STATE OF ANDHRA PRADESH Vs. CH RAMALINGA REDDY

JUDGEMENT

(1.) (at the admission stage)

(2.) THE respondent by an agreement dated July 27, 1982, undertook to execute lining to the bed and side slopes of D.B Canal from M5/6 to M6/0 and M6/0 to 6/2. Ninety percent of the contract was completed by June 30, 1984 and the balance on April 16, 1985. Accordingly, the work was handed over. Despite repeated requests to settle the claims, no action was taken by the petitioners. By letter daced February 19, 1986, he requested to settle the claims within thirty days from the date of receipt of that letter. But however, oo July 25, 1986, the petitioners have rejected the claim. Thus arose the dispute between the respondent and the petitioners. As a result, the respondent invoked Arbitration Clause 73. THEreunder, a Panel of three arbitrators, viz., the Chief Engineer, Srisailam Project; Deputy Secretary, Finance, Government of Andhra Pradesh and the Director of Accounts, Pochampad Projects are the designated arbitrators. THE Government, in G.O. Rt. No. 5, Finance and Planning dt. January 2, 1988, upgraded the post of the Deputy Secretary, Finance to the post of Joint Secretary and he was kept in-charge of the subjects hitherto being dealt with. THE Chief Engineer, Srisailam Project, in his letter dated February 24, 1988 requested the respondent to enter into a supplemental agreement agreeing for arbitration by the Joint Secretary, Finance and Planning as well. THE respondent has stated that as there is no post of Deputy Secretary of Finance which is one of the designated arbitrators and the Joint Secretary is not the Deputy Secretary, thereby, the Deputy Secretary of Finance is incapable of acting as an arbitrator and as a consequence, a vacancy in the panel of arbitrators has arisen. As tbe contract provides for arbitration by the named three arbitrators and the second arbitrator viz , the Deputy Secretary is incapable of performing the duties as an arbitrator, he requested by his notice dated April 18, 1988 under Section 8 of the Indian Arbitration Act (Act 10 of 1940), for 'short, "the Act' , to refer the dispute within fifteen days from the date of receipt of the notice to any of the named four retired Chief Engineers from the service of the first petitioner and reiterated in his notice dated April 20, and April 21,1988 respectively. Since it revoked no response, he invoked the jurisdiction of the Court below under Sections 8, 1 1 and 12 of the Act for appointment of a retired Chief Engineer as a sole arbitrator and intimated to the petitioners. This was resisted by the petitioners. It is contended that the Joint Secretary, Finance, is looking after the same subject viz , arbitration also, therefore, he is one of the designated arbitrators under the contract; a supplemental agreement was asked to be entered into; the respondent did not agree for the same; therefore, the petitioners are prepared to arbitrate through the remaining two arbitrators. THEy are not agreeable for the appointment of a sole arbitratora retired Chief Engineer. Tbe Court below, after giving reasonable opportunity to both patties and after considering the documentary evidence and the contentions advanced, appointed one Sri A.P. Ranganatha Swamy, a retired Chief Engineer as sole arbitrator and directed him to give award withia four months from the date of his entering in the reference. Assailing the legality thereof, the revision petitoin has been filed. At the stage of admission, the respondent has taken notice and Sri Subrahmanya Reddy, Advocate has entered his appearance on behalf of the respondent. Both sides addressed the arguments on merits.

(3.) SECTION 8 (1) (b) of the Act is relevant which reads thus :