Delhi Development Authority, ... vs Associated Builders, Engineers ...
2005 Latest Caselaw 265 Del

JUDGMENT

Vijender Jain, J.

1. This writ petition can be disposed of at this stage. The impugned order has been challenged by Mr.Sapra, learned counsel for the petitioner on the ground that the application for appointment of an arbitrator was pursuant to Section 11(6) of the Arbitration and Conciliation Act, 1996. Therefore, time for appointment of an arbitrator within thirty days of the demand does not get automatically forfeited after expiry of thirty days. Reliance in this regard has been placed on a judgment of Supreme Court in the case of Datar Switchgear Ltd. Vs. Tata Finance Ltd. and anr. JT 2000 (Suppl. 2) SC 226.

"In the present case, the respondent made the appointment before the appellant filed the application under Section 11 but the said appointment was made beyond 30 days. Question is whether in a case falling under Section 11(6), the opposite party cannot appoint an Arbitrator after the expiry of 30 days from the date of demand.

So far as cases falling under Section 11(6) are concerned - such as the one before us - no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an Arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an Arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an Arbitrator under Section 11(6) is forfeited."

2. On the other hand, learned counsel for the respondent has contended that the ratio of Datar Switchgear's case (supra) would not come to the aid of the petitioner as in this case appointment of the arbitrator was not made prior to the filing of the present writ petition under Section 11(6) of the Arbitration & Conciliation Act. It was contended before us by Mr.Dewan that one person notified his appointment as an arbitrator on 11.11.2003 whereas on 10.11.2003 a petition for appointment of an arbitrator was filed in the Court. It was contended that earlier the arbitrator was appointed by Engineer Member in the disputes between the parties in terms of the arbitration clause. However, that arbitrator retired on 30.6.2003. Thereafter the respondent had requested the Engineer Member to supply the vacancy within thirty days and it was also mentioned in the said notice that in case of failure to supply the vacancy within a period of thirty days, the petitioner would forfeit its right to supply the vacancy. That letter was not replied to by the petitioner nor any arbitrator in terms thereof was appointed within a period of thirty days. It was contended by Mr.Dewan that the notice was issued by the respondent on 27.8.2003 and thereafter nothing was done by the petitioner and eventually the respondent had to file a petition in Court for appointment of an arbitrator.

3. We have given our anxious considerations to the arguments advanced by learned counsel for both the parties. The reliance placed by Mr.Sapra on Data Switchgear's case (supra) is on the basis that arbitrator has been appointed prior to the filing of a petition under Section 11 of the Arbitration and Conciliation Act. From the perusal of the record we find that no arbitrator was appointed after giving notice to the respondent by the petitioner in terms of the arbitration clause. At the time of the hearing of the petitioner, learned counsel for the petitioner has taken us to internal circular of the petitioner which is at page 13 of the paper-book which, as a matter of fact, is a transfer and posting order. On the basis of the said transfer and posting order it was contended before us that on 28.10.2003 arbitrator was appointed by the petitioner. If we agree with the submission of the learned counsel for the petitioner, then it would mean that any party can transfer or post a person for the purpose of arbitration and keep his or her name in their own file without intimating and informing about the said appointment to the opposite party. That cannot be the purpose of appointment of the arbitrator. An arbitrator is appointed to adjudicate upon the dispute and the dispute can be agitated only if the other party has the notice of such appointment. Therefore, appointment of such arbitrator and communication thereof are two essential features for the appointment of the arbitrator. Moreover, in this case not even a copy of the above said transfer and posting order was sent to the respondent. Therefore, judging from any angle, we cannot say that the mandate of the Supreme Court as discussed in the said authority has been fulfillled by the petitioner.

4. We, therefore, find no infirmity in the order passed by the learned Single Judge. There is no merit in this petition. Same is dismissed. Interim order stands vacated.