UNION OF INDIAversusR. B. CH RAGHUNATH SINGH & CO.

     128

A                                  UNION OF INDIA
                                              v.
                     R. B. CH RAGHUNATH SINGH & CO.
                                      July 27, 1979                                        '
B                      [N. L. UNTWALIA AND A. P. SEN, JJ.)
         Arbitration ~4ct, 1940, Section 8(1)(b) applicability of-Atbitration agree-
     ment specifies two names of arbitrators by designation-One such designated post   ~
     abolished and the second nan1cd officer refuses ta act-Whether a Court can
     (lppoint another arbitrator.

       D.isruissjng the appeals by certific21te, th'e Court
c        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 rarties did not intend to supply the vacancy. The words in sr.;:ction
    8 ( 1) (b) arc these : "and arbitration agreemeint does not show that it Yl&S
    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.
D                                                                       [129 D-EJ.
        Mjs. Prabhat General Agencies etc. v. Union of India and Anr.,     [1971] 2
     S.C.R. 564; affirmed.
      Bada1n Satyanarayananiurthi v. Badarn Vrenkatara1nanamurthi, A.1.R.      1948-
    Madras 312; distinguished.

E       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. ~achthey, R. B. Datar, Girish Chandra                and Miss A.
F   Subhashini for the Appellant.
       R. K. Garg for the Respondent.
       Th·~ 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
G   applied to the Trial Court for the filing of the Arbitration agreement                 l
    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.
                    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.
     J
              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             c
              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.        D·
          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      E
          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         F
          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                  G
         be appointed by the court under Section 8 of the Ad

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         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
                                                                                      H
          (ll (1971] 2 s.c.R. 564.
          (2) A.l.R. 1948 Mtdros 312.
      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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