Mr. Sanjeev Sarin And Anr. vs Smt. Rita Wadhwa And Ors.
2002 Latest Caselaw 2153 Del

JUDGMENT

Khan, J.

1. Petitioners are the real brothers of R-1. They are involved in a dispute regarding division of the estate left by their mother one Madhu Rekha Sarin. They first sought the intervention of some family elders to resolve it but failed. Meanwhile, they are said to have executed an agreement on 28.9.1999 for referring their disputes to the arbitration of two relatives which, though referred, could not be taken to the logical end.

2. Petitioners thereafter filed AA 662/99 for appointment of a retired Judge as an arbitrator on the basis of one document dated 28.9.1999, claimed by them to be the arbitration agreement. Their sister (R-1) contested this and disputed that this document did not amount to an arbitration agreement. The designated authority (Ld.Single Judge) on this passed order dated 20.10.2000 framing some issues in the matter on taking the view that existence of arbitration agreement was disputed.

3. Petitioners filed a review petition (RA 44/2000) against this on the plea that the Authority could not embark upon a judicial enquiry on the existence or otherwise of the arbitration agreement in the face of Supreme Court judgments in Konkan Railway Corporation Ltd. v. Mehul Construction Company , Nimet Resources Inc. v. S.R. Steel , Malaysian Airlines Systems v. Stic Travels (2000) 7 SCALE 724, Wellington Associates Limited v. Kirti Mehta and Konkan Railway Construction Ltd. v. Rani Construction Pvt. Ltd. 2002 (1) SCALE 465. But this writ petition was dismissed by order dated 9.10.2001 on the ground that petitioners had not disclosed any "new and important matter", as contemplated by Order 47 Rule 1 CPC.

4. Petitioners challenge this and praying for quashing of the impugned orders dated 20.10.2000 and 9.10.2001 passed by the Designated Authority and for appointment of a retired Judge as an arbitrator. Their case is that these ran counter to the terms of Supreme Court judgments in Konkan Railway Corporation and other cited cases above. Their counsel Dr. Singhvi argued that the Designated Authority was only exercising an administrative power and not any adjudicatory power while appointing an arbitrator and, therefore, could not examine the terms of any document to find out whether it amounted to an arbitration agreement or not. He also contended that the Authority had fallen in error by declining to review its first order which contravened the terms of Supreme Court judgment amounting to an apparent error on the face of record.

5. It is no more res integra that the order passed by the Designated Authority under Section 8/11 of the Arbitration & Conciliation Act 1996 was an administrative order and not an adjudicatory one and that the Authority was not competent to entertain or decide any contentious issue between the parties in this. That being so, it becomes unnecessary to quote extensively from the judgments cited at the bar to prove the obvious. However, it should suffice to quote from one of these judgments in Konkan Railway Construction Ltd. v. Rani Construction Pvt. Ltd:-

"There is nothing in Section 11 that requires the party other than the party making the request to be noticed. It does not contemplate a response from that other party. It dies not contemplate a decision by the Chief Justice or his designate on any controversy that the other party may raise, even in regard to its failure to appoint an arbitrator within the period of thirty days. That the Chief Justice or his designate has to make the nomination of an arbitrator only if the period the thirty days is over does not lead to the conclusion that the decision to nominate is adjudicatory."

6. Even so, the approach adopted by the Authority at the relevant time could not be held to be wholly unjustified as the legal position was in the flux at the relevant time. Therefore, adopting a via media to the mutual satisfaction of the parties, we deem it appropriate to dispose of this petition by the following order:-

"Designated Authority is requested to reconsider petitioners' AA No.662/99 in the light of the judgments of Supreme Court in Konkan Railways Corporation Ltd. v. Rani Construction Pvt. Ltd. and Wellington Associates Ltd. v. Kirti Mehta and any other judgment on the subject matter and pass appropriate orders for appointment or otherwise of an arbitrator within one month from the date of first appearance of the parties disregarding the two impugned orders dated 20.10.2000 and 9.10.2001."

7. Parties to appear before the Authority on 8th January, 2003 and Registry to post AA 662/99 on that date.