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Judgment
Jasbir Singh, Acting Chief Justice
This petition has been filed u/s 11 (6) of the Arbitration and Conciliation Act, 1996 (in short, the Act) for appointment of an Arbitrator. Vide an agreement dated 6.10.2009, paddy for custom milling was supplied to the petitioner as per clause 10 of the Haryana Rice Procurement (Levy) Order, 1985. In execution of the work, dispute arose between the parties. It is not in dispute that in the above agreement, to settle the dispute, it is provided that the matter be referred to the sole arbitrator named in clause 23 of the above agreement.
It is on record that for appointment of an Arbitrator in terms of the provisions of the agreement, the petitioner sent a letter on 29.3.2010 followed by a legal notice dated 21.9.2011. Despite that the respondents failed to appoint an Arbitrator, which compelled the petitioner to file this petition.
At the time of arguments, it is brought to the notice of the Court that after issuance of notice in this case, the department has appointed an Arbitrator.
Counsel for the petitioner states that as per established law, such action on the part of the respondents is not permissible.
The Court feels that the objection raised to the appointment of Arbitrator during pendency of this petition is perfectly justified.
This Court in Arbitration Case No. 107 of 2010 decided on 17.08.2012 titled as Arch Consultancy Services (P) Ltd. versus The Commissioner, Municipal Corporation, Amritsar while dealing with a similar situation, has observed as under:-
It is contended by counsel for the petitioner that when the respondent has failed to appoint an Arbitrator on receipt of a representation within a reasonable time, the respondent cannot appoint the Arbitrator when this Court is seized of the matter.
The contention raised appears to be correct. It has been so said by the Hon''ble Supreme Court in Union of India v. M/s Bharat Battery Manufacturing Co. (P) Ltd., 2007 (3) SLJ 1443, wherein it was observed as under:-
We are unable to countenance with the submission of the learned counsel for the appellant. Section 11(8) of the Act could have come to the aid of the appellant had the appellant appointed the arbitrator within 30 days from the date of receipt of request to do so from the respondent or the extended time as the case may be. In the present case, as noticed above, Section 11(6) petition was filed on 30.3.2006 by the respondent. The appellant stated to have appointed one Dr. Gita Rawat on 15.5.2006, i.e. after Section 11(6) petition was filed by the respondent on 30.3.2006, which is not permissible in law. In other words, the appellants are stopped from making an appointment of the arbitrator in terms of Clause 24 of the agreement after Section 11(6) petition is filed by the respondent. Once Section 11(6) petition is filed before the Court, seeking appointment of an arbitrator, the power to appoint an arbitrator in terms of arbitration clause of the agreement ceases.
In view of ratio of the aforesaid judgment, appointment of an Arbitrator by the respondent after filing of these petitions is not proper and justified. The appointment was made after invocation of the jurisdiction of this Court, by the petitioner which cannot be allowed. Reliance of the respondent on a judgment of the Supreme Court in M/s Raja Transport (P) Ltd.''s case (supra) is not justified. Facts of that case are altogether different.
It is not in dispute that the petitioner sent a letter dated 29.3.2010 followed by legal notice dated 21.9.2011 praying therein for appointment of an Arbitrator to settle the dispute between the parties. When nothing was done, this petition was filed on 22.12.2011, whereas the respondents appointed the arbitrator on 13.7.2012. Therefore, in view of the law laid down by the Supreme Court in the case of M/s Bharat Battery Manufacturing Co. (P) Ltd. (supra) followed by this Court in the case Arch Consultancy Services (P) Ltd. (supra), the respondents have lost the right to appoint the arbitrator. In view of facts mentioned above, this petition is allowed and Mr. L.R. Roojam, retired District and Sessions Judge, resident of House No. 3014, Sector 20-D, Chandigarh is appointed as an Arbitrator to settle the dispute. He shall charge fee as per norms fixed by this Court.