Satyabrata Sinha, J. - (1.) This matter has been referred to the Full Bench by a Division Bench of this court for answering the following questions of law:- "1. Does the Arbitration Act, 1940 permit an appeal under Section 39(1) of the said Act from an Order directing reference of the disputes to an Arbitrator not appointed under the Arbitration Agreement not agreed to by the parties when the Court by an earlier Order already directed filing of the said Arbitration Agreement and directed reference to an Arbitrator against which no appeal has been preferred 2. If the answer to the above question is in the negative, is such an order appealable as judgment under Clause 15 of the Letters Patent 3. Does an appeal lie from the Order passed under the Arbitration Act, in case not covered by Section 39(1) of the said Act, under Clause 15 of the Letters Patent where no question of jurisdiction involved 4. Was the case of (1) Messrs Unit Construction Co. Pvt. Ltd. v. University of North Bengal, reported in 1986(2) Calcutta High Court Notes 275 , correctly interpreted the decision of Supreme Court in (2) Babulal Khimji's case, reported in AIR 1981 Supreme Court 1786 and the case of the (3) Union of India v. Mohindra Supply Co., reported in AIR 1962 Supreme Court 256 5. Has the case of Messrs Unit Construction Co. Pvt. Ltd. v. University of North Bengal , (ibid) correctly decided that although no appeal lies under Section 39(1) of the Arbitration Act, there may be an appeal under Clause 15 of the Letters Patent."
(2.) The fact of the matter lies in a very narrow compass. The parties, admittedly, entered into an agreement on 15.6.1973 for execution of earth work information, bridge work and miscellaneous works. The said contract contains an arbitration agreement, which reads as follows:- "Clause 63(1) : "If the contractor be dissatisfied with the decision of the Railway on any matter in question dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to or if the Railway fails to make a decision within a reasonable time, then and in any such case but except in any of the Excepted Matters referred to in Clause 63 of those conditions, the contractor shall within 10 days of the receipt of the communication of such decision or after the expiry of the reasonable time as the case may be, demand in writing that such matter in question, dispute or difference be referred to Arbitration. Such demand for Arbitration shall be delivered to the Railway by the Contractor and shall specify the matters which are in question, dispute or difference and only such dispute or difference for which the demand has been made and no other shall be referred to Arbitration. (2) Work under contract, shall otherwise directed by the Engineer, continue during the Arbitration proceedings, and no payment due or payable by the railway shall be withheld on account of such proceedings provided however it shall be open for the Arbitrator or Arbitrators to consider and decide whether or not such work should continue during Arbitration proceeding. (a) Matter in question, dispute or difference to be arbitrated upon shall be referred for decision to:- (i) A Sole Arbitrator who shall be the General Manager or a person nominated by him in that behalf in cases where the claim in question is below Rs. 3,00,000/- and case where the issues involved are not of a complicated nature. The General Manager shall be the sole Judge to decide whether or not the issues involved are of a complicated nature. (ii) Two Arbitrators, who shall be Gazetted Railway Officers of equal status to be appointed in the matter laid down in Clause (3)(b) for all claim of Rs. 3,00,000 and above, and for all claims irrespective of the amount or value of such claims if the issues involved are of a complicated nature, the General Manager shall be sole Judge to decide whether the issues are of a complicated nature or not. In the event of the two Arbitrators being divided in their opinions the matter under dispute will be referred to an Umpire to be appointed in the manner laid down in Clause (3)(b) for his decision. (b) For the purpose of appointing two Arbitrators as referred to in sub-clause (a)(ii) above, the Railway will send a panel of more than three names of Officers of the appropriate status of different departments of the Railway to the contractor, who will be asked to suggest, panel of three names out of the list so sent by the Railway, the General Manager will appoint one Arbitrator out of this panel as the Contractor's nominee and then appoint a second Arbitrator of equal status as the Railways' nominee either from the panel or from outside the panel ensuring that one of the two Arbitrators so nominated is invariably from the Accounts Department. Before entering into reference, between the two Arbitrators. (c) The Arbitrator or Arbitrators or the Umpire shall have power to call for such evidence by way of affidavit or otherwise as the Arbitrator or Arbitrators or Umpire shall think proper, and it shall be the duty of the parties what to do or cause to be done all such things as may be necessary to enable the Arbitrator or Arbitrators or Umpire to make the Award without any delay. (d) It will be no objection that the person appointed as Arbitrator, Arbitrators, the Umpire are Government Servants and that in the course of their duties as Government servants they have expressed any view on all or any of the matter in dispute. (e) Subject as aforesaid, Arbitration Act, 1940, and the Rules thereunder and any statutory modification thereof shall apply to the Arbitration Proceedings under this Clause."
(3.) The respondent-firm filed an application on 2.3.1982 before this Court under Section 20 of the Arbitration Act praying therein that the respondents be directed to file the aforementioned arbitration agreement dated 15.6.1973 and for appointment of an Arbitrator in terms thereof. Pratibha Bonnerjea, J., by an order dated 23.6.1982 directed the respondent to file the said Arbitration Agreement. It was further directed therein that the Arbitrators would be appointed in terms of the arbitration agreement and the appellant was directed to submit a panel of names of Arbitrators to the claimant within three weeks from the said date whereupon the Arbitrators were to enter upon reference forthwith and to pass an award within 6 months from the date of entering into reference. According to the appellant, the Law Officer of the South Eastern Railways requested the Ministry of Law for extension of time for three weeks on 28.7.1982 so as to enable them to comply with the said order whereupon the matter was mentioned and by an order dated 28.7.1982 Pratibha Bonnerjea, J. while rejecting the prayer of the appellant appointed Sri P.K. Pal, Barrister-at-Law as the Sole Arbitrator and directed him to make an award within 6 months.;