ORDER S.S. Nijjar, J. (Oral) - This petition was placed before this Court on 15th January, 1998 by praecipe. Although Lodging No. 16 of 1998 has been given the petition is still not numbered. Let the same be numbered within a period of one week. 2. In this petition a prayer is made for quashing and setting aside the appointment of the learned sole Arbitrator Mr. Justice P. S. Shah (Retired). It is also prayed that pending the hearing and final disposal of the petition, the proceedings before the sole Arbitrator be stayed. 3. The petitioner is a Public Limited Company incorporated under the Companies Act, 1956 and has its registered office at Ratnagiri, Maharashtra. The second petitioner is a partnership firm and third and fourth petitioners are partners of the second petitioner. The Respondents have initiated proceedings before the sole Arbitrator Mr. Justice P. S. Singh (Retired) in respect of certain alleged dues of the respondents under the Arbitration Conciliation Act, 1996, hereinafter referred to as "the Act". The Respondents in their statement of claim filed before the sole Arbitrator have stated that the Respondents are carrying on the business of providing finance under their diverse schemes such as lease finance, bill discounting etc. It is claimed by the respondents that under the equipment lease scheme, the respondents at the request of the persons is need of finance under the scheme purchase equipments identified by such persons from identified suppliers. Thereafter the said equipments are leased to the persons at whose instance the equipment has been purchased. According to the petition, the respondents had claimed that the first petitioner manufactures and sells dyes and dyes intermediates and the second petitioner is the co-leasee. Third and fourth petitioner claim to be partners of second petitioner and guarantor to the transaction. The respondents have alleged that there has been default in effecting payments of the lease installments by the petitioners. It is also alleged that the post dated cheques issued by the petitioners had been dishonoured. Thus, it is claimed that the petitioners are liable to pay to the respondents a sum of Rs. 11,34,130/- as per the particulars of claims submitted before the sole Arbitrator. A further sum for compensation for delayed payment is also claimed being Rs. 9,77,488/- at the rate of Rs. 1/- per 1,000 per day from 19th August, 1997 till payment and/or realisation thereof. 11,34,130/- as per the particulars of claims submitted before the sole Arbitrator. A further sum for compensation for delayed payment is also claimed being Rs. 9,77,488/- at the rate of Rs. 1/- per 1,000 per day from 19th August, 1997 till payment and/or realisation thereof. It is further pleaded that the petitioners filed their written statement to the statement of claim filed by the respondents before the sole Arbitrator and objected to the appointment of the learned sole Arbitrator Mr. Justice P. S. Shah (Retired). This was objected to on the ground that the appointment of the Arbitrator was done unilaterally and without consulting the petitioners. 4. Mr. Naphade, learned Counsel appearing for the petitioners has made three submissions. Before noticing the submission it would be appropriate to reproduce Clause 10.12 of the Agreement which provisions for Arbitration. "10.12 Arbitration Except where it has been provided otherwise, any dispute or difference arising out of or in connection with the agreement between the parties including any dispute or difference relating to the interpretation of the agreement or any clause thereof shall be referred to the sale arbitration of ........... or of a person appointed by the lessor (with summary powers) and the provisions of the Arbitration Act, 1940 and rules framed thereunder and any amendment thereto from time to time, shall apply. No objection shall be taken on the ground that the Arbitrator so appointed is an employee of the lessor or is in any way associated with the lessor. It is made clear that the venue of Arbitration proceedings will be the sole discretion of the Arbitrator and no objection shall be entertained from any parties in this regard. The award of the Arbitrator shall be final conclusive and binding on all the parties. The arbitrator shall be competent to decide whether any matter of dispute or difference referred to him falls within purview of arbitration as provided for above and/or any matter relating to arbitration under the Arbitration Act, 1940." Referring to the aforesaid clause of the agreement, Mr. Naphade has submitted that one part of the arbitration clause is inconsistent with the other. It is submitted that in the first part of the arbitration clause it is provided that the disputes shall be referred to the sole Arbitration of .............. Thereafter the name of the sole Arbitrator has not been filled in. Naphade has submitted that one part of the arbitration clause is inconsistent with the other. It is submitted that in the first part of the arbitration clause it is provided that the disputes shall be referred to the sole Arbitration of .............. Thereafter the name of the sole Arbitrator has not been filled in. The clause thereafter goes on to provide that the respondent will have a discretion to appoint any person and the provisions of Arbitration Act, 1940 and Rules framed thereunder and any amendment made from time to time shall apply. Mr. Naphade submits that the aforesaid two conditions of the clauses makes the arbitration clause wholly indefinite and inconsistent with each other. First part of the clause provides for a named Arbitrator. Yet the second part of the clause gives the discretion to the respondents to appoint any person as an Arbitrator. It is submitted that this kind of an agreement cannot be said to be a binding agreement. In support of his submission, the counsel has relied upon Section 93 of the Indian Evidence Act. Mr. Naphade submits that the present clause is squarely covered by illustrations A and B of Section 93. 5. Mr. Madan learned counsel appearing for the respondents has, however, submitted that there is no inconsistency or ambiguity in the arbitration clause. The clause clearly states that either there shall be a named Arbitrator or it shall be the option of the respondents to appoint an Arbitrator. Thus there is nothing indefinite about the clause, neither is there any inconsistency. Counsel further submit that this submission of his can be supported by Section 11 of the Act. This section in particular sub-section (2) clearly provides that the parties are free to agree on a procedure for appointing an Arbitrator or Arbitrators. If there is a failure on the part of one party to act then the other party is free to appoint the Arbitrator. Sub-section (6) only applies if there is no other procedure prescribed in the agreement itself. This sub-section provides that if a party fails to act as required under that procedure then a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means or securing the appointment. This sub-section provides that if a party fails to act as required under that procedure then a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means or securing the appointment. It is submitted that a bare perusal of the Arbitration clause clearly shows that in the absence of there being a named Arbitrator, the respondent have the sole discretion for appointment of the Arbitrator. Therefore, it was not at all necessary for the respondents to take out any proceedings under Section 11 of the Act. Mr. Madan has further submitted that in order to ensure that the petitioners are given a fair hearing, the respondents have taken utmost care to approach a retired Judge of this Court to act as the sole Arbitrator. Under the Arbitrator clause if the intentions of the respondent were not bona fide then easily an employee of the respondents could have been appointed as an Arbitrator. 6. Having considered the rival submission. I find considerable force in the submissions made by Mr. Madan. The reliance placed on Section 93 of the Indian Evidence Act by Mr. Naphade, in my view, is misconceived. The illustration therein pertains to a situation where an essential terms of the contract has been left wholly indefinite. It is settled that in matters of contract consideration must be definite. Illustration A of Section 93 deals with a situation where the consideration has been left wholly indefinite. Illustration B deals with the situation where the deed which is sought to be relied upon contains blanks and in view of those blanks the party is precluded from giving evidence to show that the blanks have been filed in. In the present case it is not the case of the respondents that the blank has been filed or that an Arbitrator has been nominated. What has been done is that an Arbitrator has been appointed under the second part of the clause. In view of the above I find that the clause is neither indefinite nor is it inconsistent. Mr. Naphade has thereafter argued that there is in fact no reference which could be decided by the sole Arbitrator, it is submitted that under the Act no definition has been given of the term "Reference". In view of the above I find that the clause is neither indefinite nor is it inconsistent. Mr. Naphade has thereafter argued that there is in fact no reference which could be decided by the sole Arbitrator, it is submitted that under the Act no definition has been given of the term "Reference". This position is contrasted with the Arbitration Act 1940, hereinafter referred to as "the old Act", wherein reference has been defined to mean a reference to Arbitration. It is submitted that the legislature has consciously deleted the definition of the term "reference". In view of the fact that there is no statutory definition of Reference then the judicial interpretation given to the term Reference has to be accepted. In support of this question the Counsel has relied upon a judgment of the Supreme Court reported in (Thawardas Pherumal and another v. Union of India ( AIR 1955 SC 468 ) in this case it is held that a reference requires assent of both sides. If one side is not prepared to submit a given matter to arbitration when there is an agreement between them that it should be referred, then recourse must be had to the court under Section 20 of the old Act and the recalcitrant party can then be compelled to submit the matter under sub-section (4) of the old Act. In the absence of either, agreement by both the sides about the terms of reference, or an order of the Court under Section 20(4) compelling a reference, the Arbitrator is not vested with the necessary exclusively jurisdiction. On the basis of the aforesaid observations, Counsel submits that the two necessary ingredients necessary to constitute a valid reference are missing in the present case. Firstly as noticed above, according to the Counsel there is no arbitration clause. Secondly even if there is an arbitration clause then there is no valid reference. It is submitted that admittedly reference has been made only 'by the respondents. Arbitrator has also been appointed by the Respondents. These act have been done unilaterally. 7. There is no consent of the petitioners. Thus it is submitted that the matter is squarely covered by the aforesaid decision of the Supreme Court. The only recourse open to the respondents was to approach the Court for necessary reliefs under Section 11 of the Act. Mr. These act have been done unilaterally. 7. There is no consent of the petitioners. Thus it is submitted that the matter is squarely covered by the aforesaid decision of the Supreme Court. The only recourse open to the respondents was to approach the Court for necessary reliefs under Section 11 of the Act. Mr. Madan, however, submits that the Supreme Court in the aforesaid judgment was dealing with a reference which had to be made on the question of law. If the Arbitrator is called upon to decide a question of law it is submitted no doubt the reference has to be made by the consent of both the parties. Here again I am of the view that the submission made by Mr. Madan has substance. In paragraph 11 of the said judgment it is observed as follows: "In India this question is governed by Section 16(1)(c) of the Arbitration Act of 1940 which empowers to Court to remit an award for reconsideration "where an objection to the legality of the award is apparent upon the face of it." 8. This covers cases in which an error of law appears on the face of the award. But in determining what such an error is, a distinction must be drawn between cases in which a question of law is specifically referred and those in which a decision on a question of law is incidentally material (however necessary) in order to decide the question actually referred. 9. If a question of a law is specifically referred and it is evident that the parties desire to have a decision from the arbitrator about that rather than one from the Courts, then the Courts will not interfere, though even there, there is authority for the view that the Courts will interfere if it is apparent that the arbitrator has acted illegally in reaching his decision, that is to say, if he has decided on inadmissible evidence or on principles of construction that the law does not countenance or something of that nature. See the speech of Viscount Cave in - "Kelantan Government v. Duff Development Co. Ltd. (1923 AC 395 at p. 409(A)). But that is not a matter which arises in this case." 10. This proposition is reiterated in paragraph 14. See the speech of Viscount Cave in - "Kelantan Government v. Duff Development Co. Ltd. (1923 AC 395 at p. 409(A)). But that is not a matter which arises in this case." 10. This proposition is reiterated in paragraph 14. A perusal of the same shows that the Supreme Court was considering as to whether or not the Arbitrator was correct in deciding a question of law which was not specifically referred. Even otherwise, there is no provision in the Arbitration clause that the reference has to be made by consent of both the parties. The Arbitration clause in the present case clearly leaves an option that the Respondents to appoint an Arbitrator in the absence of there being a named Arbitrator. Mr. Naphade thereafter submits that in any event in the present case substantial questions of law have been raised and, therefore, the petition deserves to be admitted. In answer to this submission of the Counsel for the petitioner Mr. Madan has submitted that all along the petitioners have been appearing before the Arbitrator. The first date of hearing was on 30th July, 1997. On that date the petitioners as well as respondents appeared and certain directions were issued for filing statement of claim, reply, counter claim, rejoinder and reply to counter claim. Parties were directed to file compilation of documents along with other pleadings. Inspection of documents was to be completed on or before 6th October, 1997. Even the fees of the hearing was fixed. On 6th October, 1997 the matter was adjourned on the telephonic request of the Advocate for the Petitioner. Certain other directions were, however, given. Thereafter on 25th October, 1997 again the matter was adjourned at the instance of the petitioners. The request was again made by a letter. Thereafter the matter was kept for hearing on 8th September, 1997 and certain directions were given on the said date. The matter was adjourned to 12th November, 1997. On this date again a request was made for adjourned by the Advocate for the Respondents who telephoned the residence of the Arbitrator in his absence. In the minutes of the meeting it is observed that it appeared that the respondents are not interested in filing any reply or complying with the direction though sufficient opportunity has been given and the latitude shown till this date. In the minutes of the meeting it is observed that it appeared that the respondents are not interested in filing any reply or complying with the direction though sufficient opportunity has been given and the latitude shown till this date. Therefore, it is observed that under the circumstances there is no alternative except to proceed with cases against the respondents. The next meeting of the arbitration was fixed on 22nd of November, 1997. The matter was again adjourned to 29th November, 1997. The petitioners thereafter filed an application for setting aside the directions for proceeding ex parte which was made on 13th November 1997. The aforesaid direction was set aside by the Arbitrator. The petitioners were directed to file reply by 26th November, 1997. Thereafter the matter was adjourned to 29th November, 1997. By a letter dated 24-11-1997 advocate for the Petitioners again requested that the hearing of the case be fixed on 6th/7th December, 1997 in view of his personal difficulty. Thereafter by letter dated 27th November, 1997 addressed to M/s. Madekar and Company with a copy endorsed to the sole Arbitrator it was suggested that the arbitration proceedings be kept in abeyance without prejudice to the contention of the parties. By another letter dated 1st December, 1997 Mr. Wasnik appearing for the petitioners requested for adjournment of the hearing on 6th December, 1997 till further communication by the Advocate for the petitioner. This request for adjournment was renewed on 5th December, 1997 by the petitioners stating that "on account of some key executive being away from town, necessary consultation could not be done between our clients and their Company Advisor in the matter of certain mutual developments. Since the undersigned has to seek certain vital instructions he would be unable to attend the arbitration and it is humbly prayed that the matter be fix after 10 days. This request was ultimately rejected by the Arbitrator and in my view rightly as sufficient latitude has been given to the petitioners. In the written statement filed by the petitioners a preliminary objection was taken on 12th November, 1997 to the effect that the Arbitrator has no jurisdiction. It was prayed that preliminary issues with regard to jurisdiction be framed and the evidence in that behalf be recorded and after recording of the evidence the issue be decided. This request of the petitioner has been rejected by the learned Arbitrator. It was prayed that preliminary issues with regard to jurisdiction be framed and the evidence in that behalf be recorded and after recording of the evidence the issue be decided. This request of the petitioner has been rejected by the learned Arbitrator. He has observed that it would be appropriate to decide the question of lack of jurisdiction along with other issues on merits to avoid unnecessary duplication of events. For this view of his, the Arbitrator has relied upon an unreported judgment of this court given in Arbitration Petition No. 114 of 1997, Kailash S. Mantry v. M/s. Indraprastha Holding Ltd. (Petition No. 114 of 1997 decided on 1-10-1997). The submission as raised is noticed in paragraph 5 of the judgment. Thereafter examining the various provisions of the Act the ratio of the judgment can be found in a paragraph 7 of the judgment which are as under. "(5) Mr. Dhanuka appearing for the petitioners sought to challenge the award of the Arbitrator on several ground Mr. Dhanuka first submitted that the petitioners had raised a specific plea before the Arbitrator that the arbitration proceedings were without jurisdiction. Mr. Dhanuka urged that Sections 16(2) and (5) of the Act provide that the Arbitral tribunal shall decide the plea of jurisdiction first and where the arbitral tribunal takes a decision rejecting the plea, then only it can continue with the arbitration proceeding and make the arbitral award. According to Mr. Dhanuka Section 16(5) on its true construction contemplates that the decision of the arbitral tribunal on the preliminary plea of lack of jurisdiction must be conveyed to the party raising the said plea as well as to the other party and must be supported by reasons before the arbitration proceedings can continue on merits. Mr. Dhanuka urged that the Arbitrator contravened the provisions of Section 16(5) by not deciding the plea of jurisdiction and, therefore, the arbitration proceedings as well as the impugned award are liable to bet set aside. In reply, Mr. Tulzapurkar for the first respondent argued that under Section 16 the Arbitrator is not bound to rule on the preliminary objection of jurisdiction separately and thus no illegality has been committed by the Arbitrator in dealing with the issue of jurisdiction in the final award. Mr. Tulzapurkar submitted that the interpretation suggestion by Mr. Dhanuka would be manifestly contrary to the scheme and object of the Act. Mr. Tulzapurkar submitted that the interpretation suggestion by Mr. Dhanuka would be manifestly contrary to the scheme and object of the Act. (7) Now the short question is whether sub-section (5) contemplates two separate decisions to be delivered by the Arbitrator i.e., (i) to first decide the plea of lack or excess of jurisdiction, and (ii) if the Arbitrator decides not to accept objection to pass an award on merits. It is pertinent to note that under sub-section (6) it is clearly provide that only remedy of the party aggrieved by the decision of the arbitral tribunal on the issue of lack or excess jurisdiction, as the case may be, is to make an application for setting aside the final award in accordance with Section 34, Section 34(1) in no uncertain terms provides that recourse to a court against arbitral award can be made only by an application for setting aside the award in accordance with sub-sections (2) and (3) of Section 34. It is pertinent to note that under Section 37 an appeal is provided only against an order of the arbitral tribunal accepting the plea of lack or excess of jurisdiction. No appeal has been provided against an order rejecting the plea of lack or excess of jurisdiction as provided under Section 12(2) or (3) of the Act. Thus the scheme of the Act appears to be that where an objection as to lack or excess of jurisdiction is raised by the party in accordance with sub-section (2) and (3) of Section 16 and the arbitral tribunal decides to accept such plea, the decision would be appealable under Section 37(2) of the Act. In case the arbitral tribunal rejects the plea and passes the award on merits, the remedy of the aggrieved party is to make an application for setting aside the award in accordance with Section 34 of the Act. In the light of these provisions, it is difficult to accept the argument of Mr. Dhanuka that under sub-section (5) of Section 16 the arbitral tribunal is enjoined to record a separate decision rejecting the plea relating to lack or excess of jurisdiction and thereafter to make a separate arbitral award. I do not think that it was the intention of the Legislature to separate the proceedings in two compartments in the manner suggested by Mr. Dhanuka. Having considered carefully the scheme of Section 16. I do not think that it was the intention of the Legislature to separate the proceedings in two compartments in the manner suggested by Mr. Dhanuka. Having considered carefully the scheme of Section 16. I have no doubt that the Arbitrator committed no illegality in recording his decision on the plea of jurisdiction in the award passed by him in accordance with sub-section (5) of the Act. Mr. Dhanuka argued that it is necessary for the Arbitrator to record his decision on the plea of jurisdiction at the preliminary stage since the aggrieved party has got right to approach the Court to challenge such decision. I am afraid that the argument of the Counsel is not, well founded. As already indicated, the remedy of the aggrieved party is to apply for setting aside the award under Section 34, and in the event of the Arbitrator accepting the plea of jurisdiction, to file an appeal to the Court under Section 37(4) of the Act. One of the objects in enacting the new Act is to minimise the supervisory role of the Court in arbitral process. It is, therefore, not possible to accept the construction sought to be placed by Mr. Dhanuka on the provisions of Section 16(5) of the Act." In view of the above I find that no substantial question of law has been raised by the Petitioner as submitted by Mr. Naphade. Consequently, I hold that the petition is wholly devoid of any merit. The same is hereby dismissed with no order as to costs. Petition dismissed.