Punjab-Haryana High Court
Shalini Govil vs M/S Intelligent Industries on 6 September, 2023
2023:PHHC:117924
In the High Court for the States of Punjab and Haryana
At Chandigarh
ARB-24-2021 (O&M)
Date of Decision:-6.9.2023
Shalini Govil ... Petitioner
Versus
M/s Intelligent Industries ... Respondent
CORAM: HON'BLE MR. JUSTICE GURVINDER SINGH GILL
Present:- Mr. N.S. Diwana, Advocate for
Mr. Yashpal Gupta, Advocate for the petitioner.
Respondent is proceeded against ex parte.
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GURVINDER SINGH GILL, J. (Oral)
1. The instant petition has been filed by the petitioner under Section 11(6) of
Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator
so as to adjudicate on the dispute between the parties.
2. The parties had entered into Memorandum of Understanding (MOU) dated
5.4.2015 (Annexure P-1), whereby the petitioner agreed to invest her money
and further granted friendly loan of Rs. 50 lacs at an interest of 18% per
annum in the name of the respondent's proprietorship firm. It was agreed
between the parties that the respondent will pay regular interest over the
invested amount which was duly secured by post-dated cheques. The
respondent intentionally stopped making payment of interest after April,
2018. As per Clause - 4.1 of the said MOU dated 5.4.2015 (Annexure P-
KAMAL KUMAR
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ARB-24-2021 (O&M) (2) 2023:PHHC:117924
1), the disputes, if any, arising between the parties were to be settled by way
of arbitration. Out of two Arbitrators, one to be nominated by the
petitioner and the other to be nominated by the respondent and in case of
any disagreement amongst them, 3 rd Arbitrator shall be appointed by both
of them.
3. A dispute having arisen, the petitioner served notice dated 28.1.2020
(Annexure P-3) upon the respondent to appoint an Arbitrator. On failure of
respondent to do the needful, the instant petition has been filed.
4. It is the case of the petitioner that he had nominated his Arbitrator namely
Shri R. Narayanan, Advocate, Office address 1/12A, Block-A, Jangpura
Extension, New Delhi and also issued notice to the respondent for
nominating Arbitrator on his behalf, but to no avail, leading to filing of the
instant petition. It has been submitted that under these circumstances, a Sole
Arbitrator may be appointed for adjudication of dispute.
5. The respondent has already been proceeded against ex parte vide order dated
16.5.2022.
6. In view of the discussion made above, particularly the fact that there exists
an arbitration clause and notice had been duly issued and there is nothing on
record to disentitle the petitioner from invoking arbitration, the petition
merits acceptance. Having regard to the facts of the case, this Court is of the
opinion that the matter can be effectively adjudicated by a sole Arbitrator
instead of a three member Arbitral panel, as had been agreed amongst parties
in arbitration clause 4.1.
7. It is now well settled that after petition under Section 11(4) of the 1996 Act is
filed before the court seeking appointment of an arbitrator, the power to
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ARB-24-2021 (O&M) (3) 2023:PHHC:117924
appoint an arbitrator in terms of the arbitration clause of the agreement
ceases. Reference for judicial precedents in this regard may be made to
judgments of Hon'ble Supreme Court in Datar Switchgears Ltd. Vs. Tata
Finance Ltd. & Another : (2000)8 SCC 151 and Union of India Vs. Bharat
Battery Mfg. Co. (P) Ltd. : (2007) 7 SCC 684 and a Coordinate Bench of this
Court in ARB Case No.24 of 2010 titled M/s Akash Enterprises Vs. The
General Manager, Northern Railway and others decided on 17.03.2011. In
view of the settled position of law, respondents must be held to have waived
the right to appoint and is estopped from appointing the Arbitral Tribunal
under Clause 4.1 of agreement/MOU dated 5.4.2015. The Court can on
petition filed under Section 11(4) of the 1996 Act appoint an independent
person as sole Arbitrator. Reference in this regard may be made to
judgment of Hon'ble Supreme Court in Denel (Proprietary Limited) Vs.
Bharat Electronics Ltd. and another : 2010 (3) RCR (Civil) 233 and Delhi
High Court in ARB.P. 779/2019 titled M/s Arvind Kumar Jain Vs. Union of
India decided on 04.02.2020.
8. As the respondent has chosen not to appear despite having been served
and has been proceeded against ex-parte, the petition is accepted and Shri
M.P.Mehndiratta, District & Sessions Judge (Retd.) is appointed as the sole
Arbitrator. However, such appointment would be subject to the declaration to
be made by Shri M.P.Mehndiratta, District & Sessions Judge (Retd.) under
Section 12 of the Act with regard to his independence and impartiality to
settle the disputes between the parties.
9. The Arbitrator shall be paid fee in accordance with the Fourth Schedule of
the Act, as amended or as may be mutually settled.
KAMAL KUMAR
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ARB-24-2021 (O&M) (4) 2023:PHHC:117924
10. The venue for the Arbitration shall be at Arbitration Centre, Gurugram or
at any other place convenient to all concerned.
11. After seeking convenience of the Arbitrator, the parties are directed to appear
before him on 30.9.2023 at 11:00 A.M. or any other date suitable to all
concerned.
12. A copy of this order be sent to the appointed Arbitrator at the given address :
H. No. 1090, Sector - 15,
Part-2, Gurugram.
Phone No. 92509-25555.
13. The petition is accordingly disposed of in the above mentioned terms.
6.9.2023 ( GURVINDER SINGH GILL )
kamal JUDGE
Whether speaking /reasoned Yes / No
Whether Reportable Yes / No
KAMAL KUMAR
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