UNION OF INDIA Vs. VIJAYALAKSHMI ENTERPRISES

JUDGEMENT

(1.) Union of India represented by the General Manager, South Central Railway and two others are the petitioners in this Writ Petition. The Writ Petition has been filed for a Mandamus restraining the 2nd respondent herein, who was appointed as an Arbitrator in Arbitration Application No. 22 of 2001 by order dated 28-8-2001, from functioning as an Arbitrator to resolve the disputes by way of arbitration proceedings in respect of Contract Agreement acceptance letter Nos. B/W.496/ I/4/Zone S-3(A)/1997-98/Tl, dated 3-7-1997 and B/W. 496/I/4/Zone S-3(B)/ 1997-98/T1, dated 30-7-1997 as his appointment is illegal, contrary to law and void as per Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act').

(2.) We have perused the order passed by J. Chelameswar, J in A.A.No. 22 of 2001. This order was passed after hearing the Counsel for the Contractor and the learned Counsel for Railways. Since there was an arbitration agreement between the parties, which was also not in dispute, the learned Judge after hearing the Counsel appearing on either side referred the matter to be resolved by the process of arbitration. The learned Judge appointed a former Judge of this Court Sri D. Reddeppa Reddy, J. as the Arbitrator reserving liberty to him to fix his remuneration. The correctness of this order is questioned in this Writ Petition.

(3.) According to the learned Counsel for the petitioners, the order passed by the learned single Judge is contrary to law and void, that since the Railway Arbitrator has terminated the arbitral proceedings under Section 32(2) (c) of the Act with regard to claim No. 2, the contract came to end and as such, there is no existence of contract for referring the remaining claim Nos. 1,3,4,5 and 6 to an independent Arbitrator under Section 11(6) of the Act. It is further argued by the Learned Counsel for the petitioners that the 1st respondent cannot split up the disputes one before the Arbitrator appointed by the Railways as per the contract agreement and another for appointment of a fresh arbitrator under Section 11(6) of the Act for claim Nos. 1,3,4,5 and 6. Therefore, it is submitted that the arbitration application filed by the 1st respondent is not maintainable on the ground that there must be two independent arbitration applications in view of the two independent contract Nos. S-3(A) and S-3(B). It is also argued that the named arbitrator in the agreement between the parties should have been considered and that the qualification prescribed for the arbitrator i.e., Railway Gazetted Officers should have been considered. Thus it is submitted that there are no arbitrable disputes existing to refer the same for arbitration and, therefore, the order passed by the learned single Judge appointing the 2nd respondent as Arbitrator is non est in law.