ORDER Mukul Mudgal, J.
1. This is a petition on behalf of the petitioner under Section 11(4) of the Arbitration & Conciliation Act, 1996 and under Section 10 read with Section 151 CPC, seeking the appointment of an arbitrator.
2. On 24th July, 1995, a Licence Agreement was entered into between the petitioner and the respondent by which the petitioner was granted licence to establish Voice Mail Services for eight cities. Thereafter, differences arose between the parties and by its letter dated 25th January, 1999, the arbitration clause was invoked by the petitioner. The relevant portion of the letter dated 25.1.1999 reads as follows :
"We would request that an independent arbitrator, preferably TRAI, be appointed for a fair settlement under the Arbitration clause and that we should be given an opportunity to present our case to you in person.
3. The relevant portion of the arbitration clause reads as under :
"20.1.1. In the event of any question dispute or difference arising under this licence, or in connection thereof, except as to the matter, the decision of which is specifically provided under this licence, the same shall be referred to the sole arbitration of the Director General, Telecommunications, or in case his designation has changed, or his office is abolished, then, in such case, to the sole arbitration of the officer for the time being entrusted, whether in addition to the functions of the Director General, Telecommunications or by whatever designation such officer may be called (hereinafter referred to as the said officer is unable or unwilling to act as such, to the sole arbitration, then some other person appointed by the Director General, Telecommunications or the said officer, will act as the sole arbitrator."
4. On 13th September, 1999, the present petition was filed in this Court. On 22nd September, 1999, this Court issued notice to the respondent returnable for 27.10.1999. It is not in dispute that an arbitrator was appointed by the respondent on 21st October, 1999 in accordance with the provisions of the Arbitration Clause before the case came up for hearing after notice in this Court.
5. In the present petition, therefore the petitioner claims that the respondents acted negligenctly subsequent to the notice issued by the petitioner invoking the arbitration clause on 25.1.1999 and accordingly have forfeited their right to appoint an arbitrator in accordance with the arbitration clause. The petition accordingly prays for appointment of an independent arbitrator.
6. In support of this proposition the learned counsel for the petitioner, Ms. Ritu Bhalla has relied upon the judgment of the Andhra Pradesh High Court reported as Marshall Corporation Ltd., Vishakhapatnam Vs. Union of India 1998 Arb. W.L. J. 540 & 553 to the following effect :
"It is already stated above that in view of such conduct of the respondents in not appointing the arbitrator as per the request made by the applicant, they have forfeited their right to appoint an arbitrator and as such, the alleged appointment of an arbitrator during the pendency of the present applications cannot be said to be valid and the present applications cannot be said to be infructuous and did not maintainable on such grounds".
7. The learned counsel for the petitioner has also relied upon the judgment of a learned Single Judge of the Bombay High Court reported as B.T. Patil & Sons Belgaum (Construction ) Pvt. Ltd. Kohlapur Vs. Konkan Rly. Corpn. Ltd. & Anr., 1998 Arb. W.L.J. 290 @ 303 wherein it was held as follows:
"In my view, the agreed machinery gets exhausted on such refusal or inaction. Thereafter the only procedure which is equired to be followed for appointment of Arbitrators would be under Subsection (6) read with sub-section (8) of section 11, subject to the other condition that agreement on the appointment procedure does not provide other means for securing the appointment of Arbitrators."
8. The learned counsel for the petitioner has further relied upon the judgment of the learned Single Judge of this Court reported as Continental Construction Ltd. Vs. National Hydroelectric Power Corporation Ltd., 1998 Arb. W.L.J. 338 wherein it has been held as follows :
"It is not disputed that the petitioner had written letters to the respondent raising claims. It is also not disputed that vide letter dated 7.5.1996, the petitioner has invoked the arbitration clause and called upon the respondent to suggest the names of three such persons. No action has been taken by the respondent in this respect. In these circumstances the only course left is appointment of an Arbitrator by this Court under Section 11 of the Act."
9. The learned counsel for the petitioner has also relied upon the judgment of this Court reported as Sanyukt Nirmata Vs. Union of India 83 (2000) DLT 25 to contend that the arbitrator can be appointed by the court. In particular the learned counsel has relied upon the following observations :
"The learned Counsel for the petitioner relied upon a judgment of the Hon'ble Supreme Court which is reported as G. Rama Chandra Reddy & Co. Vs. Chief Engineer M.E.S. Madras Zone, 1994 (2) ALR 61 to contend that it is open to the Court to appoint an Arbitrator in case upon giving of notice in terms of the contract no Arbitrator is appointed. The Hon'ble Supreme Court held that once no Arbitrator is appointed in terms of the contract which required the respondent to appoint the Arbitrator, the respondent loses the power to appoint the Arbitrator under the contract."
10. Mr. Jaisinghani, the learned Additional Solicitor General appearing alongwith Mr. Maninder Singh on behalf of the respondent has not disputed the right of the Court to appoint an independent arbitrator but has submitted that firstly the demand made by the petitioner is not duly in accordance with the Arbitration Clause 20.1.1 between the parties because the arbitration sought for was not contemplated in the Agreement because straightway an independent arbitrator i.e. TRAI was asked for.
11. He has further submitted that in the facts and circumstances of the case since the Arbitrator was appointed before the matter was taken up in Court, the respondent has not been found negligent in acting in accordance with the terms of the arbitration clause. Mr. Jaisinghani submits that while he does not dispute the power of the Court to appoint an independent arbitrator in an appropriate case, he submits that in the facts & circumstances of the present case, an independent arbitrator could not be appointed.
12. In support of this plea, the learned counsel has relied upon the judgment of this Court dated 6th January, 2000, passed in A.A. 181/99 & IA 5714/99 titled as Essel Shyam Communication Ltd. Vs. Union of India & Ors. In particular the learned counsel has relied upon the observations to the following effect :
"In this case, Section 11 of the Act prescribes the procedure and mode of appointment of arbitrator. It replaces Sections 4, 8, 9, 10 and 20 of the old Act. In this case, the parties have agreed to the appointment of a particular person of his nominee as an arbitrator. Section 11(6) read with Section 11(2) and not Section 11(5) is attracted. Since the respondent has not referred the disputes raised to the appointed agreed arbitrator in spite of notice, the Court gets power to take necessary measures for securing the appointment. In that view, the Court will have no power to appoint another arbitrator. Taking the "necessary measure for securing the appointment" in the circumstances would mean to appoint the agreed arbitrator."
13. He has also relied upon the judgment of the Full Bench of this Court reported as Ved Prakash Mittal Vs. Union of India & Ors., ALR (3) 1985 443 to the following effect :
"If the Chief Engineer does not appoint the arbitrator he must justify his refusal and support it with reasons. If the refusal is arbitrary the court will correct the Chief Engineer and tell him where his duty lay. He is given the duty to appoint the arbitrator and not to destroy the clause. It is misreading of the clause to say that if the Chief Engineer refuses to appoint the arbitrator the Court is powerless. Such a view as judges of the division bench took belittles the effectiveness of the provisions of Section 20(4) on the ground that it does not provide for a case as had arisen before the Division Bench and before us in this full bench. The legislature foresaw that such a case can arise and, therefore, Section 20 provides that the Court shall follow this course. In the first place, the Court shall ask the person designated to appoint the arbitrator. Secondly, if he does not appoint, the Court shall appoint the arbitrator. Where the parties cannot agree upon an arbitrator the Court at once comes in and appoints the arbitrator. This is the course the Supreme Court followed in Prafulla Kumar's case and this is the course we are inclined to follow in this case."
14. He has also relied upon a judgment of the Hon'ble Division Bench of this Court reported as Govt. of NCT of Delhi & Ors. Vs. M/s. Uttam Singh Duggal & Co. Ltd., ALR 1997 (1) 227 to the following effect :
"We are, therefore, clearly of the opinion that the part of the arbitration clause relied on by the learned counsel for the appellants does not take away the jurisdiction of the court to appoint an arbitrator in an appropriate case. However, the question arises whether the court should have straight away proceeded to make an appointment without looking into the fact whether any of the parties had called upon the Chief Engineer - the chosen appointer - make an appointment on failure of Mr. Ravinder Lal to act as an arbitrator or to make an award. The Full Bench has clearly laid down that in the first place the court shall ask the person designated to appoint the arbitrator and if he does not appoint, then the court shall appoint the arbitrator."
15. While the first contention of Mr. Jaisinghani about the demand not being in accordance with the arbitration clause may have merit, yet it is not necessary to decide that in view of the following discussion. This point is however kept open for decision in an appropriate case.
16. In so far as the first judgment relied upon by the learned counsel for the petitioner is concerned, i.e., the Andhra Pradesh High Court's judgment in Marshall Corporation Ltd. (Supra), there had been persistent refusal on behalf of the respondents to appoint an arbitrator. Notice had been issued as far as back as 1992 and no arbitrator was appointed till December 1996. The facts of the above case are materially different and since no such persistent indifference to the request of the arbitration has been shown in the present case, the ratio of the above case is not applicable to the facts of the present case.
17. So far as the judgment of the learned Single Judge of the High Court of Bombay is concerned, i.e., B.T. Patil & Sons Belgaum (Supra), the learned Single Judge held that the agreed machinery gets exhausted on such refusal or inaction and only procedure which requires to be followed was appointment of the arbitrator under sub-section (6) read with sub-section (8) of Section 11, subject to the other condition that agreement on the appointment procedure does not provide other means for securing the appointment of the arbitrator. Even in the facts of the aforesaid case before the Bombay High Court there were reminders to the letter dated 7.8.1995 on 22nd January, 1996 and 29th June, 1996 where the demand for making a reference to the arbitrator was reiterated. Thus it can be seen that even in the said case before the Bombay High Court, there was delay in acting upon the reminder and no decision has been taken thereon to appoint an arbitrator. Thus this judgment is also inapplicable.
18. In so far as the third judgment relied upon by the petitioner's counsel is concerned, i.e., Continental Construction Ltd. (Supra), the arbitration agreement was signed on 1st October, 1985. A reminder was sent on 14th August, 1996 and the petition was only filed after one reminder on 21st November, 1996 before this Court. Accordingly, this judgment also does not support the petitioners' plea that there must be an appointment of an independent arbitrator. In this case also there was at least one reminder for appointment of an independent arbitrator. In so far as the judgment of this Court in Sanyukt Nirmata Vs. Union of India (Supra) is concerned, the Court held that it is open to the Court to appoint an arbitrator in case upon giving of notice in terms of the contract no arbitrator is appointed. However, in that case also 3 successive arbitrator's according to arbitration clause had been appointed. Thus the factual parameters of the Sanyukt Nirmata case (Supra) are materially different and consequently the ratio of the aforesaid decision is inapplicable. The learned counsel appearing on behalf of the respondent has not disputed this proposition as to the jurisdiction of this Court to appoint an arbitrator. In the facts of the present case an arbitrator was appointed even prior to the 1st hearing after notice by this Court clearly demonstrates that the facts of this case do not straightway warrant appointment of an independent arbitrator.
19. In so far as Mr. Jaisinghani's plea is concerned that this Court should not appoint straightway an independent arbitrator in view of the law laid down as Ved Prakash Mittal Vs. UOI (Supra) in which judgment the Full Bench of this Court followed the observations of the Hon'ble Supreme Court in Union of India Vs. Prafulla Kumar Sanyal to hold that in the first place the Court shall ask the person designated to appoint the arbitrator and in the event of failure to appoint of such a direction, the Court can appoint an independent arbitrator.
20. The Hon'ble Division Bench of this Court also followed the aforesaid judgment in its judgment dated 15th November, 1996 in Govt. of NCT of Delhi & Ors. Vs. M/s. Uttam Singh Duggal & Co. Ltd. (Supra) and has held that the law laid down by the Full Bench is that in the first place the Court shall ask the person designated to appoint the arbitrator and if it does not appoint the arbitrator then the Court should appoint the arbitrator. Even though the said judgments relied on by the learned counsel for the respondent are based on the Arbitration Act, 1940 but the principle laid down therein may be applicable unless of course there is lack of despatch even after the issuing of a notice by a Court in a petition under Section 11 of the new Act. Since it is not possible to arrive at such a finding as to dragging of the feet by the respondent in the present case, therefore the question as to whether the Court was bound to appoint the named arbitrator as per the arbitration clause in view of the Full Bench judgment in Ved Prakash Mittal's case (Supra) need not be decided. Therefore, I hold that even though Court has jurisdiction to appoint an independent arbitrator in an appropriate case, in the facts and circumstances of the present case since the respondent has not unduly delayed appointing the arbitrator, I am satisfied that the appointment of the arbitrator by the respondent as per the arbitration clause cannot be challenged.
21. In view of the above findings, since the arbitrator already stands appointed under Section 11 of the Act, the petition stands disposed of.