THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE NOUSHAD ALI C.R.P. Nos.3531, 3532, 3533, 4167, 4171, 4295, 4298 and 6604 of 2005 Date : 23-08-2010 C.R.P.No.3531 of 2005 : Between : N.V.Chowdary .. Petitioner and Government of Andhra Pradesh, rep. by its Secretary, Irrigation Department, Secretariat Buildings, Hyderabad and three others .. Respondents THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE NOUSHAD ALI C.R.P. Nos.3531, 3532, 3533, 4167, 4171, 4295, 4298 and 6604 of 2005 COMMON ORDER: (Per the Hon’ble Sri Justice V.Eswaraiah) - - Heard both the learned counsel. In all these eight Civil Revision Petitions, petitioner and the respondents are common (except some of the respondents). As all the Civil Revision Petitions raise a common question of law and involve similar facts and circumstances, they are being disposed of by a common order. 1. These Civil Revision Petition Nos.3531, 3532, 3533, 4167, 4171, 4295, 4298 and 6604 of 2005 are filed against the orders, dated 14-10-2004 in (1) I.A.No.468 of 2000 in O.S.No.1223 of 1985; (2) I.A.No.477 of 2000 in O.S.No.1226 of 1985; (3) I.A.No.471 of 2000 in O.S.No.1224 of 1985; (4) I.A.No.482 of 2000 in O.S.No.1228 of 1985; (5) I.A.No.475 of 2000 in O.S.No.1225 of 1985; (6) I.A.No.463 of 2000 in O.S.No.1221 of 1985; (7) I.A.No.481 of 2000 in O.S.No.1227 of 1985 and (8) I.A.No.465 of 2000 in O.S.No.1222 of 1985 respectively on the file of the II Senior Civil Judge, City Civil Court, Hyderabad. 2. The petitioner was allotted various contracts pursuant to his lowest tenders and entered into the agreements. Thereafter, the petitioner executed certain works and when some disputes arose between the parties, in view of the arbitration clause in the agreement, the petitioner demanded the respondent-authorities for the arbitration and thereafter filed the aforesaid suits under Sections 8 and 20 of the Indian Arbitration Act, 1940 seeking the relief directing the concerned Superintending Engineers to file the agreements into the Court and also to appoint an Arbitrator to decide the disputes which arose between the parties. Accordingly, the learned II Senior Civil Judge, City Civil Court, Hyderabad appointed retired Judge of this Court in three suits and another retired Judge of this Court in 2 other suits and the retired Chief Engineer in three other suits for adjudication of the disputes by judgment, dated 06-08-1991. Aggrieved by the said orders, the respondents preferred C.M.A.Nos.1969 and 2023 of 1991 and batch on the file of this Court and this Court by order, dated 13-12-1994 set aside the judgment of the Court below, dated 06-08- 1991 to refer the matter to the panel of Arbitrators. Pursuant to the said orders of this Court, the Court below directed the concerned Superintending Engineers to file agreements before the Court and refer the dispute to the panel of Arbitrators under Section 20(4) of the Arbitration Act by order, dated 23-04-1996 granting four months time for passing the award from the date of entering into reference as per the provisions of clause (3) of Schedule I of the Act. Accordingly, warrants were issued to the panel of Arbitrators in April, 1998, but they failed to enter into the reference and act upon. Then the petitioner issued notice under Sections 8 and 9 of the Arbitration Act on 20-09-1999 to the respondents with a copy to the panel of Arbitrators. But the respondents, in spite of receiving the said notices, did not respond and therefore the petitioner issued another notice, dated 08-11-1999 requesting the respondent-Superintending Engineer to concur on the appointment of the sole Arbitrator from the list furnished by the petitioner within 15 days from the date of receipt of the notice. Though the said notice was received, the respondents did not respond nor gave any consent for appointment of the sole Arbitrator. 3. Thus, it is the case of the petitioner that various Interlocutory Applications have been filed under Sections 8, 9 and 20 of the Indian Arbitration Act, 1940 to appoint the sole Arbitrator to adjudicate the dispute between the parties on the ground that the Arbitrators neglected and failed to act as arbitrators in spite of lapse of sufficient time from the date of the orders of the Court below. As per the orders of the Court below, the panel of Arbitrators have to pass orders within four months from the date of entering on the reference but in spite of the said orders of the Court below, dated 23-04- 1996, there was no response from the Arbitrators in spite of the petitioner issuing the notice, dated 20-09-1999. Even the respondents have not responded to the notice, dated 08-11-1999, issued by the petitioner requesting respondent-Superintending Engineer to concur for the appointment of the sole Arbitrator within 15 days from the date of receipt of the notice. 4. The learned counsel appearing for the petitioner submitted that the petitioner is entitled to the relief for appointment of a sole arbitrator or arbitrators, but the Court below having recorded a finding that in spite of its earlier orders passed on 23-04-1996, pursuant to which warrants were served on the panel of arbitrators in April, 1998, they have failed to enter into agreements and act upon the same and relying on the judgment of a learned single Judge of this Court in Government of Andhra Pradesh and Others Vs. N.V.Choudary and another[1]once again appointed the same panel of three Arbitrators on the ground that the new officers have taken charge for the adjudication of the dispute between the parties directing them to pass award within four months from the date of entering into the agreements. All the aforesaid similar orders were passed on 14-10-2004. These eight Civil Revision Petitions are filed contending that the panel of Arbitrators have neglected and refused to act pursuant to the earlier orders of the Court below and therefore the same panel of Arbitrators merely because some new persons joined in the place of the earlier officers, cannot be appointed. It is further contended that even if the new officers or panel of officers neglect or refuse to act, enter appearance and pass award and in the meanwhile if some of them are transferred, it cannot be said that the panel of arbitrators who were under legal obligations to act upon are not neglect or refuse. Once the Arbitrator neglect or refuse to act upon, it is for the Court to exercise its powers under Section 8 of the Arbitration Act, if it comes to the conclusion that the appointed arbitrators neglected or refused to act upon, to appoint an Arbitrator on the application of the parties, who gave notice under Section 8 (2) of the Act. As per the findings recorded by the Court below, it is not in dispute that panel of Arbitrators, in spite of receiving the warrants, neither entered into reference nor acted upon the warrants and therefore as the Arbitrators neglected and refused to act upon, the petitioner rightly gave notice to the respondents calling upon them to appoint a sole arbitrator from any one of the list furnished. The Department ought to have come forward agreeing for the sole Arbitrator by furnishing the names of panel of Arbitrators. As the Department failed to act upon the said notice issued by the petitioner, we are of the opinion that the Court below ought to have appointed the Arbitrator in exercise of its power under Section 8 of the Arbitration Act. 5. The learned counsel appearing for the petitioner in support of his contention placed reliance on the judgment of the Hon’ble Supreme Court of India in the case of State of West Bengal Vs. M/s. National Builders[2] wherein the Apex Court held that even where an authority is named by the office to be the sole arbitrator but he refuses to act, then the jurisdiction to appoint another arbitrator vests in the Court. Where the agreement provides for appointment of a specific person either by name or by designation and that person refuses to act, then the question of appointing him again cannot arise. Refusal by such a person results in the agreement clause ceasing to operate. When two parties agree for appointment by name or designation and the person so named refuses to act, then the agreement shall be deemed to have exhausted itself. The designated person so named having refused to act, he cannot be asked again to arbitrate. That would be contrary to the very basis of arbitration that no one can be forced to act against his free will. It would also be contrary to the agreement and if there is no agreement to appoint another person, the only remedy is to approach the Court to exercise its statutory power and appoint another arbitrator. Same result follows where the arbitration clause empowers the sole arbitrator either to arbitrate himself or to nominate anyone else. Once the nominee refuses to act, it shall be deemed that the arbitrator mentioned in the arbitration clause has refused to act and, therefore, the clause would cease to operate in the same manner as nominated officer has refused to act. The appointment of another arbitrator could only be in accordance with Section 8(1)(b) of the Act. In the instant case in our opinion the panel of arbitrators have undoubtedly neglected to act and therefore the Court below ought to have appointed an arbitrator or arbitrators of its choice instead of appointing the same panel of arbitrators. 6. Accordingly, we set aside the impugned orders and allow the C.R.Ps. appointing Justice A.Gopal Rao, retired Judge of this Court, in respect of the subject matter of the suits covered by C.R.P.Nos.3531, 3532, 3533 and 4167 of 2005 and Justice Vaman Rao, retired Judge of this Court, in respect of the subject matter of the suits covered by C.R.P.Nos.4171, 4295, 4298 and 6604 of 2005, as Arbitrators for adjudication of the dispute between the petitioner and the respondents and the award will be passed within four months from the date of entering into reference. 7. Accordingly, Civil Revision Petitions are allowed. There shall be no order as to costs. _________________ V.ESWARAIAH, J. _________________ NOUSHAD ALI, J. 23rd August, 2010. skmr [1] 1993 (3) ALT 391 [2] AIR 1994 SC 200