- (1.) BY these two revision applications, the applicants challenge the order dt. 17-12-1979 and 29-7-1980 by which the trial Courts, acting under S.8 of the Indian Arbitration Act, appointed arbitrators by virtue of cl.9 which was an arbitration clause in two agreements between the applicants and the opponents in the two cases.
(2.) IN Civil Revision Application No.107 of 1980, the position was that the parties entered into an agreement on 4-6-1976 for transporting sand for Chanda Rayatwari Colliery which was owned by the applicants. The work commenced and was completed on 27-1-1977. The final bill was also paid to the opponent in that case and the bank guarantee for Rs. 50,000/- was also released. However, about one-and-a-half years after that was done, the opponent M/s.Harichand Rai sent a notice dt.16-9-1978 contending that there was a dispute and calling upon applicant No. 1 to appoint an arbitrator for settlement of the alleged dispute. A reply was sent by the applicants on 28-2-1979 contesting the notice. An application was thereafter made by the opponent for appointment of an arbitrator to the learned Judge, and by an order passed on 17-12-1979, Shri Kamal D. Kanal, an Engineer from Nagpur, was appointed as an Arbitrator and he was directed to file his award within four months from the date of the order. In Civil Revision Application No. 470 of 1980, the transportation contract between the opponent-Tilakraj Kesarlal Thapar and the applicants was executed on 13-4-1978. Tilakraj Thapar was to furnish a security of Rs. 57,120/- for due performance of the contract. As he was unable to perform the contract within the time prescribed, the time being of the essence of the contract, a notice was sent to him. In order to avoid forfeiture of the bank guarantee, Tilakraj Thapar sent a notice on 1-4-1980 to the applicants, urging that there was a dispute regarding the contract and that he was entitled to Rs. 50,000/- as damages and asking applicant No. 1 to appoint an Arbitrator, pursuant to clause 9 or the agreement dt. 13-4-1978. Applicant No. 2, by his letter dt. 24-4-1980, repudiated the claim and Tilakraj Thapar filed an application for appointing an arbitrator. Though this application was resisted, an order came to be passed on 17-12-1979 appointing Shri R. K. Tambe as an Arbitrator and directing him to submit his award.
(3.) THESE two orders are being challenged by the two revision applications on identical grounds. The arbitration cl. No. 9 in the two agreements runs as follows: "ARBITRATION : If any dispute, question of controversy, the settlement of which is not herein specifically provided for, shall any time arise between the Western Coalfields Ltd., and the contractor/contractors, touching this agreement or any clause or anything herein contained on the construction thereof or any matter connected with this agreement or the operation of the same or the rights or duties or liabilities of either party, then and in every such case either party, shall forthwith give to the other notice of such difference and such dispute or difference shall be referred to an arbitrator nominated by the Managing Director of the Western Coalfields Ltd. and the award of such arbitrator shall be final and binding on the parties. Progress of the work shall not be suspended or delayed on account of the reference of any dispute or difference to arbitration under this clause." The trial Courts took the view that the opponents were entitled, by virtue of S. 8 of the Arbitration Act, to appoint an arbitrator. S. 8 of the Arbitration Act reads as follows :- "8.(1) In any of the following cases : (a) Where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or (b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or that the vacancy should not be supplied and as the case may be, the parties or the arbitrators do not supply, or the person designated does not under sub-sec. (3) of S. 4 supply the vacancy, or (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. (2) If the appointment is not made within fifteen clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties.";