UNION OF INDIA Vs. NEW INDIA CONSTRUCTIONS, DELHI

JUDGEMENT

(1.) Messrs New India Constructors obtained two contracts for the construction of certain tenements to be made in Delhi. Clause 25 of each, of the contracts provided means for the settlement of disputes. Clause 25 ran as follows :-

(2.) Differences having arisen between the parties, Messrs New India Constructors sent a notice to the Chief Engineer on the 3rd of December, 1951 to enter upon and proceed with the arbitration and in case he was not inclined to arbitrate to appoint some other suitable person as an arbitrator. This notice was served on the Chief Engineer on the 7th of December, 1951. No reply was given to this notice. On the 9th February, 1951, the New India Constructors approached the Court with an application under sections 5, 8, 11, 12 "and other relevant provisions" of the Arbitration Act, 1940 , stating that the Chief Engineer had neglected and failed to enter on the arbitration and to use reasonable despatch in entering on and proceeding with the reference and praying that as he had not made any appointment the authority of the Chief Engineer as an arbitrator be revoked and the Court may be pleased to appoint any person to act as sole arbitrator in place of the said Chief Engineer. This application was put in Court on the 9th of February, 1952. Service of this application was made on the respondent Government of India on the 22nd of February, 1952. On the 25th of February, 1952, the respondent approached the Court for an adjournment, which was granted. On the 27th/28th February, 1952, the Chief Engineer appointed Mr. C.P. Malik, Superintending Engineer, as the arbitrator to settle the dispute. On the 8th of March, 1952, written statement was put in Court on behalf of Government stating that owing to unavoidable circumstances it was not possible to appoint an arbitrator immediately on receipt of applicants' demand but that the Chief Engineer had on the 27th/28th February, 1952, already appointed Mr. C.P. Malik Superintending Engineer, Central Circle, New Delhi, as an arbitrator to decide the dispute under clause 25 of the agreement and that the arbitrator having been appointed the present petition was infructuous and should be dismissed. On the 5th March, the court passed an order holding that as the Chief Engineer had failed to act, his failure to act for a month amounted to neglect on his part and that the unavoidable circumstances under which the arbitrator could not act had not been explained and that this neglect was sufficient to a point a new arbitrator.

(3.) The Court therefore, appointed Mr. Pritam Singh Safeer, Advocate to act as an arbitrator in this case. The Government has appealed to this Court. We have heard Mr. Daphtary on behalf of Governmental and Mr. Kundan Lal Gosain on behalf of the New India Constructors.