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2006 DIGILAW 1680 (MAD)

K. Subbaramaiah v. K. Dhanakumar & Another

2006-07-06

A.KULASEKARAN

body2006
Judgment :- (Petition filed under Article 226 of the Constitution of India to issue a Writ of writ of certiorari to call for the records pertaining to the order passed in O.P.No.730 of 2002 on the file of this Hon'ble Court dated 29.01.2005 and quash the same.) Appointment of the Arbitrator by the High Court under Section 6, 7 of the Arbitration Act, 1996 is challenged in this writ petition. 2. This Court, by order dated 29.01.2005, appointed an Arbitrator in O.P.No.730 of 2002. The said order is challenged in this writ petition on the ground that already the petitioner herein has filed a suit in O.S.No.7 of 2003 before the Additional District Judge, Nellore, the first respondent herein filed a written statement wherein he has not canvassed the jurisdiction of the Arbitrator, hence, it is not open to him to seek remedy under Section 11 of the Act without considering all these facts and this Court allowed the said O.P. and appointed an Arbitrator. 3. Mr. Satish Parasan, learned counsel appearing for the first respondent submitted that the appointment of arbitrator in exercise of power under Section 11(6) of the Arbitration Act is a judicial order, hence, the writ petition is not maintainable; the averment that the first respondent not canvassed about arbitration clause in the written statement is incorrect; that the issues involved to be determined only by arbitrator not by civil court, hence, the suit is not maintainable. 4. Mr. Satish Parasaran, learned counsel for the first respondent relied upon the judgment reported in S.B.P. & Co. vs. Patel Engineering Ltd., and another reported in 2005 (5) CTC 302 wherein in Para-46 it was held as follows:- "46. We, therefore, sum up our conclusions as follows: (i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power. (ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that Court and by the Chief Justice of India to another judge of the Supreme Court. It is a judicial power. (ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another judge of that Court and by the Chief Justice of India to another judge of the Supreme Court. (iii) In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute. (iv) The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate. (v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act. (vi) Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act. (vii) Since an order passed by the Chief Justice of the High Court or by the designated judge of that Court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. (viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act. (viii) There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act. (ix) In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the arbitral tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. (x) Since all were guided by the decision of this Court in Konkan Railway Corpn. Ltd., & anr. v. Rani Construction Pvt. Ltd 2000 (8) SCC 159 , and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunals thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act. (xi) Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that Court designated by the Chief Justice. (xii) The decision in Konkan Railway Corpn. Ltd., & anr. v. Rani Construction Pvt. Ltd, 2000 (8) SCC 159 , is overruled. 47. The individual appeals will be posted before the appropriate Bench for being disposed of in the light of the principles settled by this decision.". 5. The learned counsel for the first respondent Mr. Satish Parasaran relied upon Sub-Clause 7 and 10 of paragraph 46 of the above said judgment. It is evident from the said Clause 7 and 10, any order passed appointing arbitrator is a judicial order, if the order is passed by Chief Justice, appeal will lie against the order under Article 136 of the Constitution of India. Satish Parasaran relied upon Sub-Clause 7 and 10 of paragraph 46 of the above said judgment. It is evident from the said Clause 7 and 10, any order passed appointing arbitrator is a judicial order, if the order is passed by Chief Justice, appeal will lie against the order under Article 136 of the Constitution of India. It is also seen from the said order of the Supreme Court that any appointment made in exercise of power under Section 11(6) of the Arbitration Act are to be treated as valid, all objections being left to be decided under Section 16 of the Act. 6. In view of the above said judgment, this Court is of the considered view that the writ petition filed invoking article 226 of the Constitution is not maintainable. Hence, the writ petition is dismissed. No costs. It is open to the petitioner to raise objections, if any about the jurisdiction of the Arbitrator before the Arbitrator, who can rule on its own jurisdiction including any objection with respect to the existence or validity of the arbitration agreement. Consequently, connected miscellaneous petition is also dismissed.