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Madhya Pradesh High Court · body

2012 DIGILAW 976 (MP)

Atul Agrawal v. Ashima Syal

2012-10-04

SUJOY PAUL

body2012
Judgment Sujoy Paul, J.;- 1. The Arbitration and Conciliation is a part of Alternative Dispute Resolution (ADR) Mechanism. By filing an application under Section 11 of Arbitration and Conciliation Act, 1996 (for short, "1996 Act"), the applicant has prayed for appointment of Arbitrator to decide the dispute. It is the case of the applicant that there exists a dispute, for which a legal notice dated 28/09/2011 (Annexure-R/2) was issued to the other side to appoint an Arbitrator in consonance with clause 24 of the Contract. On the other side, the stand of the respondents is that notice does not indicate as to what is the dispute and what claim is made by the applicant. 2. In the aforesaid factual backdrop, I have heard the parties and considered their legal submissions. 3. Shri N.K. Gupta relied on 2004 (2) M.P.J.R. 130 [M/s. G.R.D. Profiles Ltd., Vs. M.P.E.B. and another] to submit that appointment of Arbitrator is an administrative function by this Court, whereas Shri Harish Dixit relied on AIR 2011 SC 1899 [Deutsche Post Bank Home Finance Limited Vs. Taduri Sridhar and another] to submit that it is not merely an administrative function. 4. I have heard learned counsel for the parties at length and perused the record. 5. This is settled in law that for the purpose of appointment of Arbitrator, there has to be a dispute existing. The party requesting for appointment of Arbitrator needs to send a notice to the other side. However, if the entire scheme of 1996 Act is perused, the basic purpose is to resolve the dispute under the mechanism prescribed under the Act. Thus, existence of a dispute is precondition for appointment of an Arbitrator. If dispute exists, the party claiming for the same must indicate the same in the notice sent to the other side. In other words, in the notice, party must indicate the nature of the dispute and claim etc. (if any). The nature of the dispute should be disclosed and must be clearly discernible. The legal notice Annexure-R/2 contains the following averments:- 1. That, you notices and my client entered into two agreements on 28/10/2008 for development of land situated at Nai Sadak known as Filmistan Plaza and my client being the developer started construction and most of the work has been completed, but thereafter several complications created by you notices. 2. The legal notice Annexure-R/2 contains the following averments:- 1. That, you notices and my client entered into two agreements on 28/10/2008 for development of land situated at Nai Sadak known as Filmistan Plaza and my client being the developer started construction and most of the work has been completed, but thereafter several complications created by you notices. 2. That, my client tried best to resolve the dispute between the parties amicably but you notices are not interested for settlement of dispute amicably and because of huge investment made by my client for construction of Filmistan Plaza, my client is suffering. Hence, invoking the provisions of agreement with regard to arbitration my client is appointing one arbitrator Shri R.S. Garg and this notice is being issued to you notices to give consent/appoint one arbitrator under clause 23 & 24 of the agreement dated 28/10/2008, so that the whole dispute can be referred to the arbitrator as per agreement between the parties and if within 15 days from the date of notice no reply or name of one arbitrator is given by you notices, my client will proceed further as per law. 6. A bare perusal of this notice shows that applicant has not taken pains to demonstrate as to what is the nature of dispute. The notice is vague and ambiguous in nature. Unless dispute is discernible, it cannot be expected from the other side to appoint Arbitrator mechanically. The condition of existence of a dispute, is a condition of precedent. This is held by Supreme Court in (1998) 3 SCC 573 [K.K. Modi Vs. K.N. Modi and others], (2011) 8 SCC 613 [Ramesh Kumar and another Vs. Furu Ram and another]. In the present case, the applicant has not disclosed the nature of dispute and on the basis of said notice, no fault can be found in the inaction of the other side in not agreeing for appointment of Arbitrator. Thus, the minimum precondition i.e. existence of a dispute could not be established by the applicant pursuant to the said notice. This is not required to be established for the first time before this Court in the present application. Necessary and minimum ingredients of a dispute must be shown in the notice itself, which was required to be sent under Section 11(4) of the 1996 Act. 7. This is not required to be established for the first time before this Court in the present application. Necessary and minimum ingredients of a dispute must be shown in the notice itself, which was required to be sent under Section 11(4) of the 1996 Act. 7. On the basis of aforesaid analysis, I am unable to mechanically direct for appointment of an Arbitrator. The applicant has failed to establish that any dispute actually exists. Accordingly, this application is not entertained. However, liberty is reserved to the applicant to send a proper notice and then proceed in accordance with law. Application is disposed of. No costs.