BHAGWAN DASS Vs. UNION OF INDIA

JUDGEMENT

(1.) A common question of law arises for consideration in all these petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). The question precisely is whether the appointment of an Arbitrator by the respondents in each one of these cases after the filing of the present petitions is legally valid ? While the respondents argue that the appointments are valid, the petitioners contend that such appointments are of no legal consequence as the same were made after the authority competent to make the appointment had forfeited its right to do so. Reliance, in support of that submission, is placed upon the decisions of the Supreme Court to which I shall presently refer. Suffice it to say that the validity of appointments already made is the only impediment in the grant of the prayers made by the petitioners and in the making of fresh appointments in each one of these cases.

(2.) IN Arbitration Case No. 80 of 2006 and so also in all the connected petitions being disposed of by this order, the existence an Arbitration Clause providing for adjudication of disputes between the parties is not denied. It is also not denied that a demand for reference of disputes to the Arbitrator was made on 30.12.2002 in Arbitration Case No.80 of 2006. Upon failure of competent authority to make such an appointment an Arbitration application under Section 11(6) of the Act was filed before the Civil Judge (Senior Division), Ambala on 17.2.2003, which upon transfer to this Court has been registered as Arbitration Case No.80 of 2006. The Arbitrator appointed by the competent authority, in the meantime, appears to have entered upon the reference and started proceedings but since the petitioners did not participate in the proceedings on account of the petitions filed by it for reference of disputes to an independent Arbitrator, the said proceedings were terminated by the Arbitrator. That order of the Arbitrator was challenged by the petitioner before the Additional District Judge in a petition under Section 34 of the Act, who declined the prayer holding that the appointment of Arbitrator made by the competent authority was valid. The order passed by the Additional District Judge has been assailed in Civil Revision No.388 of 2006 by the petitioners, which too has been heard alongwith these petitions and shall stand disposed of by this order.

(3.) THE position is no different in Arbitration Case No.84 of 2006 in which a demand for appointment of the arbitrator was made by the petitioner on 20.12.2004. The failure of the competent authority to make an appointment, led to the filing of the said petition under Section 11 of the Act in the Court of Civil Judge at Bhatinda in March, 2005, which was later transferred to this Court in terms of the decision of the Supreme Court in SBP and Co. v. Patel Engineering Company Limited and Others, 2005(4) RCR(Civil) 747 : 2005(8) SCC 618 and registered as Arbitration Case No. 84 of 2006. An appointment of Arbitrator was, however, made by the respondents on 26.6.2006. The petitioners' case is that the contract between the parties in that case was signed at Bhatinda and although a reference has been made by the respondents for adjudication of the disputes between the parties, the same has been restricted to a claim of Rs. 8,24,690/- only. Reference of the remainder of the claims made by the petitioners has been refused on the ground that the said claims are based on excepted matters, which are not arbitrable.