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Cites 5 docs
The Companies Act, 1956
Smt. Kusum Gupta Alias Kusum ... vs Haryana State Small Industries ... on 31 July, 1986
Section 2 in The Companies Act, 1956
Smt. Rukmanibai Gupta vs Collector Jabalpur And Ors. on 22 October, 1980
The Arbitration Act, 1940

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Orissa High Court
The Managing Director, Orissa ... vs Ramesh Chandra Swain And Ors. on 14 May, 1991
Equivalent citations: AIR 1992 Ori 35
Author: A Pasayat
Bench: A Pasayat

ORDER

A. Pasayat, J.

1. These two civil revisions are interlinked and, therefore, and disposed of by this common judgment.

2. The background facts are that tenders were invited by the petitioner, a Government Company incorporated under the Companies Act, 1956, for collection of cashewnuts and apples from Jogia Hill Plantation in Ganjam district. Opposite party No. 1 (hereinafter referred to as 'the tenderer') submitted his tender and after acceptance was required to make certain deposits towards the collection price. An agreement was entered into incorporating terms of the contract. According to the tenderer, because of either inaction or delayed action of the petitioner-corporation the contract became frustrated and therefore, he demanded return of his deposits. Since the corporation did not respond to the notices issued, a demand for appointment of an arbitrator was made as per Clause (8) of the agreement. The said notice is stated to have been received by the corporation on 13-7-1988, and the reminder was issued on 13-10-1988 reiterating the demands made, He submitted to the jurisdiction of the arbitrator, viz., the Commissioner-cum-Secretary, Agriculture and Co-operative as per the agreement, and wrote to the said officer for adjudication of the disputes and differences. But the arbitrator did not take any action. Therefore, the tenderer moved the learned Subordinate Judge, Bhubaneswar for interference. The prayer was that the named arbitrator was to be removed since he did not take action to adjudicate the dispute within the statutory period and in his place another arbitrator was to be appointed to arbitrate the dispute.

3. The Corporation and the Assistant Plantation Manager were impleded as parties. The allegations made in the petition were denied and disputed by them. Though objections were filed and the original agreement was produced by the Corporation, pursuant to the direction given by the learned Subordinate Judge, it did not contest when the matter was taken up for adjudication by the learned Subordinate Judge. It was held on consideration of the materials by the learned Subordinate Judge that the Commissioner-cum-Secretary, Agriculture and Co-operation was to be removed and another arbitrator was to be appointed for adjudication of the disputes and the differences. The parties were directed to file list of three names each for selection and appointment within one month from the date of the order, i.e., 23-11-1989. The parties were directed to furnish the lists on 20-12-1989. On that date, the tenderer appeared and submitted a list; but no list was submitted by the Corporation. On 20-12-1989, three names were submitted by the tenderer which were not accepted by the learned Subordinate Judge. Direction for 'submission of a fresh list was given which was submitted on 17-1-1990. From the list submitted by the tenderer, Shri D. Hota, Retired District Judge was appointed as the arbitrator. The appointment of Shri Hota as the arbitrator is the subject-matter of challenge in Civil Revision No. 215 of 1990.

4. The main plank of challenge by the petitioner is that the clause on which the tenderer placed reliance is not arbitration clause and the named official in Clause (8) was a mediator. It is additionally averred that according to the terms of Clause (8), the official indicated is the Commissioner, Agriculture and Rural Development, Government of Orissa, Bhubaneswar. Instead of asking for his removal with oblique motives, the tenderer sought for removal of the Commissioner-cum-Secretary, Agriculture and Cooperation Department, who had nothing to do over the dispute and had no role to play and, therefore, the entire proceeding was vitiated. The learned counsel for the tenderer submits that these disputes were never raised before the Court below and they should not be permitted to be raised here.

5. For resolution of the dispute a look at the clause in question is necessary. The same is quoted below.

"8. In case of any dispute or differences of opinion arising out of the agreement, the matter shall be referred for orders of the Commissioner, Agriculture and Rural Development, Government of Orissa, Bhubaneswar whose decision on the issue shall be final and binding on both the parties."

6. An arbitration agreement must be in writing if it is to come within the statutory framework, but no particular form is necessary. What is necessary in an arbitration clause is that each party shall agree to refer disputes to arbitration; and it is an essential ingredient of an arbitration clause that either party may, in the event of a dispute arising, refer it, in the provided manner, to arbitration. In other words, the clause must give bilateral rights of reference. There is some amount of dispute whether an arbitration clause must be a mutual or a unilateral arbitration clause suffices. However, we are not very much presently concerned with that controversy because undisputedly here there is mutility. In order to ascertain whether a clause is an arbitration clause or not, it has to be seen whether the relevant clause contemplated of parties, disputes and finality which are the essential ingredients to bring in the provision of arbitration. There is no requirement for mention of the words "arbitrator" or "arbitration", (see Smt. Rukmanibai Gupta v. Collector, AIR 1981 SC 479). In terms of Section 2(a), "arbitration agreement" means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.

7. A somewhat similar plea was considered by this Court in AIR 1981 Ori 104 : Praharaj Patners v. State of Orissa, where it was held that the intention of the parties was to submit to arbitration. A similar case came up for consideration before the Punjab and Haryana High Court in AIR 1985 Punj & Har 219, Girdharilal Bansal v. The Chairman, Bhakra Beas Management Board, Chandigarh, where it was held that the clause was clear enough to show that the dispute which was to arise between the parties had to be referred to the arbitrator. In the instant case, all the three requirements indicated are present. Therefore, the plea that there was no clause for arbitration is not acceptable. Though the legality of the order appointing Shri D. Hota as the arbitrator and reasons for such appointment were assailed, I feel that they have become academic in view of the fact that Section 41A of the Arbitration (Orissa Amendment) Act, 1982 holds the field and the matter is to be adjudicated by the Tribunal constituted for the purpose. Consequently, the appointment of Shri D. Hota as Arbitrator is set aside.

8. I direct that a reference shall be made to the Arbitration Tribunal for adjudication and disposal in accordance with Law. The period during which the matter was pending before the learned Subordinate Judge and before this Court shall be excluded while computing the period of limitation, if any, for the purpose of reference to the Tribunal.

Both the civil revisions are disposed of. No costs.