SUPREME COURT OF INDIA
J.C. SHAH, K.S. HEGDE AND A.N. GROVER, JJ.
M/s. Prabhat General Agencies etc., Appellants
Versus
Union of India and another (In all the Appeals), Respondents.
Civil Appeals Nos. 1961 to 1963 of 1966, D/- 12-10-1970.
Advocates appeared
Mr. Bishan Narain, Senior Advocate (Mr. B. Datta and M/s. J.B. Dadachanii and Co., Advocates with him), for Appellant (In C. A. No. 1961 of 1966); Mr. B. Datta, Advocate and M/s. J. B. Dadachanii and Co., Advocates; for Appellants (In C. As. Nos. 1962 and 1963 of 1966): Mr. V. C. Mahajan, Advocate, for Respondents (In all the Appeals).
Indian Arbitration Act, 1940 - Section 20, 20 (4), 8 (1) (b) - Special leave - Arbitration clause – Agreements - Parties are agreed that no other clause in agreements is relevant for our present purpose - Disputes arose between the appellants and the respondents in respect of some claims arising from the said contracts - Appellants requested respondents to refer the disputes to arbitration of Judicial Commissioner - Respondents declined to agree to make the reference in question – Held, matter were res integra I might have agreed with one view or the other but in my opinion court below has on a consideration of the material facts and relevant law came to the conclusion that arbitration agreement in question showed that there was no intention to fill up the vacancy - Reasons mentioned above court allow these appeals set aside the orders passed by subordinate judge as well as by the Judicial Commissioner and remit the cases to the trial court for appointing a new arbitrator in place of the Judicial Commissioner, Himachal Pradesh. The respondents shall pay the costs of the appellants both in this Court as well as in the courts below - Appeals allowed.
Judgment
HEGDE, J.:- These appeals by special leave raise a common question of law. Therefore they can be dealt with together. The appellants herein entered into agreements with the Union of India under which they were allotted certain areas in a forest to tap Resin Blazes and supply the same to the Turpentine Factory at Sirmur. The agreements entered into included an arbitration clause. That clause is common in all the three agreements. That clause reads thus:
"If any question, difference or objection whatsoever shall arise in any way connected with or arising out of this or the meaning or operation of any part thereof or the debts dues or liabilities of either party, then save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including whether its decision has been otherwise provided for and whether it has been finally decided accordingly or whether the contract should be terminated or has been rightly terminated and as regards the rights and obligations of the parties as the result of such termination shall be referred for arbitration to the Judicial Commissioner, Himachal Pradesh, and his decision shall be final and binding and where the matter involves a claim for or the payment or recovery or deduction of money, only the amount, if any, awarded in such arbitration shall be recoverable in respect of the matter so referred."
2. The parties are agreed that no other clause in the agreements is relevant for our present purpose. Disputes arose between the appellants and the respondents in respect of some claims arising from the said contracts. The appellants requested the respondents to refer the disputes to the arbitration of the Judicial Commissioner, Himachal Pradesh. The respondents declined to agree to make the reference in question. Thereafter the appellants moved the Senior Sub Judge, District Sirmur Nihan under Sec. 20 of the Indian Arbitration Act, 1940 (to be hereinafter referred to as the Act) for ordering the respondents to file the agreements in question in his court and for referring the disputes to the Judicial Commissioner, Himachal Pradesh for arbitration. The learned Sub-Judge accepted these applications and directed the respondents to file the agreements in question into his Court. Thereafter he referred the disputes to the arbitration of the Judicial Commissioner, Himachal Pradesh. The Judicial Commissioner, in our opinion rightly declined to act as an arbitrator. Thereafter the learned subordinate judge was moved to appoint some other arbitrator in place of the Judicial Commissioner. The respondents opposed that prayer on the ground that arbitration clause did not provide for such an appointment. The learned subordinate judge accepted that contention and dismissed the applications. As against that decision the appellants went up in revision to the Judicial Commissioner, Himachal Pradesh. The Judicial Commissioner following an earlier decision of that Court in District Cooperative Federation Ltd. v. Khub Chand, AIR 1961 Him Pra 35 dismissed the revision petitions holding that under the agreements no reference for arbitration can be made to anyone other than the named authority. The question for decision is whether the interpretation placed by the Courts below on the relevant provision in the arbitration agreements is correct.
3. It may be noted that the agreements in these appeals relate to the exploitation of certain forest produce. The disputes that have arisen between the parties are not of technical nature requiring any specialised knowledge on the part of the arbitrator. It is clear from the terms of the agreements that the Judicial Commissioner was not appointed as an arbitrator because of any special or technical knowledge possessed by him relating to the subject matter of the dispute. Evidently he was appointed, though in our opinion quite improperly, arbitrator because he was a high judicial officer. The relevant provisions of the Act w
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.