UNION OF INDIA Vs. SRINIVASA FOREST CO OPERATIVE STORE COVERRI LABOUR CONTRACT CO OPERATIVE SOCIETY VIKARABAD

JUDGEMENT

(1.) This revision petition is filed by Union of India represented by the General Manager, South Central Railway questioning the order of the Third Addl. Judge, City Civil Court in O.P. No. 117 of 1993 whereby the learned Judge allowed the respondent's application under Section 8 of Arbitration Act for appointment of sole arbitrator to settle the disputes arising out of the Agreement No. 50/W/BG/91 dated 14-2-1992 entered into between the petitioner and the respondent. The learned Judge appointed Sri Padmanabha Gowd, retired District Judge as sole arbitrator.

(2.) The respondent was awarded a contract by the Railway Administration for stacking and leading of 50 mm gauge stone ballast between KM 129-135 SC-WD Section. The respondent contractor claimed that the Railway Administration did not pay for the work done pursuant to the said agreement. As the agreement contains an arbitration clause as per clause 64 of the General Conditions of Contract, the respondent applied to the General Manager to appoint an arbitrator. There was no response to the request made by the respondent. Hence, he filed the O.P. in the Civil Court for arbitration under various Sections of Arbitration Act, 1940 including Section 8. The stand taken by the petitioners was that the contractor did not collect and spread the ballast and did not execute the work as per the terms of the agreement and as the ballast was urgently required to ensure the safety of railway track, the contract was terminated and was entrusted to another agency. Various allegations made by the contractor were denied and it was contended that the claim of the contractor being untenable, the matter was not referred to arbitration. It was also contended that the claim was barred by limitation. The relevant portion of clause 64(3) of the General Conditions of Contract is as follows :

(3.) The learned trial Judge observed that in view of the neglect and refusal of designated arbitrator - General Manager to adjudicate upon or appoint his nominee or nominees as arbitrators, a vacancy had arisen and the Court gets the jurisdiction to appoint the Arbitrator. The learned Judge further observed that the intention not to fill up the vacancy is not inferable from the agreement and therefore, the Court can exercise its jurisdiction by appointing an arbitrator of its choice. The learned trial Judge relied on the decision of Supreme Court in Nandyal Co-operative Spinning Mills v. K. V. Mohan Rao, 1993 (2) SCC 654 : (1993 AIR SCW 2260).