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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: R. B. CH. RAGHUNATH SINGH & CO.

DATE OF JUDGMENT27/07/1979

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA SHINGAL, P.N.

CITATION:  1980 AIR  103            1980 SCR  (1) 128  1979 SCC  (4)  21

ACT:      Arbitration Act,  1940, Section  8(1)(b)  applicability of-Arbitration agreement  specifies two names of arbitrators by designation-One  such designated  post abolished  and the second named  officer refuses  to act-Whether  a  Court  can appoint another arbitrator.      Dismissing the appeals by certificate, the Court

HEADNOTE:      HELD: 1.  The Court  had no power to supply the vacancy under section  8(1) (b)  of the  Arbitration Act only if the arbitration agreement  did show  that the  parties  did  not intend to  supply the vacancy. 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". If no such intention  could be  culled out  from  the  arbitration clause, the Court could supply the vacancy. [129 D-E].      M/s. Prabhat  General Agencies  etc. v.  Union of India and Anr.,[1971] 2 S.C.R. 564; affirmed.      Badam Satyanarayanamurthi v. Badam Venkataramanamurthi, A.I.R. 1948 Madras 312; distinguished.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 2472- 2473 of 1969.      From the  Judgment and  Decree dated  26-4-1966 of  the Allahabad High Court in F.A.F.O. No. 447/61 and 476/60.      R. N. Sachthey, R. B. Datar, Girish Chandra and Miss A. Subhashini for the Appellant.      R. K. Garg for the Respondent.      The Order of the Court was delivered by      UNTWALIA, J. These two appeals by certificate arise out of the  same proceedings between the parties. The respondent company 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

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of 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 same also. The Union of India has come to this Court. 129      The decisions  of the courts below in regard to Section 20 matter  is at  an end 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:-           "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   referred  for   arbitration  to  the  Chief      Commissioner/Director of  Storage,  Ministry  of  Food,      Government of  India, and  his decision  shall be final      and binding."      The post  of Director  of Storage,  Ministry  of  Food, Government 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 another Arbitrator. The argument put forward  on behalf  of the  appellant is that when there was a  named Arbitrator  even though he was named by office, it was  not open  to the  court to supply the vacancy in his place under Section 8(1) (b) of the Act. We did not find any substance in this argument. The court had no power 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 vacancy. There is  a direct  decision of  this Court’ in M/s. Prabhat General Agencies etc. v. Union of India & Another.(1)      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.(2),  in   support  of  his  submission  that  no  other Arbitrator could  be appointed  by the court under Section 8 of the  Act when  the  Arbitrator  named  in  the  agreement refused  to  act.  In  our  opinion  while  considering  the provisions of  Section 8(1) (b) of the Act, that decision is of no  help to  the appellant.  The full  Bench decision was given with reference to the corresponding provisions of 130 law contained  in Schedule  II of  Code of  Civil Procedure, 1908 in  paragraph 5  whereof the crucial words occurring in Section 8(1)(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."      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. 131