S.N. Bhargava, J. - (1.) THIS appeal has been filed against the order dated 27.4.1991 passed by the District Judge Ajmer, allowing application under Section 20 r/w Section 8 of the Arbitration Act, moved by the respondent, M/s Ferro Concrete Construction (India) Private Ltd.
(2.) THE tender submitted by the respondent for supply of P.S.C.C. Pipes was accepted by the appellant and a work order to the tune of nearly Rs. 10 Crores was given on 23.8.1988 which was received by the respondent on 30.8.1988. A formal agreement was executed on 11.1.1989 by which the work was to be executed within two years i.e. from 23.8.88 to 22.8.1990. Clause 23 of the agreement relating to arbitration runs as under: Clause 23. - If any question, difference or objection whatsoever shall arise in any way in connection with or arising out of this instrument, or the meaning of operation of any part thereof or the rights, duties or liabilities of either party, then save in so far as the decision of any such matter constituting a total claim of Rs. 5,0001 - or above whether it has been finally decided accordingly, or whether the contract should be terminated or has been rightly terminated and as regards the rights or obligations of the parties as a result of such termination shall be referred for adjudication to a sole arbitrator to be appointed as hereinafter provided. For the purpose of appointing the sole arbitrator referred to above, the Chief Engineer will on receipt of notice and prescribed fee from the contractors send a panel of 3 names not below the rank of Superintending Engineer of the Rajasthan Government & who shall all be presently unconnected with the contract. The contractor shall on receipt of the names as aforesaid select any one of the persons names to be appointed as a sole arbitrator and communicate his name to the Chief Engineer. The Chief Engineer shall thereupon appoint the said persons as the sole arbitrator without delay. The arbitrator shall give reasons for award. Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or re -enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause. Some dispute arose between the parties and as per Clause 23 of the terms of agreement, quoted above, the respondent wrote letters to the Chief Engineer but no Arbitrator came to be appointed and therefore on 4.9.1990 the respondent filed an application in the court of District Judge, Ajmer, Under Section 20 read with Section 8 of the Arbitration Act, praying inter -alia as under: (a) That non petitioner No. 3 may be directed to file the agreement in this Hon'ble Court. (b) That the claims mentioned in Para 16 and 17 of the present petition be referred for the adjudication through the Arbitration by an Independent person be appointed as Sole Arbitrator by this Court, as the non petitioner No. 1 has failed to act in accordance with the provision of Clause 23 of General Conditions of Contract Vol. 1 Unit -11. (c) That the non petitioners be restrained not to take any action against the petitioner in relation to the present agreement dated 11.1.1989 in any way i.e. not to impose any penalty by way of damages and on the risk and responsibility of the petitioner, no work be got carried out from any other person or agency. No coercive method or action be taken against the persons or against the property and no amount be deducted or with held from the other contract of the petitioner as against the contract in dispute. (d) .... (e)....
(3.) NOTICES of the said application were issued and the State Government filed a detailed reply. The Distt. Judge, after hearing learned Counsel for the parties vide its order dated 27.4.1991 held that the respondent is entitled to get Arbitrator appointed Under Section 8 and fixed the case for 9.5.1991 for hearing the parties on the poi it of nominating an Arbitrator. It is against this order that the present appeal has been filed by the State of Rajasthan. The respondent had entered into a Caveat. It was furnished with a copy of the memo of appeal and the stay petition. Record of the case was also called from the court below. Arguments were heard.;