HARBANS SINGH TULI AND SONS BUILDERS PVT. LTD. versus UNION OF INDIA

Citation: [1992] 1 S.C.R. 602 · Decided: 11-02-1992 · Supreme Court of India · Bench: T.K. THOMMEN · Disposal: Dismissed

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Judgment (excerpt)

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HARBANS SINGH TULi AND SONS BUILDERS PVT. LTD. 
v. 
• 
UNION OF INDIA 
FEBRUARY 11, 1992 
[T.K. THOMMEN AND S. MOHAN, JJ.] 
Arbitration Act, 1940: Sections 5 and 21>-Arbitrato~Appointment 
of-Contract comaining clauses regarding appointment-Whether and when 
... 
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C could be relied upon--Court appointing arbitrator-ln place of arbitrator ap-
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pointed as per contract-Validity of 
The respondent entrusted certain construction work to the 
petitioner, and the petitioner executed the con.tract. During the course of 
the contract, the petitioner was required to do some extra work for which 
D a claim for payment was made and on that account, a dispute arose. Since 
clause 70 of the contract provided for arbitration, the petitioner asked for 
the appointment of arbitrator. Accordingly, an arbitrator was appointed. 
The petitioner protested against the appointment of the arbitrator and 
the procee!lings dragged on. On his retirement fro~ the Army, the ap-
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pointment of the arbitrator came to an end. The same was the case with 
the two successive arbitrators appointed thereafter. Subsequently another 
arbitrator was appointed and he too relinquished the charge as the 
petitioner did not cooperate with him for more than 4 years. Thus, the 
matter was pending adjudication for about nine years, and a notice under 
Section 8 of the Arbitration Act was issued by the petitioner calling upon 
the Respondent to appoint an arbitrator. But no such appointment was 
made. Thereafter the petitioner filed an application before the trial court 
for appointment of an arbitrator by the Court. The respondent contested 
the suit on merits and also on the ground of lack of territorial jurisdic-
, 
tion. The trial. court allowed the application and appointed an arbitrator; 
G It also revoked the appointment of the arbitrator made by the respondent 
during the pendency of the application before the trial court. 
Aggrieved against the said order, the respondent approached the 
High Court by way of a Civil Revision. The High Court gave its finding 
that there was want of jurisdiction on the part of the trial court; and that 
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Section 8(1) (b) of the Arbitration Act did not apply since there was no 
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TULi & SONS v. U.0.1. 
603 
negligence or refusal by the respondent to appoint an arbitrator. Accord-
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ingly, the High Court set aside the order of the trial court appointing an 
arbitrator, who later made an ex-parte award without affording adequate 
opportunity to the respondent. 
Against the High Court's order, the petitioner preferred the present 
special leave petition. 
On behalf of the petitioner, it was contended that the appointment 
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of the arbitrator made by the trial court should not have been interfered; 
that where a notice was issued by the petitioner ·calling upon the respon-
dent to appoint an arbitrator, after the expiry of 15 days of that notice, the C 
right to appoint arbitrator is forfeited; and since a part of the cause of 
action had arisen, within the territory as payment was made there by 
cheque, there was no lack of territorial jurisdiction. 
On behalf of the respondent, it was contended that Section 8 (I) (a) 
of the Arbitration Act had no application to a case in which the agreement D 
provided for appointment of an arbitrator by one of the parties or by 
nominated persons; that where the parties have consented to a named 
person to be appointed as arbitrator; there was no application of Section 
8 of the Act; and that merely because the arbitrator had hurried, that 
would not constitute failure of justice. 
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Dismissing the special leave petition, this Court, 
HELD: (Per Mohan, J.) I. Sub-section (I) (a) of Section 8 of the 
Arbitration Act would apply to a case of initial appointment of an ar-
bitrator or arbitrators. The implication is in the arbitration agreement F 
that the arbitrator or arbitrators must not have been named. Where, 
therefore, they are named, this section will have no application. Similarly, 
the arbitrator or arbitrators are required to be appointed by all parties to 
the reference with consent. On the contrary, if there is some other mode 
of appointment, say Section 4, where the parties to the agreement agree G 
that the arbitrator has to be appointed by a person designated in the 
agreement either by name or held, for the time being in office, certainly, 
this section will not apply. [611C-F) 
Prabhat General Agencies etc. v. Union of India Anr. etc., (

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