HINDUSTHAN STEEL LTD. Vs. BHAI SUNDAR DASS SARDAR SINGH PR. LTD.

JUDGEMENT

(1.) In this application Hindusthan Steel Limited has made an application against the Respondent contractor for an injunction restraining the said contractor and the joint arbitrators from proceeding with the arbitration pending before the said arbitrators. The circumstances under which the application has been made, as set out in the petition, may be briefly stated as follows:

(2.) The concluded contract came into existence between the Petitioner and the contractor in connection with certain specified engineering works of Durgapur Steel Plant. The contract provides an arbitration clause which reads as follows:

(3.) After the commencement of the work, disputes and differences arose between the parties and the contractor indicated to the Petitioner to refer those disputes to arbitration. The Petitioner agreed to settle those differences by arbitration which the Petitioner itself has described in the petition as 'the said first arbitration'. On January 26, 1966, the contractor informed the Petitioner their decision to appoint K. M. Bhatia as its arbitrator and requested the Petitioner to nominate its arbitrator. On February 10, 1966, the Petitioner informed the contractor -the appointment of S.N. Banerjee as its arbitrator in the 'said first arbitration'. By a letter dated April 29, 1966, the said arbitrators informed the contractor to file their statement within 15 days from the receipt of the said letter. Direction was also given to the Petitioner to file its counter statement. On or about May, 21, 1966, K. M. Bhatia, acting as the arbitrator of the said first arbitration, wrote a letter to the contractor a copy of which was forwarded to the Petitioner. The Petitioner came to know from the said copy that the contractor had applied to the Petitioner for inclusion of certain other items in the said first arbitration. In the said letter, K. M. Bhatia also requested the Petitioner to give its decision at an early date so that the new items might be included in the said first arbitration. Thereafter, by a letter dated June 1, 1966, the contractor nominated K. M. Bhatia to act as an arbitrator in respect of the new claims. By a letter dated July 21, 1966, the Petitioner was informed by the lawyer on behalf of the contractor that as the Petitioner had failed to nominate the arbitrator -in respect of the new claims, K. M. Bhatia was appointed to act as the sole arbitrator in the reference relating to the new items. On August 24,1966, the Petitioner made an application to this Hon'ble Court for an order that the purported appointment of K. M. Bhatia to act as the sole arbitrator be set aside. After hearing the parties on November 24, 1966, Datta J. was pleased to set aside the appointment of K. M. Bhatia as the sole arbitrator. Thereafter, the Petitioner came to know that the Respondent made two ex parte applications on August 29, 1966 and September 8, 1966, to the Court of Subordinate Judge, Dist. Burdwan, and obtained four months' extension to file the award in the said first reference. On or about December 19, 1966, K. M. Bhatia and S.N. Banerjee held the first and second sittings in the said first " arbitration. After the directions for filing of the documents by the said joint arbitrators, they gave a notice of the meeting to be held by them on July 20, 1967, by a letter dated July 12, 1967. The Petitioner submitted before the arbitrators through its counsel that the arbitrators had become functus officio as the order of the Court of Subordinate Judge, Burdwan, extending the time to make the award was invalid inasmuch as the said Court had no jurisdiction to extend the date of making the award in the said first reference. On July 23, 1967, the arbitrators, after hearing the parties, were pleased to adjourn the meeting and directed the parties to get the time extended from the appropriate Court in accordance with law. It is also alleged that the contractor moved another ex parte application on July 27, 1967, before the Burdwan Court and obtained another order for extension of time for making the award. The Petitioner came to know on August 19, 1967, that the. arbitrators had fixed next meeting of the arbitration on September 20, 1967. By a letter dated August 31, 1967, the Petitioner requested the arbitrators not to hold the sitting. But the Petitioner was informed by a letter dated September 6, 1967, that the arbitration proceedings would be held on September 20, 1967, unless contrary order from competent Court was received by them prior to that date. (Thereafter, the present application was made on September 14, 1967, and an interim injunction was obtained restraining the arbitrators from proceeding with the said first reference.