J.N.Takru, J. - (1.) THIS is a revision application under Section 115 Civil Procedure Code and is directed against an order of the learned Munsif of Ghazipur dated 14th September, 1951, whereby he allowed the application made by the opposite party under section 33 of the Indian Arbitration Act, "1940.
(2.) THE facts giving rise to the aforesaid revision may be briefly stated as follows: THE parties to the dispute are the Eastern U. P. Electric Supply Company Ltd., Ghazipur and the Municipal Board of Ghazipur which we shall, for the sake of convenience hereinafter refer to as the Company and the Board respectively. On 30-5-1949 the Company filed an application supported by an affidavit under Section 33 of the Indian Arbitration Act, 1940 before the learned Munsif of Ghazipur, to which the Board, the District Magistrate, Ghazipur and the Electric Inspector to the Government of United Provinces were made opposite parties. THE application stated that the Company and the Board had entered into an agreement on 25-2-1939 by which the former undertook to supply electric energy to the latter for street lighting as well as for running its Water Works -- the rate stipulated for supplying energy for the Water Works was 131/2 pies per unit, the Board guaranteeing a minimum consumption of 50,000 units per year. THE agreement also contained an arbitration clause, being Clause (13), the material portion of which laid down that, "if and whenever any doubt, difference or dispute shall hereinafter arise in respect of this agreement ..... the matter in dispute shall be referred to a committee of arbitration consisting of the District Magistrate Ghazipur, the Electric Inspector to the Government of United Provinces, the Administrator or Chairman Municipal Board as the case may be, or their nominee, a representative of the Company, presided over by the District Magistrate of Ghazipur and the decision arrived at by such Committee of arbitration shall be final and binding on both the parties and shall be an award within the meaning of the Indian Arbitration Act, 1899, or any statutory amendment thereof for the time being in force....." Apparently no period had been fixed within which the Company had to commence the supply of energy, whether for street lighting or for the Water Works. The Company however installed some machinery and started supplying energy for street lighting from 15-7-1942. As for the Water Works the Board had been working them with Oil Engines but as a result of a breakdown in 1943 they were also connected with the electric mains of the Company, and the Company started supplying energy to the Water Works also. The Company, however, realised soon afterwards that it could not supply energy to the Board for running its Water Works at the rate of 13 1/2 pies per unit as the said rate was very low having regard to the fact that due to World War II the prices of all the commodities had risen very high -- a contingency which was not and could not be within the contemplation of the parties on the date of agreement. The Company, therefore, wrote to the Board that the said agreement relating to the Water Works had become void and inoperative in law as its performance had become impossible. The Board thereupon agreed to suspend the agreement dated 25-2-1939, and to execute a new one in lieu thereof; and a new agreement to that effect, which shall be referred to hereinafter as the Interim agreement, was executed on 1-10-1944 whereby the Board agreed to run its Water Works with its own Oil Engines during the period of that interim agreement and to use electric energy only in case of accident or failure of the said Oil Engines. The Interim agreement also contained an arbitration clause, Clause (ii) similar in its terms to those of Clause (13) of the Original agreement. Disputes having arisen between the parties during the subsistence of the interim agreement with regard to the payment of the Company's bills for current supplied to the Water Works, the Company wrote to the District Magistrate, Ghazipur to refer the matter teethe arbitration of the Arbitration Committee as provided in Clause (11) of the Interim agreement. The District Magistrate did not take any action on this application and by his letter dated 27-3-1947 informed the Company that as the Interim agreement was to expire on 31-3-1947 no action could be taken in that connection within the short time which remained available. During this very period another dispute had arisen between the parties regarding the Company's bills for extra hours of street lighting. This time the Board by its letter dated 31-3-1947 addressed to the District Magistrate asked him to refer that dispute also to arbitration. The Company objected to that reference on the ground that as the Interim agreement had expired on 31-3-1947, all rights and liabilities which had accrued to the parties during the period covered by that agreement, could only be decided by the ordinary law of land and not under the arbitration clause contained in the Interim agreement. The Company further addressed letters to the District Magistrate of Ghazipur dated 22-4-1947 and 6-7-1948, to the same effect, but in spite of those letters the District Magistrate appeared to be willing to proceed with the arbitration and had fixed 4-9-1948 for a meeting of the Arbitration Committee and the Electric Inspector to the Government of United Provinces had also been informed to attend and take part in the same. The Company's application then goes on to say that one of the terms of the Interim agreement was that the parties could, with mutual consent, extend the period stipulated therein by one year after the termination of the War, but it was asserted that even after that period of one year the situation far from being normal was as a matter of fact worse and that it was impossible for the Company to supply energy for the Water Works at the extremely low rate of 13 1/2 pies per unit. The Company thereupon intimated to the Board that it was not possible for it to supply energy to the Water Works after 1-4-1947 and that as such the Water Works connection which was permitted under the terms of the Interim agreement would be disconnected on the date of which the Interim agreement came to an end. On receipt of this notice the Board made another reference to the Arbitration Committee under Clause (13) of the Original Agreement dated 25-2-1939. The main objections of the Company to the said reference were: (1) that the agreement for the supply for energy to the Water Works had became void and inoperative in law and had ceased to exist on account of the doctrine of frustration, and (2) that since the agreement regarding the supply of energy to the Water Works had become void and in-operative in law, the arbitration clause which was a part thereof had also ceased to exist, and the parties thereto were relieved of all their rights and liabilities under the said agreement.
(3.) THE company, therefore, prayed that the Court would be pleased to enquire into and determine the following questions under Section 33 of the Indian Arbitration Act, 1940: (i) Whether there was any arbitration agreement for referring disputes of the nature referred to above by the Municipal Board to an Arbitration Committee? (ii) If so, whether such agreement subsists?;