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7. The wording "entered on reference" is somewhat ambiguous. It can mean the process of (1) accepting the office or (2) of doing some act as such arbitrator including issuing of notice to the parties or (3) of applying mind to any controversy or (4) of hearing the evidence itself. It is however not easy to decide when precisely he assumes office or starts functioning effectively or when he is called upon to apply his mind to the dispute. Under the corresponding provision of the English enactments after which our Arbitration Act is modelled, the decision of Cockburn, C. J. in the case of Baker v. Stephens. (1867) 2 QB 523, was considered to be the leading authority on the construction of this wording. According to the learned Chief Justice, the arbitrator enters on reference not, when he accepts or assumes office, or when he issues notices to the parties to appear and file statement of their claims, but when he has occasion to hear all the parties to the dispute about the merits excepting those against whom proceedings are set ex parte. This view exclu-dee all earlier stages even when the arbitrator decides some controversy on application of his mind. The dictum of this case was followed by all Indian High Courts till the Appeal Court in England had occasion to strike a discordant note in the case of Iossifoglu v. Coumantaros, (1941) I KB 396. According to the ratio of this case, arbitrators enter on reference even when they accept the office and communicate with each other about the choice of the umpire. This case is now followed by all the High Courts including our High Court in Dr. Babubhai's case (supra). In this case, Tendolkar, J. preferred to follow the ratio of lossifoglu's case (supra) as against the ratio of Baker v. Stephens case (supra) as in his opinion the Baker's case was impliedly overruled by Iossifoglu's case though not expressly referred to.

10. Mr. Bhonsle, the learned Govt. Pleader, appearing for Respondent, relied on Dr. Babubhai's case (supra) and the case of Soneylal Thakur v. Lachhminarain Thakur, and M. George v. Raju M. Mathew, . We have already indicated how reliance on Dr. Babubhai's case is wholly misconceived. The Patna case also relied amongst others on Dr. Babubhai's case. The question of its application to facts and facts of each (sic) is very difficult. The words "when he proceeds to do something in furtherance of and towards the execution of the work of arbitration" are too vague to admit precise connotation. These can cover even the act of issuing notices. But the learned Judges in that case (Patna) did not treat the act of even appearing of the parties before the arbitrator and the adjournments, as act of entering on reference. Fixing the date of hearing was considered by the learned Judges to be such an act. As observed by the learned Judges in para 5 of the judgment the true position in such a situation appears to be depending on facts and facts of each case. The words 'doing some act by the arbitrator in furtherance of and towards the execution of arbitration work" or 'taking some effective step' by themselves do not indicate any precise concept. The same is true of Kerala Judgment. In this case of M. George v. Raju M. Mathew, decided by the Supreme Court in (1979) 1 SCC 193, the question as to when arbitrator enters on reference, had not arisen for consideration. Reliance thereon is not of any use. 

 He then    recorded    his     conclusion    in para 35 of the judgment  as follows:-- 
   

 "We therefore,     answer the questions referred to us  as  follows:
(1) An Arbitrator does not enter on the reference as soon as he assumes the office of an Arbitrator. An Arbitrator does not necessarily enter on the reference when he actually commences the decision of the matter in the presence of both parties or ex parte. An Arbitrator enters on a reference when he first applies his mind to the dispute or controversy before him depending on the facts and circumstances of each case." With respect, we find ourselves in agreement with the above observation.

13. Thus, the arbitration proceeding consists of two stages. One such stage consists of merely ministerial acts while the second stage consists of effective adjudicative acts in furtherance of the work of arbitration, namely of proceedings to decide controversies in between the parties, whether arising out of the main dispute or procedural aspects in the disposal thereof. The arbitrator cannot be said to have entered on the reference unless the second stage can be said to have been reached someway or the other. Looked at from this point of view it is impossible to hold that the arbitrator had entered on reference in 17-11-1971 when nothing had happened on that date beyond the arbitrator issuing notices to the parties to file their statement of claims. The resume of events in this case indicates that no effective step was taken by the arbitrator, till the hearing of the dispute commenced on 21-2-1972. Each one of the earlier stages covered merely some or the other of the ministerial acts such as issuing of notices, acceptance of statement of claims and adjourning the case to suit the convenience of the parties. 21st February 1972 must be held, on the facts and in the circumstances of the case, to be the date on which the arbitrator had entered on reference. The award dated 15-5-1972 was within four months prescribed under clause 3 of Schedule I of the Arbitration Act. In this view of the matter, the finding recorded by the learned Judge on this point is liable to be set aside.