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2008 DIGILAW 228 (AP)

General Manager, South Central Railway, Secunderabad v. Ashok Engineering Co. , Hyderabad

2008-03-27

GHULAM MOHAMMED, P.SWAROOP REDDY

body2008
GHULAM MOHAMMED, J :- This civil revision petition is filed against the order dated 7.8.2007 passed in OP No.10 of 2003 on the file of I Senior Civil Judge, City Civil Court, Hyderabad, by which an Arbitrator was appointed to resolve the disputes between the parties under the agreement dated 28.4.1998 2. The brief facts of the case are that the first respondent herein and petitioners have entered into an agreement dated 28.4.1998 for supply of sand, stacking and spreading the same into the tract over ballast portion in between Kms. 872 to 888 on Hingoli Section. The dispute raised by first respondent-company is that it has supplied sand in 2nd phase worth Rs.13,166/- and the bill amount was not paid and that an amount of Rs.6,438/- was deducted from the first bill towards security deposit. The first respondent could not complete the balance contract work and sent a letter on 29.3.2000 rescinding the contract and further claimed the payment for the work done. When there was no response, the first respondent addressed a letter seeking to appoint an Arbitrator as per Condition No.64 of GCC, which was not done. Therefore, the first respondent filed an application under Section 11(5) and (6) of AIbitration and Conciliation Act, 1996 seeking appointment of Arbitrator to resolve the disputes between the parties, which was allowed. Hence, this appeal by the petitioners. 3. Heard learned Counsel for the parties and perused the record. 4. Learned Counsel for petitioners contended that the District Court has no power to appoint an Arbitrator and such power is vested with Hon'ble the Chief Justice in view of the decision of the Supreme Court in M/s. S.B.P. and Company v. M/s. Patel Engineering Ltd., 2006 (1) ALD 10 (SC) = AIR 2006 SC 450. On the other hand, learned Counsel for the first respondent contended that this. Court has to adjudicate the dispute in an arbitration application. 5. We have considered the contentions advanced by both the Counsel. The question whether the District Court has the power to appoint an Arbitrator or not, has been dealt with by the Supreme Court in the above decision and the relevant portion of the judgment reads as under: "40. Then the question is whether the Chief Justice of the High Court can designate a District Judge to perform the functions under Section 11(6) of the Act. Then the question is whether the Chief Justice of the High Court can designate a District Judge to perform the functions under Section 11(6) of the Act. We have seen the definition of 'Court' in the Act. We have reasoned that the intention of the Legislature was not to entrust the duty of appointing an Arbitrator to the District Court. Since the intention of the statute was to entrust the power to the highest judicial authorities in the State and in the country, we have no hesitation in holding that the Chief Justice cannot designate a District Judge to perform the functions under Section 11(6) of the Act. This restriction on the power of the Chief Justice on designating a District Judge or a non-judicial authority flows from the scheme of the Act. 41. In our dispensation of justice, especially in respect of matters entrusted to the ordinary hierarchy of Courts or judicial authorities, the duty would normally be performed by a judicial authority according to the normal procedure of that Court or of that authority. When the Chief Justice of the High Court is entrusted with the power, he would be entitled to designate another Judge of the High Court for exercising that power. Similarly, the Chief Justice of India would be in a position to designate another Judge of the Supreme Court to exercise the power under Section 11(6) of the Act. When so entrusted with the right to exercise such a power, the Judge of the High Court and the Judge of the Supreme Court would be exercising the power vested in the Chief Justice of the High Court or in the Chief Justice of India. Therefore, we clarify that the Chief Justice of a High Court can delegate the function under Section 11(6) of the Act to a Judge of that Court and he would actually exercise the power of the Chief Justice conferred under Section 11(6) of the Act. Therefore, we clarify that the Chief Justice of a High Court can delegate the function under Section 11(6) of the Act to a Judge of that Court and he would actually exercise the power of the Chief Justice conferred under Section 11(6) of the Act. The position would be the same when the Chief Justice of India delegates the power to another Judge of the Supreme Court and he exercises that power as designated by the Chief Justice of India." The Supreme Court while summing up its conclusions, inter alia, recorded in para 46(i) and (ii) that 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 and that 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. 6. In view of the law laid down by the Supreme Court in the said decision, as extracted above, and in the light of its conclusions, we are of the opinion that the civil revision petition is maintainable and the District Court does not have the power to appoint the Arbitrator and as such, the impugned order is liable to be set aside. 7. Accordingly, the civil revision petition is allowed and the impugned order is set aside and since OP pertains to the year 2003, the same shall stand withdrawn and transferred to this Court for disposal in accordance with law. On being transferred, the Registry shall number the OP as arbitration application and list before the concerned Bench.