ORDER : S. Abdul Nazeer, J. Since common questions of fact and law are involved in all these writ petitions, they are clubbed together, heard and disposed of by this order. 2. In an arbitration proceedings between the first and third respondents pending before the second respondent-Arbitrator, the petitioner made an application for impleading itself as additional respondent. The said application has been rejected b) the Aibitrator. The petitioner has called in question the validity of the said order in these writ petitions. 3. Sri M.R.C. Ravi, learned Counsel appearing for the petitioner would contend that the Government of Karnataka has passed an order dated 21.6.2014 transferring the assets and liabilities (rights and obligations) of the project in question along with the officers and staff to the petitioner. Thus, the petitioner has become the successor in interest in respect of the projects including the project that is concerned with the dispute before the Arbitral Tribunal. In view of the transfer of the assets and liabilities (rights and obligations) of the project including zone, circle, division and sub-division offices along with the officers and staff to the petitioner, the terms and conditions of all contracts entered between the Executive Engineer and the Contractors for executing the project is binding on the petitioner and accordingly, the petitioner is a necessary parts for effective prosecution of the arbitral case. The Executive Engineer has signed the agreement for and on behalf of the State Government. The petitioner has stepped into the shoes of the State Government and has become successor in interest and accordingly petitioner has become the employer and the Executive Engineer is deemed to be executing the agreement. Therefore, 'he Arbitral Tribunal ought to have allowed the application. 4. It is further argued that in an identical case in C.A.Nos. 8544 to 8545/2003 disposed of on 31.10.2010, the Apex Court has held that the petitioner has locus standi to file a review petition as it has succeeded to the assets and liabilities of the State. The Arbitrator has failed to follow the decision of the Apex Court while considering the application. 5. Learned Additional Government Advocate appearing for the third respondent has supported the case of the petitioner. It is argued that since the petitioner is, he successor in interest, the Tribunal ought to have allowed the application of the petitioner. 6.
The Arbitrator has failed to follow the decision of the Apex Court while considering the application. 5. Learned Additional Government Advocate appearing for the third respondent has supported the case of the petitioner. It is argued that since the petitioner is, he successor in interest, the Tribunal ought to have allowed the application of the petitioner. 6. On, the other hand, Sri Udaya Holla, learned Senior Counsel appearing for respondent No. 1 has sought to justify the order of the Tribunal, it is argued that petitioner is not a party to the contract. Therefore, it cannot be permitted to come on record as additional respondent. It is further submitted that the writ petitions cannot be maintained as they are filed against an interim order of the Tribunal. If petitioner is aggrieved by the award of the Tribunal, it can challenge the same before the appropriate forum. Learned Senior Counsel has drawn my attention to the decision of the Apex Court in S. B. P. And Co. v. Patel Engineering Ltd. And Another-AIR 2006 SC 450 and in particular, paragraph 44 of the said judgment. He has also relied on the following decisions in support of his contentions: (i) Waverly Jute Mills Co. Ltd. v. Raymon And Co. (India) Pvt. Ltd. AIR, 1963 SC 90. (ii) Jagdish Chander v. Ramesh Chander And Others - (2007) 5 SCC 719 . (iii) Indowind Energy Limited v. Wescare (India) Limited And Another (2010) 5 SCC 16. (iv) Sandeep Kumar And Others v. Master Ritesh And Others - (2006) 13 SCC 567. (v) Vijay Kumar Sharma @ Manju v. Paghunandan Sharma @ Haul Ram And Others (2010) 2 SCC 486 . (vi) S. N. Prasad, Hitek Industries (Bihar) Limited v. Mon Net Finance Limited And Others - (2011) 1 SCC 320 . (vii) Vijay Jain v. Investnet Securities India Ltd. - 2003 (116) Company Cases 164. (viii) Atul Singh And Others v. Sunil Kumar Singh And Others - (2008) 2 SCC 602 . (ix) Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya And Another- (2003) 5 SCC 531 . (x) Sanay Verma v. Manik Roy And Others-(2006) 13 SCC 608. (xi) Akka Bai And Another v. Gowrawwa - AIR 1990 KAR 278 . (xii) Electronics Corporation of India Ltd. And Others v. Secretary, Revenue Department, Govt. of Andhra Pradesh And Others - (1999) 4 SCC 458 .
(x) Sanay Verma v. Manik Roy And Others-(2006) 13 SCC 608. (xi) Akka Bai And Another v. Gowrawwa - AIR 1990 KAR 278 . (xii) Electronics Corporation of India Ltd. And Others v. Secretary, Revenue Department, Govt. of Andhra Pradesh And Others - (1999) 4 SCC 458 . (xiii) Sree Balaji Nagar Residential Association v. State of Tamil Nadu & Others - 2014 (10) Scale 388, and (xiv) M.R. Engineers And Contractors Private Limited v. Som Datt Builders Limited - (2009) 7 SCC 696 . 7. Having regard to the contention urged, the question for consideration is whether the Arbitral Tribunal is justified in rejecting the application filed by the petitioner to implead itself as additional respondent? 8. The Government of Karnataka has issued an order at Annexure 'J' dated 4.3.2014 appointing the petitioner-company as the successor in interest in respect of the projects mentioned therein. This order was passed for effective administration and implementation of the Tungabhadra Left Bank Canal and Distributaries modernisation works and transferred projects to the petitioner-company. This was followed by yet another Government Order at Annexure 'K dated 21.6.2014 transferring the assets and liabilities (rights and obligations) of the project including Zone, Circle, Division and Sub-Division officers along with the officers and staff to the Nigam. Thus, the petitioner company has become the successor in interest of ail the projects including the project that is concerned with the pending dispute before the Arbitral Tribunal. In view of the transferring of the assets and liabilities (rights and obligations) of the project including Zone, Circle. Division and Sub-division offices along with the officers and staff to the Nigam. the terms and conditions of all contracts entered into by the Executive Engineer and the Contractors for executing the project shall be binding on the petitioner. It is on the basis of these two Government Orders, the petitioner made an application to come on record as additional respondent in the arbitration proceedings. It is to be noted here that the Executive Engineer has signed the agreement for and on behalf of the State Government and not in his individual capacity as the Executive Engineer and in view of the order dated 21.6.2014, the petitioner has stepped into the shoes of the State Government and has become the successor in interest. 9. A similar question arose before the Hon'ble Supreme Court in C.A. Nos.
9. A similar question arose before the Hon'ble Supreme Court in C.A. Nos. 8544 to 8545/2003 between Karnataka Neeravari Nigam Ltd. v. M/s B.T. Patil & Sons & Others. During the pendency of the said case, the Nigam was incorporated. It was not brought on record as party to the arbitration proceedings. Therefore, Nigam made an application for review. The Hon'ble Supreme Court by order dated 31.10.2003 has held thus: "So far as the question of locus standi of the appellant to file the review' petition is concerned, we are of the opinion that if the Nigam has been incorporated during the pendency of the proceedings (without regard to the stage at which the proceedings were) and the Nigam has succeeded to the rights and liabilities of the State then in. so far as these proceedings are concerned the Nigam would certainly have locus standi to file the review petition." 10. Let me consider the decisions relied on by Sri Udaya Holla, learned Senior Counsel in support of his contentions: In paragraph 44 of S.B.P. and Co.s case (surra), the Apex Court has held that any order passed by an Arbitral Tribunal during arbitration cannot be challenged under Articles 226 or 227 of the Constitution of India. Under Section 37 of the Arbitration and Conciliation Act, 19%. the aggrieved party has an avenue for ventilating his grievances, against the award including any in between orders that might have been passed by the Arbitral Tribunal acting under Section 16 of the Act. The aggrieved party aggrieved by the order of the Arbitral Tribunal has a right of appeal under Section 37 of the Act, and has to wait until the award is passed by the Tribunal. 11. As noticed above, the petitioner, a successor in interest in respect of the projects in question is not a party to the arbitration agreement. In view of the aforesaid two Government Orders, the terms and conditions of all contracts entered into by the Executive Engineers and the Contractors for executing the project is binding on the petitioner. However, it cannot ventilate its grievances against the award under Section 34. Under Section 34, recourse against an arbitral award may be made only by a party. The expression party has been defined in sub-section (h) of Section 2 under which party means a party to an arbitration agreement.
However, it cannot ventilate its grievances against the award under Section 34. Under Section 34, recourse against an arbitral award may be made only by a party. The expression party has been defined in sub-section (h) of Section 2 under which party means a party to an arbitration agreement. The petitioner cannot have any remedy to challenge the award despite it being a successor in interest. Therefore, it is just and proper to allow the petitioner to come on record as additional respondent. 12. In fact, In B.T. Patil's case (supra), the Arbitrator subsequently has allowed an identical application allowing the petitioner to come on record by order dated 29.11.2014 by holding as under: "In that view of admitted factual and legal position of M/s Karnataka Neeravari Nigam Limited, its position becomes clear on the record that this Company is the real contestant Respondent in these proceedings as it has stepped into the shoes of the original Respondent, the State of Karnataka. But in transpires from the description of the Opposite Party in the Statement of Claim i.e. the Claim Petition of the Claimant already filed in this Arbitral proceeding before the previous Arbitrator that only the State of Karnataka is described as the sole Respondent. In view of the above stated actual legal position of M/s Karnataka Neeravari Nigam Limited, it becomes essential for the Claimant to implead this Government Company in the claim petition cause title as the main or sole Respondent in place of the existing Respondent the State of Karnataka Hence the Claimant is required to take necessary step for impleadment of M/s Karnataka Neeravari Nigam Limited as such in the claim petition cause title by the next sitting of the Tribunal" 13. In Waverly Jute Mills Co. Ltd.'S Case (supra), the Apex Court has held that an arbitration agreement is the very foundation on which the jurisdiction of Arbitrators to act rests and where that is not in existence, the proceedings must be held to be wholly without jurisdiction and this defect is not cured by appearance of parties in those proceedings even if that be without protest. 14. In Jagadis H. Chander's case (supra), the Ape; Court has held that it is not permissible to appoint an Arbitrator to adjudicate disputes between parties in the absence of an arbitration agreement or mutual consent 15.
14. In Jagadis H. Chander's case (supra), the Ape; Court has held that it is not permissible to appoint an Arbitrator to adjudicate disputes between parties in the absence of an arbitration agreement or mutual consent 15. In Indowind Energy Limited's case (supra), the Apex Court has held that arbitration agreement can come into existence only in the manntr contemplated under Section 7. 16. In Sandeep Kumar's case (supra), the Supreme Court has held that arbitration agreement cannot be invoked against persons who are not parties to the arbitration agreement. 17. In Vijay Kumar Sharma @ Manju's case (supra), the Supreme Court held that neither the will nor the unilateral subsequent declaration can be held to be arbitration agreement. 18. In Sukalu Ram Goni's Case, the Supreme Court has held that the award against a person not party to reference for arbitration but participating in proceedings under protest is without jurisdiction and hence such person not bound by award. Arbitrator does not get authority and jurisdiction to make the award against a non-party to true contract. 19. In Deutsche Post Rank Home Finance Limited', case (supra), the Supreme Court has held that existence of arbitration agreement between parties is a condition precedent for appointing an Arbitrator. If a person who is not a party to the arbitration agreement is impleaded as a party to the petition under Section 11 of the Act, the Court should either delete such party from the array of parties or when appointing an Arbitrator make it clear that the Arbitrator is appointed only to decide disputes between parties to the arbitration agreement. 20. In S.N. Prasad's case (supra), the Supreme Court has held that there can be reference to arbitration only if there is an arbitration agreement between the parties. If there is dispute between a party to an arbitration with other parties to the arbitration agreement as also non-parties to arbitration agreement, reference to arbitration or appointment of Arbitrator can only be with respect to parties to arbitration agreement and not non-parties. 21. In Vijay Jain's Case (supra) the Bombay High Court has held that only those parties who are parties to the arbitration agreement can be made party to the arbitration proceedings. Third party who accepted the document on behalf of either of the parties cannot be impleaded as a necessary party. 22 In Atul Singh's case (supra), the.
21. In Vijay Jain's Case (supra) the Bombay High Court has held that only those parties who are parties to the arbitration agreement can be made party to the arbitration proceedings. Third party who accepted the document on behalf of either of the parties cannot be impleaded as a necessary party. 22 In Atul Singh's case (supra), the. Supreme Court has held that party against whom arbitration reference sought found not to be a party to the arbitration agreement on the basis of which reference is sought. 23. In Sukanya Holdings (P) Ltd's case (supra), the Supreme Court has held that there is no power conferred on the Court to add parties who are not parties to the agreement in the arbitration proceedings. 24. In San Jay Verma's case (supra), the Supreme Court has held that transferee pendent lite is not entitled to seek impleadment. 25. A Division Bench of this Court In Akka Bai's case (supra), has held that application by transferee pendent lite after five years at fag end of litigation liable to be rejected on ground of delay. 26. None of these decisions pertain to a case where the applicant was a successor in interest in respect of the projects including the project that is concerned with the pending dispute before the Arbitral Tribunal. These decisions are not applicable to the facts of the instant writ petitions. 27. I am of the view that the Arbitrator was not justified in rejecting the application. 28. In view of the above discussions, I pass the following: ORDER (i) Writ petitions are allowed. (ii) The impugned orders parsed by the second respondent dated 14.8.2014 and 1.7.2014 in all these cases are hereby quashed. (iii) The petitioner is permitted to come on record as respondent No. 2 in the arbitration proceedings before the Arbitral Tribunal in the aforesaid cases. 29. In view of the disposal of the writ petitions as above, I.A. No. 1/2014 in W.P.No.40737/2014 and I.A. No. 2/2014 in W.P. No. 34991/2014 do not survive for consideration. They are accordingly dismissed. No costs.