- (1.) THIS is an application under section 33 of the Arbitration Act inter alia for declaration that the arbitration clause contained in the contract dated the 20th of April, 1971 is invalid and void, for declaration that the appointment of Sri S. Sinha as the sole Arbitrator is invalid and without jurisdiction. Alternatively appointment of said sole Arbitrator be set aside and liberty given to the petitioner to appoint an arbitrator, for injunction and other reliefs.
(2.) THE facts of this case which lies on a very short compass as it involves the interpretation of the arbitration clause in the contract and the effect of superstition of an authority under a west Bengal Act. The admitted facts are that the tender submitted by the respondent messrs K. C. Anand and Co. in respect of certain works known as Tollygunge storm and drainage project construction was accepted by the Calcutta Metropolitan Water and Sanitation Authority, a body corporate constituted under the West Bengal Act, (XIII) of 1956 and a formal contract dated the 20th of April, 1971 was entered into between the said authority hereinafter referred to as "c. M. W. S. A. " It appears that the respondent alleged to have completed the work under the said contract but certain disputes arose relating to the same and by a letter dated the 31st of January, 1974 the respondent called upon the then Chairman of "c. M. W. S. A. " to settle the disputes in terms of Clause 35 of the general Condition of Contract which is set out here under : "cl. 35. ARBITRATION: if any dispute or difference of any kind whatsoever shall arise between the Authority and the Contractor in connection with or arising out of the contract or construction or the carrying out of the works (whether during the progress of the works or after their completion but during the maintenance period and whether before or after the determination, abandonment or breach of the contract)ii shall be referred to and the settled by the Chairman who shall give his decision in writing within 90 days and give notice of the fame of the contractor. Such decision in respect of every matter so referred to shall be final and binding on all parties to the contract until the completion of the work and maintenance thereof and shall forthwith be given effect by the Contractor who shall proceed with the works with all due diligence whether notice of dissatisfaction is given by him or not. If, however, the contractor is dissatisfied with any such decision of the Chairman, he may within thirty days after receiving notice of such decision give notice in writing to the Authority that he is dissatisfied with the decision. If no such notice of dissatisfaction is given within the said period the decision shall riot hereafter be open to question and shall be final and binding upon the contractor. If such notice of dissatisfaction with any such decision of the Chairman be given within the said period of 30 days, the dispute or difference upon which such decision has been given shall be referred to two Arbitrators (one to be appointed by the Authority and the other by the contractor) with an Umpire to be appointed by the said Arbitrators. The reference shall be made in accordance with the provisions of the Arbitration Act, 1940 (Act. No, X of 1940) of the Central Legislature or any re-enactment or statutory modification thereof provided however that the Umpire shall be appointed in writing before entering on the reference. Such Arbitrators or Umpire as the case may be whose decision shall be final and binding shall have full power to open up, review and revise any decision, opinion, direction, certificate of valuation of the chairman and neither party shall be limited in the proceeding before such Arbitrators or the Umpire to the evidence or arguments put before the Chairman for the purpose of obtaining his decision above referred to. Such reference except as to the with holding by the engineer of any certificate or the withholding of any portion of the security Deposit to which the Contractor claims to be entitled or as to the exercise of the General manager's power under clause 33, titled "action when entire security deposit becomes payable to the authority, shall not, unless agreed to by the Authority and the Contractor in writing be opened until after the completion or alleged of the works, provided always that the giving of a certificate of completion under the provisions of these general Conditions shall not be condition precedent to the opening of any such reference. "
(3.) IT appears that thereafter by an order made by the State Government: in exercise of the power conferred under section 90 (A) of the Calcutta Metropolitan Water and Sanitation Authority Act, 1966, the said C. M. W. S. A. was superseded for a period of one year from 12th of February, 1974. The consequence of such suppression is provided by amendment of the Calcutta metropolitan Water and Sanitation Authority Act, 1968 and incorporated in section 90 (b) which are inter alia as follows : "90. B. (1) when an order of suppression has been made under section 90 (A), then with effect from the date of the order: - (a) all directors and members of the Authority shall vacate their offices ; (b) all properties, funds and dues which are vested in or realisable by the Authority shall vest in and be realisable by the Calcutta metropolitan Development Authority constituted under section 3 of the west Bengal Calcutta Metropolitan Development Authority Act, xi of Act, 1972, (hereinafter referred to as 1972 the Metropolitan Authority) ; (c) all contracts and liabilities which are enforceable by or against the Board shall be enforceable by or against the Metropolitan Authority ; (d) all the powers and duties which may, under the provisions of this or any other Act or any rule, regulation by-law, order or notification made there under, be exercised or performed by the authority shall be exercised or performed by the Metropolitan Authority; (e) all legal proceedings instituted by or against the Authority may be continued or enforced by or against the Metropolitan Authority ; (f) all officers and other employees of the Authority continuing in. office immediately before the date of the order shall be deemed to be employed by the Metropolitan Authority on such terms and conditions not being less advantageous than what they were entitled to immediately before the said date";