Judgment

MOHAN,J.:- The facts relating to the case are as follows:-

The petitioner herein offered his tender for entering into a contract for provision of officers mess and single officers quarters. On 13-3-1970, the tender was accepted and the acceptance was communicated. Thereafter, a contract was signed at Lucknow. Between 1973, the petitioner executed the contract. During the course of contract, he was required to do some extra work for which he made a claim. A dispute arose concerning this. Clause 70 of the contract enabled the parties to go by way of arbitration. He applied to the Engineer-in-Chief, Army Headquarters, New Delhi for appointment of arbitrator. Accordingly, Brig. EMA Da Costa, Chief Engineer, Pune and Rajasthan zone was appointed as an arbitrator on 23-11-73. The petitioner vide his letter dated 2-12-73, protested against the appointment of Brig. Da Costa. It appears that the proceedings were dragged on and nothing useful turned out. In February 1976, when Brig. Da Costa was relieved from the Army, his appointment as arbitrator came to an end. Thereafter by an order dated 27-4-76, Brig. SDL Jaini was appointed as an arbitrator. Even then no progress took place in the arbitration, he also retired on 18-3-76. On 29-4-78, one Mr. G. R. Mirachandani was appointed as an arbitrator. He relinquished the appointment on 11-4-80 since he was to retire on 31-7-80. The next appointment was that of Mr. V. Badrinath dated 12-6-80. He also relinquished the charge on 14-9-84 since the petitioner did not co-operate with him for more than 4 years. In the meanwhile, the question arose as to who had the competence to represent the contractor in the arbitration proceedings. The petitioner was required to obtain the succession certificate from the Collector, since the original contractor died in June, 1982. Thereafter, the matter was pending without any adjudication. Therefore, a notice was issued under section 8 of the Arbitration Act. On (sic) upon the respondent to appoint an arbitrator but no such appointment was made. Therefore, he filed an application for the appointment of an arbitrator before the learned Subordinate Judge, Chandigarh. One of the contentions raised was after the filing of the application under Section 8 since the respondent had not appointed an arbitrator, as required under Section 8 (1)(b) of the Act, the right to make such an appointment had been forfeited. Therefore, the only course left open to the court was to appoint an arbitrator as required under Section 8 of the Act.

2. The application was contested on behalf of the respondent not only on merits but also on the ground of want of territorial jurisdiction of the court. It is seen that the appointment of Mr. YNR Rao and Mr. Gopalkrishnan took place during the pendency of the application of the petitioner under Section 8 before the learned Subordinate Judge, Chandigarh.

The following 5 issues were set down for trial:

(i) Whether there are sufficient grounds for the appointment of an Arbitrator for referring the matter in dispute?

(ii) Whether the petition is within time?

(iii)Whether the present petition is not maintainable?

(iv) Whether this court does not have the territorial jurisdiction to try the present suit.

(v) Relief.

3. On issue number 1, the learned Subordinate Judge came to the conclusion that there exists a dispute between the parties and hence there was a need to appoint an arbitrator.

4. Issue number 2 was answered in favour of the petitioner, while issue number 3 was not pressed. As regards issue number 4, the court was of the view that having regard to the clause 26 and in view of the case A.B.C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem, AIR 1989 SC 1239, the Civil Court at Chandigarh had jurisdiction, as part of cause of action arose at Chandigarh. This order was pronounced on 30th July, 1990. In continuation of that judgment by order dated 20th August, 1990, Mr. Puranjit Singh, Superintending Engineer, Capital Project, Chandigarh was appoi