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2014 DIGILAW 1634 (MP)

M. P. Electricity Board v. Tata Consultancy Services

2014-12-09

ALOK ARADHE

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Judgment Alok Aradhe, J.:- Mr. Anoop Nair, learned counsel for the applicant. Mr. Kishore Shrivastava, learned senior counsel with Mr. Shashank Verma, counsel for the non-applicant. With consent of the parties, the matter is heard finally. In this application filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), the applicant seeks appointment of an Arbitrator. 2. Facts giving rise to filing of the application briefly stated are that the erstwhile M.P. Electricity Board and the non-applicant had entered into an agreement on 23-9-1993. Clause 34 of the agreement provides that any dispute or differences arising out of the agreement shall be finally settled by arbitration in accordance with the provisions of Indian Arbitration Act, 1940. The dispute between the parties had arisen. By notice dated 17-7-2001, the applicant terminated the contract of the non-applicant. Thereafter, the applicant sent a notice on 20-12-2001 to the non-applicant by which it appointed an Arbitrator. The applicant thereafter filed an application for appointment of an Arbitrator before the District Court on 17-11-2003 which was returned to it to be filed before the competent forum on 10-12-2004 as the amount in dispute was above Rs. 10 Lakhs. The applicant thereupon has filed this application before this Court on 10-1-2005 seeking appointment of an Arbitrator. 3. Learned counsel for the applicant submitted that the parties had entered into an agreement which contains an arbitration clause and the present applicant namely M.P. Poorva Kshetra Vidyut Vitaran Co. Ltd., is successor of M.P. State Electricity Board, therefore, it has locus to maintain the application. It is further submitted that the issue whether the claim made by the applicant is barred by limitation cannot be decided without recording the evidence, therefore, the same be referred for decision to the Arbitrator. In support of aforesaid submissions, learned counsel for the applicant has placed reliance on decisions of the Supreme Court in the case of SBP & Co. vs. Patel Engineering Ltd. and another, (2005) 8 SCC 618 , Schlumberger Asia Services Limited vs. Oil and Natural Gas Corporation Limited, (2013) 7 SCC 562 , Today Homes and Infrastructure Private Limited vs. Ludhiana Improvement Trust and another, 2014(4) MPLJ (S.C.) 41 : (2014) 5 SCC 68 and Swiss Timing Limited vs. Commonwealth Games 2010 Organising Committee, 2014(4) MPLJ (S.C.) 527 : (2014) 6 SCC 677 . 4. 4. On the other hand, learned senior counsel for the non-applicant has raised an objection with regard to maintainability of the proceeding on the ground that the applicant is not a party to the arbitration agreement and, therefore, it has no locus to file an application under section 11(6) of the Act. It is further submitted that after the coming into force of M.P. Re-Organisation Act, 2000, M.P. Electricity Board stood dissolved and M.P. State Electricity Board was constituted under section58(4) of the Act. It is further submitted that under section 131 of the Electricity Act, 2003, six companies have come into existence and even M.P. State Electricity Board is also not in existence. There is no document to show that the applicant is successor of either M.P. Electricity Board or M.P. State Electricity Board in respect of the claim involved in this application. It is further submitted that there is no arbitration agreement between the applicant and the non-applicant. It is also urged that the claim of the applicant is prima facie barred by limitation as the cause of action had accrued to the applicant on 17-7-2001, as no application under section 14 of the Limitation Act, 1963, has been filed seeking condonation of delay for the period from 17-11-2003 till 20-12-2004 i.e. the period for which the applicant filed the application for appointment of an Arbitrator remained pending before the District Judge. In support of his submissions, learned senior counsel for the non-applicant has placed reliance on decisions of Supreme Court in SBP & Co., vs. Patel Engineering Ltd. and another (supra), Indian Oil Corporation Limited vs. SPS Engineering Limited, 2011(3) MPLJ (S.C.) 73 : (2011) 3 SCC 507 and Schlumberger Asia Services Limited vs. Oil and Natural Gas Corporation Limited (supra). 5. I have considered the submissions made by learned counsel for the parties. 5. I have considered the submissions made by learned counsel for the parties. Section 11(6) of the Act reads as under:-- "(6) Where, under an appointment procedure agreed upon by the parties-- (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or if under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. 6. Section 2(h) of the Act defines expression "Party" means a party to an arbitration agreement." 7. From perusal of section 11(6) as well as section 2(h) of the Act, it is evident that a person who is a party to an arbitration agreement can invoke section 11(6) of the Act. 8. The Supreme Court in the case of SBP & Co. (supra) in para 39 has held that the Court while dealing with the application under section 11(6) of the Act has to be satisfied whether the person who has made a request before the Court is a party to the arbitration agreement. 9. In view of the ratio laid down by the Constitution Bench of the Supreme Court in the case of SBP & Co. (supra), the facts of the case may be seen. In the instant case, the agreement was executed between the M.P. Electricity Board and the non-applicant. It is pertinent to mention here that there is no mention in the agreement that the agreement is being executed with the M.P. Electricity Board and its successor. Section 58(3) of the M.P. Re-Organisation Act, 2000, provides that the Board or the Corporation referred to in sub-section (1) which includes the applicant shall cease to function as from and shall be deemed to be dissolved on such date as the Central Government may by order appoint. By virtue of notification issued under section 58(3) of the M.P. Re-Organisation Act, 2000, dated 4th November, 2004, the M.P. Electricity Board has ceased to be in existence with effect from 15-11-2000. Thereafter, the M.P. Electricity Board has come into existence. By virtue of notification issued under section 58(3) of the M.P. Re-Organisation Act, 2000, dated 4th November, 2004, the M.P. Electricity Board has ceased to be in existence with effect from 15-11-2000. Thereafter, the M.P. Electricity Board has come into existence. Even the M.P. State Electricity Board is not in existence now in view of section 131 of the Electricity Act, 2003, as six companies have been incorporated including the present applicant in place of the erstwhile M.P. State Electricity Board. There is no material on record to indicate that either the applicant is successor of M.P. State Electricity Board or is entitled to prosecute the claim on behalf of M.P. Electricity Board. Admittedly, neither the M.P. State Electricity Board nor the present applicant namely M.P. Poorva Kshetra Vidyut Vitaran Co. Ltd., is a party to the arbitration agreement. Therefore, it has no locus to file the application under section 11(6) of the Act. Therefore, it is not necessary to advert to other contentions advanced by the parties. In view of preceding analysis, I do not find any merit in the application. In the result, same fails and is hereby dismissed.