PUNJAB STATE Vs. SAI BUILDERS

JUDGEMENT

(1.) This order will dispose of two Civil Revision Nos. 1932 and 1933 of 1992. The facts giving rise to the present petitions are as follows:

(2.) The petitioner-State of Punjab and the Satluj Construction Company, entered into an agreement for executing certain works on the SYL Canal. As this work was not completed in terms of the contract, the petitioner and the respondent, herein, entered into a work order dated February 11, 1988 for the execution of the remaining work. A dispute thereafter, arose between the parties herein arising out of the execution of the works and the respondent seeking to invoke the arbitration clause in the agreement, filed and application under Section 20 of the Arbitration Act (hereinafter called 'the Act') for appointment of an arbitrator. This application was allowed by the Sub-Judge, and it was directed, vide order dated August 1, 1989 that the matter be referred to the arbitration of the Superintending Engineer (Construction Circle No. 1II S.Y.L. Canal Project, Punjab, Chandigarh) who was the named arbitrator in the agreement. The respondent filed an appeal against the said order and that appeal was allowed on August 17, 1990 by the District Judge, who directed that the Arbitrator be appointed in terms of Clause 63 of the agreement and he further ordered that the petitioner-State was to forward a panel of three Superintending Engineers by name within a period of thirty days for the appointment of an arbitrator from amongst those named, failing which the respondent/contractor was to forward a list of three names of his own for the said purpose leaving the option to the petitioner to select one person from that list within 15 days and in the event of not doing so, the respondent was entitled to name the arbitrator. It appears that the petitioner did not forward the panel of three Superintending Engineers within 30 days as directed by the District Judge, and on this omission the respondent forwarded a panel of three names. The petitioner, however, did not select any person from that panel, with the result that the respondent proceeded to appoint respondent No. 2, Shri M.P. Sachdeva, Superintending Engineer as the Arbitrator. It appears that the Arbitrator had, in fact, entered into the arbitration and substantial proceedings had already been taken when the petitioner filed an application under Sections 5 and 11 of the Act, for the revocation of the appointment of respondent No. 2 as the arbitrator, primarily on the ground that the arbitrator had been appointed contrary to the directions given by the District Judge inasmuch as the period of 30 days during which the names of three Supertending Engineers were to be forwarded was to be determined from the date when the copy of the order was supplied to the petitioner and not from the date of order and if this interpretation was to be accepted, the names forwarded were within time. It was also asserted in the application that Sh. M.P. Sachdeva, the arbitrator was one of the Senior Officers of the department wherein one Ram Murti Singla was also working and this person was the husband of one and brother of the other partner/director of the respondent firm and as such there was an apprehension that the arbitrator would not do justice to the petitioner. Both these arguments were repelled by the Sub-Judge, who found that the names forwarded by the petitioner were beyond the time fixed by the District Judge and the appointment of Shri M.P. Sachdeva, Superintending Engineer was in terms of Clause 63 of the agreement and, therefore, valid. It was also found that apprehension of the petitioner that it would not get justice from the arbitrator on account of his close association with Ram Murti Singla, was without basis. On these two accounts, the application was dismissed. The present petition has been filed impugning that order.

(3.) It has been argued by Mr. N.S. Boparai, learned State counsel that the finding of the learned Sub-Judge that the arbitrator was to be appointed in accordance with the terms of Clause 63 of the Agreement and the appointment of Shri Sachdeva was, therefore, valid, was erroneous inasmuch as that the said clause did not apply to the work order executed between the parties herein. He has drawn my attention to the photostat copy of the work order Form executed between the parties in which it has been clearly slated that in case of any dispute arising out of the execution of this work, the Superintending Engineer Govt. Circle No. 1II, would determine the matter and his order would be final. He has also urged that in view of the facts setout above the close association of the arbitrator with Ram Murti Singla precluded a fair arbitration and it was well nigh impossible to get justice from the Arbitrator.