ARDESHAR SORABJI Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE appellants in all these three appeals are contractors who had done work in the Madhya Pradesh side of what is popularly known as the "gandhi Sagar scheme". They had in course of their contract been given part payments on assessment of work done, but when the final settlement was to be made on equivalent Citation: different dates in each of the contracts there cropped up certain differences as to the sums ultimately payable. The work by its very nature is slow and there being always some scope for difference of opinion such differences are by no means unusual and have been provided for in all these written agreements by an arbitration clause which is a standard one, and in this case follows the wording in vogue in the Central P. W. D. and numbered Clause 25 in the written Instruments. The essence of it is that all such disputes are to be referred to the arbitration of the Superintending Engineer in charge of the scheme for the time being. This officer would be in any case a servant of the Government, that is one of the parties and might quite conceivably be the very one closely associated with the work out of which the disputes arise. All the same, these contracts include this condition presumably on the theory that a public servant of that standing is assumed not to be so over-zealous in the interests of Government as to take sides or assume a partisan attitude. Anyway, this clause having been held to be good by the Courts it was expected that the claimants would first move for a reference to the arbitration before going to the courts. Actually, however, in circumstances to be set out presently they filed suits each for his claim alleging inter alia that the other side, that is, defendant government had been unwilling to join in the reference to arbitration. The latter, however, on receipt of summons entered appearance and before taking any other step of the proceedings, asked for stay under Section 34, Arbitration Act till the reference could be made and the arbitrator enabled to decide. This being accepted by the lower Court the plaintiffs have come up in appeal. The only question that has to be considered at this stage is whether immediately before the filing of the suits and after it the defendant had been unwilling to join in the reference. If so, the stay would be improper: but in case the defendant had been and was still willing to go before the arbitrator the stay was proper and need not be interfered with.

(2.) THOUGH this is the only question that can be properly examined at this stage the plaintiff-appellants had both in the lower Court and somewhat summarily in this court, gone into the fitness of the Superintending Engineer for the time-being who was one Ranganna in two of the three suits to discharge the functions of arbitrator. We are really not concerned with that at this stage. Even in the event of the arbitration being compulsory, it would be open to either party to move the court under the Arbitration Act that the particular arbitrator nominated in the agreement cannot function. and a variation in the personnel was called for for reasons to be given. That court will be competent to consider them and decide whether any change would be called for.

(3.) IN the case of Ardeshar Irani the position is as follows: The dispute having arisen sometime in 1960 the plaintiff-contractor wrote at length on 30-11-1960 (page 42 of the paperbook ). He sets out the history of the contract and the particulars of the disputed items with all of which we are not directly concerned at this stage. Then he speaks of the arbitration and asserts that he is ready and willing to go to arbitration in respect of the aforesaid claim. This "rea-diness" is immediately qualified by the condition that it should not go to the superintending engineer for the time being, because he had as executive engineer in the same division had some administrative connection with the work concerned. In effect it was a statement expressing no readiness to accept the arbitration of the person mentioned in Clause 25 of the agreement, but asking for a variation as a condition precedent to the implementation of the arbitration agreement. Government did not reply to it and accordingly the plaintiff sent a notice on 5-51961 in which he repeated this "readiness" to go to arbitration on condition that the arbitrator would be somebody other than the one mentioned in the agreement. Government being silent even on this he filed the suit on 31-7-1961 and there also he entered into a lengthy averment that though the arbitration agreement was that the arbitrator should be the superintending engineer for the time being in the particular case the superintending engineer concerned was in the view of the plaintiff unacceptable as arbitrator. The defendant having insisted upon arbitration and having asked for stay under Section 34 of the Arbitration Act the Court had to make thp order now assailed.