KENZIES Vs. STATE OF MYSORE

JUDGEMENT

(1.) M/s Mckenzies Ltd, Engineers and Contractors, Bombay, have challenged in this revision petition filed under S.I 15 of the CPC, the order of the Second AddI Civil Judge, Bangalore City, made in AC.No. 14 of 1972, on the 2nd of November, 1973, under S.5 of the Arbitration Act, 1940, (hereinafter referred to as 'the Act'). The facts necessary for decision of this case may briefly be stated as follows: The petitioner-firm entered into an agreement dt.23-11-1959 with the 1st respondent-State of Mysore (Karnataka) - in connection with construction of Linganarnukki Main Dam, Section-II, which is part of the Sharavathi Project. The said agreement contained an arbitration clause-Clause 51-in regard to settlement of certain types of disputes between the parties. It contemplates reference of certain types of disputes to Arbitrators, each of the parties to the agreement nominating one Arbitrator. The petitioner raised certain disputes to be adjudicated by the Arbitrators and proposed Respondent-3 Shri H.C.Sharma as an Arbitrator. The 1st respondent nominated Respondent-2 Shri M.V.A. betty, Advisor to Govt, Irrigation and Power, reserving, however, the right to contend that no matter referred to in the notice of the petitioner could be decided by arbiration under Clause 51 of the agreement on the ground that the disputes referred are not arbitrable under the agreement. The State riled its .written statement dealing with the claim made by the petitioner. It appears that the State raised a contention to the effect that all the items referred to arbitration are not arbitrable, that they are barred by limitation and that they are covered by other clauses in the agreement, viz, Clauses 20, 27 and 28. The two Arbitrators appointed an Umpire and the Board of three Arbitrators held several sittings after notice to the parties. They framed issues arising out of the pleadings, the 1st issue being: " Are all the claims or any of them arbitrable under the contract? " Para 8 of the order under revision contains a brief summary of the petitioner, which may be extracted as follows :

(2.) The learned Advocate General appearing for the State, filed a Memo along with an order of the State Govt dt.16th of Jany, 1974, revoking the authority of Respondent-2 as Arbitrator and contended that in view of the said order of the State Govt, this revision petition does not survive. The order under revision was made on the 2nd of Novr, 1973 and the present revision petition was filed on the 30th of Jany, 1974. It is on the 16th of Jany, 1974, that the State Govt, on the basis of the leave granted by the learned Civil Judge, passed the order, revoking the authority given to Respondent-2 as an Arbitrator. It is no doubt true that the petitioner had not obtained any order from the Court of the Civil Judge, staying the operation of its own order on the ground that they need some time for filing a revision petition in this Court. As there was no stay order operating against. Respondent-1, there was also no legal hurdle in its way for revoking the authority granted to Respondent-2 having regard to the fact that it had obtained leave from the Court on the 2nd of Novr, 1974. But, merely beause action has been taken as aforesaid by the 1st respondent to revoke the authority of the 2nd respondent, we fail to see how the present revision petition can be rendered incompetent. The right of the party, to secure reliefs at the hands of this Court or the power of this Court under S.115 of the CPC, cannot be taken away by the party obtaining the order challenged in revision. If the contention of the learned Advocate General is accepted it would mean that the right of the party or the power of the Court can successfully be curtailed by the party obtaining leave under S.5 of the Act revoking the authority of the Arbitrator without waste of time and well before the other party approaches this Court for relief. The learned Advocate General has not assigned any good reasons for persuading us to take the view that the order made by the State Govt on the 16th of Jany, 1974, referred to above, has the effect of rendering this revision petition incompetent or infructuous. Hence, we over-rule the objection of the learned Advocate General.

(3.) Sri V. Krishnamurthy, learned Counsel for the petitioner: contended that the learned Civil Judge has committed a material illegality in according leave to the 1st respondent under S.5 of the Act. It was maintained that the Court cannot accord leave to revoke the authority of the Arbitrator, unless it is satisfied that substantial micarriage of justice would take place in the event of its refusal. It was further contended that by recording a clearly unsustainable finding that substantial injustice will take place in the event of refusal to grant leave to remove the authority of the Arbitrator, the Court cannot exercise the power of granting leave under S.5 of the Act. The principles to be borne in mind by the Court in the matter of granting leave under S.5 of the Act for revoking the authority of the Arbitrator, have been laid down: by the Supreme Court in Amarchan Lalit Kumar v. Ambica Jute Mills Ltd.(AIR. 1966 SC. 1036) . The principle laid down by their Lordships of the Supreme Court in para 13 of the judgment, may be extracted as follows :