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1972 Supreme(Cal) 81

IN THE HIGH COURT AT CALCUTTA
Amaresh Chandra Roy, Ajoy Kumar Basu, JJ.
A. K. Ghosh & Bros - Claimant/petitioner.
Versus
State of West Bengal - Opposite Party
Civil Revision Case No. 1707 of 1971
Decided On : March 16, 1972

Advocates Appeared:
Satya Priya Ghosh - for the Petitioner
Nani Gopal Das - for the Opposite Party

The consent of both parties is necessary for the appointment of an arbitrator under Cl. 25 of the Arbitration Act, 1940, and the delay in appointing an arbitrator cannot be condoned if it is more than two years and the application to the court has already been made.

Headnote:

ARBITRATION ACT, 1940 - SEC. 8 - APPOINTMENT OF ARBITRATOR - CONSENT OF PARTIES - DELAY IN APPOINTMENT - CONDONATION OF DELAY - JURISDICTION OF COURT.

Fact of the Case:

Petitioner, a registered firm, entered into a contract with the State of West Bengal for the construction of a District Hospital. Disputes arose between the parties regarding extra and/or additional works executed by the petitioner. The petitioner requested the Chief Engineer to refer the dispute to arbitration, but the Chief Engineer did not comply. The petitioner then served notices on the Chief Engineer to appoint an arbitrator, but no response was received. The petitioner filed an application under Sec. 8 of the Arbitration Act, 1940 for the appointment of an arbitrator.

Finding of the Court:

The court held that the Chief Engineer was not appointed as an arbitrator by virtue of Cl. 25 of the contract, as consent of both parties was necessary for such appointment. The court also held that the delay in appointing an arbitrator could not be condoned, as it was more than two years and the application to the court had already been made. The court further held that the jurisdiction of the court under Sec. 8 of the Arbitration Act could not be taken away or affected by the subsequent appointment of an arbitrator by the Chief Engineer.

Issues: 1. Whether the Chief Engineer was appointed as an arbitrator by virtue of Cl. 25 of the contract? 2. Whether the delay in appointing an arbitrator could be condoned? 3. Whether the jurisdiction of the court under Sec. 8 of the Arbitration Act could be taken away or affected by the subsequent appointment of an arbitrator by the Chief Engineer?

Ratio Decidendi: 1. Cl. 25 of the contract provided for arbitration in case of disputes, with the Chief Engineer or his nominee acting as the sole arbitrator. However, the appointment of the arbitrator required the consent of both parties. 2. The delay in appointing an arbitrator could not be condoned, as it was more than two years and the application to the court had already been made. 3. The jurisdiction of the court under Sec. 8 of the Arbitration Act could not be taken away or affected by the subsequent appointment of an arbitrator by the Chief Engineer, as the court was already in seisin of the matter.

Final Decision: The court set aside the order of the lower court and directed the lower court to proceed with the application for the appointment of an arbitrator in accordance with the law.

JUDGMENT

Amaresh Roy, J.

This Rule was issued upon an application under Sec. 115 of the Code of Civil Procedure and was directed against an order passed by the learned Subordinate Judge of Alipore on 6th February, 1971 in Misc. Case No. 39 of 1970 dismissing Misc. case by rejecting the petition upon which it was started. That Misc. case commenced on an application filed by Messrs. A.K. Ghose and Brothers, registered firm under Sec. 8 of the Arbitration Act of 1940 praying for appointment of a suitable arbitrator over the disputes arising between the petitioner and the State of West Bengal under Cl. 25 of the conditions of a contract between parties in W. B. Form No. 2911 (ii) in respect of Tender No. 81 of 1960-61. The relevant facts are that the Superintendent Engineer, Western Circle, Public Works Department, Government of West Bengal issued an advertisement inviting tenders for construction of District Hospital at Bankura with provision for 151 beds for patients therein. In response to the advertisement the petitioner Messrs. A. K Ghose and Brothers submitted tender and deposited the requisite earnest money. That tender was accepted and the petitioner commenced and completed the work by 30th April, 1963. During the progress of the work the petitioner claimed to have executed several extra and/or additional works not mentioned and described in the original tender contract. This is said to have been done under instruction given by the Engineer-in-charge to whom the rates in respect of such extra or additional works are said to have been submitted. In October, 1966 on examining the final bill prepared by the Department the petitioner noticed that substantial portion of their claim made in supplementary tenders and/or bills were not included in the said final bill as having been disallowed. The petitioner however signed the final bill and received the amount allowed in the said final bill on 6th October, 1966. But that was without prejudice to their rights and claims. The petitioners were informed by the Executive Engineer, Bankura Division, P.W.D. by letter dated 30th September. 1967 that their claim could not be entertained It is contended that disputes having thus arisen between the parties within the meaning of Cl. 25 of the condition of contract the petitioner by letter dated 20th September, 1968 requested the Chief Engineer to refer the said dispute to his arbitration as the sole Arbitrator. Though he received that letter on 23rd September, 1968 the Chief Engineer did not comply with the request. The petitioners then by letter 4th June, 1969 informed the Chief Engineer that they are desirous of appointing an arbitrator from any retired Judge in the rank of the District Judge and gave notice to concur within 15 days from the date of the receipt of the letter. As no reply was received the petitioner again served upon the Chief Engineer a notice dated 23rd January 1970. But the Chief Engineer did not appoint any arbitrator within 15 days after the service of the said notice. On those allegations the petitioners filed an application on 2nd May, 1970 in the Court of the Subordinate Judge at Alipore under Sec. 8 of the Arbitration Act, 1940. That application was numbered as Misc. Judicial Case No. 39 of 1970 The application was opposed on behalf of the State of West Bengal by filing a written objection contending therein that by virtue of Cl. 25 of the condition of contract between the parties the Chief Engineer, P. W. D. has already appointed on 8th July, 1970 Shri S. N. Banerjee, Additional Chief Engineer, P.W.D. to act as the Arbitrator and opposite party had been duly informed of that appointment. For that reason the State of West Bengal contended that the application under Sec. 8 of the Arbitration Act should be rejected.

2. The learned Subordinate Judge in his order No. 13 dated 6. 2. 71 by which order he has rejected the application of the petitioners under Sec. 8 of the Arbitration Act-has noticed that the averments of












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