UNION OF INDIA Vs. OM PRAKASH

JUDGEMENT

(1.) These seven appeals by certificate have been preferred by the Union of India against a common judgment of the Allahabad High Court disposing of seven appeals under Section 39 (1) (vi) of the Arbitration Act, 1940. The appeals turn on the true meaning and scope of Ss. 8 and 30 of the Act. Section 8 is in these terms:

(2.) The facts leading to the appeals are these. During the last World war, the respondent, a contractor, entered into seven agreements with the military department of the Government of India for the construction of hospital, three other buildings and three tubewells. In each of these agreements there was a clause providing that any dispute arising between the parties would be referred to an arbitrator. In four cases the agreements provided for arbitration by the Director of Farms, General Headquarters, Simla; in two cases the Officer Commanding, Lucknow, was to be the arbitrator, and in the remaining other case, a Quarter-Master at Delhi was chosen as the arbitrator. Disputes having arisen between the parties, the respondent made seven applications in the court of the First Civil Judge, Meerut, under Section 8 (2) of the Act stating that the offices by reference to which the arbitrators were selected in the agreements had been abolished and it was therefore necessary to appoint new arbitrators. In the applications the respondent named several officers praying that one of them be appointed to act as arbitrator "who shall have like power to act in the reference and to make an award as if he has been appointed by the consent of the parties." It will be noticed that the prayer repeats the material portion of sub-s. (2) of Section 8. On February 13. 1950 the court appointed Col. Ranbir Singh whose name was not in the respondent's list. to act as arbitrator in all the seven cases and further directed the papers to be sent to him, asking him to give his award within two months from that date. If the respondent's contention in these appeals is correct that after appointing an arbitrator under Section 8 (2) the court ceases to have jurisdiction and cannot make an order of reference, the further directions given in the order of February 13, 1950 were invalid. However, the question did not assume importance at that stage because both sides agreed to submit the disputes to Col. Ranbir Singh for arbitration. After the arbitration had made some progress, Col. Ranbir Singh returned the papers to the court on being asked not to proceed further by the Government counsel, who thought that the arbitrator was not competent to deal with the questions of law arising for decision. After this the District Judge, Meerut, transferred the cases to the Judge of the Small Cause Court, Meerut, presumably on the assumption that the respondent's applications for the appointment of an arbitrator were pending. If the respondent's contention is right, this was an erroneous assumption, but no objection was raised at the time and the Judge of the Small Cause Court by his order dated February 13, 1951 appointed Director of Farms, General Headquarters, Simla, to act as abitrator in all the seven cases. In that order the court further directed as follows:

(3.) The respondent made seven applications urging several grounds for setting aside the awards, but the Judge of the Small Cause Court, Meerut, overruled all objections and confirmed the awards, and a decree in terms of the award in each case was passed on May 26, 1952. Against that order the respondent preferred seven appeals to the Allahabad High Court. The High Court allowed the appeals accepting the contention that the court was functus officio after appointing the arbitrator under Section 8 (2) and had no jurisdiction to refer the cases to the arbitrator. The High Court was of the view that it was for the parties to refer their disputes to the arbitrator after he was appointed by the court, and the reference by the court being without jurisdiction, the awards were invalid. The High Court further held that when the court below made the order of reference there was no post of Director of Farms, General Headquarters. Simla, in existence and, as such, Brig. Bhandari was not competent to act as arbitrator on the basis of the order dated February 13, 1951. The Union of India questions the correctness of the High Court's decision in these appeals.