Surinder Singh, J. - (1.) THIS revision petition arises from the facts which are not disputed. A loan of Rs 2.000/ - was advanced by the firm Respondent No. 1 to the Petitioner, based on Promissory Note (Exhibit P. 7) dated March 24, 1971, executed by the latter in favour of said Respondent. An agreement (Mark 'B') was also executed by the parties on the same day wherein a provision was made for reference of all disputed matters to the arbitration of Shri Kulwant Singh, Managing Director of Respondent No. 1 firm. The amount of loan not having been repaid by the Petitioner, made a request (Exhibit P. 16) to the Arbitrator to enter upon the reference and give his award in accordance with the terms of the agreement referred to above. The Arbitrator made the award on July 25, 1972, affing(sic) liability upon the Petitioner for payment of Rs. 2,252.60 to Respondent No. 1. Thereafter, an application was made by the Arbitrator to the Court under Sections 14/17 of the Indian Arbitration Act for making the award a rule of the Court and passing a decree in terms thereof.
(2.) THE application was resisted by the Petitioner who pleaded, inter alia, that (sic) agreement for a reference to arbitration had been entered into and as such an agreement, as alleged by Respondent No. 1, was the outcome of forgery and misrepresentation. It was also contended that the Arbitrator being the controllin Respondent No. 1 g hand of Respondent No. 1, was not competent so act as such. These objections found their way into the relevant issues framed and adjudicated upon by the trial court. It was held that although the other objections against the validity of the award had not been substantiated, the award was made by the Arbitrator in consequence of a unilateral reference by Respondent No. 1 and the Petitioner not being a party to this reference, the award was invalid and could not be made the rule of the Court. The application filed for this purpose was, therefore, dismissed. The contesting Respondent, however, carried an appeal against the decision of the trial Court and was rewarded with success in the lower appellate Court. The Additional District Judge differed with the trial Court as regards the finding that the reference to the award was unilateral and while accepting the appeal of Respondent No. 1, the said Court made the award dated July 25, 1972, a rule of the Court. It is against this verdict that the present revision petition is directed. The Learned Counsel for the Petitioner, during the course of his address, has highlighted only two points which may be considered in turn. The first submission is that the finding of the lower appellate Court, holding the reference to the arbitrator as not being unilateral, is contrary to law. A number of authorities in this behalf have been referred to but consideration thereof leaves us with a few which are relevant to the point under consideration. The main plank of the counsel's arguments is Jugannath Kapoor and Anr. v. Premier Credit and Instalment Corporation (P) Ltd : AIR 1973 All. 49 A learned Single Judge of the Allahabad High Court had the occasion to consider a case of this nature in the aforesaid authority. It was held that a unilateral reference to arbitration by one of the parties only, outside Court, was illegal and conferred no jurisdiction on the arbitrator. While coming to this conclusion, the learned Judge, apart from noticing a decision of this Court in Ajit Singh v. Fateh Singh : AIR 1962 P&H. 412 placed reliance on Thawardas Pherumal v. Union of India, : AIR 1955 SC 468 wherein the following observations were made: - A reference requires the assent of 'both' sides. If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the Court under Section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under Sub -section (4) In the absence of either, agreement by both sides about the terms of reference, or an order of the Court under Section 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction On the other hand, the Learned Counsel for the contesting Respondent has strongly relied upon a more recent decision cited as P C. Aggarwal v. K. N. Khosla : AIR 1975 Delhi 54. In that case, a Division Bench of that Court scanned through a plethora of authorities laying down the law on the point during the last more than half a century and after an exhaustive consideration, came to the conclusion that a facile generalisation, as in Jagannath Kapoor's case (supra), could not be justified that every reference, in which both the parties did not join in giving a second consent to the reference in addition to the previous one embodied in the arbitration agreement, becomes a unilateral reference. It was further held by the Division Bench that a separate reference to arbitration is necessary only where there is a bare agreement between the parties that disputes between them shall be decided by resort to arbitration. When, however both the parties had consented that the reference to arbitration is to be made in a particular manner and have made their consent in advance, the actual reference to arbitration has to be considered as a bilateral and not a unilateral reference. It was amplified that a truly unilateral reference would arise when the agreement between the parties is restricted to the simple fact that disputes between the parties would be decided by arbitration but the agreement does not specifically include the reference of particular disputes to arbitration. I am in respectful agreement with the enunciation of law made by the Division Bench in that case. It was rightly construed by the Division Bench, on account of the reasons enumerated, that an all embracing general principle has not been laid down by the Supreme Court in Thawaraas Pherumal's case (supra) to the effect that there can be no reference to arbitration, except through the Court under Section 20 of the Indian Arbitration Act, 1940, unless both the parties join in it. This conclusion was duly fortified by some observations made in a later decision of the Supreme Court in Bhusawal Borough Municipality v. Amalgamated Electricity Company Limited : (1964)5 SCR 905.
(3.) THE case in hand is to be viewed in the light of above interpretation of law. A perusal of the agreement for reference to arbitration (Mark 'C') would reveal some noteworthy features. The agreement was entered into on March 24, 1971, i.e. on the same day when the loan was advanced. It was clearly stipulated in the agreement that in case of any dispute arising out of or relating to the loan, whether in regard to its repayment, interest, future interest or any other matter pertaining to the transaction, the said dispute shall be referred to the sole arbitration of Shri Kulwant Singh, whose decision shall be final and binding upon the parties It was further agreed that the arbitrator shall be fully entitled to proceed ex parte against any party who fails to appear on the date fixed after the arbitrator has given notice to the parties. This later clause goes a long way to indicate that the parties did not contemplate only a bilateral reference as the arbitrator had been authorised to proceed ex parte against any party not appearing before. In view of these facts, to argue that the reference made by Respondent No. 1 to the arbitrator was illegal as being unilateral and thus bad, is entering the realm of conjectures and not reality. The award made by the arbitrator did not suffer from any infirmity or illegality and was thus rightly made the rule of the Court.;