R.L.ANAND, J. - (1.) THIS is a civil revision and has been directed against the order dated 28.2.2001 passed by Civil Judge (Jr. Division), Chandigarh, who dismissed the application of the petitioners under Section 41(b) read with Schedule (2), Rule 4 of the Arbitration Act further read with Order 39 Rules 1 and 2 CPC for staying the proceedings before the arbitrator Brig. R.R. Singh.
(2.) SOME facts can be noticed in the following manner :- Shri Vishnu Kumar Gupta was registered as class-S contractor with MES and had been executing various construction contracts with the MES for the last 25 years. After his death in July, 1991, the firm is being represented by the LRs of Vishnu Kumar Gupta in all the proceedings. The petitioners had entered into a contract with the respondents for the work of provisions of RCC structures and concrete pavement at Srinagar and an agreement was entered into between the parties. The work was completed to the entire satisfaction of the respondents and subsequently dispute arose between the parties and the matter was referred to the arbitrator as per Clause 70 of the agreement. Earlier respondent No. 3 appointed Major Gen. W.S. Chona as sole arbitrator for adjudication of dispute between the parties. Major Gen. Chona resigned and then Sh. S.K. Rao was appointed as sole arbitrator on 30.3.1994. Being aggrieved by the appointment of Shri Rao as sole arbitrator, the petitioners filed a petition under Sections 8, 11 and 12 of the Arbitration Act in the Court of Civil Judge (Sr. Division), Chandigarh and during the pendency of the said petition Shri S.K. Rao resigned and the counsel for the respondents made a statement dated 17.4.1997 that another arbitrator in place of Shri Rao would be appointed within 15 days. Upon this the petition was withdrawn. No appointment was made within the period of 15 days as promised by the counsel for the respondents. Thereafter the petitioners filed a petition under Sections 8 and 12 of the Arbitration Act, 1940, for appointment of an independent and impartial arbitrator. During the pendency of said petition, on 2.8.1997 respondent No. 3 appointed Brig. T.K. Mittal as sole arbitrator and the petition of the petitioners was dismissed on 12.9.1997 by the court of Civil Judge (Jr. Division), Chandigarh upon the statement of the counsel for the respondents. A review application was moved by the petitioners and it was inter alia pleaded that since the new arbitrator was not appointed within a period of 15 days, as such the respondents have lost their right to appoint Brig. T.K. Mittal as sole arbitrator and thus the appointment of Brig. Mittal is bad in the eyes of law. It was further pleaded by the petitioners that the appointment of respondent No. 4 as sole arbitrator is bad because the arbitrator was supposed to complete the arbitration proceedings within six months and the said period of six months has already expired. The maximum period could be extended upto one year with mutual consent of the parties. As no decision has been given by the sole arbitrator, therefore, the authority of the arbitrator should be revoked and in place of the sole arbitrator a fresh arbitrator may be appointed by the Court who may be acceptable to both the parties. 2A. Notice of the petition was given to the respondents, who filed the reply and denied the allegations. According to the respondents, Shri S.K. Rao was earlier appointed as sole arbitrator. Thereafter, within a period of 15 days Brig. T.K. Mittal was appointed as sole arbitrator in compliance with the arbitration clause No. 70. Then Brig. R.R. Singh was appointed as sole arbitrator on 22.9.2000. The application moved by the petitioner for the removal of sole arbitrator is misconceived. The learned trial court heard arguments of the parties and vide impugned order dated 28.2.2001 and for the reasons given in paras 3 to 7, which are reproduced as under, dismissed the application : "3. I have heard the arguments of Ld. counsel for both the parties and have also gone through the record placed on file very carefully. The ld. counsel for the petitioners Sh. Naresh Markanda has argued that as per Condition No. 70 of the agreement, award is to be made by the arbitrator within a period of 6 months and the said period of 6 months could be extended upto one year with the mutual consent of both the parties in any case, but a period of 7-1/2 years has passed and the respondents are appointing one after the other arbitrator and till date no award has been made in the present case. He has further argued that since the Ld. counsel for the respondents had given his statement in the earlier petition pending for appointment of a new arbitrator that on the resignation of Sh. S.K. Rao, Arbitrator, a new arbitrator shall be appointed within a period of 15 days and no arbitrator was appointed by the respondents within a period of 15 days, as such, the respondents have lost their right to appoint a new arbitrator and as such the appointment of a new sole arbitrator, by the respondents, is bad in the eyes of law and there is every apprehension in the mind of the petitioners that the new Arbitrator appointed by the respondents is biased as against the petitioners and he will definitely give his award as against the petitioners. He has further drawn my attention towards the list of disputes, which has been placed on record in which appl. Rs. 1 core has been mentioned as losses occurred to the respondents and there is every likelihood that the new Arbitrator shall pass the entire claim of the respondents. 4. On the other hand, the Ld. Counsel Sh. G.C. Babbar appearing on behalf of UOI has argued, that as per condition 70 of the agreement, the only power for the appointment of a new Arbitrator vests with the respondents and on the resignation of the earlier arbitrator, the only power vests with the respondent for appointment of a new Arbitrator in his place. He has denied if any undertaking was given by the counsel for the respondents in the earlier arbitration matter pending between the two parties that the new arbitrator shall be appointed by the respondents within a period of 15 days. He has further argued that no irreparable loss is going to be caused to the petitioners in case the proceedings before the newly appointed arbitrator are not being stayed. 5. After hearing the rival contentions of Ld. Counsel for both the parties and after having gone through the record placed on file very carefully, I have found that there is merely an apprehension in the mind of the petitioners that the new appointed arbitrator by the respondents would give a biased decision as against the petitioners. I have gone through condition 70 of the agreement entered into between the parties. The relevant portion, material for the decision of the present application, is being reproduced as under :- "If the arbitrator so appointed resigns his appointment or vacate his office or is unable or unwillfully to act due to any reason whatsoever, the authority appointing him may appoint a new arbitrator to act in his place." 6. As per this condition No. 70 of the agreement, it has not been mentioned as to if, only once an arbitrator can be appointed by the respondents. The petitioners have not disputed the earlier authority of the respondents in appointment of the Sole Arbitrator. Earlier to the appointment of the latest sole arbitrator appointed by the respondents, the arbitrators were being appointed by the respondents only. No such undertaking given by the ld. counsel for the respondents has been placed on record, to the effect, that new arbitrator shall be appointed by the respondents within a period of 15 days. Even if there had been any undertaking of a new arbitrator within a period of 15 days, the authority of the respondents for appointment of a new arbitrator would not have ceased, even then. The ld. counsel for the petitioners has further argued that the summons issued to the newly appointed arbitrator were forwarded in original to the respondents for further action and this fact reveals that the respondents and the newly appointed arbitrator are hand in glove with each other. However, I am not convinced with this argument raised on behalf of the petitioners merely because of the reasons that the summons in original were sent by the arbitrator to the respondents, does not warrant for drawing an inference that the arbitrator is hand in glove with the respondents, since this fact cannot be ignored that the sole arbitrator is an employee of the respondents and the fact of sending of the original summons to the respondents was not even concealed by the newly appointed arbitrator, since copy of the said summons and the forwarding letter was also sent by the arbitrator to this court. 7. In the aforesaid circumstances, I do not find, at this stage, illegality for the appointment of a new arbitrator by the respondents. No ground is made out for staying the proceedings before the arbitrator. Moreover, interim injunction can be granted only in case of irreparable loss being caused to the petitioners, whereas in the present case, no such irreparable loss has been stated to be caused by the petitioners in case the proceedings before the arbitrator are not being stayed. The proceedings before the arbitrator cannot be stayed on the mere apprehension in the mind of the petitioners. At this stage, no ground is made for allowing the application moved by the petitioners, as such the same is ordered to be dismissed without commenting upon the merits of the present case."
(3.) AGGRIEVED by the said order, the present revision.;