UNION OF INDIA Vs. SOHAN LAL PUGLIA

JUDGEMENT

(1.) The parties herein entered into a contract on or about 2-9-1993 relating to construction of supply of 50 mm gauge stone ballast machine crushed for permanent way in stocks along with the track and in station yard etc. Disputes and differences having been arose between the parties, the respondent invoked the arbitration clause contained in the said agreement. As the appellants herein did not appoint an Arbitrator in terms thereof, an application was filed by the respondent herein under Section 20 of the Arbitration Act, 1940 and by reason of an order dated 7-4-1997, the District and Sessions Judge, Jaipur city, Jaipur, appointed two retired District Judges as Arbitrators. The appellants herein filed a revision petition thereagainst and by reason of the impugned judgment dated 15-1-1998, the same was dismissed.

(2.) The core question which was raised before the High Court for consideration was as to when the appellants had not refused to appoint an Arbitrator, under Section 20 of the Act the petition was not maintainable. The High Court having regard to the decision of this Court in G. Rama-chandra Reddy and Co. v. Chief Engineer, Madras Zone, Military Engineering Service, reported in 1994 (5) SCC 142 negatived the said contention.

(3.) Mr. H. L. Agrawal, learned senior counsel appearing for the appellants, however, submitted that the District Judge, Jaipur city while making appointment ought to have taken into consideration the terms contained in the Arbitration clause as also sub-section (4) of Section 20 of the Arbitration Act and in terms whereof the parties in a case involving the dispute of more than Rs.five lacs were to appoint Gazetted Officers. Sub-sec. (4) of Section 20 of the Arbitration Act, 1940 reads as under :