Garden View Landscape Pvt. Ltd. vs The Indian Agriculture Research ...
2004 Latest Caselaw 1052 Del

JUDGMENT

R.C. Jain, J.

1. This is an application under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to settle the disputes which have arisen between the parties in relation to a contract dated 01.10.1999 by which the petitioner was granted a contract for the maintenance of horticulture works at IARI Campus, Pusa, New Delhi. According to the petitioner, the said contract contains an arbitration agreement in clause 27 for settlement of disputes/differences between the parties through arbitration. The said clause reads as under:

''27 Arbitration: Any dispute or difference, if arise between the IARI/Director or its representative and the contractor on any matter within the scope of the contract, shall finally be decided by Director, IARI or his any authorised representative.''

2. Petitioner's case is that the respondent has illegally withheld substantial amount from his bills for the maintenance and had also withheld security deposit etc and due to certain acts of commission and omission the petitioner has suffered damages. The petitioner has detailed out its claims in para-7 of the petition. Petitioner's case is that vide a communication dated 26.9.2003 the petitioner invoked the arbitration and called upon the respondent to appoint an arbitrator, but the respondent failed to appoint an arbitrator and instead wrongly denied the petitioner's right to have an arbitrator appointed. Hence, this petition.

3. The petition is opposed on behalf of the respondent and a reply has been filed raising preliminary objections about the maintainability of the present petition and denying various claims made by the petitioner against the respondent.

4. I have heard Mr.Dharmesh Misra, learned counsel for the petitioner and Mr.N.S.Dalal, learned counsel appearing for the respondent and have given my thoughtful consideration to their respective submissions. In the instant case the existence of an arbitration agreement contained in clause no.27 of the agreement as also that of disputes / differences, is accepted by the parties. Therefore, having regard to the settled legal position about the nature and scope of the present proceedings and the powers an functions of this Court/Judicial Authority, strictly speaking, the application deserves to be allowed and an arbitrator needs to be appointed in terms of the said arbitration agreement. In this view, I am fortified by the Constitution Bench decision of the Hon'ble Supreme Court in the case of Konkan Railways Corporation Limited and Anr.v. Rani Construction Pvt.Ltd, . In that case the Hon'ble Supreme Court had the occasion to morefully consider the ambit and scope of the power of the chief Justice or his nominee while deciding an application under Section 11 of the Arbitration and Conciliation Act, 1996. In the said case the Apex Court clearly laid down that there is nothing in Section 11 of the Arbitration and Conciliation Act, 1996 hat requires a party other than the party making the request to be even noticed and it does not contemplate a response from the other party. The Apex Court further held that appointment of arbitrator by the Chief Justice or his designate is not a judicial function resulting in an adjudicatory order. Further, that Section 11 does not contemplate a decision on any controversy between the parties. It further held that the Chief Justice or his designate has to make the nomination of an arbitrator only if he period of 30 days is over does not lead to the conclusion that the decision to nominate is adjudicatory. While disposing of an application under Section 11 containing an averment that the said period has passed, the Chief Justice or his designate has to make the appointment of an arbitrator. This is additionally for the reasons that Section 16 of the Act empowers the Arbitral Tribunal to rule on its jurisdiction and the expression ''that the Arbitral Tribunal may rule on any objections with respect to the existence or validity of the arbitration agreement'' shows that the Arbitral Tribunal's authority under Section 16 is not confined to the width of its jurisdiction, but goes to the very root of its jurisdiction. It is, therefore, open for any party to challenge before the Arbitral Tribunal that it had been wrongly constituted. Since this Court cannot go into or decide any controversial question raised by the parties as the same falls under the domain of the arbitrator, there is no escape from the conclusion that the present petition deserves to be allowed and an arbitrator needs to be appointed to settle the disputes/differences between the parties.

5. Accordingly, the application is allowed and Mr.Justice S.N.Sapra, a former Judge of this Court is appointed as the sole arbitrator to settle the isputes/differences between the parties, including the claims set out in para-7 of the petition and any claim or counter claim which might be raised on behalf of the respondent. The arbitrator shall be entitled to fix his own fee, not exceeding Rupees One lac, excluding the secretarial expenses, if any, to be paid equally by both sides. The parties are directed to appear before the arbitrator on 15th October, 2004 at 5.00 P.M. A copy of the order be forwarded to the named arbitrator forthwith and also be given to counsel for the parties under the signature of the Court Master.

6. Application stands disposed of.