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Rajasthan High Court
Wanchoo C.J. & Dave, J.
Chief Engineer B.& R. Jaipur - Appellant
Versus
Harbans Singh - Respondents
D.B. Civil Revision No. 9 of 1952
Decided On : July 15, 1954
The provisions as to the intention not to supply the vacancy applies to all the four conditions mentioned in clause (b) of the section. After all, if the arbitrator refuses to act, one can say that there is a vacancy without any violence to the language. The difference between a refusal to act and incapability of acting is, to our mine, very little. In the later case, the arbitrator is physically incapable of acting, while in the former case, though he may be physically capable of acting, he directly intimates to the parties that he is not prepared to act. In either case, there is clearly a vacancy in the post of the arbitrator. Further, the case of neglect to act is not very different from the case of a refusal to act. In the case of refusal, the arbitrator directly communicates to the parties that he is not prepared to act, and thus a vacancy arises. In the case of neglect, the arbitrator does not make any such direct communication; but his whole conduct shows indirectly to the parties that he is not prepared to act. In both the cases, the vacancy arises because the arbitrator is not prepared to act; and we, therefore, see no reason why it cannot be said that a vacancy arises when an arbitrator neglects or refuses to act. Therefore, whether it is the case of the death of the arbitrator or of his incapacity or refusal or neglect, the question that has to be examined is whether the arbitration agreement shows that the intention was that the vacancy should not be supplied. (Para 5)
The question whether the intention was that vacancy should not be supplied Depends upon the terms of the agreement and the surrounding circumstances which have to be seen in each case. The fact, that one of the parties to the agreement is constituted an arbitrator has significance where the question arises whether it was intended to replace that party by another person, The further fact that the arbitrator is not mentioned by name but his office also supports the connection that it was not intended that the official should be replaced by some other person as an arbitrator. It is not impossible that he may neglect or refuse to act but we cannot overlook that a public servant would generally be expected to carry on the duties which he imposes upon himself, and would not neglect or refuse to do so. Lastly, the actual words in the arbitration clause being: —
"Chief Engineer shall be the sole arbitrator and judge in case of dispute, etc." the use of the word judge, to our mind, must carry some significance. It seems to us that the intention was not only that the Chief Engineer should be the only arbitrator but also the only judge of the dispute between the Executive Engineer and the contractor. If he was to be the only judge, the intention must be that no other person must judge between the contractor and the Executive Engineer on the point of dispute. (Paras 6 & 7)
2. The facts of the case may be briefly narrated. Some construction work was to be done in Ganganagar, and Harbans Singh, apposite party, was appointed contractor for that purpose. In November, 1947, he entered into an agreement with the Chief Engineer of the former State of Bikaner. That agreement lays down the terms on which Harbans Singh had accepted the contract and one of the terms (clause 15) was that—
"Chief Engineer shall be the sole arbitrator and judge in case of dispute between me and the Execution Engineer with reference to the quality or measurements of work executed or rate of progress of the construction and meaning of plans, working drawing sections and specifications and above conditions or any other thing connected with this contract, and his decision shall be conclusive and binding."
It is said that disputes arose about this work and were referred to the arbitration of the Chief Engineer, and that officer gave an award in October, 1949. That award is being contested in the courts and is a separate matter. Harbans Singh wrote a letter to the Chief Engineer on the 17th of June, 1950, in which he said that there was a dispute between him and the Executive Engineer, and referred that dispute to the arbitration of the Chief Engineer. He also made it clear in that letter that that dispute was besides the dispute which had been submitted to the Chief Engineer earlier, and on which the Chief Engineer had given his award in October, 1949 Later, Harbans Singh gave a notice, on the 24th of July, 1950, to the Chief Engineer. In this he said that as the Chief Engineer had not entered upon arbitration within one month of the 17th June, 1950 he was giving fifteen days notice to him as well as to the Executive Engineer to concur in the appointment of the new arbitrator. On the 28th July, 1950, the Chief Engineer sent a reply to the effect that the claims were still under examination, and that it would take time as the case was old and complicated and new officers were handling it. Thereafter, Harbans Singh applied, on the 7th of February, 1951, under sec. 8 of the Arbitration Act, to the court alleging that the arbitrator had neglected to work, and therefore a new arbitrator should be appointed in his place.
3. This application was opposed on various grounds before the trial court. We need not refer to those grounds for the point, which has been urged before us, was not taken in the trial court, and that point is that the arbitration agreement shows that it was not the intention that the vacancy should be supplied, and therefore no new arbitrator could be appointed in place of the Chief Engineer, and inasmuch as the lower court removed the sole arbitrator, namely the Chief Engineer and directed the parties to submit the name of another arbitrator within a month, the order was without jurisdiction.
4. We have heard learned counsel at length on this point. The relevant portion of sec. 8 of the Arbitration Act is as follows—
"(1) In any of the following cases:—
(a) .....................
(b) if any appointed arbitrator "or umpire neglects or refuses to act, or is incapable of acting or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy;
(c) .................
any party may serve the other parties or the arbitrators, as the case may be with a written notice to concur in the appointment or appointments or in supplying the vacancy.
(2) If the appointment is not made within fifteen clear days after the service of the said notice; the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, ap
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