ARDESHAR IRANI Vs. STATE OF M P

JUDGEMENT

(1.) THIS order shall also govern the disposal of Misc. (First Appeal No. 117 of 1970 a. Krishnamurthy v. The State) Both these appeals are filed under Section 39 (1) (vi) of the Arbitration Act, 1940, against judgment of the Additional District Judge, mandsaur setting aside the award.

(2.) THE plaintiff-appellant in each case filed the suit for recovery of the amount claimed as due from the State Government on the basis of a building contract. On the suit being filed, the defendant State of Madhya Pradesh applied for staying the suit on the ground that there was an arbitration agreement between the parties, according to which, the dispute was to be decided by arbitration. Ultimately such an objection by the defendant was sustained and the dispute was referred for adjudication by the Arbitrator. Shri B. V. Subbarao, Superintending Engineer, irrigation Department of the State Government. There was no agreement made between the parties with regard to the remuneration to be paid to the arbitrator and the court while referring the dispute to the arbitrator also did not fix the remuneration payable to the arbitrator, It appears that the question of remuneration payable to the arbitrator did not engage the attention of either party, the court or even the arbitrator at that stage.

(3.) THEREAFTER the arbitiator by Memo No. A27/arb. dated the 27th October, 1969, gave notice to the parties under Section 14 of the Arbitration Act stating that he had made and signed the award on that day and further that his fees would be as already intimated so that the sealed envelope containing the award would be made available to either of the parties on payment of the full fees. On 13-111969, the arbitrator sent another memo No. Q-36/arb. dated 13-11-1969 addressed to the Officer Incharge of the case on behalf of the State Government stating that the plaintiffs were anxious to proceed further in the matter and that they had already informed the arbitrator about their willingness to pay not only their share of the fees but also the defendant's share of the fees in order to obtain the award. It was further stated by the arbitrator that unless the defendant paid its share of the fees within 10 days, the arbitrator would be free to accept the full fees from the plaintiffs and to hand over the award to them. No document containing such an offer by the plaintiffs 'to the arbitrator in writing has been pointed out to us so that it is clear that the plaintiffs' offer must have been made orally to the arbitrator. On receiving this communication from the arbitrator, the defendant filed an application dated 17-11-1969 in the court stating that the fees demanded by the arbitrator were exorbitant, even assuming that he was entitled to any payment in spite of his being a Government servant drawing the salary of a superintending Engineer. It was prayed in that application that the Court may fix the amount of fees, if any payable to the arbitrator and also direct the arbitrator to file the award in the court. A telegram was also sent by the defendant to the arbitrator on 20-11-1969 intimating him that an application praying for settlement of the fees had already been filed in the court so that the matter was sub judice and for that reason the award should not be handed over to the plaintiff. A confirmation copy of the telegram was also duly sent. Another application was filed in the court by the defendant on 25-11-1969 to the same effect. The full amount of fees as demanded by the arbitrator was also simultaneously deposited by the defendant in the court while praying for fixation of proper fees in accordance with section 38 of the Arbitration Act.