UNION OF INDIA Vs. HARI KRISHAN JOSHI

JUDGEMENT

(1.) THIS petition for revision is directed against the order of the trial Court holding that there could be no unilateral reference to arbitration. The case of the petitioner is that there was a contract between the Union of India and the respondents. In the contract there is an arbitration clause to the effect that any differences or disputes arising between the parties with reference to the contract, will be settled by the sole arbitration of General Manager or his nominee. According to the petitioner the disputes having arisen the matter was referred to the nominee of the General Manager. It is common ground that no notice of this reference was given to the respondent or that after notice he refused to participate in the reference. It is only after the reference had been made that the arbitrator sent a notice to the respondent and the respondent then made an application under Section 33. Two principal grounds were urged in that application, that the arbitration may be set aside under Section 33 wherein a prayer has been made (1) that there is no valid reference and the arbitrator cannot proceed with the same; and (2) that there was no completed contract and, therefore, there is no arbitration clause on the basis of which the arbitration can proceed. The petitioner also took the plea in the application under Section 33 of the Arbitration Act that the Civil Court at Julundar where the application was made had no jurisdiction to entertain the same.

(2.) THE trial Court came to the conclusion on November 28, 1969 by a separate order that the Civil Court at Jullundur had jurisdiction. This order was not called in question by the petitioner in revision. The trial court then proceeded to determine only one question, namely, that the reference being a unilateral was not legal. Basing itself on the decision of the Supreme Court in Thawardas Pherumal v. Union of India, AIR 1955 SC 468 the court below came to the conclusion that such a reference would be no reference in the eye of law and on that basis allowed the application under Section 33. It did not in this situation decide the other question that there was no arbitration agreement because there was no completed contract.

(3.) THE other contention of Mr. Gujral is that there can be a unilateral reference and the learned counsel relies on the decision of the Allahabad High Court in Balika Devi v. Kedar Nath Puri, AIR 1956 All 377. In this case the learned Judges of the Allahabad High Court distinguished the Supreme Court decision in Thawardas Pherumal's case, AIR 1955 SC 468 (supra ). They, however, did not doubt the correctness of the Supreme Court decision which naturally they could not. The Allahabad case was one where under Section 8, the matter had arisen. That itself presupposes that the parties were ad idem in the matter of arbitration. Anyhow the matter stands concluded by the decision of the Lahore High Court reported as The Punjab Province v. Dr. Lakhmi Dass, (1944)46 Pun LR 50= (AIR 1944 Lah 149) and Thawardas Pherumal, AIR 1955 SC 468 (supra ). In Lakhmi Dass's case, (1944)46 Pun LR 50= (AIR 1944 Lah 149) it was observed as follows:--