GOPAL Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) THIS is an application for removal of the named Arbitrator and appointment of an Arbitrator in terms of an arbitration agreement between the parties dated the 27 of Jan., 1967. The application is made under Section 8 (b) read with Explanation to Section 9 and Section 11 of the Arbitration Act.

(2.) THE relevant facts are that by a contract in writing dated the 27th of January, 1967 between the parties the petitioner was appointed as clearing/handling and transport agents of the respondents in respect of a complete 1200 tons a day capacity cement making plant including its spares, tools and tackles as also for such other consignments as may be desired by the Director. Government Cement Factory on behalf of the Government of Uttar Pradesh being supplied by Messrs. Fives Lille Cail of Paris, France or by any suppliers at Calcutta Port or Dum Dum Airport on the terms and conditions contained in the said agreement.

(3.) IT is alleged by the petitioner that various works were done under the said contracts and bills were submitted by the petitioner to the respondent out of which a sum of Rupees 502786.75 still remains due and payable by the respondent to the petitioner. The respondent is alleged to have been raising various disputes in regard to the payment of the said bills of the petitioner and have not paid the same. IT is alleged by the petitioner that demands were made both orally and in writing from the respondent to pay the said sums but the respondent has failed and neglected to do so and in consequence the petitioner by a cable dated the 11th of November, 1968 regretted that no payment has been received by them in respect of their outstanding bills and asked for remittance of Rs. 75,000/- on account and requested them to intimate when the matter between them can be finalised. The respondent by their telegram dated the 11th of December, 1968 intimated that as per their account no amount was payable to the petitioner and also asked for sending the Accountant of the petitioner for scrutiny of the bills. The petitioner by their telegram and letter dated the 19th February, 1969 to the Director, Uttar Pradesh Government Cement Factory, Dalla Project, Mirzapur pointed out that the allegations of the respondent were incorrect and inter alia requested to send the due amounts and if the said sum is not paid petitioner gave notice that they Will take necessary steps for safeguarding their interests. Thereafter various correspondences and telegrams ensued between the parties and ultimately on the 17th/20th of July, 1970, the petitioner regretted that no payments were received by them in respect of their outstanding bills amounting to Rs. 5,02,786.75 and pointed out that under Clause 17 of the contract between the parties payments of the bills should have been made within 30 days upon presentation and although more than one year has elapsed after the presentation of the bills no payment has been received by the petitioner and they finally invoked the arbitration clause of the contract and called upon the respondent to nominate and appoint the arbitrator in terms of the arbitration clause within 15 days thereof otherwise the petitioner gave notice that they will appoint a person as the sole arbitrator to proceed with the matter. Copy of the said letter was also sent to the Secretary Government of Uttar Pradesh, Industries Department, the nominated arbitrator under the agreement with a request to enter upon the reference. As no reply was received by the petitioner to their said notice dated the 17th/20th of July, 1970 the petitioner again wrote a letter to the Director, Uttar Pradesh Government Cement Factory. Dalla Project dated the 22nd of August, 1970 with a copy to the Secretary, Government of Uttar Pradesh Industries Department, Lucknow stating that as one month has elapsed after the appointed arbitrator was requested to enter upon the reference in terms of the arbitration agreement for adjudicating the disputes and differences between the parties, the petitioner gave notice that they have no alternative but to move the Court for appointment of an arbitrator without any further reference to the respondent. Thereafter the petitioner by a letter dated the 12th of September, 1970 addressed to the Secretary Government of Uttar Pradesh, Industries Department, Lucknow with a copy to the Director, Uttar Pradesh Government Cement Factory, Dalla Project, again gave a notice as the dispute between the parties has not been referred to the arbitrator in terms of the arbitration clause in the agreement and requested the appointed arbitrator, that is, the Secretary to enter upon reference forthwith on receipt of the said letter and fixing the date of the meeting of the arbitrators for preliminary directions etc. As there was no response either from the appointed arbitrator or the Director of Uttar Pradesh Government Cement Factory, Dalla Project, the petitioner finally by a letter dated the 7th of January, 1971 to the Director Uttar Pradesh Government Cement Factory, Dalla Project gave a notice under Section 8 of the Arbitration Act that they have appointed Dr. Tapas Banerjee. Barrister-at-Law as a sole Arbitrator to adjudicate the disputes that have arisen between the parties and the respondent to call upon to concur in such appointment within 15 days after the service of the said notice and if they failed to concur, the petitioner would apply to appropriate Court for appointment of Dr. Banerjee as the sole Arbitrator with directions to enter upon reference and make an award. IT is only after the said notice under the Arbitration Act being served on the respondent, the Director, Uttar Pradesh Government Cement Factory, Dalla Project replied by a letter dated the 29th of January. 1971 and contended that it is only the Secretary to the Government of Uttar Pradesh, Industries Department who can be appointed as sole Arbitrator for adjudication of disputes between the parties and the points of dispute have already been referred to by the petitioner to the Secy., Govt. of Uttar Pradesh, the Arbitrator whose decision is awaited. IT was also contended that the agreement does not provide for appointment of any other person as the Arbitrator. By a letter dated the 6th of Feb., 1971 the respondent intimated the petitioner that as the petitioner by their letter dated the 7th of Jan., 1971 has referred to the Government for orders the Government is examining the same with reference to the arbitration proceeding desired by the respondent and in the meantime the Deputy Director, Uttar Pradesh Government Cement Fectory, Dalla Project by the said letter alleged that six bills of the petitioner have not been received by them and asked for copies of the same to enable them to examine the said bills. There were certain internal correspondences of the respondent which have been annexed to the affidavit-in-opposition of Sukhamay Ghosh affirmed on the 26th of May, 1961 referring to the views taken by the respondent's Departments including Law Department, according to which there was no dispute to be referred to the arbitration and as such there cannot be any question of appointment of an arbitrator and neglect or refusal on the part of the arbitrator to act and appointment of sole Arbitrator under Section 8 of the Arbitration Act. Finally, the respondent by a lengthy letter dated the 15th of April, 1971 addressed to the petitioner inter alia contended that as there is no dispute between the parties and the matter is pending investigation by the respondent and after their investigation if any dispute arises then the disputed matter can be referred to adjudication of the Secretary, Government of Uttar Pradesh, Industries Department in terms of the arbitration clause and as there was no dispute Section 8 of the Arbitration Act has no application. Thereafter on the 20th of April, 1971 the petitioner made this application for removal of the appointed arbitrator under the agreement and appointment of Dr. Tapas Banerjee, Barrister-at-Law or such other person as the Court deemed fit and proper as Arbitrator to adjudicate the dispute between the parties.