JUDGMENT
M.N. Rao, J.
1. This appeal by the Government of Andhra Pradesh represented by the Deputy Secretary, Finance and the Superintending Engineer, Irrigation Circle, Kurnool is preferred against the order of the learned First Additional Judge, City Civil Courts, Hyderabad in O.P. No. 85/90 dated 30th October, 1995, allowing the plea of the respondent No. 1 Ch. Ramalinga Reddy, a Class-1 Contractor for removal of respondents 2, 3 and 4 herein (respondents 3 to 5 in the O.P.) as Arbitrators and appoint another Arbitrator in their place to adjudicate the dispute between him and the Superintending Engineer, Irrigation Circle, Kurnool. By the impugned order, the learned Judge directed both parties to file a list of Arbitrators within six days for appointing one of them as sole Arbitrator.
2. Pursuant to the tenders called by the Superintending Engineer, Irrigation Circle, Anantapur in respect of formation of a new tank in the District one D. Seetharam Reddy’s tender was accepted and an agreement was concluded with him by the Superintending Engineer for carrying out the work, the value of which was Rs. 19,72,559/-. After executing a part of the work, the said Seetharam Reddy fell ill. So he requested the Superintending Engineer to entrust the balance of that work to Ch. Ramalinga Reddy, the respondent No. 1 herein (petitioner in the O.P.), by a letter dated 30th November, 1981, and accordingly, the work was transferred by the Superintending Engineer in the name of Ramalinga Reddy by proceedings dated 11-1-1982. A tripartite agreement was also entered into between the Superintending Engineer, Seetharam Reddy, the original contractor and Ramalinga Reddy, the first respondent herein under which it was agreed that Ramalinga Reddy alone should execute the balance of the work and the amounts for the work carried out by him should be paid to him only. It was also mentioned in the tripartite agreement that the original contractor Seetharam Reddy has given up all his rights in respect of the contract works and Ramalinga Reddy is entitled to all the assets and liabilities in that regard. A Power of Attorney was said to have been executed by Seetharam Reddy on 1-12-1981 and registered on 3-12-1981. Subsequently, as disputes arose, the matter was referred to a panel of Arbitrators named therein in consequence of a relevant arbitral clause in the agreement.
3. The panel of Arbitrators, after having entered upon the reference, issued notices to both parties. During the pendency of the arbitration proceedings, a letter dated 9-11-1989 was received by Ramalinga Reddy on 21-11-1989, the contents of which read :
“In the reference cited, the second respondent i.e., the Superintending Engineer (ID), Kurnool has reported that the original contractor Mr. D. Seetharam Reddy has already withdrawn the power of attorney issued in favour of the petitioner, Ch. Ramalinga Reddy, hence it is affirmed that the case cannot be taken on file and this case is closed on the file.”
The consequence of the above letter was that the Arbitrators closed the arbitration proceedings without giving their decision one way or the other.
4. Challenging the aforesaid action of the Arbitrators, the Contractor Ramalinga Reddy filed O.P. No. 85/90 in the Court of the First Additional Judge, City Civil Courts. Hyderabad under Section 8 of the Arbitration Act, 1940 for removal of the Arbitrators and appointment of another Arbitrator in their placed to adjudicate the dispute. The learned Judge, after hearing the contentions advanced by both sides and considering the material on record had expressed the view following the decision of the Supreme Court in State of West Bengal v. National Builders , that the contractor Ramalinga Reddy was justified in approaching the Court for appointment of an Arbitrator since the three Arbitrators mentioned in the panel refused to proceed with the reference on the ground that the power of attorney executed by the original Contractor Seetharam Reddy in favour of Ramalinga Reddy had been withdrawn. In the result, as stated supra, the learned Judge allowed the application and called upon both sides to submit a list of Arbitrators within six days for the purpose of appointing one of them as the Sole Arbitrator.
5. The learned Government Pleader for Arbitration contends that the view taken by the learned trial Judge was erroneous; when the Arbitrators were not willing to proceed further it was the duty of the Court to give them a direction to resume their duties and complete the award.
6. We are not inclined to agree. The action of the Arbitrators in closing the arbitration without expressing any view as to the merits of the claims referred to them on the sole ground that the power of attorney executed by the original contractor Seetharam Reddy in favour of Ramalinga Reddy, the first respondent herein, undoubtedly amounts refusal on their part to proceed with the duty of arbitration entrusted to them. The very rationale for appointment of an Arbitrator is the supposition that the person chosen as an Arbitrator would be willing to proceed with the act of arbitration entrusted to him. When such a person refuses to discharge his duty, the Court cannot thrust such an unwilling person on the parties. This aspect was dealt with by the Supreme Court in National Builders case wherein it was held :
“Where the agreement provides for appointment of a specific person either by name or by designation and that person refuses to act then the question of appointing him again cannot arise. Refusal by such a person results in the agreement clause ceasing to operate when two parties agree for appointment of ‘A’ or ‘B’ by name or designation and the person so named refuses to act then the agreement shall be deemed to have exhausted itself. The person so named having refused to act he cannot be asked again to arbitrate. That would be contrary to the very basis of arbitration that no one can be forced to act against his free Will. It would also be contrary to the agreement and if there is no agreement to appoint another person, the only remedy is to approach the Court to exercise its statutory power and appoint another Arbitrator.
In the case the Arbitrator had allowed an unduly long time to pass by and when one of the parties expressed loss of confidence in him and the other party sought extension of time, he declined to grant extension of time and asked the parties to work out their remedy. That situation was interpreted by the Supreme Court as refusal on the part of the Arbitrator to carry out the duties entrusted to him. The facts of the present case are almost similar to the precedent adverted to above. The learned First Additional Judge in has carefully considered the legal and factual aspects of the matter and expressed the correct opinion.
7. In the result, confirming the view of the learned First Additional Judge in O.P. 85/90, we dismiss the appeal at the admission stage.
8. Appeal dismissed.