DELHI INFRAMART PVT. LTD. Vs. N.K. SINGHAL

JUDGEMENT

(1.) The case of the petitioner, in brief, is that it is a company duly incorporated under the Companies Act, 1956 and entered into a Collaboration Agreement dated 22.10.2012 with the respondent. Under this agreement, the petitioner had agreed to re-develop and re-construct the property bearing No.B-28, Delhi Officers Co-operative House Building Society, Madhuban, Delhi-110092. The respondent had cheated the petitioner by dishonestly inducing him to enter into the said agreement, without having any intention to fulfil his obligations and commitments and has caused wrongful loss to him and earned wrongful gain to himself. The respondent had failed to abide by the terms and conditions of the said agreement and failed to fulfil his commitments. Vide letter dated 05.08.2014, Justice S.N. Katriar (Retd.) has informed the petitioner that he has accepted to act as a sole Arbitrator in response to the letter dated 28.07.2014 of the respondent and the hearing would take place on 21.08.2014, at 2.00 PM at Milon Banerji Conference Room, Supreme Court of India, Tilak Marg, New Delhi. The petitioner, through is Advocate, vide his letter dated 11.08.2014, objected to the appointment of Justice S.N. Katriar (Retd.) as Arbitrator and intimated both Justice S.N. Katriar (Retd.) and the respondent that the reference entered by Justice S. N. Katriar (Retd.) is arbitrary, illegal and against the terms of the agreement and also called upon the respondent to withdraw the reference. The petitioner also called upon Justice S.N. Katriar (Retd.) to disclose in writing his relation with the respondent and not to act as Arbitrator since the petitioner had reasonable apprehension and justifiable doubt as to his integrity and independence. Despite receiving the said communication dated 11.08.2014, Justice S.N. Katriar (Retd.) and the respondent did not send any reply to the petitioner. It is submitted that the respondent has no power to appoint Justice S.N. Katriar (Retd.) as sole Arbitrator, without the consent of the petitioner and as such his appointment is illegal and against the terms of the agreement. Since the respondent unilaterally appointed Justice S.N. Katriar (Retd.) and the said appointment has been accepted by Justice S.N. Katriar (Retd.), without the consent of the petitioner, there are reasonable apprehension and justifiable doubt as to his independence and impartiality and hence the present petition. It is prayed that an Arbitrator be appointed in terms of Collaboration Agreement dated 22.10.2012.

(2.) After the notice of the said petition was issued to the respondent, the respondent filed an application bearing No. 17580/2014 seeking dismissal of the petition. It is contended that the petitioner has concealed the material facts from the notice of this Court. It is further contended that the said Arbitrator had been appointed in terms of clause 40 of the Collaboration Agreement dated 22.10.2012 and that under the said clause, the respondents were empowered to appoint the sole Arbitrator and no consent of the petitioner was needed. It is further submitted that Justice S.N. Katriar (Retd.) was a retired Judge of Patna High Court, who has been appointed as a sole Arbitrator and his impartiality and integrity cannot be doubted. He was appointed as a sole Arbitrator vide letter dated 23.07.2014. It is also submitted that a letter dated 28.07.2014 was also written to him seeking his acceptance. In the interregnum, the respondent filed a petition under Section 9 being OMP No. 854/2014 on 30.07.2014. Vide order dated 01.08.2014, the said petition was disposed of with a direction to the Arbitrator to treat the said petition under Section 9 as application under Section 17 of the Arbitration and Conciliation Act, 1996.

(3.) Justice S.N. Katriar (Retd.) accepted the appointment vide his letter dated 05.08.2014 and informed the parties that preliminary hearing would be held on 21.08.2014. The respondent informed the petitioner as well as the Arbitrator vide letter dated 09.08.2014 about the order of this Court dated 01.08.2014 passed in OMP No. 854/2014. The petitioner wrote a letter dated 11.08.2014 to Justice S.N. Katriar (Retd.) objecting to his appointment which was received by him on 14.08.2014. It is submitted that the Arbitrator hold a hearing on 21.08.2014, wherein the petitioner appeared and pressed his objections made by it vide letter dated 11.08.2014. After making the submissions on said objections, the petitioner's counsel sought an adjournment in order to seek instructions from his client with respect to the contents of para 8 and the prayer portion of the said application and, thereafter, the matter was adjourned to 01.09.2014. Instead of attending the proceedings before the Arbitrator on 01.09.2014, the petitioner filed the present petition on 21.08.2014 itself. It is submitted that petition is liable to be dismissed since the Arbitrator has been appointed as per the procedure prescribed under the arbitration agreement. It is further submitted that the petitioner has suppressed the material facts and the petition ought to be dismissed on this ground. It is further submitted that the Arbitrator, so appointed, is a retired High Court Judge, who has no connection with the respondent and whose impartiality cannot be doubted.