The main legal point established in the judgment is that the appointment of arbitrators and the composition of the Arbitral Tribunal must be in accordance with the agreement between the parties and the provisions of the Arbitration Act 1996.

1. This is an appeal against the order dated 20.01.2006 passed by the Sub Judge I, Katihar in Misc. Case No. 2/2004.

2. The appellant is the Unit Head, National Jute Manufacturers Corporation Ltd., Unit R.B.H.M., Katihar having its office at R.B.H.M. Jute Mills, Katihar and respondent No. 6 is the Director (Personnel), National Jute Manufacturers Corporation Ltd. having his office at Kolkata.

3. The appellant had to start a canteen in his mill premises for the workers. Tenders were invited for this. Pramod Kumar Agarwal (after whose death, during arbitration proceeding the respondents were substituted and who would hereinafter be referred to as the Contractor) filed tender. Thereafter through a letter, the contractor was directed to start the canteen. The contractor accordingly started the canteen. The case of the respondents is that the contractor started supplying food, breakfast, tea etc. as per concessional rate given by the management of the Mill. He was assured that subsidy would be paid after entering into proper agreement. Then, an agreement was entered into between the appellant and the contractor according to which the contractor was to be paid subsidy at the rate of Rs. 10,000.00 per month. But in spite of requests and legal notice, no subsidy was paid. The contractor hence sent an application to the Director (Personnel) (respondent No. 6) to settle the dispute of non-payment of subsidy as according to the agreement, all the dispute arising out of the agreement, were to be referred to the sole Arbitrator, the Director (Personnel), but in spite of reminder sent, no proceeding of arbitration was initiated. The contractor, hence, filed an application u/s. 8(2) of the Arbitration Act before the Sub Judge I, Katihar for getting the total amount of subsidy being Rs. 3,30,000.00 with interest, realised through arbitration. On the basis of that application the miscellaneous case was registered.

4. After notice, the appellant appeared and opposed the prayer of the contractor by filing a written statement contending, inter alia, that no arbitration agreement was filed along with the application as provided u/s. 8(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act). Though there was an agreement between the parties, there was no agreement to pay Rs. 10,000.00 per month as subsidy. In a meeting, a trade union leader had only suggested that the contractor should receive the subsidy of Rs. 10,000.00 per month. So, the matter of subsidy cannot be made a basis for reference to the arbitrator being not covered under the Arbitration Clause of the Agreement.

5. The learned Sub Judge then directed the parties to file lists showing the name of their arbitrators. On behalf of the respondents a list of two persons including Sri Deo Kumar Jha, Advocate, was filed. The appellant gave only the name of respondent No. 6 for appointment as only Arbitrator. The Court appointed Sri Deo Kumar Jha, Advocate and respondent No. 6 as the arbitrators. But in spite of the letters sent to respondent No. 6, he did not respond. The appellant was also ready to give the name of any person for appointment as arbitrator on his behalf. The learned Sub Judge, hence, in presence of both the parties appointed one Sri Anil Kumar Singh, Advocate, as the second arbitrator.

6. The two arbitrators, after concluding the arbitral proceedings, submitted an award on 16.09.2005 in favour of the respondents. The learned Sub Judge invited objection against the award. The appellant filed his objection on 3.12.2005. The learned Sub Judge after hearing the parties, by the impugned order rejected the objection. of the appellant, and by the same order after modification in the rate of interest confirmed the award and directed to prepare the final award and decree.

7. The impugned order has been assailed by the learned counsel for the appellant on various grounds. The main thrust of his submissions, however, is that the arbitrators were app