Full Judgment Text
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PETITIONER:
UNION OF INDIA
Vs.
RESPONDENT:
R. B. CH. RAGHUNATH SINGH & CO.
DATE OF JUDGMENT27/07/1979
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
SHINGAL, P.N.
CITATION:
1980 AIR 103 1980 SCR (1) 128
1979 SCC (4) 21
ACT:
Arbitration Act, 1940, Section 8(1)(b) applicability
of-Arbitration agreement specifies two names of arbitrators
by designation-One such designated post abolished and the
second named officer refuses to act-Whether a Court can
appoint another arbitrator.
Dismissing the appeals by certificate, the Court
HEADNOTE:
HELD: 1. The Court had no power to supply the vacancy
under section 8(1) (b) of the Arbitration Act only if the
arbitration agreement did show that the parties did not
intend to supply the vacancy. The words in section 8(1) (b)
are these: "and arbitration agreement does not show that it
was intended that the vacancy should not be supplied". If no
such intention could be culled out from the arbitration
clause, the Court could supply the vacancy. [129 D-E].
M/s. Prabhat General Agencies etc. v. Union of India
and Anr.,[1971] 2 S.C.R. 564; affirmed.
Badam Satyanarayanamurthi v. Badam Venkataramanamurthi,
A.I.R. 1948 Madras 312; distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2472-
2473 of 1969.
From the Judgment and Decree dated 26-4-1966 of the
Allahabad High Court in F.A.F.O. No. 447/61 and 476/60.
R. N. Sachthey, R. B. Datar, Girish Chandra and Miss A.
Subhashini for the Appellant.
R. K. Garg for the Respondent.
The Order of the Court was delivered by
UNTWALIA, J. These two appeals by certificate arise out
of the same proceedings between the parties. The respondent
company applied to the Trial Court for the filing of the
Arbitration agreement under Section 20 of the Arbitration
Act, 1940 hereinafter called the Act and for appointment of
an Arbitrator under Section 8. The applications were
allowed. An Arbitrator was appointed. The Union of India
took the matter in appeals to the Allahabad High Court. The
High Court has dismissed the appeal arising out of the order
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of the Trial Court under Section 20 of the Act and has
treated the appeal arising out of Section 8 order as a
revision and dismissed the same also. The Union of India has
come to this Court.
129
The decisions of the courts below in regard to Section
20 matter is at an end now. It was denied on behalf of the
appellant that there was any Arbitration agreement. The
findings of the court below in this regard could not be
assailed at all.
The Arbitration clause in the contract between the
parties ran as follows:-
"All disputes or differences arising between the
parties or their representatives and the Controller of
Rationing Delhi at any time hereafter and of whatever
nature arising out of or in respect of the contract
shall be referred for arbitration to the Chief
Commissioner/Director of Storage, Ministry of Food,
Government of India, and his decision shall be final
and binding."
The post of Director of Storage, Ministry of Food,
Government of India was abolished and no person holding that
post was available for arbitration for the purpose of the
arbitration clause aforesaid. The Chief Commissioner,
however, was available but he refused to act. That led the
respondent company to apply to the court under Section 8 of
the Act for appointment of another Arbitrator. The argument
put forward on behalf of the appellant is that when there
was a named Arbitrator even though he was named by office,
it was not open to the court to supply the vacancy in his
place under Section 8(1) (b) of the Act. We did not find any
substance in this argument. The court had no power to supply
the vacancy under Section 8(1) (b) only if the arbitration
agreement did show that the parties did not intend to supply
the vacancy. If no such intention could be culled out from
the arbitration clause, the court could supply the vacancy.
There is a direct decision of this Court’ in M/s. Prabhat
General Agencies etc. v. Union of India & Another.(1)
Mr. R. B. Datar, counsel for the appellant placed the
reliance upon the Full Bench Decision of Madras High Court
in Badam Satayanarayanamurthi v. Badam Venkataramanamurthi &
Ors.(2), in support of his submission that no other
Arbitrator could be appointed by the court under Section 8
of the Act when the Arbitrator named in the agreement
refused to act. In our opinion while considering the
provisions of Section 8(1) (b) of the Act, that decision is
of no help to the appellant. The full Bench decision was
given with reference to the corresponding provisions of
130
law contained in Schedule II of Code of Civil Procedure,
1908 in paragraph 5 whereof the crucial words occurring in
Section 8(1)(b) of the Act were not there. The words in
Section 8(1)(b) are these: "and arbitration agreement does
not show that it was intended that the vacancy should not be
supplied."
For the reasons stated above, we hold that there is no
merit in either of the two appeals. They are accordingly
dismissed with costs which we quantify at Rs. 1500/-.
S.R. Appeals dismissed.
131