P (PLP)

In pursuance of the reference, Pherumal Lilaram the arbitrator appointed by Gobindram and Sons, the defendants in the suit, wrote to the parties calling upon them to appear before the arbitrators with all their evidence on 25th February 1943. On the 25th nothing was done as Gobindram and Sons did not attend the hearing. On the 26th the arbitrators fixed another hearing for 25th March 1943. On 5th March 1943 the arbitrators held some proceedings and called upon Messrs. Gobindram and Sons to produce their Sukkur noondh book at the adjourned hearing which was fixed for 12th March 1943. On 12th March 1943, Gobindram & Sons wrote to the arbitrators pointing out that the time given to them for the production of the noondh boot was insufficient and requested the arbitrators to give them further time or a fortnight. On the 15th of March the arbitrators intimated to the parties that in accordance with the request made by Gobindram & Sons the hearing was adjourned to 1st Apkil 1943. From 1st April 1943 to July 1943 nothing was done by the arbitrators. On 7th July 1943, Bhai Assandas, the arbitrator appointed by Hariram Kbiaram wrote to the defendants Godindram & Sons, expressing his inability to act as an arbitrator. On 12th August 1943, Gobindram & Sons wrote to Khiaram that as Assandas had expressed his inability to act, Hariram Khiaram should appoint another arbitrator. On 20th August 1943, Hariram Kairam sent a reply stating that as the firm of Hariram Khiaram had ceased to exist, it would not serve any purpose to proceed with the arbitration. On 6th September 1943 Godindram & Sons wrote to Hariram Khiaram that as they had failed to appoint an arbitrator, they appoint Mr. Holaram as an arbitrator on their behalf. Hariram Khairam refused to recognise the appointment of Holaram and contended that the refercnce had lapsed by reason of the inability of Bhai Assandas, the arbitrator appointed by them under the arbitration agreement, to proceed with arbitration On 14th October 1943, Gobindram and Sons through their advocate wrote to Hariram Kh.iaram stating that as it is possible that the appointment of Seth Holaram made by them may be challenged they appointed their arbitrator Pherusmal Lilaram nominated in the arbitration agreement to act as the sole arbitrator in the dispute and required Hariram Khiaram to appear before him. Nothing happened between 14th October 1943 and 96th February 1943. On 25th February 1944, Pherumal Lilaram gave notice to the parties fixing the hearing of the arbitration for 6t11 March 1944. On 7th March 1944, Hariram Khiaram wrote to Pherumal Lilaram disputing his authority to proceed with the arbitration and informed him that he had filed suits in respect of the matters in dispute. Shortly after the institution of the suits on 18th July 1944, Gobind ram and Sons, the defendants in the suits, applied for a stay of the suits. The learned judge stayed the suits holding that there was an arbitration agreement within the meaning of the Arbitration Act, 1940, and that section 34, Arbitration 1940, applied in terms to the subject‑matters involved in the suits. We think in dealing, with the applications for stay the learned Judge has lost sight of the provisions of S. 8, Arbitration Act of 1940. Section 8 reads ; 8. (1) In any of the following cases ; (a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not after differences have arisen, concur in the appointment or appointments or (b) If any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be do not supply the vacancy ; or (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him.; any party may serve the other parties or the arbitra tor as the case may be, with a written notice to concur in the appointment or appointments or in supplying the Vacancy. (2) If the app6intment is not inside within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have power to act in the reference and to make an award as if he or they had been appointed by consent of all parties." The learned judge does not appear to have appreciated the difference in the language of section 8 (11 (b) and section 9 of the Act, On a plain reading of section 8, it should have been manifest to the learned judge that whereas under section 8 (1) (a) the arbitration agreement contemplates a reference to one or more arbitrators to be appointed by the consent of the parties, clause (b) of section 8 (1) contemplates an appointed arbitrator or umpire. The learned judge has apparently construed the arbitration agreement in question to fall within the purview of section 9, Arbitration Act of 1940 But section 9 does not refer to an arbitration agreement in which provision is made for a reference to appointed arbitrators. Section 9 deals with an arbitration agreement in which provision is made for a reference to No arbitrators, ogre to be appoint ed by each party. In the arbitration agreement before us, 'provision is made' for reference to two appointed arbitrators. The procedure to be allotted in a case where the appointed arbitrator refuses to act or is incapable of acting or dies, is laid down in section 8 itself, which lays down that

" any party may serve the other parties o: the arbitrators, as the case may be, with a written notice is concur in the appointment or appointments or in supplying the vacancy." It is common ground that in this case no such written notice was given to Hariram Khiaram to concur in the appointment or in supplying the vacancy. Sub‑section (2) of section 8 of the Act lays down that ; " If the appointment is not made within fifteen clear days after the service of the said notice, the Court may on the application of the party who gave the notice ...appoint an arbitrator." In the present case it is an admitted position that no such application was ever made to the Court. The procedure which has been followed by the defendants is the procedure laid down by section 9, Arbitration Act which has no application to an arbitration agreement which provides for a reference to appointed arbitrators as distinguished from arbitrators to be appointed. (a) This aspect of the case has been considered by the Division Bench of the Calcutta High Court in General Electric Trading Co. v. Siemens (India) Limited, 56 Cal. 848 : (A. I. R. (16) 1929 Cal. 177), In that case an application was made under section 19, Arbitration Act, 1899, corresponding to section 34, Arbitration Act of 1940 C. C. Ghose J. delivering the judge ment of the Division Bench observed ; Now in this case, two arbitrators have been mutually agreed upon and they have been appointed as such by the parties. Therefore, section 9, Arbitration Act has no application, because the language used therein has reference to a. case where the submission is to two arbitrators one to be appointed by each party. Let us next see whether there is anything in the language used in section 8, Arbitration Act, which prevents the application of section 8 to this case, having regard to the events that have happened section 8 (1) (a) obviously has no application, because it deals with the case of a reference to a single arbitrator. Turning to section 8 (1) (b), there is nothing, in my opinion, in the language used therein which would render it inapplicable to this case. To start with the arbitrator who has refused to act, etc. is air appoint ed arbitrator. In the second place, the submission does of show that the place of the arbitrator who has refused to act, etc., should not be filled up. In the third place, it is clear that the parties have not cared to fill up the vacant place. Therefore, I do not see why section 8 (1) (b) should not apply. This is the conclusion I come to on the language used in the section, It is not necessary to refer to other passages in the judgment of the learned judge which deal with the view of Scott C. J. of the Bombay High Court in the matter of the interpretation of section 8 (1) (b) as it stood before the Arbitration Act of 1940. , Under the Arbitration Act of 1940, no such difficulty as was present before Scott C. J. arises in the interpretation of section 8 (1) (b). Even in the matter of the interpretation of section 8 (1) (b), as enacted in the Arbitration Act of 1899, Ghose J. disagreed with Scott C. J., and agreed with Marten.J. who held that where provision is made for a reference to two appointed arbitrators, section. 8 (1) (b) applied. We think the order of the Chief Judge of the Small Causes Court staying the suits should be set aside. The arbitration agreement was executed in 1942, and one of the appointed arbitrators refused to act as far back as 1943 and no attempt has been made at any time to supply the vacancy through the assistance of the Court as provided by section 8, Arbitration Act 1940. We do not think we would be justified in permitting the defendants at this late stage to rectify their error of procedure. We therefore set aside the order of .the learned Small Causes Court Judge staying the two suits, and direct him to proceed with the suits and dispose of them according to law. The application is allowed in the Court. H.M A. Application allowed.