J B DADACHANJI Vs. RAVINDER NARAIN

JUDGEMENT

(1.) The first application, IA 9696/03 is filed by Shri O.C. Mathur, respondent No. 2 under Section 15(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') for appointment of substitute arbitrator in place of Dr. Justice A.S. Anand on the ground that pending arbitration proceedings do not stand terminated under Section 32 of the Act. The second and third applications, lAs 11496 and 11599 of 2003 have been filed in A.A. No. 122 of 2000 and CS(OS) No. 1084-A of 2000 by the petitioner and respondent No. 1/petitioner respectively in the said suit for withdrawal of their arbitration petition and the suit.

(2.) The arbitration petition, Arb. P. No. 122 of 2000 was filed by M/s. J.B. Dadachanji (in short the 'JBD') under Section 11 of the Act for appointment an arbitrator for adjudication of disputes regarding validity of modification deed dated 1st January, 1997, dissolution of firms and rendition of accounts. The respondent No. 1 in this petition is Shri Ravinder Narain (in short 'RN'), who is the partner of JBD Company and respondent No. 2, Shri O.C. Mathur, who is another partner of JBD company (in short OCM).

(3.) Since JBD, the petitioner herein has settled all the disputes with RN in the Section 11 petition, it seeks to withdraw the petition for appointment of an arbitrator as it does not want to carry on the arbitration proceedings any further. A similar prayer is also sought by RN in IA No. 11599/2003 in CS(OS) No. 1084-A/2000, filed by RN for dissolution of firms and rendition of accounts. It is not in dispute that initially this Court by its Order dated 9th July, 2002 did appoint Hon'ble Dr. Justice A.S. Anand as the sole arbitrator at the behest of JBD but even before reference could be entered upon or notice be issued to the parties, the learned Arbitrator withdrew from the arbitration proceedings by writing the letter dated 6th July, 2003. The petitioner has based his application to withdraw the arbitration petition on the ground that it had inherent rights to do so particularly when the petitioner states that he has settled all disputes raised by him and has no dispute with either RN or OCM. It is also submitted that upon the withdrawal of the learned arbitrator appointed by this Court from the office of Arbitrator and termination of the mandate of the arbitration as per Section 15(2), the rules applicable to the appointment of the arbitrator became applicable and the procedure stipulated under Section 11 was thus required to be complied with and thus a substituted arbitrator cannot be sought by any party including OCM without following the procedure and the rules applicable prior to the appointment of the arbitrator. This plea has also,been supported by RN. OCM has strenuously opposed the withdrawal of this petition as well as the suit and submitted that the functions under Section 11 of the Act are administrative and not judicial or quasi-judicial and a mandatory duty under Section 15(2) of the Act is cast upon this Court to appoint a substitute arbitrator. It is thus submitted by OCM that once an arbitrator was appointed as per Section 11, arbitration proceedings have commenced under Section 21 and they must be deemed to be continued to be pending and must be concluded. Since the arbitrator already stood appointed by the Order dated 9th July, 2002, passed by Hon'ble Mr. Justice D.K. Jain, the arbitration proceedings cannot be said to have terminated notwithstanding the withdrawal of Hon'ble Dr. Justice A.S. Anand as an Arbitrator. Consequently as per IA No. 9696 of 2003 filed by OCM under Section 15(2), it is mandatory to appoint an substitute arbitrator since pending arbitration proceedings have not stood terminated under Section 32. In a partnership dispute for dissolution of firm and rendition of accounts, if any partner does not proceed, other partners are entitled to proceed and if necessary are entitled to be transposed in exercise of judicial or quasi-judicial powers by Arbitral Tribunal in a manner akin to partnership suits.