Union of India v. R. B. Ch Raghunath Singh & Co.
UNTWALIA, J. These two appeals by certificate arise out of the
same proceedings between the parties. The respondent company
G applied to the Trial Court for the filing of the Arbitration agreement
under Section 20 of the Arbitration Act, 1940 hereinafter called the
Act and for appointment of an Arbitrator under Section 8. The
applications were allowed. An Arbitrator was appointed. The Union
of India took the matter in appeals to the Allahabad High Court.
The High Court has dismissed the appeal arising out of the order of
H the Trial Court under Section 20 of the Act and has treated the appeal
arising out of Section 8 order as a revision and dismissed the samo·
also. The Union of India has come to this Court.
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UNION v. RAGllUNATH SINGH & co. (Untwalia, J.) 129
The decisions of the courts below in regard to Section 20 matM
is at an e"nd now. It was denied on behalf of the appellant that
there was any Arbitration agreement. The findings of the court below
in this regard could not be assailed at all.
The Arbitration clause in the contract between the parties ran as
follows n.
"All disputes or differences arising between the parties or
their representatives and the Controller of Rationing Delhi
at any time hereafter and of whatever nature arising out of
or in respect of the contract shall be refurred for arbitration
to the Chief Commissioner /Director of Storage, Ministry of
Food, Government of India, and his decision shall be final
and bi"nding."
The post of Director of Storage, Ministry of Food, Gowrnment
of India was abolished and no person holding that post was available
for arbitration for the purpose of the arbitration clause aforesaid.
The Chief Commissioner, however, was available but he refused to
act. That led the respondent company to apply to the court under
Section 8 of the Act for appointment of a'nother Arbitrator. The
argumerrt put forward on behalf of the appellant is that when there
. was a named Arbitrator even thongh he was named by office, it was
not open to the court to supply the vacancy in his place under Section
S(l)(b) of the Act. We did not find any substa"nce in this argument.
The court had no powzr to supply the vacancy under Section 8(1) (b)
only if the arbitration agreement did show that the parties did not
intend to supply the vacancy. If no such intention could be culled
out from the arbitration clause, the court could supply the vaca"ncy.
There is a direct decision of this Court in M/s . . Prabhat General
Agencies etc. v. Union of llldia & Another.(')
Mr. R. B. Datar, counsel for the appellant placed the reliance
upon the Full Bench Decision of Madras High Court in Badam
Satayanarayanamurthi v. Badam Venkataramanamurthi & Ors.('),
in support of his submission that no other Arbitrator could
be appointed by the court under Section 8 of the Ad
when tho Arbitrator named in the agreement refused to act. In
our opinion while considering the provisions of SectiO"n 8 (1) (b) of
the Act, that decision is of no help to the appellant. The full Bench
decision was given with reference t"o the corresponding provisions of
(ll (1971] 2 s.c.R. 564.
(2) A.l.R. 1948 Mtdros 312.
D·
130 SUPREMP. COURT REPORTS [1980] 1 S.C.R.
A law contained in Schedule II of Code of Civil Procedure, 1908 in '-,..-..
paragraph 5 whereof the crucial words occurring in Section S(l){b) •
of the Act were not there. The words in Section 8 (1) (b) are these :
"and arbitration agreement does not show that it was intended that ,
the vacancy should not be supplied."
B For the reasons stated above, we hold that there is no merit in
either of the two appeals. They are accordingly dismissed with costs
which we quantify at Rs. 1500 /-. "- •
S.R. Appeals dismissed.
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