1984 Supreme(All) 491

IN THE HIGH COURT OF ALLAHABAD
R. P. SAXENA, I. P. SINGH
STATE - Appellant
Versus
SARDUL SINGH KULWANT SINGH - Respondents
F. A. F. O. 663 Of 1984
Decided On : 10/17/1984

The court has the jurisdiction to appoint an arbitrator under Section 20 (4) of the Arbitration Act if the appointed arbitrator is disqualified from being appointed as an arbitrator due to his bias and partiality, and the intention of the parties was not to supply the vacancy.

Headnote:

ARBITRATION - APPOINTMENT OF ARBITRATOR - CHIEF ENGINEER, MADHYA GANGA CANAL, IRRIGATION DEPARTMENT - DISQUALIFICATION - BIASED AND PARTISAN - REFERENCE TO RETIRED CHIEF ENGINEER, U. P. JAL NIGAM, LUCKNOW - VALIDITY - SECTION 8 (B) OF THE ARBITRATION ACT - INTERPRETATION - INTENTION OF PARTIES - VACANCY - FILLING UP - SECTION 20 (4) OF THE ARBITRATION ACT - JURISDICTION OF COURT.

Fact of the Case:

The respondent submitted three separate tenders for three different works which were accepted by the appellant. The contractor completed the works. There was a dispute regarding the amount payable to the contractor under each contract. The respondent gave three notices to the appellant under Section 8 of the Arbitration Act calling upon him to enter on a reference and adjudicate the disputes. The appellant did not enter on the reference. The respondent gave three separate applications under Sections 8 and 20 of the Arbitration Act. The appellant contested the applications on the pleas that the respondent did not prefer claims within 48 hours as required under clause 5.12 of the Agreement, that the claims are barred by time, that the claims are false and imaginary, that in fact there is no dispute between the parties, that there is no question of the decision of the dispute by the appellant, that clause 34 does not provide for arbitration and that the court has no jurisdiction. The Civil Judge allowed the applications and called upon the parties to furnish the names of arbitrators so that the disputes could be referred to an arbitrator for settlement. The appellant submitted the names of some retired Chief Engineers for being considered for arbitration. The appellant did not submit any names for consideration. They filed an objection that the disputes could only be referred to the arbitration of the appellant and none else. The respondent objected to the reference of the disputes to the appellant on the ground that he is partisan and biased and as such disqualified to be an arbitrator. The Civil Judge accepted the objection of the respondent and made the reference to a retired Chief Engineer, U. P. Jal Nigam, Lucknow from among the names suggested by the respondent.

Finding of the Court:

The court held that the Civil Judge was competent to appoint an arbitrator in place of the Chief Engineer, Madhya Ganga Canal, Irrigation Department, who was disqualified from being appointed as an arbitrator due to his bias and partiality. The court also held that the intention of the parties was not to supply the vacancy and that the court had jurisdiction to appoint an arbitrator under Section 20 (4) of the Arbitration Act.

Issues: 1. Whether the Chief Engineer, Madhya Ganga Canal, Irrigation Department, was disqualified from being appointed as an arbitrator due to his bias and partiality? 2. Whether the intention of the parties was to supply the vacancy? 3. Whether the court had jurisdiction to appoint an arbitrator under Section 20 (4) of the Arbitration Act?

Ratio Decidendi: 1. The court held that the Chief Engineer, Madhya Ganga Canal, Irrigation Department, was disqualified from being appointed as an arbitrator due to his bias and partiality. The court relied on the fact that the Chief Engineer had joined the objection filed by the appellants, in which they had alleged that the respondent's claims were imaginary and false. The court also relied on the fact that the Chief Engineer had expressed his opinion on the merits of the case against the respondent. 2. The court held that the intention of the parties was not to supply the vacancy. The court relied on the fact that the arbitration clause referred to the Chief Engineer, Madhya Ganga Canal, Irrigation Department, by designation. The court also relied on the fact that the parties had not supplied the vacancy after the Chief Engineer had refused to act as an arbitrator. 3. The court held that it had jurisdiction to appoint an arbitrator under Section 20 (4) of the Arbitration Act. The court relied on the fact that Section 8 (1) (b) of the Arbitration Act provides that the court may appoint an arbitrator if the appointed arbitrator 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. The court also relied on the fact that the parties had not supplied the vacancy.

Final Decision: The court dismissed the appeals and upheld the order of the Civil Judge appointing a retired Chief Engineer, U. P. Jal Nigam, Lucknow as the arbitrator.