Appeal No 207068
Appeal by Special Leave from the Judgment and Order dated 16 2 1968 of the Punjab  Haryana High Court in Civil Revi sion Case No 10766 and Civil Appeal No 178469
Appeal by Special Leave from the
Judgment and Order dated 25 11 2968 of the Punjab  Haryana High Court in Civil Revision No 239 of 1967
GL Sanghi and K J John for the Appellants
SN Anand and RN Sachthey for the Respondents
39 The Judgment of the Court was delivered by KAILASAM J
Civil Appeal No 2070 of 1963 is by spe cial leave by the appellants against the judgment of the Punjab and Haryana High Court dismissing the appellant s petition for revising an order passed by the Subordinate Judge Ambala City allowing an application by the State respondent and appointing the Arbitration Committee
The appellants entered into an agreement with the 
Public Works Department Punjab State for execution of certain construc tion works in August 1952
They entered into an agreement exhibit A I
The agreement provided an arbitration clause in the following terms  In the matter of dispute the case shall be referred to the Settlement Committee consist ing of a Superintending Engineer an officer of the
Finance Department of the rank of at least Deputy Secretary and an Accounts Offi cer all to be nominated by the Government for arbitration whose decision will be final
 Disputes arose between the parties and the State of Punjab appointed a Settlement Committee by notification dated 31st January 1958
The Settlement Committee entered upon the arbitration but before the Arbitration Committee concluded its work the State Government unilaterally abolished the Committee by an order dated 27th March 1962
Subsequent ly by a notification dated 18th May 1962 the State Gov ernment constituted a Committee giving the names of three officers with headquarters at Nangal
The new Committee took up the dispute as well as a claim made by the Govern ment and issued notice to the parties
The new Settlement Committee passed an award on 25th July 1962
The appel lants challenged the validity of the award in the Civil Court
The Civil Court set aside the second Settlement Committee s award on the ground that it was made by the Committee even before the expiry of the time given by it to the appellants
There after the second Settlement Commit tee also ceased to function
The State Government gave notice to the appellant under section 81 of the Arbitration Act to
concur in the appointment of a fresh Settlement Committee to arbitrate the matter between the parties
The appellants did not respond to the notice
The State Government made an application to the trial court for appointment of an arbitrator under section 32 of the Arbitration Act
The appellants raised two objections namely that section 8 was not ap plicable to the case and that by abolition of the first Settlement Committee the State Government had put an end to the arbitration clause agreed to between the parties by the agreement at exhibit A 1
The learned JUdge rejected both the grounds and held that after the State Government withdrew the personnel of the first Settlement Committee they became incapable of acting and therefore the court Was entitled to act under section 81b of the Act
On the second point it held that the terms of the arbitration clause in the agreement exhibit A 1 did not justify reading into it the condi tion that the intention of the parties was that the vacan cies in the Settlement Committee for arbitration were not to be filled
4 240SCI77 40 In the Revision Application before the High Court the appellants in effect raised the same contentions though in a slightly different form
The High Court agreed with the view of the trial Judge that when once the Government abol ished the first Settlement Committee it became incapable of acting and section 81b became applicable
It also agreed with the trial court and found that there was nothing in the terms of the arbitration clause in exhibit A 1 to justify the contention that when once a Settlement Committee was ap pointed the power under the clause is exhausted
The High Court held that the trial court was justified in proceeding under sub section 1 of section 8 in asking the appellant to give the names for consideration of the court for the reconstitution of the Committee and as the appel lants did not give the names the trial court was Justified in accepting the names given by the State Government
In the appeal before us the same conten tions were raised
It was submitted that when one of the parties to the arbitration agreement unilaterally disabled the Settlement Committee from functioning the court will not assist that party by holding that the Commit tee became incapable of acting
It was contended that the provisions of section 8 of the Arbitration Act will not be applicable when one of the parties could appoint a Set tlement Committee by itself without reference to the other party
The learned counsel for the appellant also contended that when the first Settlement Committee ceased to exist by the government unilaterally putting an end to it the arbitration clause worked itself out and no other committee could be appointed The relevant clause in the agreement though given earlier is again In the matter of dispute the case shall be referred to the Settlement Committee consist ing of a Superintending Engineer an officer of the Finance Department of the rank of at least Deputy Secretary and an Accounts offi cer all to be nominated by the Government for arbitration whose decision will be final
 The clause is an amendment to the original condition No 5
The clause further provided that the agreement is supplemen tal to the original agreement and save as varied as herein before provided the said agreement and all the terms and conditions thereof shall continue to be binding and in full force and effect
The submission of the learned counsel for the appellant is that the clause referred only to the matter already in dispute and to a settlement committee which had been already appointed
Reliance was placed on the words underlined in the clause In the matter of dis pute and referred to the Settlement Committee
This plea cannot be accepted for in the later part of the condi tion it is made clear by the words all to be nominated by the Government for arbitration whose decision will b final To be nominated contemplates a future appointment
But we do not think that this makes any difference for there could be no doubt mat the condition enables the Government to appoint three persons holding the ranks specified in the condition as the Settlement 41 Committee
There is no indication at all that when once the Committee was dissolved no new committee could be ap pointed
In fact it has to be noted that after the first Settlement Committee was dissolved by the unilateral act of the Government a second Committee came into existence and gave an award which was set aside by the Civil Court
After the award was set aside the second Committee also ceased to function
There is no material on record to show that the appellants objected to the constitution of the second Committee on the ground that the condition did not provide for the appointment of a second Settlement Committee
There is no reason alleged as to why the second Settlement Com mittee ceased to function
If the second Committee was also not terminated by the action of the Government the contention of the appellants that a unilateral act would put the case outside the purview of section 8 of the Arbitration Act would not be available
On a careful reading of the condition relating to arbi tration we agree with the High Court as well as the trial court that there is no bar to the Government appointing a fresh Committee for going into the dispute consisting of three officers as stipulated in the condition
As the appellant would not reply to the letter of the Government seeking to nominate a Settlement Committee the Government moved the court for appointment of the Committee
The trial court gave an option to the appellant to furnish names but as he did not furnish the names trial court ac cepted the names suggested by the Government
On our finding that the Government was entitled to appoint a Com mittee under the new agreement the Government could have very well appointed a committee by itself without coming to court
But may be by way of abundant caution the Government came to court and the court has appointed a committee as suggested by the State
We are equally clear that under section 8 the Court is entitled to act and appoint a com mittee
As already found by us when the second Settlement Committee ceased to function the Committee became incapa ble of acting and therefore it was within the competency of the court to proceed to appoint a new committee
Equally untenable is the contention that section 8 is not applicable to cases where the condition stipulates the appointment of a Settlement Committee by one of the parties
This submis sion was made relying on the wording of the section that any party may serve the other parties or the arbitrators as the case may be with a written notice to concur in the appoint ment or appointments or in supplying the vacancy
This part of the section no doubt contemplates two parties but the section cannot be read as not being applicable where the agreement provides for the nomination of the committee by one of the parties for the section itself says that the party may serve the other parties May serve the other parties will include not serving other parties in cases in which the service on the other party is not contemplated
In the circumstances we are satisfied that the order of the High Court is proper and cannot be interfered with
The appeal is dismissed
The parties will bear their own costs
42 Civil Appeal No 1734 of 1969 This appeal is similar to the one which we have just now disposed of ieCANo 2070 of 1968
The High Court also dismissed the petition under appeal on the ground that the facts of the case are similar to the one in Civil Revision Petition No 107 of 1966 out of which CA No 2070 of 1968 arose and dismissed the petition on the same grounds
In this appeal before us the learned counsel for the appellant adopted the arguments advanced by the counsel in CA No 2070 of 1968 and did not wish to add anything further
For the reasons stated in CANo 2070 of 1968 we dismiss this appeal also
No order as to costs
PHP Appeals dismissed


Summary:
The parties entered into an agreement for the execution of some construction work
An arbitration clause in the agreement stipulated that if disputes arose the matter would be referred to a Settlement Committee to be appointed by the State Government
A dispute arose and a Settlement Committee was duly constituted but was unilaterally abol ished by the respondent before it concluded its work Subsequently the respondent appointed another Settlement Committee whose award was set aside by the Civil Court on the ground that it was made even before the expiry of the time given by the Committee to the appellant
The Commit tee thereafter ceased to exist and the respondent applied to the trial court for appointing an arbitrator section 82 of the Arbitration Act
The appellant opposed the same on two grounds
Firstly that by unilaterally abolishing the first Settlement Committee the State Government had put an end to the arbitration clause and no other committee could be appointed and secondly that section 8 was not applicable
The appellants  objections were rejected by the trial court and later by the High Court in revision
In appeal before this Court the respondent also argued that s8 would not apply when one party could appoint a Settlement Committee without reference to the other party
Dismissing the appeal the Court HELD 1 The wording of section 8 that any party may serve the other parties with a written notice to concur in the appointment or appointments or in supplying the vacancy will include not serving other parties in cases in which the service on the other party is not contemplated
The section cannot be read as not being applicable where the agreement provides or the nomination of the Committee by one of the parties for the section itself says that the party may serve the other parties
41F G 2 The Government could have appointed a Committee by itself without coming to court
There is no indication in the clause that when once the Committee was unilaterally dissolved no new Committee could be formed
When the second Committee ceased to function it became incapable of act ing and therefore  it was within the competency of the Court to proceed to appoint a new Committee
41E F