INDIAN RARE EARTHS LTD. Vs. M. SADASIVA PANICKER

JUDGEMENT

(1.) THIS appeal is preferred by the petitioners in arbitration O.P.No.91 of 1982 on the file of the Court of Principal Subordinate Judge,Quilon which is a petition filed under sections 16,30 and 33 of the Arbitration Act,for setting aside the award dated 30 th June 1982 passed by the 2nd respondent.

(2.) THE facts that led to the filing of the appeal may be briefly stated as follows:The 1 st respondent was enga­ged as a Contractor as per Ext.P -2 agreement dated 6 th June 1978 for the collection of raw sand and sea washings from the mining areas mentioned in the tender form.The period of contract was from 1 st June 1978 to 31 st May 1979.The work as per the contract was commenced on 7 th June 1978.The contract was terminated with effect from 12 th January 1979 and the work was entrusted to another contractor,whose tender was the next highest.The 1 st respondent filed a suit O.S.No.84 of 1979 before the Court of Subordinate Judge,Quilon under section 20 of the Arbitration Act.The 1 st dependent in that suit is the 1 st appellant herein and the 2 nd defendant is its Manager,Mineral Division,Quilon and the 2 nd appellant herein.The allegation of the plaintiff in the suit was that there existed some disputes between the appellants herein and the plaintiff who is the 1st respondent herein,that Clause 23 of the tender form embodied an arbitration clause according to which all disputes or differences whatso­ever arising between the parties out of or relating to the construction,meaning and operation or effect of the contract or the breach thereof shall be settled by an arbitrator to be appointed by the Managing Director and his decision shall be final and binding on both parties that dispute had arisen between him and the appellants herein,and he was entitled to have the disputes and differences settled by arbitration,but the request of the 1 st respondent to the appellants to refer the disputes to Arbitration was not heeded to by the appellants and that this necessitated the filing of the suit under section 20 of the Arbitration Act.The issues to be referred to the arbitrator were also enumerated in paragraph 21 of the plaint.On the basis of those averments the plaintiff sought for a decree as prayed for.

(3.) THE learned Subordinate Judge held that there were disputes between the appellants and the first respondent,and that one of the questions to be tackled was whether the workers employed by the 1 st respondent are not the work­men under the appellants.In this view of the matter,the learned Subordinate Judge held that it was necessary to appoint an arbitrator as contemplated by clause 23 of the tender form.The learned Subordinate Judge further observed that as regards the choice of the arbitrator clause 23 contemplated appointment of an arbitrator by the Managing Director of tae 1st appellant "Company but the learned counsel for the plaintiff argued that the stage for appointment of the arbitrator by the Managing Director was over as demand for the purpose was not complied with and since the parties were before the court,the court had power to appoint an arbitrator of its own choice.The learned Sub Judge ultimately appointed the 2 nd respondent herein as arbitrator under Section 20 of the Arbitration Act holding that under Section 20,the court had power to appoint any person as arbitrator and was not bound by provisions contained in Clause 23.The operative portion of the decree reads thus: