{"id":16502,"date":"2008-11-17T00:00:00","date_gmt":"2008-11-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-haryana-vs-ms-dashmesh-woolen-silk-mills-on-17-november-2008"},"modified":"2016-02-29T05:23:27","modified_gmt":"2016-02-28T23:53:27","slug":"state-of-haryana-vs-ms-dashmesh-woolen-silk-mills-on-17-november-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-haryana-vs-ms-dashmesh-woolen-silk-mills-on-17-november-2008","title":{"rendered":"State Of Haryana vs M\/S Dashmesh Woolen &amp; Silk Mills &amp; &#8230; on 17 November, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Punjab-Haryana High Court<\/div>\n<div class=\"doc_title\">State Of Haryana vs M\/S Dashmesh Woolen &amp; Silk Mills &amp; &#8230; on 17 November, 2008<\/div>\n<pre>CR No.2464 of 1991                                            1\n\n\n      IN THE HIGH COURT OF PUNJAB AND HARYANA AT\n                     CHANDIGARH\n\n\n\n\n                                    CR No.2464 of 1991\n\n                                    Date of Decision: 17.11.2008\n\n\n\n\nState of Haryana                                       ....Petitioner\n\n                        Vs.\n\nM\/s Dashmesh Woolen &amp; Silk Mills &amp; Anr.                ..Respondents\n\n\n\n\nCoram: Hon'ble Mr. Justice Vinod K.Sharma\n\n\n\n\nPresent:    Mr.Madan Gupta, Sr.DAG, Haryana,\n            for the petitioner.\n\n            Mr.Sarwan Singh, Sr.Advocate with\n            Mr.N.S.Rapri, Advocate,\n            for respondent No.1.\n\n                        ---\n\nVinod K.Sharma,J. (Oral)\n<\/pre>\n<p>            This revision petition under Section 115 of the Code of Civil<\/p>\n<p>Procedure (for short the Code) is directed against the judgment dated<\/p>\n<p>18.2.1991 passed by the learned Additional District Judge, Chandigarh vide<\/p>\n<p>which appeal filed against the order dated 8.9.1982 passed by the learned<\/p>\n<p>Sub Judge First Class, Chandigarh was accepted.\n<\/p>\n<p>            The petitioner State of Haryana filed a petition under sections<br \/>\n<span class=\"hidden_text\"> CR No.2464 of 1991                                             2<\/span><\/p>\n<p>14 and 17 of the Arbitration Act, 1940 (for short the Act) for making the<\/p>\n<p>award the rule of the Court in which respondent No.1 filed objections under<\/p>\n<p>sections 30 and 33 of the Act.\n<\/p>\n<p>             It was claimed that the contract was executed between the<\/p>\n<p>State of Haryana and M\/s Dashmesh Woolen and Silk Mills vide rate<\/p>\n<p>contract bearing No. GL\/RC\/209\/72-73\/38505-506 dated 20.4.1973. The<\/p>\n<p>case of the petitioner is that a dispute arose between the parties and in<\/p>\n<p>terms of the arbitration agreement the same was referred to Smt.Sushil<\/p>\n<p>Dogra, arbitrator who pronounced the award on 15.9.1978.<\/p>\n<p>             The respondent took a plea that the award passed was illegal,<\/p>\n<p>void and without jurisdiction. It was claimed that Smt.Sushil Dogra could<\/p>\n<p>not be appointed as an Arbitrator as Shri S.P.Bhatia, Joint Director of<\/p>\n<p>Industries was appointed as an Arbitrator in exercise of authority vested in<\/p>\n<p>the State of Haryana under clause 18 of the agreement and once the said<\/p>\n<p>authority was exercised it could not thereafter appoint Smt.Sushil Dogra as<\/p>\n<p>an arbitrator. It was also claimed that there was no valid contract between<\/p>\n<p>the parties. A plea was also raised that the reference made to the Arbitrator<\/p>\n<p>was not valid one as it was a unilateral reference.\n<\/p>\n<p>             The objections were contested.\n<\/p>\n<p>             Learned trial court rejected the objections and made the award<\/p>\n<p>rule of the court.\n<\/p>\n<p>             Appeal against the rejection of objections was accepted by the<\/p>\n<p>learned Additional District Judge, Chandigarh holding that there was no<\/p>\n<p>concluded contract between the parties and therefore, the award passed was<\/p>\n<p>without jurisdiction. The learned appellate court also held that the<br \/>\n<span class=\"hidden_text\"> CR No.2464 of 1991                                                3<\/span><\/p>\n<p>appointment of Smt. Sushil Dogra as an Arbitrator was also vitiated as she<\/p>\n<p>could not be appointed as an Arbitrator after Bhatia was appointed as an<\/p>\n<p>Arbitrator.\n<\/p>\n<p>              The learned court also held that the reference made was not in<\/p>\n<p>consonance with law as unilateral reference is not permissible.<\/p>\n<p>              Mr.Madan Gupta, learned Senior Deputy Advocate General,<\/p>\n<p>Haryana challenged the impugned order on the plea that the learned lower<\/p>\n<p>appellate court was in error in coming to the conclusion that there was no<\/p>\n<p>valid contract between the parties. The contention of the learned counsel for<\/p>\n<p>the petitioner is that the learned lower appellate court has misread Clause 6<\/p>\n<p>of Ex.O.2 to come to this conclusion.\n<\/p>\n<p>              Clause 6 of Ex.O.2 reads as under:-\n<\/p>\n<p>              &#8220;6.   Failure to execute agreement, deposit prescribed security,<\/p>\n<p>              effect supplies within the stipulated period, repeatedly offering<\/p>\n<p>              supplies liable to rejection, without prior inspection by this<\/p>\n<p>              Department may render your earnest money\/security liable to<\/p>\n<p>              forfeiture and cancellation of this acceptance letter and also<\/p>\n<p>              blacklisting of your firm in addition to other remedies as<\/p>\n<p>              available under terms of the contract.&#8221;\n<\/p>\n<p>              There is force in this contention of the learned counsel for the<\/p>\n<p>petitioner. Clause 6 of Ex.O.2 gave power to the State of Haryana to cancel<\/p>\n<p>the contract which stood accepted.\n<\/p>\n<p>              This view of mine finds support from the fact that subsequent<\/p>\n<p>thereto there was correspondence between the parties where the respondent<\/p>\n<p>sought concession from the petitioner.\n<\/p>\n<p><span class=\"hidden_text\"> CR No.2464 of 1991                                                4<\/span><\/p>\n<p>            Learned lower appellate court, therefore, was not justified in<\/p>\n<p>holding that there was no        valid contract between the parties. Even<\/p>\n<p>otherwise, the reading of Ex.O2 shows that offer made by respondent was<\/p>\n<p>accepted, thus contract stood concluded. Clause 6 of Ex.O.2 reproduced<\/p>\n<p>above only gives right to cancel the contract and is not prerequisite as was<\/p>\n<p>held by learned lower appellate court.\n<\/p>\n<p>            However, this revision deserves to be rejected on other two<\/p>\n<p>grounds, Arbitration Clause between the parties reads as under:-<\/p>\n<blockquote><p>            &#8220;18.         If any question, difference or objection whatsoever<\/p>\n<p>            shall arise, in any way connected with or arising out of this<\/p>\n<p>            instrument or the meaning or operation of any part thereof or<\/p>\n<p>            the rights, duties or liabilities of either party then save in so far<\/p>\n<p>            as the decision of any such matter is herein before provided for<\/p>\n<p>            and has been so decided, every such matter including whether<\/p>\n<p>            its decision has been otherwise provided for and or whether it<\/p>\n<p>            has been finally decided accordingly or whether the contract<\/p>\n<p>            should be terminated or has been rightly terminated in whole<\/p>\n<p>            or part and as regards the rights and obligations of the parties as<\/p>\n<p>            the result of such termination shall be referred for arbitration to<\/p>\n<p>            any officer appointed by Haryana        Government         and   his<\/p>\n<p>            decision shall be final and binding and where the matter<\/p>\n<p>            involves a claim the amount if any awarded in such arbitration<\/p>\n<p>            shall be recoverable in respect of the matter so referred.&#8221;<\/p><\/blockquote>\n<p>            Clause 18 authorized the State of Haryana to appoint an<\/p>\n<p>Arbitrator to adjudicate the dispute. In exercise of said power admittedly an<br \/>\n<span class=\"hidden_text\"> CR No.2464 of 1991                                              5<\/span><\/p>\n<p>Arbitrator was appointed. Thereafter, it was not open to the State to appoint<\/p>\n<p>any other arbitrator as the authority appointed Arbitrator can be revoked<\/p>\n<p>only by the court, unless the arbitration agreement gives such a power to a<\/p>\n<p>party to fill up the vacancy.\n<\/p>\n<p>             However, no such power was given in the arbitration clause<\/p>\n<p>entered into between the parties. This view finds support from the judgment<\/p>\n<p>of this court in the case of Messrs Shamji Mal Vs. Messers L.Sefton &amp;<\/p>\n<p>Co. Ltd. Mirzapur and another 1954 P.L.R. 187, wherein this court was<\/p>\n<p>pleased to lay down that once the power to appoint an Arbitrator under the<\/p>\n<p>contract is exercised by appointing an arbitrator, thereafter there is no power<\/p>\n<p>with the authority to appoint another Arbitrator.<\/p>\n<p>             The order passed by the learned appellate court is also required<\/p>\n<p>to be upheld as it has been rightly held that it is not enough for the contract<\/p>\n<p>to provide for arbitration as the arbitrator only gets jurisdiction when both<\/p>\n<p>the parties specifically agree to refer specified matters or, failing that, the<\/p>\n<p>court compels them to do so under the Act if the dispute is covered by it.<\/p>\n<p>             This view finds support from the judgment of Hon&#8217;ble Supreme<\/p>\n<p>Court in the case of <a href=\"\/doc\/318186\/\">Seth Thawardas Pherumal V. The Union of India<\/a><\/p>\n<p>(1955) 2 S.C.R. 48 and the judgment of Hon&#8217;ble Calcutta High Court in the<\/p>\n<p>case of East India Construction, Co. (P) Ltd. Vs. Union of India AIR<\/p>\n<p>1970 Calcutta 243, wherein it has been held that in the absence of specific<\/p>\n<p>provision in agreement giving power to the appointing authority to fill up<\/p>\n<p>vacancy, power to appoint arbitrator gets exhausted once it was exercised by<\/p>\n<p>the said authority. Thereafter it is only the court which is competent to<\/p>\n<p>appoint arbitrator.\n<\/p>\n<p><span class=\"hidden_text\"> CR No.2464 of 1991                                                6<\/span><\/p>\n<p>             In view of what has been observed above, there is no merit in<\/p>\n<p>the present revision petition which is ordered to be dismissed.<\/p>\n<pre>17.11.2008                                         (Vinod K.Sharma)\nrp                                                      Judge\n <\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Punjab-Haryana High Court State Of Haryana vs M\/S Dashmesh Woolen &amp; Silk Mills &amp; &#8230; on 17 November, 2008 CR No.2464 of 1991 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR No.2464 of 1991 Date of Decision: 17.11.2008 State of Haryana &#8230;.Petitioner Vs. M\/s Dashmesh Woolen &amp; Silk Mills &amp; Anr. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,28],"tags":[],"class_list":["post-16502","post","type-post","status-publish","format-standard","hentry","category-high-court","category-punjab-haryana-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Of Haryana vs M\/S Dashmesh Woolen &amp; Silk Mills &amp; ... on 17 November, 2008 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/state-of-haryana-vs-ms-dashmesh-woolen-silk-mills-on-17-november-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Of Haryana vs M\/S Dashmesh Woolen &amp; 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