Syed Sadat Abdul Masud, J. - (1.) In this application Hindusthan Steel Limited has made an application against the Respondent contractor for an injunction restraining the said contractor and the joint arbitrators from proceeding with the arbitration pending before the said arbitrators. The circumstances under which the application has been made, as set out in the petition, may be briefly stated as follows:
(2.) The concluded contract came into existence between the Petitioner and the contractor in connection with certain specified engineering works of Durgapur Steel Plant. The contract provides an arbitration clause which reads as follows: All questions, disputes or differences of any kind whatsoever, arising out of, or in connection with the contract, at any time, whether -during the progress, of the work or after its completion or whether before or after the determination of the contract, other than questions, disputes or differences for the decision of which specific provisions have been made in the foregoing clauses of these conditions (hereinafter referred to as 'excepted matters' and decisions on such 'excepted matters' according to the said specific provisions shall be final and binding on the contractor and shall not be reopened or attempted to be reopened on the ground of any informality, omission, delay or error in the proceeding in or about the same or on any other ground whatsoever) shall be submitted in writing by the contractor to the employer, and the employer shall, within a reasonable time, after the submission of the same make and notify its decision thereon in writing. If the contractor be dissatisfied with the decision of the employer on any matter in question, dispute or difference on any ground in connection with this contract or as to the withholding by the employer of any certificate to which the contractor may claim to be entitled to, or if the employer fails to make a decision within a reasonable time, then and in any such case but not including any of the excepted matters, or matters for which the contractor has given no claim certificates, the contractor may within ten days of the receipt of such decision or after the expiry of a reasonable period of time, as the case may be, demand in writing that such matter in question, dispute or difference in connection with this contract be referred to arbitration. Such demand for arbitration shall be delivered to the employer by the contractor and shall specify the matters which are in question, dispute or difference and only such question, dispute or difference, other than any of the excepted matters in respect of the contract of which the demand has been made and no other shall be referred to arbitration. The further progress of any work under the contract shall, unless otherwise directed by the engineer, continue during the arbitration proceedings, and no payment due or payable by the employer shall be withheld on account of such proceedings, provided, however, that it shall also be open to the arbitrator or arbitrators to consider and decide whether or not such work shall continue during the arbitration proceedings. Matters in question, dispute or difference other than the excepted matters, in respect of this contract to be submitted to arbitration as aforesaid, shall be referred to decision to (i) a sole arbitrator who shall be the chairman or any officer of the employer nominated by the chairman in that behalf in cases in which the claim in question is below Rs. 50,000 and in cases in which the issues involved are not of a complicated nature. The chairman or the officer nominated shall be the sole judge to decide whether or not the issues involved are of a complicated nature; (ii) the arbitration of two persons, one to be nominated by the employer and the other by the contractor or failing agreement between these two arbitrators to an umpire appointed by them before proceeding with the arbitration in respect of all claims of and above the value of Rs. 50,000 and for all claims, irrespective of the amount or value of such claims, if the issues involved therein are of a complicated nature. Such submission shall be deemed to be a submission to arbitration and the decision of such arbitration shall be final and conclusive under the provisions of the Indian Arbitration Act, 1910, and of the rules thereunder and all statutory modifications thereof shall govern all such arbitration proceedings and shall be deemed to apply to and be incorporated in this contract. The venue of arbitration proceedings shall be the General Manager's Administrative Office of the Durgapur Steel Plant.
(3.) After the commencement of the work, disputes and differences arose between the parties and the contractor indicated to the Petitioner to refer those disputes to arbitration. The Petitioner agreed to settle those differences by arbitration which the Petitioner itself has described in the petition as 'the said first arbitration'. On January 26, 1966, the contractor informed the Petitioner their decision to appoint K. M. Bhatia as its arbitrator and requested the Petitioner to nominate its arbitrator. On February 10, 1966, the Petitioner informed the contractor -the appointment of S.N. Banerjee as its arbitrator in the 'said first arbitration'. By a letter dated April 29, 1966, the said arbitrators informed the contractor to file their statement within 15 days from the receipt of the said letter. Direction was also given to the Petitioner to file its counter statement. On or about May, 21, 1966, K. M. Bhatia, acting as the arbitrator of the said first arbitration, wrote a letter to the contractor a copy of which was forwarded to the Petitioner. The Petitioner came to know from the said copy that the contractor had applied to the Petitioner for inclusion of certain other items in the said first arbitration. In the said letter, K. M. Bhatia also requested the Petitioner to give its decision at an early date so that the new items might be included in the said first arbitration. Thereafter, by a letter dated June 1, 1966, the contractor nominated K. M. Bhatia to act as an arbitrator in respect of the new claims. By a letter dated July 21, 1966, the Petitioner was informed by the lawyer on behalf of the contractor that as the Petitioner had failed to nominate the arbitrator -in respect of the new claims, K. M. Bhatia was appointed to act as the sole arbitrator in the reference relating to the new items. On August 24,1966, the Petitioner made an application to this Hon'ble Court for an order that the purported appointment of K. M. Bhatia to act as the sole arbitrator be set aside. After hearing the parties on November 24, 1966, Datta J. was pleased to set aside the appointment of K. M. Bhatia as the sole arbitrator. Thereafter, the Petitioner came to know that the Respondent made two ex parte applications on August 29, 1966 and September 8, 1966, to the Court of Subordinate Judge, Dist. Burdwan, and obtained four months' extension to file the award in the said first reference. On or about December 19, 1966, K. M. Bhatia and S.N. Banerjee held the first and second sittings in the said first " arbitration. After the directions for filing of the documents by the said joint arbitrators, they gave a notice of the meeting to be held by them on July 20, 1967, by a letter dated July 12, 1967. The Petitioner submitted before the arbitrators through its counsel that the arbitrators had become functus officio as the order of the Court of Subordinate Judge, Burdwan, extending the time to make the award was invalid inasmuch as the said Court had no jurisdiction to extend the date of making the award in the said first reference. On July 23, 1967, the arbitrators, after hearing the parties, were pleased to adjourn the meeting and directed the parties to get the time extended from the appropriate Court in accordance with law. It is also alleged that the contractor moved another ex parte application on July 27, 1967, before the Burdwan Court and obtained another order for extension of time for making the award. The Petitioner came to know on August 19, 1967, that the. arbitrators had fixed next meeting of the arbitration on September 20, 1967. By a letter dated August 31, 1967, the Petitioner requested the arbitrators not to hold the sitting. But the Petitioner was informed by a letter dated September 6, 1967, that the arbitration proceedings would be held on September 20, 1967, unless contrary order from competent Court was received by them prior to that date. (Thereafter, the present application was made on September 14, 1967, and an interim injunction was obtained restraining the arbitrators from proceeding with the said first reference.;