Defendant is the appellant. The suit was for settlement of accounts of a firm. There was an arbitration clause in the agreement between the parties. The clause provided for appointment for one arbitrator each by the two parties and appointment of an umpire by the arbitrators. At the request of the appellant/defendant the trial court referred the matter to arbitrators appointed by the parties. The arbitrator appointed by the appellant refused to enter upon the arbitration. When the matter was reported to the court by the other arbitrator, the court directed him to proceed with the arbitration. He filed an award, which the court accepted. Accordingly, the decree was passed. This is challenged in this appeal. 2. Heard the learned counsel for the appellant. The learned counsel for the respondent submitted that in spite of notice his party has not turned up.
3. Section 8 of the Arbitration Act, 1940 provides that if any appointed arbitrator refuses to act, a party may serve a notice on the other party to appoint an arbitrator. Sub-section 2 of the Section provides that if the appointment is not made within fifteen clear days after service of the said notice, the Court may, on the application of the party who gave the notice and after giving other parties an opportunity of being heard, appoint an arbitrator. In this case no notice was given to the other side by the appellant. The court could not have invoked its power under sub-section 2 of Section 8. There has been a violation of the provision contained in Section 8 of the Act. When the agreement provided for appointment of two arbitrators and an umpire, it was not proper for the court to direct one of the arbitrators to proceed with the arbitration. So it is only just and proper that the matter is sent back to the court.
In the result, this appeal is allowed. The impugned award, judgment and decree are set aside. The matter is sent back for fresh disposal in accordance with the law. The appellant is directed to issue notice to the respondent to supply the vacancy as provided in Section 8 (1) of the Arbitration Act within 15 days of appearance in the lower court. The parties will appear in that court on 03.01.2015.
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K. ABRAHAM MATHEW JUDGE //True copy// P.A. TO JUDGE shg/