- (1.) AMITAVA Lala, J. These are the appeals under Section 39 of the Arbitration Act, 1940 (hereinafter referred to as the 'act, 1940') arising out of the order's passed by the learned IInd Additional Civil Judge (Junior Division), Agra on 19th February, 1996 in Arbitration Petition Nos. 499 and 500 of 1995, M/s. Sheikhein International v. Agra Development Authority, Agra & Ors. Since both the appeals are similarly placed and connected with each other, the same are heard analogously and decided by this solitary judgment.
(2.) THE sole issue in the aforesaid appeals is that without giving adequate opportunity to the appellants the learned Judge appointed an arbitrator, thereby the orders impugned passed by the learned Court below are wholly without jurisdiction and are liable to be set aside. In this context the appellant relied upon the Clause-30 of the Contract, which provided an arbitration clause as follows: " (30) In case any dispute or difference shall arise between the Agra Development Authority and the contractor either during the progress of the work or after its completion or after the determination, breach of the contract concerning the work or execution thereof or as to the constructions or meaning of abondoment or these presents of the tender, drawings specifications or instructions herein before referred to or as to any other matter or things arising out of or connected with or incidental to the contract or the work to be executed or payments to be made in pursuance thereof then either party shall forthwith give to the other notice in writing of such dispute or difference and such dispute or difference shall be referred to an Arbitrator to be mutually agreed upon by the contractor and the Agra Development Authority. Upon every reference the cost shall be in the discretion of the Arbitrator. In the event of the parties not agreeing in the selection of an Arbitrator the Vice-Chairman of Agra Development Authority shall be asked to appoint a sole Arbitrator. THE award of such arbitrator shall be final and binding in both parties. " From the order's impugned we find that on the basis of mutual consent the matter was fixed for hearing in the Court for the purpose of appointment of arbitrator on the basis of the list of nominees given by both the parties before the Court. The Court was pleased to select one candidate from the panel of nominees of the respondents and appointed him arbitrator justifying his competency about the engineering matter. We further find that the appellants herein submitted to the jurisdiction of the arbitrator and participated in the arbitration proceedings. As contended before the Court, parties have agreed to adopt the arbitral proceeding under the new Act i. e. as per Section 85 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'act, 1996' ). Ultimately the award was passed on 3rd August, 1996. On 18th July, 1998 this appeal has been preferred challenging the original order of appointment dated 19th February, 1996. A question arose as to how the award could have been passed when an order of stay was in operation in this appeal at the relevant point of time. According to the respondents, the order of stay, which has been passed on 26th July, 1996, was received by the arbitrator only on 5th August, 1996 i. e. after passing the award. Section 39 of the old Act i. e. Act, 1940 speaks certain criteria for the purpose of preferring an appeal, which are as follows: (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (iv) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award.
(3.) THE order, which has been passed by the Court below, is under Section 20 of the Act, 1940. Such Section 20 speaks about the application to file arbitration agreement in the appropriate Court. Section 20 (4) of the Act, 1940 is significant in respect of the dispute herein, which is as follows: " (4) Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Courts. " However, by way of U. P. Amendment of Section 20 of the Act, the portion "shall order the agreement to be filed and" was omitted from the original section.;