Bose, CJ. - (1.) THIS is an appeal from an order of Mallick, J. dated the 19th July 1963 staying a suit under Section 34 of the Arbitration Act, 1940.
(2.) THE appellant who is a contractor under the Controller of Stationery, Government of India, entered into certain contracts with the Controller of Printing and Stationery, Calcutta representing the respondent Union of India for the supply of envelopes, flaps ungummed of different sizes and for the supply of exercise books etc. and deposited a sum of Rs. 12,777/- as security money. THE contracts contained an arbitration clause being Clause XVII of the general conditions of contract. THE said arbitration clause is as follows: (XVII). Arbitration--"Except where herein otherwise provided any dispute or difference arising; during or after the subsistence of this contract touching any clause, matter or thing herein contained, or the operation or construction hereof, or the rights, duties or liabilities of either party under or in connection therewith shall be referred to the arbitration of the Secretary to the Government of India, Ministry of Works, Housing and Supply and if the Secretary to the Government of India, Ministry of Works, Housing and Supply is unable or unwilling to act to the sole arbitration some other person appointed by the Secretary to the Government of India, Ministry of Works, Housing and Supply willing to act as such Arbitrator. It will be no objection to any such appointment that the Arbitrator so appointed is a Government servant, that he had to deal with matters to which this agreement relates and that in course of his duties as such Government servant he had expressed views on all or any of the matter in dispute or difference. THE Award of the Arbitrator so appointed shall be final, conclusive and binding on all parties to this contract. The appellant manufactured and supplied the requisite stationery in terms of the said contracts and submitted bills. As the respondent failed to pay a sum of Rs. 10,193.30 nP. being the outstanding balance in respect of the said bills and also failed and neglected to refund the security deposit of Rs. 12,777/-, disputes and differences arose between the parties and on the 8th January 1961 the appellant referred the disputes and differences relating to the said claims to the Secretary to the Government of India; Ministry of Works, Housing and Supply in terms of the arbitration agreement, but no reply was received by the appellant to the letter written to the Secretary till the 3rd July 1961 when the appellant sent a reminder to the Secretary, but as this letter also was not replied to, the appel lant made an application to this Court on the 28th August 1961 for appointment of an Arbitrator under Section 8 of the Arbitration Act, 1940. During the pendency of the said application, on or about the 15th/19th September 1961 the Secretary appointed one Sri K. R. Desai as an Arbitrator in respect of the said reference. On the 28th September 1961 Sri Desai purported to enter on the reference and directed the appellant to file a statement of claim by the 3rd October 1961 or to adopt the statement of claim which he had submitted to the Secretary when the reference was made and which was already on record. On the 4th December 1961 the said application for appointment of Arbitrator which was made by the appellant was dismissed inter alia on the ground that Sri Desai was already appointed the Arbitrator by the Secretary. On the 14th December 1961 Sri Desai again asked the appellant to file his claim by the 15th January 1962. On the 10th January 1962 Messrs. J.K. Sarkar and Co., solicitors for the appellant, wrote to Sri Desai stating that his appointment as Arbitrator was bad and that he had no jurisdiction to act in the matter. On the 26th March 1962 an application was made by the respondent Union of India for extension of time to make the award, the prescribed period having expired in the meantime. On the 31st May 1962 a notice under Section 80 of the Code of Civil, Procedure was issued by the appellant for the filing of a suit against the respondent Union of India for Rs. 22,970.30 np. in respect of the said balance of claim and refund of the security deposit. On the 29th August 1962 Sri Desai resigned the office of Arbitrator. On the 17th September 1962 the application for extension of time to make the Award was disposed of and no order was made on the said application to extend the time. On or about the 10th December 1962 the Secretary appointed one Sri V. Ramaswami Iyer as the Arbitrator in place of the said Sri Desai. On the 11th December 1962 Sri Iyer purported to enter on the reference and directed the appellant to file a statement of claim by the 31st December 1962. On the 20th December 1962 Messrs. J.K. Sarkar and Co., solicitors for the appellant, wrote to Sri Iyer challenging his appointment as bad. On the 21st January 1962 (1963?) Sri Iyer again directed the appellant to file his statement of claim by the 5th February 1963. On the 22nd January 1963 J.K. Sarkar and Co. again wrote to the Arbitrator objecting to his jurisdiction to proceed with the reference and on the Ist February 1963 another letter was written by the said solicitors to Sri Iyer to the same effect. On the I5th February, 1963 Sri Iyer wrote a letter to the parties fixing Ist of March 1963 for hearing of the reference. By a letter dated the 23rd February 1963 J.K. Sarkar and Co., informed the Arbitrator that a suit being suit No. 323 of 1963 had already been filed against the Union of India and so the Arbitrator should not proceed with the reference. On the Ist March 1963 the hearing of the reference was adjourned till the 8th March 1963 and on the last mentioned date the arbitration proceedings were adjourned, sine die in view of the fact that a suit had already been filed. On the 8th March 1963 the Union of India was served with a summons in the said suit and on the 10th May 1963 the respon dent made an application for stay of the suit under Section 34 of the Arbitration Act. After the affidavits were filed, the application came up for hearing before Mallick, J. who by his order dated the 19th July 1963 stayed the suit filed by the appellant. It is against this order that the present appeal has been preferred.
(3.) THE first point which has been urged by the learned counsel for the appellant is that the power of appointment which was conferred by the arbitration clause upon the Secretary, Ministry of Works, Housing and Supply, was extinguished after it was once exercised and the Secretary having appointed Sri Desai, his power was exhausted by this single execution and he was not competent to make a second appointment. Reliance is placed in support of this argument on a passage in Russell on Arbitration (17th Edition) p. 215 and on the case of Oliver v. Coilings, (1809) 11 East 367: (sic) ER 1045 and on the case of Reynolds v. Gray, (1697) 91 E R 1045. THE passage in Russel is as follows : "But appointment of an Umpire which has become effectual by acceptance of the office exhausts the power of appointment, and the appointers have no power to revoke the appointment made or to make a fresh appointment in place of it; if the person appointed then will not act, recourse must be had to the Court.";