KHAYALI RAM Vs. STATE OF H.P.

JUDGEMENT

(1.) Counsel for the petitioner submitted that an agreement has been entered into between the parties which is annexed as Annexure 1 to the memo of this Arbitration Application which is dated 11th April, 2007. As per this agreement and especially Clause 8.1(b) thereof, there is an arbitration clause, if the dispute has arisen from the said agreement. It is further submitted by the counsel for the petitioner that a dispute has arisen between the parties because of revenue support provided by the Government, for which notice was also given by this applicant dated 05.11.2015 for appointment of an arbitrator. Arbitrator was not appointed by the respondents and, hence, this Arbitration Application has been preferred on 12th Jan., 2016. Thereafter, on 28th Jan., 2016, Secretary, Department of I.T. & E. Governance, Government of Jharkhand, has bee appointed as a sole Arbitrator. This communication is at Annexure 4 to the rejoinder affidavit filed by the petitioner. Counsel for the petitioner submitted that in view of the decision rendered by Honourable Supreme Court in a case reported in (2000) 8 SCC 151 (para 19 thereof), once an application has been preferred under sub section (6) of Sec. 11 of the Arbitration and Conciliation Act, 1996, the respondents-State cannot appoint arbitrator. Counsel for the petitioner has also relied upon the amendment made in Sec. 12(5) of the Act of 1996 to be read with Seventh Schedule thereof. As per this newly amended provision, a person, who is an employee, consultant, advisor or any other past or present business relationship with the parties, cannot be appointed as an arbitrator. In view of these facts, it is suggested by the counsel for the petitioner that let any retired Honourable Judge of this Court may kindly be appointed as an arbitrator.

(2.) Counsel for the respondents submitted that it is true that the notice given by this petitioner was received by the respondents, but the talks were going on between the parties even on 12th Jan., 2016, the day on which this Arbitration Application has been preferred. Thus, without waiting for a negotiation between the parties, hurriedly this Arbitration Application has been preferred, that does not mean that the right of the respondents to appoint an arbitrator is being forfeited. It is also submitted by the counsel for the respondents-State that in fact arbitrator has already been appointed by the respondents in view of Clause 8.1(b) vide letter dated 28th Jan., 2016 which is annexed as Annexure 4 to the rejoinder affidavit and, hence, this Arbitration Application may not be entertained by this Court.

(3.) Having heard learned counsels for both sides and looking to the facts and circumstances of the case, more particularly, the fact that,