JUDGMENT 1. - Heard counsel for the parties.This is an arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996 arising out of the agreement dated 25th April, 2011 (Annexure-1) containing arbitration Clause 25 for settlement of the disputes between the parties arising out of the said agreement. 2. Briefly, stated the facts of the case are that:- 2(a): On 25th April, 2011 Agreement (Annexure-1) was executed between the parties for handling and transporting of goods and seeds (labour work) for the plant of the non- applicant at Kota for the period w.e.f. 25th April, 2011 to 31st March, 2012. As per the terms and conditions of the agreement, the applicant deposited Rs. 1 Lac as earnest money and Rs. 2,50,000/- as security deposit. 2(b): At the end of the contract period when there was no work even was left with the non-applicant, a letter was written by the Regional Manager to the higher officer for blacklisting the applicant firm. 2(c): On 16th March, 2012 a show cause notice (Annexure-2) was issued by the non-applicants to the applicant which was replied to by it on 23rd March, 2012 through its counsel and denied the allegations leveled in the notice dated 16th March, 2012. However, the Managing Director, with the approval of the Chairman unilaterally by order dated 24th April, 2012 (Annexure-4) ordered for blacklisting the applicant firm for five years and also ordered forfeiture of the earnest money as well as the security amount deposited by the applicant firm. 2(d): On account of passing of the aforesaid order of blacklisting and forfeiture of the earnest and security amount, a dispute has arisen between the parties and in view of Agreement dated 25th April, 2011 (Annexure-1) containing arbitration Clause No.25, the applicant through its Counsel Shri L.L. Gupta served the legal notice (Annexure-5) on 17th October, 2012 asking the non- applicants to make the payment of Rs. 3,50,000/- or in the event of non-payment to refer the dispute to an, independent Arbitrator for which the applicant suggested the name of Mr. Justice MAA Khan, former Judge of this Court. Appointment of the independent Arbitrator has been sought for the reason that since the decision of forfeiture of the earnest and security amount and blacklisting of the applicant firm was passed by the Managing Director himself with the approval of Chairman. Justice MAA Khan, former Judge of this Court. Appointment of the independent Arbitrator has been sought for the reason that since the decision of forfeiture of the earnest and security amount and blacklisting of the applicant firm was passed by the Managing Director himself with the approval of Chairman. The said notice was received by the non-applicants but when no reply in response to the said notice was received by the applicant even after more than 30 days, then the applicant has filed the present arbitration application on 3r January, 2013 for appointment of an Independent Arbitrator for adjudication of disputes and differences which have arisen between the parties. However, no independent Arbitrator has been appointed sofar. 3. Counsel for the non-applicants, in the reply to the arbitration application has raised preliminary objections that since the representation of the applicant is pending, the arbitration application is not maintainable and further raised the objection that the Managing Director of the non-applicant Corporation is the sole named Arbitrator under Clause 25 of the Agreement but by notice dated 17th October, 2012 (Annexure-5) the applicant itself has challenged the authority of the Managing Director as an Arbitrator which is not open to the applicant after agreeing and getting the fruits of the agreement. Except the aforesaid two preliminary objections, others are the facts regarding compliance and non-compliance of terms of the agreement which are not germane to decide the present arbitration application. 4. Counsel for the applicant submits that since the order dated 24th April, 2012 (Annexure-4) blacklisting the applicant firm and forfeiting the earnest as well as security amount has been passed by the Managing Director-named Arbitrator himself with the approval of the Chairman of the Corporation who is higher in status than the Managing Director-named Arbitrator, thus, there is a reasonable apprehension in the mind of the applicant that the Managing Director would not be an impartial arbitrator. The Managing Director cannot be allowed to sit as a Judge in his own cause as an Arbitrator and the applicant is entitled for appointment of an independent Arbitrator. In support of his submissions, counsel for the applicant has placed reliance on paragraph Nos. 41 to 48 of the Judgment of the Supreme Court in the case of Bipromasz Bipron Trading SA v. Bharat Electronics Limited (BEL) (2012) 6 SCC 384 . 5. Mr. J.K. Singhi, Sr. In support of his submissions, counsel for the applicant has placed reliance on paragraph Nos. 41 to 48 of the Judgment of the Supreme Court in the case of Bipromasz Bipron Trading SA v. Bharat Electronics Limited (BEL) (2012) 6 SCC 384 . 5. Mr. J.K. Singhi, Sr. Counsel appearing for the non- applicants submits that since the representation of the applicant is pending, the arbitration applications is not maintainable and further the applicant who has signed the agreement with the open eyes and agreed upon the named Arbitrator (Managing Director), cannot be allowed to resile therefrom and asking for an independent arbitrator is not justified. In support of his submissions, Mr. Singhi has placed reliance on paragraph nos. 25, 42 and 46 of the judgment in the case of Bipromasz Bipron Trading SA (supra). Much emphasis has been laid by Mr. Singhi on two judgments of the Supreme Court in the case of Union of India v. MP Gupta, (2004) 10 SCC 504 and Northern Railway Administration, Ministry of Railway v. Patel Engineering Company Ltd. (2008) 10 SCC 240 . 6. Before proceeding further, it would be appropriate to consider paragraph nos. 25 and 41 to 48 of the judgment in the case of Bipromasz Bipron Trading SA (supra), wherein in paragraph No.42 and in paragraph No.46 the cases of Union of India (supra) and Northern Railway (supra) cited by Mr. J.K. Singhi have also been considered, which are as follows:- "25. On the other hand, Mr. Bhat, learned counsel appearing for the respondent has submitted that the petitioner having agreed to the provisions of arbitration contained in Clause 10 of the general conditions cannot now be permitted to turn around and contend that someone else has to be appointed as an arbitrator, thus giving a go-by to the arbitration agreement. He submits that it is well settled that once the parties have agreed upon a named arbitrator, the parties cannot resile therefrom. In support of the submission, he relied on the judgment of this Court in the cases of Union of India v. M.P. Gupta, (2004)10 SCC 504 ) you One Engineering & Construction Co. He submits that it is well settled that once the parties have agreed upon a named arbitrator, the parties cannot resile therefrom. In support of the submission, he relied on the judgment of this Court in the cases of Union of India v. M.P. Gupta, (2004)10 SCC 504 ) you One Engineering & Construction Co. Ltd. v. National Highways Authority of India, (2006) 4 SCC 372 , National Highway Authority of India v. Bumihiway DDB Ltd.(JV) (2006) 10 SCC 763 , Northern Railway Administration, Ministry of Railway v. Patel Engineering Company Ltd. (2008) 10 SCC 240 , and Indian Oil Corporation Limited. v. Raja Transport Private Limited (2009) 8 SCC 520 . " 41. I am also not much impressed by the submission made by Mr. Bhat that this Court is bound to appoint the Chairman-cum-Managing Director or its nominee as the arbitrator in view of the arbitration clause. However, it is necessary to consider the judgments relied upon by Mr. Bhat. 42. In the case of Union of India & Anr. v. M.P. Gupta (supra), this Court observed that in view of the express provision contained in the arbitration clause that two Gazetted Railway Officers shall be appointed as arbitrators; a Former Judge of the Delhi High Court can not be appointed as the Sole Arbitrator. It must be noticed here that in the aforesaid case, no facts have been pleaded in justification of the plea for the appointment of an independent arbitrator in spite of the arbitration clause. 43. in You One Engineering & Construction Co. Ltd. v. National Highways Authority of India(NHAI) (supra), Justice B.N. Srikrishna, sitting as a Chamber Judge in a petition under Section 11(6) has observed as follows:- "10. In my view, the contention has no merit. The arbitration agreement clearly envisages the appointment of the presiding arbitrator by IRC. There is no qualification that the arbitrator has to be a different person depending on the nature of the dispute. If the parties have entered into such an agreement with open eyes, it is not open to ignore it and invoke exercise of powers in Section 11 (6)." In this matter also, there was no plea that the Arbitral Tribunal constituted under the arbitration clause was likely to be favorable inclined towards the respondent. If the parties have entered into such an agreement with open eyes, it is not open to ignore it and invoke exercise of powers in Section 11 (6)." In this matter also, there was no plea that the Arbitral Tribunal constituted under the arbitration clause was likely to be favorable inclined towards the respondent. This Court has merely reiterated the legal position that in normal circumstances, arbitrator has to be appointed in terms of the agreement of the parties contained in the arbitration clause. 44. In National Highways Authority of India v. Bumihiway DDB Ltd. (JV) (supra), the question which was before this Court was again as to whether a presiding arbitrator could be appointed beyond the scope of the arbitration clause, by the High Court in a petition under Section 11 (6). It was submitted on behalf of the appellant that when the arbitration agreement clearly envisages the appointment of the presiding officer by the IRC and there is no specification that the arbitrator has to be different person depending on the nature of the dispute, it is not open to ignore it and invoke the exercise of power under Section 11 (6) of the Act. It was also submitted that the High Court was not justified in referring to the principle of hierarchy and ignoring the express contractual provision for appointment of the presiding arbitrator. 45. Upon consideration of the rival submissions, this Court considered the questions of law which had arisen. The relevant question for the purposes of this case is: (Bumihiway case 10, SCC p.773, para 20). "20. (c) Whether an arbitration clause, which is a sacrosanct clause, can be rewritten by appointment of a judicial arbitrator when no qualification therefor is provided in the agreement?" The answer to the aforesaid question was in the negative. It was held that the appointment made by the High Court was beyond the arbitration agreement which clearly envisages the appointment of the presiding arbitrator by IRC, there is no qualification that the arbitrator has to be a different person depending on the nature of the dispute. It was emphasised in Bumihiway case 10 that (SCC p.778, para 36) "36.... It was held that the appointment made by the High Court was beyond the arbitration agreement which clearly envisages the appointment of the presiding arbitrator by IRC, there is no qualification that the arbitrator has to be a different person depending on the nature of the dispute. It was emphasised in Bumihiway case 10 that (SCC p.778, para 36) "36.... if the parties have entered into such an agreement with open eyes, it is not open to ignore it and invoke exercise of the powers in Section 11(6)." (You One Engg case 9, SCC p.378, para 10) The observations made by this Court in RITE Approach Group Ltd. v. Rosoboronexport 18 (SCC p.212, para 20) , were reiterated, wherein this Court has clearly held that: (Bumihiway case 10, SCC p.779, para 37) "In view of the specific provision contained in the agreement specifying the jurisdiction of the court to decide the matter, this Court cannot assume the jurisdiction, and hence, whenever there is a specific clause conferring jurisdiction on a particular court to decide the matter, then it automatically ousts the jurisdiction of the other court." 46. In Northern Railway Administration, Ministry of Railway, New Delhi v. Patel Engineering Company Limited (supra), a three Judge bench of this Court reiterated the general principle as noticed in the judgments relied upon by Mr. Bhat. At the same time, it is emphasised that in exercise of its powers under Section 11 (6) of the Act, the Court has to take into consideration the provision contained in Section 11 (8) of the Act. The aforesaid provision requires that the Chief Justice or the person or an institution designated by him in appointing an arbitrator shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. It is also observed that a bare reading of the Scheme of Section 11 shows that the emphasis is on the term of the agreement being adhere to and/or give effect to as closely as possible. But it is not mandatory for the Chief Justice or any person or institution designated by him to appoint the named arbitrator or arbitrators. But at the same time, due regard has to be given to the qualifications required by the agreement and other considerations. 47. But it is not mandatory for the Chief Justice or any person or institution designated by him to appoint the named arbitrator or arbitrators. But at the same time, due regard has to be given to the qualifications required by the agreement and other considerations. 47. In Indian Oil Corporation Limited v. Raja Transport Private Limited (Supra), this Court whilst emphasising that normally the Court shall make the appointment in terms of the agreed procedure, has observed that the Chief Justice or his designate may deviate from the same after recording reasons for the same. In Paragraph 45 of the aforesaid judgment, it is observed as follows: (SCC p.535) "45. If the arbitration agreement provides for arbitration by a named arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Admn. (supra), where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent arbitrator in accordance with Section 11 (8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons." 48. In view of the aforesaid observations, it would not be possible to reject the petition merely on the ground that this Court would have no power to make an appointment of an arbitrator other than the Chairman-cum-Managing Director or his designate. This Court would have the power to appoint a person other than the named arbitrator, upon examination of the relevant facts, which would tend to indicate that the named arbitrator is not likely to be impartial. (Emphasis in italics are in original whereas underlines are of mine) 7. This Court would have the power to appoint a person other than the named arbitrator, upon examination of the relevant facts, which would tend to indicate that the named arbitrator is not likely to be impartial. (Emphasis in italics are in original whereas underlines are of mine) 7. I have gone through the record of the arbitration application and further considered the aforesaid submissions of counsel for the parties as well as the case law cited by the counsel for the parties. 8. In my view since the order blacklisting the applicant company and forfeiting the earnest money and security money has been passed by the Managing Director himself with the approval of the Chairman, who is the superior authority, the Managing Director cannot be allowed to sit in his own cause as an Arbitrator and further the apprehension of the applicant that the Managing Director would not be impartial is a reasonable apprehension. I am further of the view that this Court while exercising the powers under Section 11(6) read with Section 11(8) of the Act of 1996, in the fact situation of the present case this Court has power to appoint any other impartial Arbitrator other than the named Arbitrator. 9. Consequently, this arbitration application is allowed and Mr. Justice Bhanwaroo Khan, Former Judge of this Court, resident of 1/21, Opposite Mahila Thana, Gandhi Nagar, Jaipur is appointed Arbitrator to adjudicate the disputes between the parties arising out of the agreement dated 25th April, 2011 (Annexure-1). Fees and other terms and conditions of arbitration shall be settled by the Arbitrator as per the Arbitration Manual. 10. A copy of this order be sent to the Arbitrator.Application Allowed. *******