M. R. SHAH, J. ( 1 ) LEAVE to join Mr. D. P. Shah, sole Arbitrator as party respondent No. 3. ( 2 ) RULE. Mr. Shelat waives service of rule on behalf of the respondents. ( 3 ) WITH the consent of the learned advocates for the respective parties, the matter is taken up for final hearing today. ( 4 ) IN this petition filed under Article 226/227 of the Constitution of India, the petitioner has challenged the legality and validity of the order dated 6. 7. 2004 passed by the learned Single Judge of this Court in the petition under the Arbitration and Conciliation Act, 1996 ("the Act" for short), being Application No. 12 of 2002 with a prayer to appoint one Mr. K. R. Majmudar (Chartered Accountant) as a sole Arbitrator and refer the dispute amongst the petitioner and the respondents relating to "m/s Avishkar" for adjudication by the said sole Arbitrator and to make "scheme" deemed appropriate for dealing with the matter entrusted to the Arbitrator. ( 5 ) IT appears from the record that there was dispute between the petitioner and the respondents and one Mr. D. P. Shah, Chartered Accountant was appointed as Arbitrator under Section 11 of the Act for the purpose of resolving the dispute between the parties. ( 6 ) IT is the case of the petitioner that, as, the said Arbitrator did not declare the award and was not performing his duty as Arbitrator and that in fact, he has misconducted himself, and, therefore, the petition, being Arbitration Petition No. 12 of 2005 was filed before this Court for appointment of another Arbitrator named Shri K. R. Majmudar (Chartered Accountant) as the sole Arbitrator. The learned Single Judge of this Court by order dated 6. 7. 2004 dismissed the said petition by holding that as there was Memorandum of Understanding between the parties before the Arbitrator and on perusal of the Memorandum of Understanding and the award made under the covering letter dated 27. 3. 2001, it is evident that the said Arbitrator Mr. Shah has made the final award giving the decision of rights and liabilities of each of the partner, the question of appointment of the Arbitrator afresh and reference of dispute to the arbitrator for fresh resolution does not arise. 3. 2001, it is evident that the said Arbitrator Mr. Shah has made the final award giving the decision of rights and liabilities of each of the partner, the question of appointment of the Arbitrator afresh and reference of dispute to the arbitrator for fresh resolution does not arise. If the petitioner is not satisfied with the award of the Arbitrator or has any grievance against the Arbitrator, the remedy shall lie elsewhere. Being aggrieved and dissatisfied with the aforesaid order, the petitioner has preferred the present petition under Article 226/227 of the Constitution of India. ( 7 ) MR. N. M. KAPADIA, learned advocate appearing for the petitioner, has vehemently submitted that the sole Arbitrator has not declared any award as contemplated under Section 31 of the Act and that in fact, there is no award declared by the sole Arbitrator. It is submitted that, as, the Arbitrator has refused to perform his duties as Arbitrator, the Arbitrator is required to be removed and another Arbitrator is required to be appointed named Mr. K. R. Majmudar. He submitted that the Memorandum of Understanding dated 12. 11. 2000 is treated as the interim award and thereafter there are four statements of accounts out of which fourth statement of account dated 27. 3. 2001 is treated as the final award by the sole Arbitrator which is not the award as envisaged under Section 31 of the Act, and, therefore, appropriate order may be passed for appointment of another sole Arbitrator. ( 8 ) MR. K. V. SHELAT, learned advocate appearing for the respondents, has vehemently submitted that the Memorandum of Understanding dated 12. 11. 2000 is in the handwriting of the sole Arbitrator himself, and, therefore, it is the award declared by the sole Arbitrator and as per Section 30 of the Act, the parties are at liberty to arrive at the settlement which can be considered by the Arbitrator as the award. Under the circumstances, when the Arbitrator himself has treated the Memorandum of Understanding signed by both the parties as the award, it is to be treated as the award, and, therefore, the contention on behalf of the petitioner that there is no award is not well founded. It is further submitted that when the Arbitrator has already declared the award, there is no question of change of Arbitrator as per the prayer of the petitioner. It is further submitted that when the Arbitrator has already declared the award, there is no question of change of Arbitrator as per the prayer of the petitioner. ( 9 ) HEARD the learned advocates for the parties. ( 10 ) IT is not in dispute that under Section 30 of the Act, the parties can enter into the settlement and the same can be recorded by the learned Arbitrator. Section 30 of the Act reads as under. :"30. Settlement - (1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement. (2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms. (3) An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award. (4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute. "section 31 contemplates as to how the award is to be declared by the Arbitrator. Section 31 of the Act reads as under. :"31. Form and contents of arbitral award - (1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. (2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated. (3) The arbitral award shall state the reasons upon which it is based, unless - (a) the parties have agreed that no reasons are to be given, or (b) the award is an arbitral award on agreed terms under section 30. (4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. (4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. (5) After the arbitral award is made, a signed copy shall be delivered to each party. (6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim award on any matter with respect to which it may make a final arbitral award. (7) (a) Unless otherwise agreed by the parties, where as in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b)A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment. (8) Unless otherwise agreed by the parties, - (a) the costs of an arbitration shall be fixed by the arbitral tribunal ; (b) the arbitral tribunal shall specify - (i) the party entitled to costs, (ii) the party who shall pay the costs, (iii) the amount of costs or method of determining that amount, and (iv) the manner in which the costs shall be paid. Explanation - For the purpose of clause (a), "costs" means reasonable costs relating to - (i) the fees and expenses of the arbitrators and witnesses, (ii) legal fees and expenses (iii) any administration fees of the institution supervising the arbitration, and (iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award. " ( 11 ) AS per Section 30 of the Act, more particularly, sub-section (2) of Section 30 of the Act, if during the arbitral proceedings, the parties settle the dispute, the Arbitral Tribunal shall terminate the proceedings and if requested by the parties and not objected to by the Arbitral Tribunal, record the settlement in the form of arbitral award on agreed terms. As per sub-section (3) of Section 30 of the Act, the arbitral award on agreed terms shall be made in accordance with Section 31 of the Act and shall state that it is arbitral award. As per section 31 of the Act, the arbitral award shall be made in writing and shall be signed by the members of the Arbitral Tribunal. On going through the Memorandum of Understanding dated 12. 11. 2000 and even the statement of account dated 27. 3. 2001, it cannot be said that the Arbitrator has passed the award on the basis of the said Memorandum of Understanding as per the agreed terms and in accordance with Section 31 of the Act and the Arbitrator has not stated that it is arbitral award. There is no award passed by the Arbitrator declaring the Memorandum of Understanding as award and even the Memorandum of Understanding dated 12. 11. 2000 is also not signed by the Arbitrator, and, therefore, it cannot be said that the Memorandum of Understanding dated 12. 11. 2000 is the award as contemplated under Section 31 of the Act and the same is in form as prescribed under Section 31 of the Act. However, one another aspect is also required to be considered, i. e. the prayer which is sought by the petitioner in the present petition, i. e. with regard to the appointment of one Mr. K. R. Majmudar (Chartered Accountant) as the sole Arbitrator in place of Mr. D. P. Shah, existing Arbitrator cannot be granted for the simple reason that from the record, it is very clear that there is no refusal on the part of the Arbitrator Mr. D. P. Shah not to perform his duty as Arbitrator as suggested on behalf of the petitioner. On the contrary, it is the case of Mr. Shah, sole Arbitrator that he has completed and performed all his duties as was required under the provisions of the Act. Under the circumstances, the prayer of the petitioner for change of Arbitrator cannot be granted. If there is allegation on the part of the petitioner that Mr. On the contrary, it is the case of Mr. Shah, sole Arbitrator that he has completed and performed all his duties as was required under the provisions of the Act. Under the circumstances, the prayer of the petitioner for change of Arbitrator cannot be granted. If there is allegation on the part of the petitioner that Mr. D. P. Shah, sole Arbitrator has misconducted himself, as per the settled legal position, the petitioner has to wait till appropriate award is passed and declared by the Arbitrator which can be challenged by the petitioner in the proceedings under Section 34 of the Act, but till the award is declared, he cannot be removed on the ground of misconduct. As stated above, the Arbitrator has not declared the award as contemplated under Section 31 of the Act and more particularly, the Arbitrator has not passed the order that the Memorandum of Understanding be treated as arbitral award by declaring the same as contemplated under Section 31 of the Act. The Arbitrator is directed to pass appropriate award considering the provisions of Section 30 read with Section 31 of the Act on its own merits and in accordance with law. Such exercise is required to be done by the Arbitrator within a period of four weeks from the date of the receipt of the writ of this order. ( 12 ) THE impugned order passed by the learned Single Judge of this Court dated 06. 07. 2004 in Arbitration Petition No. 12 of 2002 is modified to the aforesaid extent. ( 13 ) FOR the reasons stated above, this petition is partly allowed. Rule is made absolute with no order as to costs. Direct service is permitted. .