KSEB Vs. STEPHEN AND CO.

JUDGEMENT

(1.) The revision petitioner, Kerala State Electricity Board, entered into an agreement with the respondent for the construction of 66 KV. SC tap line from Alleppey to Sherthalai and some other allied works. Dispute arose between the parties and as per a clause in the contract the matter was referred for arbitration. The respondent nominated an advocate of Ernakulam and the petitioner nominated Shri A. M. Mani, retired Chief Engineer of the K. S. E. Board as its nominee. The arbitrators entered on reference and number of sittings were held. However, the arbitrators did not pass an award within the time stipulated by the court. The time for passing the award expired on 5-12-1983. Thereafter Shri A.M. Mani expressed his unwillingness to continue as an arbitrator. The respondent sent a notice under S.9(b) of the Arbitration Act calling upon the petitioner to nominate another arbitrator in the place of Shri A. M. Mani. The petitioner sent a reply on 18-7-1985 stating that the period of arbitration has already expired on 5.12.1983 and the arbitrators have become functus officio and that no arbitration proceeding was in existence However, without prejudice to the rights of the K. S. E. Board Shri. G. Ganesa Pillai, Chief Engineer (Civil) was nominated as an arbitrator. Meanwhile the respondent filed I. A. 4011 (a)/84, 4011(b)/84 and 4011(c)/84 in O.P. Nos. 38/84, 39/84 and 40/84 respectively praying that their nominee may be allowed to continue to act as a sole arbitrator and the period for making the award be extended for a further period of three months. The petitioner resisted the application stating that the period for arbitration has already expired and that the petitioner had nominated Shri. Ganesa Pillai as their arbitrator. The court after considering the rival contentions held that the petitioner has nominated an arbitrator . in time as prescribed under S.9(b) of the Arbitration Act. Therefore, the arbitrator nominated by respondent was allowed to continue as the sole arbitrator. This order is being challenged in these civil revision petitions.

(2.) Admittedly the period for arbitration expired on 5-12-1983. It is also not disputed that Shri A. M. Mani expressed his unwillingness to act as an arbitrator after the expiry of the said period. Thereafter the respondent sent notice to the petitioner calling upon them to suggest a name of new arbitrator and in the K. S. E. Board's reply dated 18-8-1984 suggested Shri Ganesa Pillai, Chief Engineer, as their nominee. The court below has not understood the factual situation. The court below was of the opinion that no nomination was made by the respondent in time and therefore the other arbitrator was allowed to continue as the sole arbitrator. The order passed by the court below is not sustainable.

(3.) The agreement between the parties, provided that the reference shall be to two arbitrators one appointed by each party. One of the nominated arbitrators expressed his unwillingness to act as an 'arbitrator'. The contractor sent notice under S.9 of the Act, calling upon the Board to suggest a new arbitrator. S.9 of the Arbitration Act reads as follows;