UNION OF INDIA Vs. KARSANDAS JETHABHAI AND CO

JUDGEMENT

(1.) THIS appeal has been filed under sec. 39 of the Indian Arbitration Act 1940 by the Union of India owning and representing the Western Railway against the respondent who had filed a Misc. Applica- tion No. 5g of 1967 in the court of the Civil Judge (S. D.) Porbandar under sec. 30 of the said Act for setting aside the award dated 1st April 1967 by the original non-applicants Nos. 1 and 2 the arbitrators. THIS first appeal had originally come before the learned Single Judge of this Court who having found that the ruling reported in the case of VINAYAK VISHNU SAHASRABUDHE V. G. GADRE AND OTHERS A.I.R. 1959 BOMBAY 39 was not good law had referred the same to the Division Bench.

(2.) THE facts of the case are that the present respondent M/s. Karsha- ndas Jethabhai and Company had undertaken some contract work of the Railways and a dispute had arisen between this Company and the Railways regarding certain amounts of payment. As per the agreement contained in the arbitration clause the matter was referred to the arbitration of one Shri S. K. Iyer Deputy Chief Engineer (South and Central) Western Railway and Shri N. K. Rewari Deputy Financial Adviser Western Railway Churchgate Bombay. After hearing both the parties and after affording an opportunity to both the sides to lead whatever evidence they wanted to lead the arbitrators had given their award on 1st April 1967 which was got filed by the original applicant-the contractor by filing an application before the court under sec. 14 of the Act THE award was accordingly filed by the arbitrators and then the contractor filed their objections Ex. 13 on 7 August 1967 praying for the setting aside of the award as per sec. 30 and (c) of the Act. THE said prayer was resisted by the Union of India before the trial Judge but no evidence was led before the court. THE court held that the arbitrators were duly appointed but set aside the award on the ground that the arbitrators and no jurisdiction in so far as they had failed to appoint an Umpire before proceeding with arbitration as per clause 63(3) (b) of the General Conditions of the Contract as laid down in Book of 1955 governing the relevant contract and also under the pro- visions of the Indian Arbitration Act.

(3.) AS far as the question on the basis on which the award in question is set aside be the trial court is concerned the earlier Bombay view reported in the case of Vinayak Vishnu (Supra) referred to above has been set at naught by the subsequent Division Bench of the Bombay High Court which held that the view expressed in the case was no longer good Law. The case of Vinayak Vishnu (Supra) was decided by the Single Judge of the Bombay High Court. The said case came to be reviewed by the Division Bench of the Bombay High Court in the case of M/S. MODERN BUILDERS V. HUKMATRAI N. VADIRANI A.I.R. 1967 BOMBAY 373. Interpreting Clause 2 of the first schedule the Division Bench held that the provision of the said clause regarding the appointment of an umpire are merely directory and not mandatory. The Division Bench in this connection has observed as under :