MAHINDRA LAL, DEPUTY COMMISSIONER Vs. MAYURA INDUSTRIES

JUDGEMENT

(1.) This appeal has arisen against the judgment of the learned single Judge of this Court dated May 25, 1982, allowing the petition filed under sections 33 read with section 31 of the Arbitration Act (hereinafter referred to as the Act) and holding that appellant Nos. 1 and 2 could not have referred the dispute, which had arisen amongst the parties, to the arbitrator in the manner adopted by them.

(2.) On February 17, 1975, an agreement Annexure R/3, was entered into, amongst appellants 1 and 2 and respondent, for the supply of refrigerators and deep freezers by the respondent to appellant Nos, 1 and 2 on certain terms and conditions. During the subsistence of the agreement, a dispute arose amongst the parties. Appellants 1 and 2 appointed Shri Mohinder Lai, the then Deputy Commissioner, to act as the sole arbitrator in accordance with Clause 18 of the agreement, which reads as under: - "If any question, difference or objection whatsoever shall, arise in any way connected with or arising out of this instrument or the meaning, or operation of any part thereof or the rights, duties or liabilities of either party than save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including whether its decision has been otherwise provided for and/or whether it has finally decided accordingly or whether the contract should be terminated or has been rightly terminated in whole or part and as regards the rights and obligations of the parties as the result of such termination shall be referred for arbitration to any officer appointed by Himachal Pradesh Government acting as such at the time of reference and his decision shall be final and binding and where the matter involves a claim the amount, if any, awarded in such arbitration shall be recoverable in respect of the matter so referred."

(3.) The act of appellant Nos. 1 and 2 in referring the dispute to the sole arbitration of the arbitrator was challenged by the respondent by filing a petition under section 33 read with section 31 of the Act on the ground that there could not be a unilateral reference by them without his consent and the same being bad in law, the authority of the arbitrator deserved to be revoked. The learned single Judge by placing reliance upon ILR 1977 HP 314 Trilok Chand Butail v. The Union Co -operative Insurance Society Ltd. etc. and AIR 1972 Punjab and Haryana 207 Union of India v. Hari Krishan Joshi and others, held that a unilateral arbitration reference was not possible except by proceedings under section 20 of the Act and accordingly the matter could not be referred to the arbitrator in the manner adopted by appellant Nos. 1 and 2. Against this decision, the present appeal has been preferred by appellants No, 1 and 2 making the arbitrator as appellant No. 3.