SUMAC INTERNATIONAL LIMITED LKO THROU MANAGING DIRECTOR Vs. U P COOPERATIVE SUGAR FACTORIES FEDERATION LTD

JUDGEMENT

(1.) This is an application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act, 1996')for appointment of an Arbitrator consequent to the death of earlier Arbitrator Justice B.L. Lumba (Retired) who was appointed under the Arbitration Act, 1940 (hereinafter referred to as ''the Act, 1940'), therefore, in essence the application is under section 15(2) read with section 11 of the Act, 1996.

(2.) A dispute allegedly arose in respect of a contract entered into between the parties, consequently, proceedings were initiated at the behest of the applicant under Section 8 of the Arbitration Act, 1940 before the Civil Court whereupon Justice B.L. Lumba (Retired) was appointed as an Arbitrator by the Court of Civil Judge on 24.01.2000, whereupon, the applicant filed his claim before the Arbitrator and the opposite party no.2 filed his counter claim. As per the applicant counsel evidence was also adduced and the matter was fixed for arguments before the Arbitrator, although, Sri Sudhanshu Chauhan learned counsel for the opposite parties submits that applicant's evidence was adduced but the opposite party's evidence remained to be adduced. Be that as it may, it is not in issue that the proceedings before the Arbitrator reached atleast the stage of evidence if not further, under the Old Act, 1940. The applicant was declared a sick industrial unit on 13.11.1997. Proceedings for winding up were initiated before the High Court at Lucknow bearing Company Petition No. 09 of 2003. In July 2003 Justice Lumba died, whereupon, proceedings were initiated by the applicant before the Court under Section 8 of the Act, 1940 for appointment of another Arbitrator bearing Original Suit No. 827 of 1993. As the company petition for winding up applicant's company was pending before the Company Judge Allahabad High Court at Lucknow, on an application being filed in this regard, the records of the proceeding for appointment of another Arbitrator were summoned by the Company Judge in the High Court and an arbitrator was appointed in these proceedings on 16.04.2014 but, on an appeal being filed against the same, it was set aside as being impermissible. This was done on 14.01.2016. Special Leave Petition bearing No. 5307 of 2016 was filed which was dismissed as withdrawn on 29.02.2016. Subsequently an application was filed in the decided Special Appeal for sending back the records of Original Suit No. 827 of 1993 to the Civil Court for appointment of an Arbitrator which was disposed of with the observation to seek appropriate relief before the Company Judge, however, instead of doing so, the applicant, as informed by its counsel, considering the decision of the Supreme Court in the case of Thyssen Stahlunion Gmbh vs. Steel Authority of India Ltd. reported in, 1999 9 SCC 334, filed this application for appointment of a substitute Arbitrator under Section 11(b) of the Act, 1956..

(3.) Sri Sudhanshu Chauhan learned counsel appearing for the opposite parties has raised a preliminary objection as to the very maintainability of this application under the new Act, 1996 on the ground that the arbitration proceedings had already commenced under the Old Act, 1940, therefore, any application for appointment of an Arbitrator or substitute Arbitrator after the death of the original Arbitrator could only have been filed before the Civil Court under section 8 of the Act, 1940 and in fact this had already been done by the applicant, therefore, another application under the new Act, 1996 before the High Court was misconceived and not maintainable. He relied upon the decisions of the Supreme Court (Milk Food Ltd. vs. G.M.C. Ice Cream P. Ltd., 2004 7 SCC 288, N.S. Nayak & sons vs. State of Goa, 2003 6 SCC 56 and State of West Bengal vs. Amrit Lal Chatterjee, 2003 10 SCC 572.