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2000 DIGILAW 779 (PNJ)

Om Aggarwal v. Haryana State Industrial Development Corporation Limited

2000-07-21

R.L.ANAND

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Judgment R.L.Anand, J. 1. This is a civil revision under Article 227 of the Constitution of India vide which it has been prayed that the order dated 8.5.2000 passed by Honble Mr. Justice D.V. Sehgal (Retd.) be set aside and some other arbitrator may be appointed in accordance with the new Act i.e. The Arbitration and Conciliation Act, 1996. 2. Some facts can be noticed in the following manner- The respondent entered into a financial collaboration agreement on 21.12.1994 for setting of white button mushroom at village Juglan, Hisar. The company of which the petitioner is Managing Director received a show cause notice dated 11.9.1998 regarding the buy-back of the shares by the company amidst some allegations contained in the show cause notice. In pursuance of the same the respondent Corporation i.e. Haryana State Industrial Development Corporation Limited appointed Honble Mr. Justice D.V. Sehgal (Retd.) as arbitrator vide order dated 3.6.1999, which was conveyed to the company and the respondent Corporation. 3. Two fold objections have been taken up by the learned counsel for the petitioner against the order dated 8.5.2000. Firstly, that the appointment of Honble Mr. Justice D.V. Sehgal (Retd.) is not in accordance with Section 11 of the Act. According to the learned counsel for the petitioner the company of which the petitioner is the Managing Director was never consulted and the company never gave the consent for the appointment of Justice Sehgal as arbitrator. This submission of the counsel for the petitioner is not acceptable to this Court. Section 11(2) of the Act clearly lays clown that the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. In this case the agreement contains that if the dispute arises between the parties, the mater will be referred to the Commissioner of the Corporation or his nominee. The Commissioner has exercised his power and appointed Justice Sehgal as arbitrator. 4. The second contention raised by the counsel for the petitioner is that under the new Act the appointment of the arbitrator can only be challenged on a limited aspect as contained in Section 12(3), which lays down that an arbitrator may be challenged only if the circumstances exist that give rise to justifiable doubts as to his independence or impartiality. The second contention raised by the counsel for the petitioner is that under the new Act the appointment of the arbitrator can only be challenged on a limited aspect as contained in Section 12(3), which lays down that an arbitrator may be challenged only if the circumstances exist that give rise to justifiable doubts as to his independence or impartiality. During the course of submissions, the learned counsel for the petitioner fairly conceded before me that so far as the integrity of Justice Sehgal is concerned, it is beyond pale of doubt. His grievance is that Justice Sehgal has been appointed as arbitrator in other cases of the Corporation and there is a justifiable doubt in the mind of the petitioner that he may not get justice from Justice Sehgal. In my opinion, no basis has been propounded so as to conceive any doubt that the award will be in favour of the Corporation. It may also be mentioned here that the present petition has also not been filed by the company but by Om Aggagwal in his independent capacity. 5. In these circumstances, I do not find any merit in this revision, which is hereby dismissed with no order as to costs.