur in the appointment of an Arbitrator. Therefore, a notice requiring the other party for concurring the appointment of an Arbitrator can be given in a case only if the Arbitration agreement clause provide?, that the reference shall be to one or more arbitrators to be appointed by the consent of the parties. In the present case the Arbitration agreement does not provide that the Arbitrator is to be appointed by the consent of the parties. On the other hand the Arbitration clause is specific to the effect that the Arbitrator shall be appointed in. conformity with the provisions of the Arbitration Act, 1940. Therefore, the opposite party No. 1 was not entitled to issue of a notice as contemplated under section 8(1) of the Arbitration Act requiring the present petitioner or the opposite party No. 2 for concurring in the matter of appointment of an Arbitrator. Sub-section (2) of section 8 of the Arbitration Act in clear term provides that if the appointment is not made within 15 clear days after the service of the said notice under section 8(2) the party who gave the notice may move the court for appointment of an Arbitrator and on such an application being filed the court after giving the parties an opportunity being heard appoint an Arbitrator who shall have like power to act in the reference and to make an award as if he has been appointed by the consent of all parties. There being no provision in Arbitration agreement for appointment of an Arbitrator the consent of parties, section 8(1) of the Arbitration Act is not attracted. Consequently section 8(2) of the Arbitration Act shall not clothe the court with the jurisdiction to appoint an Arbitrator even if an application is made in that behalf.

5. As already stated a notice under section 8(1) of the Arbitration Act is a prerequisite for exercise of powers under section 8(2). While exercising powers under section 8(2) of the Act, the court is called upon to decide whether there is an arbitration agreement of the nature indicated in clause (a) of sub-section 1, and if notice under the said Sub-Section has been given and whether 15 clear days has clasped after the service of such notice. The learned Sub Judge has not considered any of the above aspects of the matter before passing the impugned order.

6. I would, therefore, allow this revision and set aside the impugned order. As there is no appearance on behalf of the Opposite party No. 1, there would be no order as to costs of this court.


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