UNION OF INDIA Vs. S N DAS PRIVATE LTD
LAWS(CAL)-1961-3-27
HIGH COURT OF CALCUTTA
Decided on March 24,1961

UNION OF INDIA Appellant
VERSUS
S.N. DAS AND BROTHERS (PRIVATE) LTD. Respondents

JUDGEMENT

P.C.Mallick, J. - (1.) THIS is an application under Section 20 of the Arbitration Act for filing an arbitration agreement. The arbitration clause in the contract between the parties is the usual arbitration clause. It is set out in extenso in paragraph 2 of the petition. The arbitration clause provides that the disputes shall be referred to the sole arbitration of the Director-General of Supplies and Disposals or some other person appointed by him. Disputes between the parties arose and by a notice under Section 80 of the Code of Civil Procedure dated December 14, 1959, the defendant intimated its intention to institute a suit for the recovery of the amount claimed in the notice, A copy of this draft plaint was annexed to the notice. The claim in dispute relates to three contracts. In answer to this letter, the Government reminded the defendant by its letter dated March 28, I960, that there was an .arbitration clause in the contract and the disputes were liable to be adjusted by arbitration, in terms of the said arbitration clause. Thereupon, by its letter dated June 28, 1960, the defendant appointed one J.B. Moulik, Chartered Accountant, as the arbitrator on its behalf. The Government by its letter dated July 13, 1960, in answer to the previous letter dated June 28, 1960, wrote as under: "Please note that I have this day on behalf of the purchaser, the President of India, appointed Shri R.R. Desai, Deputy Legal Adviser, (arbn..) Ministry of Law, Room No. 49-B, second floor, National Insurance Building, Parliament Street, New Delhi, as arbitrator to hear and determine the said disputes and differences. The appointment by the purchaser is, however, without prejudice to his right to contend that the said disputes and differences do not fall under arbitration, to raise all legal contentions open to him, to prefer his own counter claim in the said arbitration proceedings, to claim proof to the satisfaction of the arbitrator that the appointment of your arbitrator has been validly made and that reference is thus invalid."
(2.) IT appears that both the arbitrators sat together and appointed Mr. Dipankar Gupta, a member of the Bar, as Umpire. I understand that thereupon the arbitrators gave directions for filing statements by the parties and purported to proceed with the determination of the disputes. On September 22, 1960, Mr. S.D. Pyne, solicitor for the Government wrote a letter to R.R. Desai, who sent a copy of the minutes to Mr. S.D. Pyns, to the following effect: "Kindly refer to your order dated 29th ultima The above two A/Ts are subject to the General Conditions of Contract in WSB 133 and Clause 21 as amended at the date of the said A/Ts" provides for reference to arbitration to a single arbitrator. So the appointment of Shri J.B. Maulick by M/s. S. N. Das and Bros. (P) Ltd., was and is illegal, wrongful and unauthorised. In view of the wrongful attitude of the claimants the Government appointed you as the other arbitrator under protest and without prejudice. In these circumstances proceedings are being taken in Court under Section 20 of the Arbitration Act for filing the agreements and for reference to a single arbitrator as provided in the above A/Ts. The draft petition is before counsel for being finalised in the light of suggestions made by the department. The annual vacation of the Court has intervened. The Court is now closed and will reopen on 14th November next. Counsel engaged in this matter is also out of Calcutta during the vacation. After the Court reopens the application will be made. In the circumstances aforesaid may I request you not to take any further steps and proceed with the arbitration till the disposal of the application. You will be good enough not to insist on any statement and Counter statement being filed by the parties pursuant to your said order dated 29th ultimo till after the disposal of the application, as otherwise there will be unnecessary complications.'' On December 6, 1960, this notice was taken out by the Union of India for an order that the arbitration agreement be filed under Section 20 of the Arbitration Act. In the petition it is alleged that the Government is ready and willing to do all things necessary for the proper conduct of the arbitration, in terms of the agreement. It is submitted that the arbitration agreement be filed and an arbitrator appointed, in terms of the arbitration agreement.
(3.) THE defendant has opposed this application, on the ground stated in paragraph 12 of the affidavit of Sachindra Nath Das. In the said paragraph a case of waiver and estoppel is pleaded. It is alleged that the irregularity in appointing two arbitrators have been waived and the Government is estopped from contending now that the appointment of two arbitrators is invalid. Mr. Sen appearing to oppose on behalf of the defendant submitted that the act and conduct of the Government as evidenced by the letters summarised before disentitles the Government to ask for an order prayed in this application.;


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