PARBHAT GENERAL AGENCIES Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE appeals by special leave raise a common question of law. Therefore they can be dealt with together. The appellants herein entered into agreements with the Union of India under which they were allotted certain areas in a forest to tap Resin Blazes and supply the same to the Turpentine Factory at Sirmur. The agreements entered into included an arbitration clause. That clause is common in all the three agreements. That clause reads thus:

(2.) THE parties are agreed that no other clause in the agreements is relevant for our present purpose. Disputes arose between the appellants and the respondents in respect of some claims arising from the said contracts. THE appellants requested the respondents to refer the disputes to the arbitration of the Judicial Commissioner, Himachal Pradesh. THE respondents declined to agree to make the reference in question. THEreafter the appellants moved the Senior Sub Judge, District Sirmur Nihan under Sec. 20 of the Indian ARBITRATION AND CONCILIATION ACT, 1940 (to be hereinafter referred to as the Act) for ordering the respondents to file the agreements in question in his court and for referring the disputes to the Judicial Commissioner, Himachal Pradesh for arbitration. THE learned Sub-Judge accepted these applications and directed the respondents to file the agreements in question into his Court. THEreafter he referred the disputes to the arbitration of the Judicial Commissioner, Himachal Pradesh. THE Judicial Commissioner, in our opinion rightly declined to act as an arbitrator. THEreafter the learned subordinate judge was moved to appoint some other arbitrator in place of the Judicial Commissioner. THE respondents opposed that prayer on the ground that arbitration clause did not provide for such an appointment. THE learned subordinate judge accepted that contention and dismissed the applications. As against that decision the appellants went up in revision to the Judicial Commissioner, Himachal Pradesh. THE Judicial Commissioner following an earlier decision of that Court in District Cooperative Federation Ltd. v. Khub Chand, AIR 1961 Him Pra 35 dismissed the revision petitions holding that under the agreements no reference for arbitration can be made to anyone other than the named authority. THE question for decision is whether the interpretation placed by the Courts below on the relevant provision in the arbitration agreements is correct.

(3.) SECTION 20 is merely a machinery provision. The substantive rights of the parties are found in SECTION 8 (1) (b). Before S. 8 (1) (b) can come into operation it must be shown that (1) there is an agreement between the parties to refer the dispute to arbitration; (2) that they must have appointed an arbitrator or arbitrators or umpire to resolve their dispute; (3) anyone or more of those arbitrators or umpire must have neglected or refused to act or is incapable of acting or has died; (4) the arbitration agreement must not show that it was intended that the vacancy should not be filled and (5) the parties or the arbitrators as the case may be had not supplied the vacancy.