M S KHANNA Vs. NEW DELHI MINICIPAL COMMITTEE

JUDGEMENT

(1.) HE petitioner M. S. Khanna Associates (P) Limited, Contractors, F-22, Bha-gat Singh Market, New Delhi has put up this petition underSections 1) and 12 of tHE Arbitration Act, 1940(HEreinafter to be referred to as tHE Act) for tHE removal of MrA. S. Khullar, respondent No. 2, as Arbitrator who entered upon.tHE reference on 21-4-1981 to resolve tHE disputes and differenceswhich had arisen between tHE petitioner on tHE one hand andrespondent No. 1. New Delhi Municipal Committee on tHE otHErand for appointing anotHEr arbitrator in his place. THE arbitration clause No. 25 appearing in tHE contract, between tHE partieswas invoiced by tHE petitioner as early as 14-1-1980 and in pursuance tHEreof tHE Administrator of respondent No. 1 N.D.M.C.appointed Mr. A. K. Guha as Arbitrator to adjudicate upon tHEdisputes between tHE parties vide letter dated 24-9-1980 butMr. Guha resigned as an Arbitrator subsequently without takingup tHE matter and tHEreafter tHE Administrator appointed respondent No. 2 A. S. Khullar as tHE sole arbitrator or vide his letterdated 16-4-1981.

(2.) IT is alleged that after entering upon the reference on21-4-1981 even though the Arbitrator had called upon the partiesto file their submissions of claims before him and the petitionercomplied with that direction, respondent No. 1 did not and theArbitrator misconducted himself in not reminindg respondentNo. 1 to file its claim or reply to the claim of thepetitioner for a long time and rather allowed respondent No. 1to raise take objection such as that respondent No. 1 had notbeen supplied the copy of the claim of the petitioner which objection was raised by respondent No. 1 after very long time.The petitioner has been supported by the affidavit deposed toMr. D. D. Chawla one of the Directors of the petitioner company.

(3.) THE learned counsel for the petitioner has contendedthat on the removal of respondent No. 2 A. S. Khullar as Arbitrator the power rests with the Court to appoint a new Arbitrator under S. 12 (2) (a) of the Act whereas according to thelearned counsel for respondent No. 1 N.D.M.C. it is not for theCourt to appoint a new Arbitrator but the power of appointinga new Arbitrator remains with the Administrator of N.D.M.C.as according to the arbitration clause the President or the Administrative Head if there happens to be no President at therelevant time can fill up the vacancy of an Arbitrator originallyappointed if the vacancy is caused when the Arbitrator is transferred or vacates his office or is unable to act for any reason.This clause does not specifically mention the vacancy caused bythe removal of the arbitrator by the Court. Under See. 12(2)(a) when the Court removes the sole arbitrator or all the arbitrators the Court may, on the application of any party to thearbitration agreement, either appoint a person to act as solearbitrator in the place of the person or persons displaced ororder that the arbitration agreement shall cease to have effectwith respect to the differences referred. Sub-section (3) ofS. 12 provides that the person appointed under this section asan arbitrator or umpire shall have the like power to act in thereference and to make an award as if he had been appointedin accordance with the arbitration agreement. It would benoted that the provision of law contained in Sec. 12 has notbeen subjected to an agreement to the contrary between theparties, as a result of which it is clear that even if the arbitrationagreement provides for the filling up of the vacancy by a namedperson even in the case of a vacancy caused by the removal ofthe arbitrator under the orders of the Court, the same wouldbe invalid being in contravention of Sec. 12 of the ArbitrationAct which gives power to the Court alone to fill up the vacancyon the removal of an arbitrator by Court. Thus, the arbitrationagreement even though talking of the occurrence of vacancy forany reason, the same cannot and would not include the vacancycaused by the removal of the arbitrator under the orders of theCourt and consequently the President or the Administrative Headof N.D.M.C. shall not have the power to appoint a new arbitrator after the Administrator initially appointed by him is removedby the Court, and the power of appointing the new arbitratorrests with the Court under S. 12 of the Act. THE authorityWest Bengal Essential Commodities Supply Corporation Ltd.v. M/s. International Trading Corporation of India AIR 1984Calcutta 313 (6) relied upon by the learned counsel for respondent No. 1 N.D.M.C. has no applicability to the facts of thepresent case wherein the arbitrator initially appointed is beingremoved by the Court whereas in the aforesaid authority theArbitrator had not been removed by the Court. It is thus Courtalone which is competent to appoint a new arbitrator and notthe authority referred to in the arbitration agreement. Mr.O. P. Mittal, Retired Chief Engineer, C.P.W.D.,S-253, Panchsheel Park, New Delhi is appointed the new Arbitrator to decide the disputes and differences between the parties. His feesis tentatively fixed at Rs. 2,000 to be shared equally by boththe parties. Intimation of this order be sent to the new Arbitrator immediately. THEre shall, however, be no order as tocosts of this petition.