UNIPACK INDUSTRIES Vs. SUBHASH CHAND JAIN

JUDGEMENT

(1.) Petitioner, Unipack Industries, is a partnership firm and has filed the present petition under Section 12 of the Arbitration and Conciliation Act, 1996 (for short the Act). It has been prayed that respondent No. 2 (Jagan Nath) who has been appointed as the Arbitrator should be removed from holding the office of Arbitrator with respect to alleged claims of respondent No. 1 (Subhash Chand Jain).

(2.) It has been pleaded that petitioner and respondent No. 1 had business dealings. The petitioner alleges that he was making regular payment to respondent No. 1 on bill to bill basis and no dispute was raised with respect to full and final settlement of account. Respondent No.l through his advance sent a notice dated 5th July, 2001 calling upon the petitioner to pay a sum of Rs. 16,37,312.99 with interest. A reply was sent to the Counsel that no amount was outstanding. Thereafter respondent No. 2 acting as Arbitrator is alleged to have sent notice dated 9th August, 2001 to appear before him on 6th September, 2001. At the request of the petitioner, copy of the statement of claim was made available to the petitioner. It transpired that arbitration is being conducted by Paper Merchants Association.

(3.) The petitioner claims that respondent No. 2 is liable to be removed because by sending notice of 5th July, 2001 the respondent No. 1 has waived the arbitration by directing the petitioner to pay the alleged amount. Furthermore it is claimed that respondent No. 1 had failed to point out the arbitration clause between the parties because the arbitration clause of the Paper Merchants Association is applicable only to the members of the association. The petitioner is not a member of that association and therefore there cannot be any arbitration qua the petitioner. Plea has also been raised that it is the duty of respondent No. 2 not to act as an Arbitrator. The petitioner does not expect any justice from him. There are reasonable doubts of his being under the influence of the member / respondent No. 1. On these facts above said prayer has been made.