Delhi High Court
Mr. Ajay Kumar vs M/S. Pandit Munshi Ram & ... on 16 September, 2009
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Arbitration Appeal No.4/2009
% Date of decision:16th September, 2009
MR. AJAY KUMAR ....Petitioner
Through: Mr. Pradeep Kumar, Advocate
Versus
M/S. PANDIT MUNSHI RAM & ASSOCIATES
(P) LTD. ... Respondents
Through: Mr. Sudhir Nandrajog, Sr. Advocate
with Ms. Sakhila Lamba and Mr. D.Moitra,
Advocates
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? No.
2. To be referred to the reporter or not? No.
3. Whether the judgment should be reported
in the Digest? No.
RAJIV SAHAI ENDLAW, J.
1 The senior counsel for the respondent states that the
suggestion made on the last date to the respondent to prefer a suit
impleading the petitioner as well as Mr. Kishori Lal is not acceptable
to the respondent. The counsel for the petitioner and the senior
counsel for the respondent have been heard.
2 This appeal has been preferred under Section 37 of the
Arbitration Act, 1996 against the order dated 21st March, 2009 of the
arbitral tribunal issuing Show Cause Notice to one Mr. Kishori Lal as
to why he should not be impleaded as a party to the arbitration
proceedings between the petitioner and the respondent. The
appellant herein had contested before the arbitral tribunal that the
said Mr. Kishori Lal being not party to the arbitration agreement,
neither could be impleaded as a party to the arbitration proceedings
as sought by the respondent nor could the arbitrator issue notice to
him. The arbitral tribunal has on the basis of a reply to the OMP
No.171/2008 (U/s.9 of the Act) filed jointly by the appellant and the
said Mr. Kishori Lal and also on the basis of the letter dated 4th
September, 2008 of the advocate on behalf of both the appellant and
Mr. Kishori Lal deemed it appropriate to issue the Show Cause
Notice as aforesaid to Mr. Kishori Lal.
3 The senior counsel for the respondent has at the outset
challenged the maintainability of the appeal. It is contended that an
appeal under Section 37(2)(a) lies only against an order of the
arbitral tribunal accepting a plea under Section 16(2) or (3) of the
Act; no appeal is provided against an order rejecting the said plea. It
is further contended that the arbitral tribunal has at this moment not
even made any order under Section 16 of the Act and the appeal is
as such not maintainable.
4 Per contra the counsel for the petitioner has contended that
under Section 16 (3) of the Act, whenever the arbitral tribunal
exceeds the scope of its authority, a party to the arbitration is
entitled to raise a plea with respect thereto. It is contended that the
action of the arbitral tribunal of issuing Show Cause Notice to Mr.
Kishori Lal is an act in excess of its authority and thus appellant was
entitled to raise the said matter before the arbitral tribunal and
which was raised as evident from the impugned order.
5 Even if that be so, the fact remains that the arbitral tribunal
has rejected the plea of the appellant. Against such rejection, no
appeal is provided for and the remedy under Section 16 (6) is to
make a grievance in this regard under Section 34 of the Act.
6 Though arguments have also been addressed on as to whether
the said Mr. Kishori Lal could or could not be a party to the
arbitration underway, this court does not deem it expedient to either
record the same or to return a finding thereon as the same may
prejudice the plea if any taken by Mr. Kishori Lal or for that matter
even by the appellant before the arbitral tribunal. I am also of the
opinion that the arbitral tribunal has till now not taken a final view
on maintainability of arbitration against the said Mr. Kishori Lal and
has reserved the same for decision after appearance of Mr. Kishori
Lal.
7 The appeal and the pending applications are thus dismissed as
not maintainable. No order as to costs.
RAJIV SAHAI ENDLAW
(JUDGE)
September 16th, 2009
J
