TMI Blog2007 (8) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 and SPECIAL LEAVE PETITION (CIVIL) NO. 19881 OF 2006 - - - Dated:- 13-8-2007 - H.K. Sema Lokeshwar Singh Panta, JJ. JUDGMENT H.K. SEMA, J. 1. Leave granted. 2. This appeal preferred by the Union of India is directed against the judgment and order dated 26.5.2006 of the High Court of Delhi in Arbitration Petition No. 213 of 2006. By the aforesaid order the High Court appointed an arbitrator on a petition filed by the respondent under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short 'the Act'). 3. To answer the question involved in this appeal, it may not be necessary to delve the entire facts leading to the filing of the present appeal. Suffice it say that in response to an invitation to tender inqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril to June, 2004, July to September 2004, October to December 2004, January to March 2005, April to June 2005, July to September 2005, October to December 2005 and January to March 2006. As the appellant did not issue the amendment with respect to price variation clause, nor settled the dispute, which had arisen between the parties, the respondent herein sent a notice under Section 11 of Arbitration and Conciliation Act, 1996 on 7.6.2005. Through the said notice the respondent demanded that the appellant either issue the necessary amendments on account of price variation with respect to the above mentioned quarters or appoint an arbitrator within 30 days. The notice dated 7.6.2005 was acknowledged by the appellant vide acknowledgement sli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the parties to this contract. ii) In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the Court for any reason, shall be lawful for the Director General of Supplies Disposals to appoint another Arbitrator in place of the outgoing Arbitrator in the manner aforesaid. iii) It is further a terms of this contract that no person other than the person appointed by the Director General of Supplies Disposals as aforesaid should act as Arbitrator and that, if for any reason that is not possible, the matter is not to be referred to arbitration at all." 7. Having stated the brief facts in a nut-shell, we may now note a few important dates, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant appointed the arbitrator within 30 days from the date of receipt of request to do so from the respondent or the extended time as the case may be. In the present case, as noticed above, Section 11(6) petition was filed on 30.3.2006 by the respondent. The appellant stated to have appointed one Dr. Gita Rawat on 15.5.2006, i.e. after Section 11(6) petition was filed by the respondent on 30.3.2006, which is not permissible in law. In other words, the appellants are stopped from making an appointment of the arbitrator in terms of Clause 24 of the agreement after Section 11(6) petition is filed by the respondent. Once Section 11(6) petition is filed before the Court, seeking appointment of an arbitrator, the power to appoint an arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the ratio of this decision is also of no help to the appellant. 14. A three-Judge Bench of this Court in Punj Lloyd Ltd. (appellant) v. Petronet MHB Ltd. (2006) 2 SCC 638 considered the applicability of Section 11(6) petition and considered the facts which are similar to the facts of the present case and held that once notice period of 30 days had lapsed, and the party had moved the Chief Justice under Section 11(6), the other party having right to appoint arbitrator under arbitral agreement loses the right to do so. While taking this view, the Court had referred to the judgment rendered in Datar Switchgears Ltd. (appellant) v. Tata Finance Ltd. and Another (2000) 8 SCC 151 wherein at page 158 (para 19) SCC, this Court held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rportedly in terms of Clause 24 of the agreement. Once a party files an application under Section 11(6) of the Act, the other party extinguishes its right to appoint an arbitrator in terms of the clause of the agreement thereafter. The right to appoint arbitrator under the clause of agreement ceases after Section 11(6) petition has been filed by the other party before the Court seeking appointment of an arbitrator. 16. We are, therefore, of the view that the order of appointment of Dr. Gita Rawat by the appellant as a sole arbitrator dated 15.5.2006 was passed without jurisdiction. Once Section 11(6) petition is filed by one party seeking appointment of an arbitrator, the other party cannot resurrect the clause of the agreement dealing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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