- (1.) Civil Appeal No. 2070 of 1968 is by special leave by the appellants against judgment of the Punjab and Haryana High Court dismissing the appellant's petition for revising an order passed by the Subordinate Judge, Ambala City, allowing an application by the State, respondent, and appointing the Arbitration Committee. The appellants entered into an agreement with the Public Works Department, Punjab State, for execution of certain construction works in August, 1952. They entered into an agreement, Ex. A-1. The agreement provided an arbitration clause in the following terms:- "In the matter of dispute, the case shall be referred to the Settlement Committee consisting of a Superintending Engineer, an officer of the Finance Department of the rank of at least Deputy Secretary and an Accounts Officer, all to be nominated the Government for arbitration whose decision will be final." Disputes arose between the parties and the State of Punjab appointed a Settlement Committee by notification dated 31st January, 1958. The Settlement Committee entered upon the arbitration but before the Arbitration Committee concluded its work the State Government unilaterally abolished the Committee by an order dated 27th March, 1962. Subsequently by a notification dated 18th May, 1962, the State Government constituted a Committee giving the names of three officers with headquarters at Nangal. The new Committee took up the dispute as well as a claim made by the Government and issued notice to the parties. The new Settlement Committee passed an award on 25th July, 1962. The appellant challenged the validity of the award in the Civil Court. The Civil Court set aside the second Settlement Committee's award on the ground that it was made by the Committee even before the expiry of the time given by it to the appellant. Thereafter, the second Settlement Committee also ceased to function.
(2.) The State Government gave notice to the appellant under Section 8 (1) of the Arbitration Act to concur in the appointment of a fresh Settlement Committee to arbitrate the matter between the parties. The appellant did not respond to the notice. The State Government made an application to the trial Court for appointment of an arbitrator under Section 8 (2) of the Arbitration Act. The appellant raised two objections, namely that Section 8 was not applicable to the case and that by abolition of the first Settlement Committee the State Government had put an end to the arbitration clause agreed to between the parties by the agreement at Ex. A-1. The learned Judge rejected both the grounds and held that after the State Government withdrew the personnel of the first Settlement Committee they became incapable of acting and therefore the court was entitled to act under Section 8 (1) (b) of the Act. On the second point it held that the terms of the arbitration clause in the agreement Ex. A-1 did not justify reading into it the condition that the intention of the parties was that the vacancies in the Settlement committee for arbitration were not to be filled.
(3.) In the Revision Application before the High Court the appellant in effect raised the same contentions though in a slightly different form. The High Court agreed with the view of the trial Judge that when once the Government abolished the first Settlement Committee it became incapable of acting and Section 8 (1) (b) became applicable. It also agreed with the trial Court and found that there was nothing in the terms of the arbitration clause in Ex. A-1 to justify the contention that when once a Settlement Committee was appointed the power under he clause is exhausted. The High Court held that the trial Court was justified in proceeding under sub-section(1) of Section 8 in asking the appellant to give the names for consideration of the court for the reconstitution of the Committee and as the appellant did not give the names the trial Court was justified in accepting the names given by the State Government.;