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1998 Supreme(AP) 540
Andhra Pradesh High Court
Judges : R.BAYAPU REDDY
A.P.State Road Trans.Corpn.rep.by the Chief Civil Engineer-I, Hyderabad - Appellant
Versus
P.Venkata Reddy - Respondent
Decided On : 08-12-98
Headnote:Arbitration Act, 1940 - Section 3 Schedule Para 3 - Expression entered on Reference - When an arbitrator said to have entered on reference explained
Held : An arbitrator can be said to have entered on the reference only when he applies his judicial mind to the disputes between the parties by taking up the matter for hearing and begins to examine the witnesses and hears the submissions made by both parties and not the time when he calls for the claim statements or counter statements from the parties In the present case, the arbitrator had only granted time to the revision petitioner to file his counter statements which were not yet filed Therefore, it cannot be said that the provisions of para 3 of the I schedule of the Act are violated in the present case, nor can it be said that the arbitrator had failed to pass his award within four months as contemplated under the said provisions and thereby becamefunctus Officio The lower Court has, therefore, clearly erred in revoking the authority of the named arbitrator solely on the ground that he did not make his award within four months and that there was delay on his part in making such award As already stated above, such delay does not amount to negligence in performing his duties and no bias can also be attributed to him on account of such delay As a matter of fact, the lower Court does not even find that there was any bias on the part of the named arbitrator on account of such delay in making the award
( 1 ) THESE two civil revision petitions are filed by the same party, Andhra pradesh State Road Transport Corporation, represented by its Chief Civil engineer-I, Hyderabad questioning the two separate orders dt. 6-8-1993 passed in O. P. No. 491/89 and O. P. No. 492/89 on the file of the IV Additional Judge, city Civil Court. Hyderabad, by which the authority of the named arbitrator in both the cases was revoked and an independent arbitrator was appointed in his place.
( 2 ) THE first respondent in the present revision petitions is the contractor who entered into separate agreements with the petitioner herein for construction of bus stands at Yerragondapalem and Kanigiri in Prakasam district. As disputes arose between the parties regarding some amounts claimed by the contractor relating to the works done by him as per the contracts, the contractor chose to invoke the arbitration clause in the agreements and requested the General Manager, A. P. S. R. T. C. , who is the named arbitrator in the contract and who is shown as the second respondent herein, to enter into reference and decide the disputes between the parties and submit his award. The named arbitrator on such request made by the contractor, directed the contractor to submit his claim statements and when such claim statements were filed by the contractor the arbitrator directed the revision petitioner (Department) to file its counter statements. Subsequently, the contractor filed two petitions in O. P. No. 491/89 and O. P. 492/89 in the lower Court under the provisions of Sections 5,8,11 and 12 of the Arbitration Act, 1940 requesting the Court to revoke the authority of the named arbitrator and appoint another arbitrator, preferably a retired Chief Engineer, in the place of the named arbitrator to decide the disputes between the parties contending that even though the claim statement was filed by him before the arbitrator on 27-2-1989, the arbitrator failed to decide the disputes and, instead, granted nearly eight months time to the Department to file its counter statements, that the arbitrator thereby failed to act promptly and pass his award within four months after entering into reference, that in view of such delay he (contractor) apprehends bias on the part of the named arbitrator and does not expect that justice might be done to him if he is allowed to continue as arbitrator. The revision petitioner, who represents the Department, contested the two O. Ps. before the lower Court contending that there are no valid and justifiable reasons for revocation of the authority of the named arbitrator and for appointing a new arbitrator. After hearing both sides and on the basis of the material before him the lower Court allowed both the O. Ps. and revoked the authority of the named arbitrator and appointed a retired District Judge as arbitrator to decide the disputes between the parties in both the matters. Questioning such orders the present revision petitions are filed by the department.
( 3 ) AS the facts involved in both the cases and the points to be decided are the same they are heard together and are being disposed of by a common order.
( 4 ) AS seen from the facts of this case the first respondent herein who is the contractor entered into two separate agreements with the revision petitioner which is the A. P. S. R. T. C. represented by its Chief Civil engineer-I, Hyderabad for construction of bus stands at Yeragondapalem and kanigiri in Prakasam district and as disputes arose between the parties relating to the execution of the said works the first respondent requested the named arbitrator who is the General Manager of the A. P. S. R. T. C. to arbitrate the disputes between the parties as per the arbitration clause in the agreements and submit his award. No oral or documentary evidence was adduced before the lower Court There is no material to show as to when the arbitrator was requested by the first respondent to act as arbitrator to decide the dis
