K.S. SHRIVASTAV, J.

(1) THIS is an application Under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a sole arbitrator for adjudication of the disputes that have arisen between the parties to this application.

(2) THE admitted facts of the case in brief are that the petitioner entered into an agreement with the first respondent for execution of the work namely provision of LT UG 1.1 KV cable distribution work including street lighting in estate area at Mailaram near Shankerpally on 15-2-1985. The value of the contract was Rs.25,08,337-40 ps. only. The work was to be completed by 24-8-1985. The time for completion of the work was extended upon 30-5-1987. On 7-5-1987 the competent authority issued final notice and then the contract was cancelled on 1-6-1987.

(3) THE case of the petitioner in brief is that due to the default on the part of the first respondent there was delay in execution of the work because the required poles were not supplied within the stipulated time. Even so the first respondent illegally terminated the contract with effect from 1-6-1987 through letter dated 22-5-1987 on false allegations of slow progress of the work due to which the petitioner has been put to heavy financial loss. The petitioner served a notice under Section 80 of the Code of Civil Procedure demanding the payment due to be paid by the first respondent. In answer to that, the first respondent addressed a letter to Sri M.M.S. Nanda, Chief Engineer, Office of the Standing Panel of Arbitrators, dated 16-1-1997 that the contract in question contains an arbitration clause and a copy of that letter was served on the applicant on 25-1-1997. Through this letter, the said M.M.S. Nanda, Chief Engineer, was appointed arbitrator to resolve the disputes. On 27-1-1997, Sri Nanda informed the parties to file their respective written statements. The petitioner questioned the appointment of the sole arbitrator. Later Sri M.M.S. Nanda fixed 21-6-1997 as the date of first hearing and demanded the original documents as also sought enlargement of time to make and publish the award by 31-10-1997. Thereafter he did not fix any date for hearing till the filing of this application in the High Court. In the meantime, on 30-4-1998 the Engineer-in-Chief, Army Headquarters, New Delhi, addressed a letter to Sri G.S. Mehta and informed that the contract in question contains an arbitration clause and the Engineer-in-Chief had power to appoint sole arbitrator and because disputes have arisen, Sri M.M.S. Nanda had been appointed as the sole arbitrator who had resigned on 20-12-1997 and, therefore, the Engineer-in-chief, Army Headquarters had appointed Sri G.S. Mehta as the sole arbitrator to adjudicate the disputes, duly enclosing a list of disputes without referring the claims of the contractor. Thereupon, the third respondent issued a notice to the parties on 25-5-1998. It is alleged that since Sri M. M. S. Nanda did not publish the award within the stipulated time, that is to say by 31-10-1997 and no extension was granted by the parties or sanctioned by the Court and also because MMS. Nanda had resigned from the post of the sole arbitrator, the Engineer-in-chief, Army Headquarters, New Delhi, had no power or jurisdiction to appoint another arbitrator in place of MMS. Nanda who had not only become functus officio but later had also resigned. The Engineer-in-chief, Army Headquarters, is empowered to nominate the arbitrator only once as per the terms of the contract, though a vacancy had arisen but the arbitration clause in the agreement had ceased to exist, therefore the Engineer-in-Chief of Army Headquarters was incompetent to appoint a second arbitrator and, therefore, the Court should appoint an independent sole arbitrator to adjudicate the disputes.

(4) THE respondents through the counter have denied the allegations of the petitioner that on account of the default by the respondents, the work could not be completed in due time. Time was the essence of the contract. It has been denied that delay had occurred due to the delayed procurement of poles and change of design. It is alleged that the petitioner had failed to secure more than 174 poles due to his own detects and deficiencies including mismanagement. The contract had to be completed at the risk and cost of the petitioner. There was no scope to extend the contract beyond 30-4-1987 in view of the urgency and defence requirements. The petitioner could complete only 11. 72 per cent of the total work while the entire work was to be completed by 24-8-1985 and he could not complete it inspite of liberal extension upto 30-4-1987. The whereabouts of the petitioner were not known for about 9 years after the cancellation of the contract with effect from 1-6-1987. The arbitrator was appointed in terms of Clause 70 of the General Conditions of Contract (for short, gcc). The arbitrator entered into the reference and directed the petitioner and the respondents to file their respective claims but the petitioner did not show any inclination. The arbitrator resigned on 20-12-1997 and a second arbitrator was appointed in terms of Clause 70 of the GCC. The petitioner gave its consent for extension of time by three months from 24-11-1998 subject to the result of this application.

(5) IT is a matter of record that further proceedings pending before the third respondent, that is the second arbitrator, have been stayed vide docket order dated 3-11-1998.

(6) IT is no longer in dispute before me that the petitioner through the tender dated 17-1-1985 had accepted to refer all disputes as required by Clause 70 of the GCC to the sole arbitrator of an Engineer Officer to be appointed by the Engineer-in-Chief, Army Headquarters, New Delhi, whose decision shall be final, conclusive and binding. Clause 70 of the GCC reads as under:

"70. Arbitration :--All disputes, between the parties to the Contract (other than those for which the decision of the CWE or any other person is by the contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the Works or termination or determination of the Contract under Condition Nos. 55, 56 and 57 hereof: Provided that in the event of abandonment of the works or cancellation of the Contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies : Provided always that commencement or continuance of any arbitration proceeding hereunder or otherwise shall not in any manner militate against the Governments right of recovery from the contractor as provided in Condition 67 hereof. If the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place. The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence. The Arbitrator may, from time to time with the consent of the parties, enlarge, the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award. The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute. The venue of Arbitration shall be such place or places as may be fixed by the Arbitrator in his sole discretion. The Award of the Arbitrator shall be final and binding on both parties to the Contract."

(7) LEARNED Counsel of the petitioner has argued that in accordance with sub-clause (2) of Clause 70 of the GCC, both parties should agree in writing for referring the matter to the arbitrator. The respondents have not obtained in writing the consent of the petitioner for appointment of the third respondent as the arbitrator and on this count only, the appointment of the third respondent is contrary to the terms of the aforementioned clause of the GCC and, therefore, it is liable to be ignored and an independent arbitrator should be appointed. Relying on the case of State of West Bengal v. National Builders, AIR 1994 SC 200 [LQ/SC/1993/903] = 1994 (1) Arb.L.R. 5, it has been contended that the first arbitrator had resigned and, therefore, the agreement clause had ceased to operate whereby the Engineer-in-Chief, Army Head quaters, had no power to nominate a second person as the arbitrator and the only remedy left was to approach the Court to exercise its statutory power for appointing another arbitrator. Reliance has also been placed on the case of S. Krishna Reddy v. Government of Andhra Pradesh and another, AIR 1994 AP 292 [LQ/APHC/1994/11] . It is lastly urged that under sub-clause (9) of Clause 70 of the GCC, the arbitrator has to give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may and since six months had passed, the arbitrator had become functus officio and under these circumstances, the Court should appoint an arbitrator to resolve the disputes.

(8) ON the other hand, the learned Standing Counsel for the first respondent has argued that the case of State of West Bengal (supra) is of no assistance to the petitioner because the agreement provides that if for any reason the arbitrator appointed resigns or refuses to act, a second arbitrator can be appointed. This case is also distinguishable on facts. It is also urged on behalf of the first respondent that the petitioner has made appearance before the third respondent, that is the second arbitrator, and had given his consent for extension of time by three months from 24-11-1998 though subject to the result of this application and had obtained interim stay on 3-1 i-1998 and, therefore, it cannot be said that the second arbitrator had become functus officio because the time fixed in the agreement has since expired.

(9) SHRI M.M.S. Nanda was appointed as the arbitrator to resolve the disputes between the parties to this application under Clause 70 of the GCC. On 27-1-1997, the arbitrator issued notices to the parties to file the disputed claims and counters. On 21-6-1997 the petitioner made a query as to whether a clause exists in the agreement in question for referring the dispute to the arbitrator. On that day both parties appeared before the said arbitrator who directed them to file the relevant documents. He sought enlargement of time to make and publish the award by 31-10-1997. Thus it appears that both parties had agreed to enlarge the time upto 31-10-1997. It appears that after that, M.M.S. Nanda, the Arbitrator, did not seek enlargement of time to make and publish the award and, therefore, he became functus officio on 1-11-1997. On 20-12-1997 M.M.S. Nanda resigned his appointment as the arbitrator on the ground that he was due to be retired shortly from the Government Service and shall be unable to proceed further with the case in view of his impending retirement. It further appears that under the erroneous impression that the award could be passed within one year from the date of entering upon the reference without obtaining consent of the parties for enlargement of time, he had submitted his resignation on 20-12-1997. On 27-10-1998, the Lt. Gen. Engineer-in-chief wrote to the third respondent-arbitrator to adjudicate the disputes. Thereafter the petitioner had filed an application before the third respondent-arbitrator giving its consent for enlarging the time for completing the proceedings by another three months from 24-11-1998 without prejudice to its right to continue this application for appointment of the arbitrator.

(10) THE first question that falls for determination is whether both parties should agree in writing for referring the disputes to the arbitrator.

(11) SUB-CLAUSE (2) of the Clause 70 of the GCC speaks that unless both parties agree in writing, such reference shall not take place until after the competition or the alleged completion of the work or termination or determination of the contract under Conditions No. 55, 56, 57 thereof. A look at this clause shows that until after the completion of the work or the alleged completion of the work or termination or determination of the contract under conditions No. 55, 56 and 57 of the GCC, both the parties to the agreement should agree in writing for referring the dispute to the arbitrator. It is an admitted fact that the contract in question has been terminated on 1-6-1987. Therefore, there appears to be no force in the contention of the learned Counsel of the petitioner that, in the absence of obtaining consent in writing of the petitioner, the reference to the arbitrator is invalid.

(12) THE main question that falls for determination is whether after Sri M.M.S. Nanda had become functus officio with effect from 30-10-1997 or after his resignation on 20-12-1997, the clause 70 of the agreement in question has ceased to operate, and whether the Lt. Gen. Engineer-in-Chief had no jurisdiction to appoint the third respondent as the arbitrator.

(13) IN the case of State of West Bengal (supra), the relevant Clause 25 of the agreement read as under:"except where otherwise provided in the contract all questions and disputes shall be referred to the sole arbitration of the Chief Engineer of the department. Should the Chief Engineer be for any reason unwilling or unable to act as such arbitrator, such questions and disputes shall be referred to an arbitrator to be appointed by the Chief Engineer. "a comparison of Clause 25 reproduced above and the Clause 70 of the agreement in question extracted above, shows that, in the case of State of West Bengal, the Chief Engineer was appointed as the sole arbitrator and at his option, another person could be appointed by him, whereas in the case on hand, the authority mentioned in the tender documents, that is to say Lt. Gen. Engineer-in-Chief was authorised to appoint an Engineer Officer as the sole arbitrator to adjudicate the disputes and sub-clause (4) of Clause 70 of the GCC provides that in the event the arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatever, the authority appointing him may appoint a new arbitrator to act in his place. It appears that in the case of State of West Bengal, under Clause 25 of the agreement, the Chief Engineer was not empowered to nominate another person to act as arbitrator.

(14) IN the case of State of West Bengal (supra), the Supreme Court has observed that mere negligence or refusal to act alone is not sufficient to empower the Court to intervene. The agreement must not further show that the parties intended that the vacancy shall not be supplied. To put it affirmatively in absence of clear words or explicit language to the contrary the Court may appoint another arbitrator. The true effect of the word is that it extends jurisdiction of the Court to exercise power, if the agreement does not specifically debar it from doing so. To put it simply the Courts power to interfere and appoint an arbitrator comes into operation if the arbitrator refuses to act and the agreement does not show that the parties did not intend that the vacancy shall not be supplied. The Apex Court has further observed that in a case where the arbitration clause provides for appointment of a sole arbitrator and he had refused to act then the agreement clause stands exhausted, and it is for the Court to intervene and appoint another arbitrator if the arbitration agreement does not show that it was intended that the vacancy shall not be supplied. That is the agreement should not debar any further arbitration. If it is provided in the agreement that if the arbitrator_ appointed in accordance with the agreement refuses to act then the dispute shall be resolved by another arbitrator. There is an end of the matter. But if the agreement does not show this then the next arbitrator can be appointed by the Court only, (underlying is mine)

(15) AS noted above, Clause 70 of the GCC provides that if a vacancy exists due to resignation, vacation of his office, or where the arbitrator appointed is unable or unwilling to act due to any reason whatsoever, the authority appointing the arbitrator may appoint a new arbitrator to act in his place. Therefore, on the authority of Stale of West Bengal (supra), I hold that there is force in the contention of the learned Standing Counsel of the first respondent that the Lt. Gen. Engineer-in-Chief was competent to fill in the vacancy in terms of the Clause 70 of the GCC and the appointment of the third respondent as the second arbitrator is valid. It is not out of place to mention that in the case of State of West Bengal (supra), the contractor that is National Builders has sought the resignation of the appointed arbitrator for illegal misconduct and the arbitrator had recorded in the order sheet that extension of time on consent of both parties will not be allowed by him and the stipulated time is being allowed to expire and the parties were directed to themselves decide the future course of action. On account of these facts, it appears that the Supreme Court has observed that no one can be forced to act against his free will and the arbitrator cannot be asked again to arbitrate against his free will, particularly when a party to the agreement claims that he has lost confidence in the arbitrator. Such is not the case here.

(16) THE case of S. Krishna Reddy (supra) is also distinguishable on facts because in that case the Court found that no useful purpose would be served if the very same named persons are appointed as the arbitrators when they have failed to discharge their obligation for a considerable length of time.

(17) THE petitioner had voluntarily agreed for the appointment of the arbitrator to be named by the Lt. Gen. Engineer-in-Chief through its tender as also under the agreement in question and, therefore, it is not open to him subsequently to say that the third respondent is under the influence of the appointing authority and, therefore, the plea of bias cannot be entertained particularly when there is no acceptable material on record which supports the allegation of the petitioner.

(18) IN the result, the application for appointment of the arbitrator is dismissed. No costs.