KHETRI Vs. PARAMOUNT LTD

JUDGEMENT

(1.) BOTH the writ petitions are arising out of the same arbitral proceedings, although against the different orders, one is against the order dated 2. 4. 2005 passed by the Additional District Judge, Khetri whereby the application of the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act of 1996') has been dismissed and another is against the order of rejection of the amendment application for adding the counter claim of 30 crores by the Arbitrator vide order dated 20. 5. 2005. Since one of the common question involved in both the writ petitions is interference of this Court under Article 226 of the Constitution of India with regard to arbitral proceedings, therefore, I also think it proper to decide both the writ petitions together by a common order.

(2.) THE facts of S. B. Civil Writ Petition No. 3068/2005 are that after the appointment of Shri A. P. Choudhary as Arbitrator by this Court, an application was moved under Section 14 of the Act of 1996 that the sole Arbitrator has failed and/or unable to function as Arbitrator within the meaning of the Act of 1996, therefore, the impugned order dated 2. 4. 2005 of the Additional District Judge, Khetri be quashed and set aside and arbitration proceedings be declared de facto and de jure terminated. THE grounds taken in the said application are that the petitioner- Company through its Chairman and Managing Director, who is authorised, has appointed Shri T. Arvind, Sr. Dy. General Manager (Admn.) HCL, KCC as Arbitrator but the High Court has cancelled the appointment of Shri T. Arvind being made during the proceeding under Section 11 of the Act of 1996 in the High Court and appointed Shri A. P. Choudhary, a retired Director of India Oil Corporation as Arbitrator, which is contrary to the five Judges Constitutional Bench of the Supreme Court in Konkan Railway Case. It was further stated that since the order, of appointment of Arbitrator under Section 11 is administrative order and not a judicial order, therefore, the same can be assailed before the civil Court.

(3.) THE respondent No. 1 has filed reply and submitted that the petitioner is trying to upset th proceedings of the arbitration and as per Section 5 and 11 of the Act of 1996, th Courts should be restrained from interfering with the arbitration proceedings except in the manner provided in the 1996 Act.