J.V. Gupta, J. - (1.) THIS petition is directed against the order of the Sub Judge 1st Class, Patiala, dated 17.1.1987 whereby application under Section 8(2) of the Arbitration Act, 1940 filed on behalf of M/s. Him Papers and Packages Pvt. Ltd. was allowed and Shri S.S. Verma, Advocate, was appointed as an arbitrator to adjudicate the matter between the parties.
(2.) THERE was an agreement dated 12.4.1985 between the parties for the supply of paper to the Punjab State Electricity Board The contractor of M/s Him Papers and Packages Pvt. Ltd. supplied the same in three lots, but lots No. 2 and 3 were not accepted as according to the Electricity Board, it was not in accordance with the specification. Consequently dispute had arisen between the parties which according to the arbitration agreement was to be referred to the sole arbitrator a nominee of the purchaser Board. The Contractor gave notice dated 29.1.1986 for appointment of the arbitrator by the Electricity Board. The said notice was received by the Board on 7.2.1986. Since the matter was not referred to the sole arbitrator as per agreement between the parties Exh. P 4, the contractor filed an application under Section & of the Arbitration Act on 28.4.1986 for appointment of the Arbitrator by the Court During the pendency of that petition the Board appointed Shri Adarsh Kumar Chief Engineer as arbitrator on 12.5.1986. The said arbitrator entered into reference on 20.5.1986. Even the contractor appeared before him and took part in the proceedings. However, on 17.1.1987 by the impugned order the said arbitrator Shri Adarash Kumar was removed and the Court appointed Shri S.S. Verma Advocate as the sole arbitrator to adjudicate the matter between the parties. The said arbitrator gave his award dated 7.3.1987 which was filed in Court on 13.3.1987. Objections to the said award were filed which are still pending for adjudication. Meanwhile, at the time of motion hearing on 31.3 1987 further proceedings for making the award a rule of the Court were stayed. Learned Counsel for the Petitioner Board submitted that according to the arbitration agreement if any dispute or differences had arisen between the parties, the same were to be referred for the sole arbitration of nominee of the purchaser Board. Though the arbitrator could not be appointed within 15 days from the service of notice on 7.2.1986 but in any case the arbitrator was appointed on 12.5.1986 during the pendency of the petition under Section 8 of the Arbitration Act. Moreover, argued the learned Counsel since the dispute involved technical matter, only a nominee of the Board could be the proper person and not an Advocate who was appointed by the Court as arbitrator to adjudicate the matter The learned Counsel mainly relied upon the Division Bench judgment of this Court reported at Union of India v. Messrs New India Constructors, Delhi and others : A.I.R. 1955 P&H. 172, wherein it was held that the expression in Section 8 "the Court may appoint" does not mean that the Court must appoint an arbitrator. The use of the word 'may' implies that the discretion is given to the Court. That discretion has to be exercised properly, and not arbitrarily, it has also been observed therein that though there had been laches in appointing the arbitrator but the Government Departments do not always act very promptly. The delay of 2,3/4 months was not such that the appointment of Superintending Engineer made by the Chief Engineer should be cancelled, when the appointment did not contravene the arbitration clause.
(3.) ON the other hand, learned Counsel for the Respondent submitted that the dispute did not involve any technical matter as it was only the question of supply of paper and, therefore, the appointment of an Advocate, namely, Shri S.S. Verma Was most appropriate. According to the learned Counsel, the present case was covered under the provisions of Section 8(a) and was not a case of Section 8(b) of the Arbitration Act and therefore, when the Board failed to appoint the Arbitrator within 15 days after service of notice, the Court was within its jurisdiction to appoint any person out side the arbitration agreement as an arbitrator. In support of his contention he referred to Union of India and Anr. v. Amarnath Aggarwal Construction Private Ltd, (1988) 94 P.L.R 678. and Banarsi Dass Mittal v. Housing Board, Haryana, 1988 (1) Arb. L.R. 170.;