CHANDER BHAN HARBHAJAN LAL versus STATE OF PUNJAB

Citation: [1977] 3 S.C.R. 38 · Decided: 22-02-1977 · Supreme Court of India · Bench: M. HAMEEDULLAH BEG · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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38 
CHANDER BHAN HARBHAJAN LAL 
v. 
STATE OF PUNJAB 
February 22, 1977 
[M. H. BEG, C.J. AND P. S. KAILASAM, J.] 
Arbitration Act, s. 8, lvhether applicable when arbitration agrcernent stipul-
ates appointment of Settlen1ent Con1n1ittee by 011e of the parties-On unilateral 
abolition of Settle111ent Conin1ittee. whether s. S t'JlJJlicahle. 
The parties entered into an agreement for the 'execution of son1e construc-
tion work. An arbitration clause in the agreelnent stipulated that if disputes 
arose, the matter would be referred to a Settlen1ent Committee to be :1ppointed 
by the State Government. 
A dispute arose, and a Settlen1cnt Con1mittee \\'as 
duly constituted, but was unilaterally abolished 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 tlte time given by the Co.mmitte~ to the 
appellant. 
The Committee thereafter ceased to exist, an<l the respondent applied 
to the trial court for appointing an arbitrator u/s. 8(2) of the Arbitrrition 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 nnd 
secondly, that s. 8 was not applica-ble. 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 s. 8 would not 
apply when one riarty could appoint a Settlement Committee without reference 
to the other party. 
· 
Dismissing the appeal, the Court, 
HELD : ( 1) The \Vording of s. 8, that any party may serve the other 
parties with a written notice to concur in the a_ppointn1cnt or appointments, or 
in supplying the vacancy, will include not o;erving other parties in cases in 
\\'hich the service on the other partv is not conten1plated. 
The ~ection cannct 
be read as not being applicable where the agreen1ent provides or the nomi:-iation 
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 Comn1ittee by itself \vithout 
coming to court. There is no indication in the cJausc that when once the Com-
mittee was unilaterally dissolved no new Committee could be formed. 
VVhen 
the second Committee ceased to function, it became "incapable of acting'' and, 
therefore, it was within the competency of the Court to proceed to appoint a 
new Committee. [41E, F] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2070/68. 
G 
Appeal i:,y Special Leave from the Judgment and Order 
dated 
16-2-1968 of the Punjab & Haryana High Court in Civil Revision Case 
No. 107 /66 and 
Civil Appeal No. 1784/69. 
Appeal by Special Leave from the Judgment and Order 
dated 
25-11-1968 of the Punjab & Haryana High Court in Civil Revision 
H 
No. 339 of 1967. 
G. L. Sanghi and K. J. John for the Appellants. 
S. N. Anand and R. N. Sachthey for the Respondents. 
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CHANDER BHAN v. PUNJAB (Kai/asam, J.) 
39 
The Judgment of the Court was delivered by 
KAILASAM, J.-Civil Appeal No. 2070 of 1963 is by special 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 applica-
tion by the State, 
respondent, and appointing the Arbitration Com-
mittee. 
'!he appellants entered into an agreement with the Public 
W crks Department, Punjab State, for execution of certain constnic-
tion works in August, 1952. They entered into an agreement, Ex. 
A-l. 
The agreement provided an arbitration clause in the follow-
ing ter1ns :-
··111 the matt.er of dispute, the case shall be 
referred 
to 
the ~cilicment Committee consisting of a 
Superintending 
Engineer, an officer of the Finance Department of the rank 
of at least Deputy Secretary and an Accounts Officer, all to 
be nominated by the Government for arbitration whose deci-
sion w1it be final." 
Disputes arose between the parties and the State of Punjab appoint-
ed a Settler,,ent 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 uni-
laterally abclished t

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