Sudhir Narain, J. - (1.) This appeal is directed against the order of the Court below appointing the arbitrator on an application being filed by the applicant-respondent under Section 8/20 of the Arbitration Act. 1940 (in short the Act).
(2.) The appellant invited tender for construction of Katiyari Siphon in kilometers 28.425 of E.G.C., district Bijnor. The respondent submitted its tender. It was accepted to the appellant. The parties executed a written agreement on 23.3.1984. The agreement contained an arbitration clause and was incorporated in clause 44C of the agreement which reads as under : "Every dispute, difference or question which may at any time arise between the parties hereto or any person claiming under them touching or arising out or in respect of this deed of the subject matter thereof shall be referred to the arbitration of Additional Chief Engineer of the project or any person nominated by him. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matters to which the contract relates and that in the course of his duties as Government servant he had expressed views on all or any of the matters in dispute or difference. In the event of the arbitrator to whom the matter originally referred being transferred or vacating his office or being unable to act for any reason Additional Chief Engineer of the project shall either enter upon the reference himself or appoint another person to act as arbitrator. Such person shall be entitled to proceed with the reference from the stage it was left by his predecessor. It is also a term of this contract that no person other than a person appointed as aforesaid should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000 (Rupees fifty thousand only) and above the arbitrator shall give reason for the award."
(3.) The appellant raised a dispute in regard to the payment made by it. The respondent referred the matter to the Additional Chief Engineer regarding its claim of balance dues on 15.9.1988. The Additional Chief Engineer did not proceed with the matter. The respondent, after waiting for about 6 months, gave a notice to the Additional Chief Engineer on 31.12.1988 for adjudication of the dispute between the parties by arbitration within one month but he neither entered upon the reference nor passed any order. The respondent firm after expiry of one month from the date of the service of the said notice, presented an application before the Court under Section 8/20 of the Act for appointment of an arbitrator.;