Decided on January 28,1983

Sindh Resettlement Corpo Limited Appellant


B.K.MEHTA - (1.) . The respondent who is the original plaintiff of Special Civil Suit Nos. 218 and 219 of 1979 on the file of the learned Civil Judge (S. D.) Kutch at Bhuj made an application to file in the Court the arbitration agreement contained in the contract of construction entered into between the respondent-plaintiff and the appellant-Corporation which was the defendant in the said suits and also praying for appointment of Arbitrater. It is not necessary to trace the entire history of litigation but suffice it to say that the alleged arbitration agreement contained in the supply contract enjoined the parties to refer every dispute difference or question which may at any time arise between the parties hereto or their branches which may touch or arise out of or in respect of the said contract to the said arbitration of the Chief Engineer of the appellant-Corporation. It is common ground that the post of Chief Engineer was vacant at the relevant time. One or the objections raised on behalf of the appellant -Corporation was that since the arbitration agreement provided for sole arbitration of a named officer whose office was vacant the arbitration agreement fails since there is no intention to substitute any other person in the place of the named arbitrator. The objection did not find favour with the learned Judge who by his common order of 7/12/1981 directed the appellant-Corporation to refer to Chief Engineer or to the person who is incharge of Chief Engineer the dispute if there is no permanent incumbent on the post and if there is no one occupying the post permanently or incharge thereof the learned Judge directed the parties to submit few names for appointment of an Arbitrator or to submit the name of a person who can act as a sole arbitrator. It is this order made in the two suits which is the subject matter of these two appeals before me.
(2.) . I do not think that there are any justifying grounds for me to interfere with the order in the question except the formal modification which is required in the order itself as a result of the passage of time and for the reasons I am presently indicating.
(3.) . As far as the question of merits is concerned it is difficult to agree with the learned Advocate appearing for the appellant-Corpora- tion that the parties did not intend to supply the vacancy. A strenuous attempt was made by the learned Advocate for the appellant-Corporation to urge that the learned Judge was clearly in error of law in ordering the reference to the Chief Engineer or to any other person holding the charge thereof or to submit the name of an agreed arbitrator or to submit the names so as to enable the court to appoint one out of them as Arbitrator inasmuch as the learned Judge failed to appreciate that the substantive power to fill in vacancy is to be found in sec. 8 of the Arbitration Act and the Court cannot in exercise of its jurisdiction under sec. 20 fill in the vacancy unless the Court is able to spell out the intention of the parties in the arbitration agreement that such vacancy is to be filled in. It is not necessary for me to go into the larger question whether the Court has power under sec. 20(4) of the Arbitration Act de hors its power under sec. 8 to fill in the vacancy which view has found favour with the two High Courts in two decisions viz. K. C. CHATTERJEE V. DURGAPUR PROJECTS LTD. A.I.R. 1972 CAL. 383 AND REGIONAL INSTITUTE OF TECHNOLOGY V. H. B. CORPON. A.I.R. 1974 PAT. 272. IN DURGAPUR PROJECTS LTD.S CASE (SUPRA) the Calcutta High Court was confronted with a similar situation where in the arbitration clause between the contractor and the company disputes were to be referred to arbitration of Chief Engineer of the Company and when dispute arose the post of Chief Engineer was lying vacant. The Division Bench of the Calcutta High Court comprising of A. C. Gupta and A. K. Mookerji JJ following the earlier decisions of the Calcutta High Court in GOVERNOR GENERAL IN COUNCIL V. ASSOCIATED LIVE STOCK FIRM (INDIA) LTD. A.I.R. 1948 CAL. 230 AND HINDUSTAN STEEL LTD. V. INGENIURS AND CONTRACTORS A.I.R. 1964 PAT. 468 held that the arbitration agreement did not indicate that the parties intended that in such circumstances the agreement would come to an end and therefore it was established on authority that there was no bar to the Court appointing arbitrator in such a case.;

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