Gauhati High Court
M/S Badri Rai And Company vs Assam Project On Forest Biodiversity ... on 15 May, 2024
Author: Kalyan Rai Surana
Bench: Kalyan Rai Surana
Page No.# 1/5
GAHC010084362024
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : I.A.(Civil)/1228/2024
M/S BADRI RAI AND COMPANY
STATION ROAD, P.O.- DULIAJAN- 786602, DISTRICT- DIBRUGARH, ASSAM
(LEAD) REPRESENTED BY PRABHAKAR PRASAD SRIVASTAVA, AGE- 59
YEARS.
VERSUS
ASSAM PROJECT ON FOREST BIODIVERSITY CONVERSATION SOCIETY
(APFBCS) AND ANR.
PROJECT MANAGEMENT UNIT, 3RD FLOOR, ARANYA BHAWAN
PANJABARI, GUWAHATI-781037, ASSAM, REPRESENTED BY ITS
DIRECTOR.
2:DIVISIONAL FOREST OFFICER
NAGAON DIVISION
NAGAON
OFFICE OF THE DIVISIONAL FOREST OFFICER
DEPARTMENT OF ENVIRONMENT AND FORESTS
ASSAM- 782001
Advocate for the Petitioner : SWAMAGAT SHARMA
Advocate for the Respondent :
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BEFORE
HONOURABLE MR. JUSTICE KALYAN RAI SURANA
ORDER
Date : 15.05.2024
Heard Mr. P. Bhuttan, learned counsel for the applicant, Mr. B. Choudhury,
learned counsel for opposite party no.1 and Mr. R.P. Sharma, learned counsel for
opposite party no.2.
2. This Court by an order dated 22.04.2024 had proposed the name of a
former Judge of this Court to be appointed as a sole Arbitrator to arbitrate the
dispute between the applicant and the opposite parties and upon proposing of
such name, notice issued on the learned proposed Arbitrator to make disclosure
as per the requirement of sub-section (8) of Section 11 of the Arbitration and
Conciliation Act, 1996 was made returnable. The applicant, who is the petitioner
in the connected arbitration petition has prayed for modification of the said
order dated 22.04.2024.
3. By referring to order dated 10.11.2023 passed in the connected
Arbitration Petition no. 17/2023, it is submitted that the Hon'ble Arbitrator, as a
Judge of this Court had heard the said Arbitration Petition no. 17/2023 on
10.11.2023 and had expressed an opinion with regard to the construction and
interpretation of the clauses 20.2 and 20.3 of the contract agreement dated
04.05.2021.
4. In this regard, by referring to the order dated 08.04.2024, passed by
the Supreme Court of India in the Petition(s) for Special Leave to Appeal (C)
No(s). 27360 of 2023 he had referred to the objection to the Arbitrator
nominated on the ground that he had previously acted as a Judge at the interim
stage in the matter arising between the same parties pertaining to the same
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arbitration and on the said ground the impugned order of the Gujarat High
Court dated 10.11.2023 was set aside by the Supreme Court of India. By
referring to the decision of the Delhi High Court dated 01.06.2023 in the
proceedings of O.M.P. (COMM) 252/2018 & I.A. 13103/2022 in the case of Man
Industries (India) Ltd. Vs. Indian Oil Corporation Ltd., it was submitted that the
Delhi High Court had taken the following view in paragraph 25 to 27, which is
quoted below:
"25. In Lion Engineering Consultants (supra), the Supreme Court held that even
without an amendment in the petition, a plea of lack of jurisdiction of the
Arbitrator can be raised even though no such objection was raised under Section
16 of the Act.
26. In Hindustan Zinc Limited (HZL) (supra), the Court held that if there is an
inherent lack of jurisdiction of the Arbitrator, the plea can be taken up any stage
and also in collateral proceedings. Such plea can be taken even where the party
has consented to the appointment of the Arbitrator.
27. Applying the above principles to the facts of the present case, the plea of the
Arbitrator being de jure ineligible to act as such is a plea of lack of jurisdiction.
This plea can be allowed to be raised by way of an amendment and even without
the same."
5. Accordingly, it is submitted that although the appointment of the
Hon'ble proposed Arbitrator is not objected to at this stage by both the parties,
yet the arbitral award could be susceptible to be interfered with on the ground
that the Arbitrator so appointed could be held to be a de jure, rendering him
ineligible to arbitrate in dispute.
6. Per contra, the learned counsel for the opposite party no.1 has
submitted that the leave sought to be taken by the applicant now can otherwise
be raised in the manner as prescribed under Section 13(2) on the ground
mentioned in sub-section (3) of Section 12 which permits an Arbitrator to be
challenged if circumstances exists that give rise to justifiable doubts as to his
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independence or in partiality.
7. It is noted from the order dated 08.04.2024 passed by the Supreme
Court of India in the case of JRE Infra Pvt. Ltd. Vs. Deendayal Port Authority,
Manu/GJ/2136/2023 that having acted as a judge at the interim stage in the
same arbitration proceeding had led to setting aside and interference with the
order dated 10.11.2023 by which petition under Section 12 (5) of the Arbitration
and Conciliation Act was rejected. The judgment of the Delhi High Court, in the
case of Man Industries India (Pvt.) Ltd. (supra), had interpreted the issue in
light of the provisions of Section 34 of the Arbitration and Conciliation Act as
well as in the provisions of Section 12(5) of the said Act to hold that even if the
parties had consented for an appointment and/ or take no objection during the
entire proceeding, yet such waiver would not come in the way to raise the issue
of inherent lack of jurisdiction of an Arbitrator at any stage of the arbitration
proceeding or even in a collateral proceeding.
8. Therefore, the objection raised by the leaned counsel for the opposite
party no.1, the Court does not find any reason to not to modify the order and
prevail upon the parties to arbitrate in the matter through the learned Arbitrator
whose name was proposed by order dated 22.04.2024, only because of the fact
that even at a subsequent stage the appointment can still be questioned.
9. Therefore, the Court is inclined to modify the order dated 22.04.2024
passed in the Arbitration Petition no. 17/2023 insofar as the name of the
proposed Arbitrator is concerned. Accordingly, in respect of the name proposed
in paragraph 23 of the order dated 22.04.2024 in Arbitration Petition no.
17/2023 to nominate and appoint Sri Achintya Malla Bujor Barua, Former Judge
of this Court as sole Arbitrator would now be substituted by the proposed
Arbitrator Justice Basu Deo Agarwal, Former Judge of this Court, resident of
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Radha Nagar, Niti Path, VIP Road, Guwahati as a Sole Arbitrator to arbitrate the
dispute between the applicant/ petitioner and the opposite party/ respondent.
10. This interlocutory application stands allowed.
11. The consequential order for issuance of notice shall be passed in the
connected Arbitration Petition no. 17/2023.
JUDGE
Comparing Assistant
