A.N. Grover, J. - (1.) THIS is a petition for revision which is directed against an order of Shri H.C. Gupta, Subordinate Judge, 1st Class, Delhi, by which he has held that the arbitration agreement entered into between the Union of India and the Petitioner firm on 1st September, 1947, has come to an end and has been rendered ineffective. He has further revoked the reference of the arbitration agreement. The facts lie within a narrow compass. By an agreement dated 1st September, 1947, the Petitioner firm was granted a licence for running a cinema in the Indian Air Force Campus (I.A.F. Station, New Delhi). The agreement was to remain in force for a period of five years. It contained an arbitration clause in the following terms: In case of disputes arising between the first party and the second party (the settlement of which has not hereinbefore been specifically provided for) the matter shall be referred to the Air Marshal Commanding and such arbitration shall be governed by the Indian Arbitration Act for the time being in force.
(2.) AFTER the expiry of five years the Union served a notice on the Petitioner under the Government Premises Eviction Act, 1950 for delivery of possession of the premises to the Government. In the year 1955 the Petitioner filed an application under Section 20 of the Indian Arbitration Act for filing of the arbitration agreement and for referring certain disputes which had arisen to the Arbitrator. The disputes inter alia were that the Petitioner was not liable to be evicted from the premises in its occupation and that in any case it was entitled to receive compensation for several improvements, fittings and fixtures made and installed by it before it could be asked to vacate the premises. The Petitioner also sought an interim injunction restraining the Government from evicting it from the premises during the pendency of the reference. On 26th May, 1955. Shri Asa Singh Gill. Subordinate Judge. 1st Class, made an order restraining the Government from evicting the Petitioner till an award was made by the Arbitrator. The Government appealed from the order granting interim injunction but it was dismissed by the High Court. In terms of the arbitration agreement a reference was made to Air Marshal S. Mukerji. The Petitioner did not file its statement of claim before the Arbitrator till 9th January. 1959. According to the Court below, it further delayed the proceedings and the issues could not be settled till 24th October, 1959. Air Marshal Mukerji unfortunately died on 8th November, 1960. His successor Air Marshal A. M. Engineer declined to act as an Arbitrator by means of a letter, dated 2nd April, 1961. He was succeeded by the present Air Marshal Arjan Singh, who is now designated as Chief of the Air Staff. He was requested in December, 1964, to act as an Arbitrator but he refused to do so.
(3.) ON 2nd April, 1965, the Union of India filed an application under Sections 5. 31(2), 33 and 41, read with Schedule IT of the Indian Arbitration Act and Order XXXIX. Rule 4 and Section 151, Code of Civil Procedure, praying that in the circumstances most of which have been mentioned above the arbitration agreement be declared as having ceased to have effect and that the agreement and the reference be revoked. A prayer was also made for the interim injunction to be vacated. This application was resisted by the Petitioner. It was maintained on behalf of the Petitioner that the arbitration agreement was still subsisting and that there was no intention in the agreement not to supply the vacancy on the death of the Arbitrator or on his refusing to act. The following three issues were framed: (1) Whether M/s A.M. Engineer and Air Marshal Arjan Singh refused to act as arbitrator, if so, to what effect? (2) If issue No. 1 is proved, whether the reference to arbitrator does not subsist? (3) Relief.;