Lodha, J. - (1.) THIS appeal under Section 39 of the Arbitration Act (No. X of 1940) (hereinafter referred to as 'the Act') is directed against the judgment and decree dated June 6, 1970 passed by the District Judge, Sri Ganganagar.
(2.) THE material facts, necessary for the disposal of this appeal, are these: THE respondent (M/s. Sharma & Co.) entered into an agreement with the appellant (the State of Rajasthan) on December 17, 1961 for supply of forty lacs of Pacca bricks to the Irrigation Department of the Government of Rajasthan. According to Clause 21 of the Agreement, all disputes arising between the parties in connection with the contract were required to be referred for arbitration to the Superintending Engineer of the Irrigation as may be nominated by the Government. THE respondent (contractor) completed the supply by July 26, 1962 and a final bill was prepared on December 25, 1962. THE respondent, inter alia, raised a claim for the payment of costs of 1,12,152 bricks and the concerned Department disputed the same. On April 15, 1967, an application under Section 8 of the Act was submitted by the respondent before the learned Senior Civil Judge, Sri Ganga-nagar. THE case was registered as Civil Misc. Application No. 1 of 1967. THE learned Senior Civil Judge, by his order dated July 11, 1967 appointed Shri R.L. Malhotra, retired Superintending Engineer as the sole Arbitrator to decide the dispute between both the parties. THE relevant portion of the order dated July 11, 1967 is as under: "14. Thus for the reasons given above, I, therefore, hold that in the instant case the application made by the petitioner is maintainable and he is entitled to the re-relief claimed in the petition viz. for the appointment of an arbitrator for settlement of the difference between the parties. 15. In the result the application is allowed. Shri R.L. Malhotra retired Superintending Engineer Irrigation (Raj) c/o 392, Model Town, Jamnagar is appointed as an arbitrator. THE non-petitioner shall pay Rs. 100/- as costs of this application to the petitioner." Feeling aggrieved by the order dated July 11, 1967 appointing Shri R.L. Malhotra as Arbitrator under Section 8 of the Act, the appellant preferred S. B. Civil Revision Petition No. 359 of 1967, which was dismissed by the learned single Judge of this Court on January 9, 1968. THE learned Senior Civil Judge, vide letter dated July 22, 1967 informed Shri R.L. Malhotra, retired Superintending Engineer, Irrigation Department, Rajasthan, that he has been appointed as Arbitrator to arbitrate on the disputes between the parties vide order dated July 11, 1967. In pursuance of this Reference, Shri R.L. Malhotra proceeded with the arbitration proceedings and obtained extension of time for making the award under Section 28 of the Act. Ultimately, he made the award on June 19, 1969. THE award was sent to the Court of District Judge, Sri Ganganagar by post on June 20, 1969. After the receipt of the award, notices were issued to both the parties. THE respondent did not contest the award and prayed that a decree may be passed in terms of the award under Section 17 of the Act. THE appellant raised various objections in the application which was filed on August 11, 1969 purporting to be under Section 17 read with Sections 30 and 33 of the Act praying therein that the award may be set aside. THE learned District Judge framed the issues and refused to set aside the award by his order dated June 6, 1970 and passed a decree for Rupees 37,255.07 p. in favour of the respondent and against the appellant with a rendition that the same will be executed only after the respondent had submitted a No-dues Certificate from the State Government in the Court. Against the judgment and decree dated June 6, 1970 the appellant has filed this appeal. We have heard Mr. D.S. Shishodia, learned Government Advocate. Nobody appeared for the respondent despite service. It was strenuously contended by the learned Government Advocate that the award which was made by the Arbitrator. Shri R.L. Malhotra on a reference made by the Court is a nullity and it should be set aside, for the Court had no jurisdiction after appointing the arbitrator under Section 8 (2) of the Act to proceed further to make the order referring the disputes to the arbitrator. In support of his contention, he relied on Union of India v. Om Prakash AIR 1976 SC 1745 We have bestowed our most anxious and thoughtful consideration to this point as it goes to the root of the matter and vitally affects the jurisdiction of the arbitrator to adjudicate upon the dispute between the parties.
(3.) A perusal of the order (letter) dated July 22, 1967 shows that reference was made to Shri R.L. Malhotra by the Senior Civil Judge, Sri Ganganagar in pursuance of the order dated July 11, 1967, by which, he was appointed to arbitrate on the disputes between the parties. In the award dated June 19, 1969, the Arbitrator has mentioned that a request was made to him to act as an Arbitrator in the matter by the Senior Civil Judge, Sri Ganganagar under his order dated July 11, 1967, conveyed to him vide letter dated July 22, 1967. As the Arbitrator could not make the award within a period of four months, he applied for extension of time limit on October 19, 1968 and the extension of four months for making the award was granted to him by the District Judge, Sri Ganganagar vide order dated February 24, 1969. It is, therefore, clear that after the appointment of the Arbitrator under Section 8 (2) of the Act, reference was not made to the Arbitrator by the parties. Sub-section (2) of Section 8 of the Act reads as under: "8. (2). If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by the consent of all parties." ;