PARBHAT GENERAL AGENCIES ETC. versus UNION OF INDIA & ANR. ETC.

Citation: [1971] 2 S.C.R. 564 · Decided: 12-10-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

56.4 
PARBHAT GENERAL AGENCIES ETC. 
v. 
UNION OF INDIA & ANR. ETC. 
October 12, 1970 
[J. C. SHAH, K, S. HE7DE AND A. N. URolER, JJ.] 
Arbitration Act, 1940, s. 8(1) (b)-Scope of-Circum<tances in which 
an arbitrator in place of named or designated arbitrator can be appointed. 
The appellants entered into agreements 
with 
the Union 
of India 
under which they were allotted 
certain 
areas in a 1forest to tap ~esin 
Blazes. The agreement included an arbitration clause which provided 
that any questions, differences, or disputes between the parties would be 
referred for 
arbil~ation to the Judicial Commissioner, Himachal Pra-
desh. 
After certain disputes had arisen, the appel'.ants ·requested 
the 
respondents to refer the disputes to the arbitration of the Judicial Com-
missione.r but the respondents declined 
to agree. 
The appellants 
then 
filed an application under 
s. 20 of the Arbitration Act, 1940, for an 
order on the respondents ,o file the agreements _in the court and for re-
ference of the disputes to the Judicial Commissioner for arbitration. The 
Trial Court accepted the applications and referred the disputes. 
How-
ever the Judicial 
Commissioner 
declined to act as an arbitrator. An 
application made to the Court for the appointment of some other arbi-
trator was opposed by th.e respondents on the ground that the arbitra-
tion clause did not provide for such an appointment and. this applica-
tion was rejected by the court. 
The Judicial Commissioner dismissed 
the revision petitions filed by the appellants following an earlier decision 
of that court and holding that under the agreements; no reference for 
arbitration could be made to anyone other than the named authority. 
On appeal to this Court, 
HELD : The appeal must be allowed and the orders passed by the 
trial court as well as the Judicial Commissioner set aside. 
The cases 
must be remitted 10 the Trial Court for appointing a new :rrbitrator in 
place of the Judicial Commissioner. 
The substantive rights of the parries are found in s. 8(1)(b). Before 
s. 8(l)(b) can come into operation, it must .be shown that (1) there is 
an agreement between the parties 10 refer the dispute to-arbitration; (2) 
that they must have appointed an arbitrator. or arbitrators or umpire to 
resolve their dispute; (3) any one or more of.those arbitrators. or umpire 
must have neglected or refused to act or is incapable of acting or has 
died· ( 4) the arbitration agreement must not show that ·it was intended 
that' the vacancy should not be filed; and (5) the parties or the arbitra-
tors as the case may be had not supplied the vacancy. [568 El 
In the present case ·all the other Tequirements were satisfied and_ the 
Qnly question v.:as \\-'hether the agreement read as a whole shows either 
explicitly or implicity that the partie_s intended that the vacancy sho~ld 
not be supplied. It may be noted that the Jangu~ge of th~ prov151~m 
is not 'that the parties intended to supply the vacancy but that the parties 
did not intend .to supply the vacancy'. 
In other words if the agreement 
is silent as ·regards supplying the vacancy, the law presumes that the 
parties intended to supply the vacancy. To take t~e case out of s. 8(1)(b) 
what is required is not the intention of the parties to supply the vacancy 
1 
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PARBHAT AGENCIES v. UNION (Hegde. J.) 
565 
but their intention not to supply the vacancy. [568 Gl 
The Judicial Contn1issioner as well as the trial court erred in thinking 
that merely because the arbitrator was designated with reference to the 
office held hy him. it should be inferred that the parties inteaded not to 
supply the 'acancy. 
The appointment of the Judicial Commissioner as 
arbitrator hy itself do~ not afford any indication that the p;1rties to the 
agreement intended not to supply the vacancy i"f the Judicial Commissioner 
refused to act or was incapable of acting. 
What the Judicial Commis-
sioner could have competently done if he had acted as an arbitrator could 
certuinly he done by an independent 
and impartial 
person 
possessing 
adequate knowledge of law. 
The language of s. 8(1)tb) is plain and 
unamhiguous and the tern1-; of the agreement in the pre"ent case did not 
in the 
lea~t sho,,· that th~ parties intcn<lc<l nol to -.upply hi..' vacancy. 
1569 D1 
Goveniur General in Cuuncil v. Associated Li1·£' Srock Fan11 (India) 
f.td .. I.I .R. 1948 \'ol. I Cal. !hi: Union of India v. Raj Narain Misra, 
(1

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