SASANKA SEKHAR RAKSHIT Vs. ASHATARU DAS
LAWS(CAL)-1981-9-37
HIGH COURT OF CALCUTTA
Decided on September 04,1981

Sasanka Sekhar Rakshit Appellant
VERSUS
Ashataru Das Respondents


Referred Judgements :-

JUSTIN HULL V. ARTHUR FRANCIS PAUL [REFERRED TO]
KAMESHWAR SINGH V. NEBILAL MISTRI [REFERRED TO]
RALLIARAM DINGRA V. GOVERNOR GENERAL OF INDIA IN COUNCIL [REFERRED TO]
HUXLEY V. WEST LONDON EXTENSION RLY. CO. [REFERRED TO]
SMEATON HANSCOMB & CO. LTD. V. SASSON I. SETTY,SON & CO. [REFERRED TO]
PERRY V. STOPPER [REFERRED TO]
SOLI PESTONJI MAJOO VS. GANGADHAR KHOMKA [REFERRED TO]
UPPER GANGES VALLEY ELECTRICITY SUPPLY COMPANY LIMITED VS. U P ELECTRICITY BOARD [REFERRED TO]
SUNIL MUKHERJEE VS. UNION OF INDIA [REFERRED TO]
P SHEIK BATCHA ROWTHER VS. N R ALAGAPPAN SERVAI [REFERRED TO]


JUDGEMENT

Sabyasachi Mukharji, J. - (1.)This is an application for a declaration that the award dated 18th March, 1981 made by the Arbitrator, Sri Sanjib Kumar Dutt, was without jurisdiction, void and alternatively, the said award be set aside and further and consequential orders. In order to appreciate the application it would be necessary to refer to the facts. On or about 20th March, 1976, an agreement was entered into between the petitioner and the respondent. The said agreement, inter alia, contained the following terms:-
"20. That all disputes and differences arising between the partners or between the surviving partners on the one hand and the heir/heirs executor/executors or legal representative/legal representatives of the deceased partner on the other hand with regard to this partnership business and/or the terms of this deed shall be referred to a Board of Arbitration. The provisions of the Indian Arbitration Act or any statutory modifications thereof the then substituting shall apply."

(2.)It appears that disputes and differences arose between the parties and on 17th April, 1979, the respondent wrote a letter to the petitioner claiming certain sums of money and suggesting the name of a learned Advocate as Arbitrator and asking the petitioner to agree therein. As the petitioner did not do so, an application was made on the 29th May, 1979 under sections 8 and 9 of the Arbitration Act, 1940 by the respondent for appointment of an Arbitrator or Arbitrators to adjudicate upon the disputes. On or about 6th August, 1979 an order, by consent of the parties, was passed and Sri Sanjib Kumar Dutt, an Advocate of this Court, was appointed the Arbitrator on a remuneration of 30 GMs per sitting irrespective of hours of sitting payable by both parties equally, that is, 15 GMs each. The Arbitrator was directed to make and submit the award within 4 months from the date of entering into the reference and the parties were asked to act on the signed copy of the minutes. Thereafter, the petitioner made an application under section 33 of the Arbitration Act, 1940, which was dismissed. On the 20th July, 1980 the respondent made an application after several sittings had been held, viz. after 41 sittings, claiming that the arbitration proceedings had been protracted and lengthy and the authority of the Arbitrator be revoked. Order was passed on the said application on 2nd Sept., 1980 by the Court giving certain directions for filing of the documents and extending the time of the Arbitrator to make the award. It is not necessary to refer in detail to the said order. Thereafter the Arbitrator proceeded with the matter and made his award which is the subject-matter of challenge in this application. It may be mentioned that in the arbitration proceeding, the respondent had claimed an award for a sum of Rs. 64, 493.82. The Arbitrator by his award has awarded and inter alia directed the petitioner to pay to the respondent a sum of Rs. 17,194/- as share of the profit in respect of the three tenders covered by the said agreement. He has further directed that an amount of Rs. 20,000.00, as assessed cost of the arbitration, should be paid by the petitioner to the respondent. In this application made on the 10th June, 1981, the said award is under challenge.
(3.)The first ground upon which the said award is challenged is that the arbitration agreement did not provide for appointment of an Arbitrator, by consent of the parties, and in view of absence of such a provision in the arbitration clause, it was contended, the Court had no jurisdiction under sections 8 and 9 or any other provisions of the Arbitration Act to appoint an Arbitrator and make a Reference. It was submitted that the orders passed by this Court in the proceedings taken in the Court and in the proceedings before the Arbitrator were all void and without jurisdiction and the consent of the petitioner, as such, in making the appointment as well as in participating in the arbitration proceedings would be of no avail. In aid of this submission, reliance was placed on the decision of Division Bench of this Court in the case of Sunil Mukherjee Vs. Union of India, AIR 1978 Cal 37 . There, the arbitration agreement between the contractor A and the railway for the purpose of appointing two arbitrators to whom the disputes were to be referred the railway was to send a panel of more than three names of railway officers to A and out of the said panel A would suggest a panel of three names out of which the General Manager would appoint one arbitrator as A's nominee and then only the General Manager would appoint a second arbitrator of equal status as the railways' nominees without A's consent of any kind. When dispute arose between the parties A called upon the railway to appoint the arbitrators in terms of the agreement for adjudication of the dispute and ultimately on A's application under section 8 of the Arbitration Act, the High Court appointed two arbitrators and directed a reference. It was held by the Division Bench of this Court that section 8 was only applicable in case where the arbitration agreement provided for a reference to two arbitrators to be appointed by the consent of the parties. It could not be said that under the arbitration agreement in question the arbitrators were to be appointed with the consent of the parties and therefore neither section 8 nor any other provision of the Act was applicable. The application under section 8 could not be entertained and the order of the Court appointing the arbitrators and directing the reference under section 8 was therefore held to be without jurisdiction and was a nullity and void and the award made by the arbitrators was held to be without jurisdiction and nullity. It was further observed that the Court had no inherent jurisdiction to appoint arbitrators as its power was regulated by the statute. The fact that A himself had made an application under section 8 and had participated in the arbitration proceedings could not estop him from raising the question, it was held, of want of jurisdiction in the Court under section 8 and could not confer jurisdiction on the Court when it did not possess it. It appears to me that the ratio of the principle of the said decision would have no application to the facts and circumstances of this case. In this case I have set out hereinbefore the arbitration clause and read in a reasonable and proper manner, in my opinion, it could be inferred that the parties intended that the reference would be by the Board of Arbitration and if agreed between the parties the Board might be consisting of a single member or more than one members. The provision of the Indian Arbitration Act would apply, only indicated that thereafter the provisions of the Indian Arbitration Act would govern. This is a reasonable and probable construction. This construction is also borne out by the subsequent conduct of the parties in the participation of the various proceedings as I have indicated hereinbefore. In that view of the matter, I am unable to accept the contention that the order appointing the arbitrator made by this Court was without jurisdiction though it was passed with the consent of the parties. The arbitration clause in this case read properly permitted the appointment of arbitrator by consent of the parties in the facts and circumstances of this case. In that view of the matter, the first contention urged in support of this application must be rejected.


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