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1991 Supreme(All) 942
IN THE HIGH COURT OF ALLAHABAD
M.P. SINGH, J.
State of U.P. and Another - Appellant
Versus
District Judge and Others - Respondent
Civil Misc. Writ Petition Nos. 17184 and 17185 of 1991
Decided On : 01-11-1991
Advocate Appeared:
For the Appellant : N.B. Singh
The court held that the phrase "sufficient cause" used in the proviso to Section 9(b) of the Arbitration Act should be interpreted liberally to serve the ends of justice.
Headnote:
ARBITRATION - APPOINTMENT OF ARBITRATOR - DELAY IN APPOINTMENT - SUFFICIENT CAUSE - INTERPRETATION OF SECTION 9(B) OF THE ARBITRATION ACT - JUDICIAL REVIEW OF DISCRETIONARY ORDERS.
Fact of the Case:
The Government failed to appoint its arbitrator within the statutory period as contemplated in Section 9(b) of the Arbitration Act. The dispute arose between the parties regarding the rate of furnishing and placing of chain link fabric on the tunnels face.
Finding of the Court:
The court held that the Government had shown sufficient cause for not appointing its arbitrator within the statutory period. The court found that there was a sincere effort on the part of the Government to appoint its arbitrator and that the delay was not obstructive or evasive.
Issues: Whether the Government had shown sufficient cause for not appointing its arbitrator within the statutory period.
Ratio Decidendi: The court held that the phrase "sufficient cause" used in the proviso to Section 9(b) of the Arbitration Act should be interpreted liberally to serve the ends of justice. The court also held that the provisions of Section 9(b) are procedural in nature and should be given a liberal interpretation. The court further held that the law of limitation is the same for every private citizen as well as the Government, but the court cannot ignore the peculiar and characteristic functioning of the Government. A certain amount of latitude is, therefore, permissible.
Final Decision: The court allowed the writ petitions and quashed the impugned orders. The delay in appointing its arbitrator by the Petitioner was condoned. The appointment of Sri K.C. Goel as sole arbitrator was set aside.
M.P. SINGH, J.
1. Delay is one of the besetting sins of the administration. The executive should ensure that the matters coming before it are dealt with expeditiously. If delay is inevitable in a particular instance, the citizen should be apprised of the same. A citizen has a reasonable expectation that a certain line of conduct will be followed. This usually should not be departed from without very good reasons. In the instant case. Government has shown sufficient cause of not appointing its arbitrator within the statutory period as contemplated in Section 9(b) of the Arbitration Act.
2. For the construction of the left bunk diversion tunnels on the (sic) Bhagirathi and Bhilanga at Tehri, an agreement was entered into between Karam Chand Thapar and Brothers, Ticil Division, Tehri (in short, Thapars) and the Superintending Engineer, Tehri Dam Circle I, Tehri (in short, the Government) on 28th April, 1978.
3. The agreement contained an arbitration clause. The relevant Clause 1-3-01 provided that in the event of any dispute between the parties, the matter would be referred to two arbitrators, one to be appointed by each party.
4. A dispute arose between the parties regarding rate of furnishing and placing of chain link fabric on the tunnels face.
5. In terms of the agreement, Thapars informed the Government on 23rd November, 1987 that they had appointed Sri K.C. Goel as their arbitrator. The Government was requested to appoint its arbitrator. A reminder was sent on 7th January, 1988, but nothing was done.
6. Section 9 of the Arbitration Act contemplates two appointments:
(i) Appointment of an arbitrator of the choice of one of the parties;
(ii) If the other party having been informed of such appointment fails to appoint its arbitrator, then the party who has appointed arbitrator may appoint its arbitrator as the sole arbitrator.
Unless the second appointment as sole arbitrator is made, the arbitrator has no power to arrogate to himself the functions of the sole arbitrator and act as such. It further requires that appointment of arbitrator should be made prior to the giving of notice.
7. Thapars appointed Sri K.C. Goel as sole arbitrator on 2nd March, 1988. This appointment was subsequently recalled on 3rd May, 1988. Thapars again appointed Sri K.C. Goel as sole arbitrator on 13th May, 1988. He entered into the reference on 10th June, 1988. Notice was issued to the Government to file claim petition on or before 8th July, 1988.
8. In the meantime, the Government had filed two applications u/s 9(b) of the Arbitration Act on 16th June, 1988, in the Court of the learned District Judge, as there were two references. It was prayed that the appointment of Sri K.C. Goel as sole arbitrator be set aside and the applicant be permitted to nominate and appoint its own arbitrator. Thapars filed objections. The applications were rejected on 29th November, 1990, by separate but identical orders. The present writ petitions are directed against those orders.
9. Heard Sri Milan Banerji on behalf of the State Government and Sri S.P. Gupta Senior Counsel appearing on behalf of Thapars at great length.
10. The Petitioners filed two civil revisions on 20th November, 1990. Sri Ajay Kumar Advocate had filed caveat in these two revisions and had put in appearance on behalf of Thapars Both the revisions remained pending. No orders were passed.
11. In the meantime, summer vacations intervened on 6th June, 1991, the present writ petitions were filed challenging the same orders dated 29th November, 1990, against which the revisions had already been filed and were pending. The Petitioner has mentioned about the filing of the revisions in the writ petitions. The Court stayed further proceedings before the sole arbitrator.
12. On 12th August, 1991, when the revisions as well as the writ petitions came for admission, Sri S.P. Gupta raised an objection that the Petitioner cannot be permitted to peruse two alternative in his submission. Accordingly, Sri Milan Banerji ap
