LexSTATE OF WEST BENGAL versus AMRITLAL CHATTERJEE
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A STATE OF WEST BENGAL v. AMRITLAL CHATTERJEE SEPTEMBER 3, 2003 B [V.N. KHARE, CJ. AND S.B. SINHA, J.] Arbitration Act, 1940: Ss. 5, 11 and 12-Application for removal of arbitrator and appointment C of new arbitrator-High Court allowed the application and appointed new arbitrator-Meanwhile 1996 Act came into force-Order of High Court challenged as without jurisdiction on account of the new Act coming into force-Held, the earlier arbitrator was appointed prior to the new Act came into force-Jn view of s. 21 of the new Act, unless otherwise agreed by the parties, arbitral proceedings commence on the date on which a D request for the dispute to be referred to arbitrator is received by the respondent-In view of s.85(2)(a) of the new Act, provisions of the 1940 Act would apply in relation to arbitration proceedings which commenced before the new Act came into force, unless otherwise agreed by the parties-The words "commencement of the arbitration proceedings" have not been defined E in the Act-They have to be given their ordinary meaning having regard to the provisions contained in Chapter II thereof-Invoking the arbitration clause by a party and appointment of arbitrator pursuant thereto and in jimherance thereof are proceedings which are required to be taken under the 1940 Act-Such steps are necessary in terms of Chapter II thereof as is F evident from the fact that even in terms of sub-section (i) of s. 20 of the Act, an application thereunder would be maintainable by a person who does not intend to proceed under Chapter II praying/or filing of arbitration agreement in court-Furthermore, s.85(2)(a) of the new Act may have to be construed keeping in view the provisions contained in s.21 of the new Act-Arbitration and Conciliation Act, 1996-Ss. 21 and 85(2)(a). G Shetty 's Construction Co. Pvt. Ltd v. Konkan Railway Construction and Anr., [1998) 5 SCC 599, relied on. Thyssen Stahlunion, GMBH v. Steel Authority of India Ltd., (1999) 9 H sec 334, held inapplicable. 346 STA TE v. AMRITLAL CHATTERJEE 347 Fuerst Day Lawson Ltd v. Jindal Exports Ltd, (2001] 6 SCC 356 and A Hari Shankar Lal v. Shambhunath Prasad and Ors.,(1962) 2 SCR 720, referred to. Words and Phrases: "commencement of the arbitration proceedings" -Meaning of in the B context of Arbitration Act, 1940 and Arbitration and Conciliation Act, 1996. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2477 of 1997 . . From the Judgment and Order dated 22.8.96 of the Calcutta High C Court in A.P. No. 40 of 1996. WITH C.A. No. 2478 of 1997. Tapas Ray, Satish Vig, Chinmoy Khaladkar and S.K. Nandy for the Appellant. Bhaskar P Gupta, Raj Kumar Gupta, Sheo Kumar Gupta and A.N. Bardiyar for the Respondent. The following Order of the Court was delivered : D E As a result of an agreement between the parties certain work orders were given to the respondent herein. It is alleged that the respondent completed the construction work on 3rd July, 1990. Subsequently, on 20th F October, 1993, the respondent raised a demand on account of additiona! work that it carried out to the Executive Engineer. It appears that the demand was not accepted by the Executive Engineer and as a result thereof the respondent sought reference for adjudication of disputes by an arbitrator. Consequently on 7th September, 1994, the ChiefEngineer oflrrigation G and Waterways Directorate appointed one Shri K.P. Choudhary, former Secretary of the said Directorate as an arbitrator and referred the disputes raised by the respondent to the arbitrator. Since for a considerable period of time the arbitrator did not enter upon the reference, the respondent filed an application under Sections 5, 11 and 12 of the Arbitration Act, 1940 H 348 SUPREME COURT REPORTS (2003] SUPP. 3 S.C.R. A for removal of the arbitrator and appointment of a new arbitrator in his place before a learned Single Judge exercising original jurisdiction before the Calcutta High Court. The learned Single Judge by an order dated 22nd August, 1996 allowed the said application and appointed Shri Sibaji Mitra, Bar-at-Law as an arbitrator by replacing Shri K.P. Choudhary. It is against B the said order of the High Court, the appellant is in appeal before us. Shri Tapas Ray, learned senior counsel appearing for the appellant urged that the order passed by the learned Single Judge of the High Court was illegal, inasmuch as it was without jurisdiction on account of the fact that
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