NANDYAL CO OP SPINNING MILLS LTD Vs. K V MOHAN RAO VISAKHAPATNAM
LAWS(APH)-1992-10-11
HIGH COURT OF ANDHRA PRADESH
Decided on October 12,1992

NANDYAL CO-OP SPINNING MILLS LTD., NANDYAL Appellant
VERSUS
K.V.MOHAN RAO, VISAKHAPATNAM Respondents




JUDGEMENT

- (1.)THIS revision petition is filed against the orders of the Subordinate Judge, Nandyal in O.P.NO.167 of 1988 appointing an arbitrator on the petition filed by the first respondent under Section 8 of the Arbitration Act.
(2.)THE first petitioner is the Nandyal Co-operative Spinning Mills Limited and the second petitioner is its Managing Director. In 1986, the first petitioner called for tenders for construction of ancillary building. THE first respondent was given the contract for constructing the building for an amount of one crore rupees. THE contract was concluded on 11-2-1986 stipulating that the building should be completed within a period of 14 months. On 22-5-1987 the first respondent, who is the contractor, gave an application to the petitioners for extension of time for completion of the contract till 31-10-1987 and later on, on 27-7-1987 the contractor addressed a letter to the petitioners to refer certain disputes to arbitration. THE petitioners sent two letters dated 8-8-87 and 18-8-87 stating that the matter is under consideration. On 17-8-1987 the first respondent, who is, the contractor requested the petitioners for appointment of an arbitrator to which the petitioners replied on 18-11-1987 stating that the matter is under consideration. THEreafter, on 7-4-1988, the first respondent filed a petition O.P.167/88 in the Court of the Subordinate Judge, Nandyal to appoint an arbitrator. Subsequently on 27-5-1988 the petitioners appointed an arbitrator by name Sri Yethiraj who is working as Superintending Engineer in the Bharat Heavy Electricals Limited at Hyderabad.
The contentions of the petitioners who were the respondents in the O.P are that since Clause 65(1) of the agreement provides that the arbitrator shall be appointed only by the Administrtive Head, that is, the Managing Director of the petitioners-Company, he alone is competent to appoint the arbitrator and therefore, the Court has no power under Section 8 of the Arbitration Act to appoint an arbitrator. The second contention is that since the Managing Director of the petitioners-Company has already appointed the arbitrator viz., Sri Yethiraj, the petition became infructuous.

(3.)THE learned Subordinate Judge considered Clause 65(1) of the agreement, Section 8 of the Arbitration Act and various decisions cited before him and came to the conclusion that since the Managing Director has not appointed the arbitrator within a period of 15 days as per the notice dated 18-9-87 given by the contractor, the contractor is entitled to file an application under Section 8 of the Arbitration Act. He also directed that as per Clause 65 (1) of the agreement that only the Managing Director shall appoint the arbitrator is unreasonable and arbitrary and therefore, the Court has got power to appoint the arbitrator under Section 8 of the Arbitration Act. As regards the second contention, he took note of the allegation by the Contractor that the arbitrator, that is, Sri Yethiraj is biased inasmuch as he is connected with M/s. Siri Consultents who are the consultants of the Bharat Heavy Electricals Limited and the petitioners herein and he is also the stock arbitrator for the petitioners and held that in such circumstances it is not proper that Sri Yethiraj should continue as arbitrator since one party had no confidence in him. Ultimately, the lower Court appointed Sri Justice C. Sree Ramulu, retired Judge of this Court as arbitrator with a direction that the arbitrator can take the assistance of a technical person, if necessary.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.