1998 Supreme(Bom) 805

IN THE HIGH COURT OF BOMBAY
(NAGPUR BENCH)
D.D. Sinha, J.
Executive Engineer, Upper
Painganga Project ..... Petitioner.
Versus
M.V. Panse others..... Respondents.
Civil Revision. Application No. 1219 of 1996, decided on 17-12-1998.
Advocates appeared :
Smt. S.S. Wandile, A.G.P., for petitioner.
S.R. Deshpande J.P. Pendse, for respondents.

Headnote:Section 8-Government contract-Where co-tractor submitted the list of three persons to Government in term of clause for appointment of anyone as sole arbitrator it way held that appointment cannot be challenged under Section 33 by Government.

       Section 8-(Since repealed)Appointment of arbitrator-Procedure - Arbitration agreement providing procedure-As provided Chief Engineer not exercising his option for appointing arbitrator-Implied consent of Chief Engineer accounted Section 8 not applicable.-It is also an admitted position that arbitration agreement provides for filling up such vacancy by supplying the name of the person to be appointed as an arbitrator by the parties as per the procedure contemplated under clause 52 of the agreement. It is also not disputed that procedure for appointment of arbitrator is specifically provided under Clause 52 of the agreement and in view of the said procedure, if party to the agreement fails to exercise option as required by the said clause, it will be presumed that the said party has given implied consent to the name/names suggested by the other party for the purpose of appointing an arbitrator. In the instant case, Shri N.D. Wadnere, first arbitrator, refused to act as an arbitrator for the reasons stated above with effect from 20.12.1994. The respondent No. 2 vide letter dated 30.12.1994 requested the Chief Engineer to supply list of arbitrators. However, there was no response given by the Chief Engineer in this regard. Therefore, names of three arbitrators were sent by the respondent No. 2 vide letter dated 10.2.1995. The Chief Engineer was again requested to exercise his option and select one of them as arbitrators. The Chief Engineer, however did not exercise the said option and did not select anyone of them to be appointed as an arbitrator and, therefore, respondent No. 2 appointed respondent No. 1 Shri M.V. Panse as a sole arbitrator whose name was included in the list of three arbitrators supplied by the respondent No. 2 to the Chief Engineer. The entire procedure contemplated under clause 52 of the arbitration agreement has been followed while making appointment of Shri M. V Panse as an arbitrator in the instant case and, therefore, it is difficult to accept the contention raised by the learned counsel for the applicant that appointment of Respondent No. 1 as an arbitrator is without consent of the applicant. On the other hand, inaction on the part of the Chief Engineer to exercise options will clearly amount to giving deemed consent regarding appointment of respondent No. 1 as a sole arbitrator as per procedure contemplated under Clause 52 of the agreement. The effects of act and omission depend upon the language used in the clause and will have to be construed accordingly in its right perspective, since many legal consequences would follow. In the present case, inaction on the part of the Chief Engineer to exercise option available to him in regard to appointment of sole arbitrator in view of Clause 52 would amount to implied consent given by the Chief Engineer for appointment of sole Arbitrator by the respondent No. 2. Hence, in the circumstances of this case, even sub-clause (b) of Section 8(1) cannot be said to be attracted.

       Sections 8 and 33-Government work contract-Dispute-Appointment of arbitrator-As per agreement contractor suggesting three names out of which one to be appointed as sole arbitrator-Government appointed one but he declined to work-Contractor suggesting one other list but Government failed to appoint any-Then contractor appointed one who made an award Government challenged such appointment of arbitrator under Section 33 of Act-Held, these being no dispute as regards to existence of agreement or its validity, application under Section 33 of Act not maintainable as provision of Section 8 not applicable.-It is important to note that the Court can exercise jurisdiction vested in it under Section 33 of the Arbitration Act only when the parties to the arbitration agreement are challenging the very existence of the agreement or validity thereof and not otherwise. In the instant case, on the basis of undisputed facts, it is difficult to hold that the applicant can be said to have challenged existence of the arbitration agreement. There is no dispute about agreement entered into between the applicant and respondent No. 2 for construction of necessary works. The applicant does not intend to challenge existence or validity of the arbitration agreement or award. The applicant simply wants to challenge appointment of respondent No. 1 Shri M.V. Panse as a sole arbitrator. Be that as it may in the instant case, for the reasons stated above, the application moved by the applicant under Section 33 of the Arbitration Act is not maintainable.

       Sections 8 and 83-Government contract-In regard of Government contract where contractor submitted the list of three person to Government in terms of clause for appointment of anyone as so be arbitrator, it was held that appointment cannot be challenged under Section 33 by Government.

       Section 33-Government contract-Where contractor submitted the list of three persons to Government in term of clause for appointment of anyone as sole arbitrator it was held that appointment cannot be challenged under Section 33 by Government.