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2016 (8) TMI 1434 - HC - Indian LawsAppointment of an arbitrator - Recovery of debts - Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. HELD THAT:- The Arbitration & Conciliation Act, 1996 is an amalgam of the Arbitration Act, 1940, the Arbitration (Protocol & Convention) Act, 1937 and the Foreign Awards (Recognition & Enforcement) Act, 1961. It is a consolidating and amending statute. The object of the Act is to minimize the supervisory role of Court in relation to matters covered by arbitration. The provisions of Section 5 of the Act limit interference of judicial authorities in matters governed by Part-I of the Act and no judicial authority in terms of the said provisions can interfere except where so provided in Part-I of the said Act. By virtue of the said provision, all other statutes have been excluded from operation insofar as they relate to intervention by any judicial authority in matters covered by Sections 1 to 43 of the Act. This Act of 1996 has been held to be a self-contained code. Arbitration is not a common law right. It is a right created by statute. The rights and remedies are created by the statute. Arbitration is consensual. When the parties have voluntarily agreed to have their disputes resolved by Arbitration, it necessarily implies that they have consciously waived their right to have their disputes adjudicated by any other authority or by any other machinery - the amended provision of Section 19 of the Debt Recovery Act, namely Section 19(8) does not give an absolute power to a constituent to have the counter-claim adjudicated by the Tribunal as the subsequent sub-section, namely Section 19(11) of the RDB Act gives power to the Tribunal to pass an order for exclusion of the counter-claim. There is no provision in the Act for transfer of suits and proceedings, except section 31, which relates to suit/proceeding by a bank or financial institution for recovery of a debt. If the petitioner instead of filing an application under Section 9 of the Arbitration and Conciliation Act, 1996 could have filed a suit prior to initiation of recovery proceeding which would be otherwise maintainable there is no reason to conclude that the application for appointment of arbitration in terms of the arbitration clause in the agreement would be barred - Moreover, the application under Section 9 was filed prior to the filing of the recovery proceeding and the respondent has participated in such proceeding and has received substantial benefits in terms of the orders passed in such proceeding. In view of a clear finding that there is an arbitration agreement between the parties and the party has approached the appropriate High Court, the application under Section 11 of the Arbitration and Conciliation Act is allowed.
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