IMPORTANT POINT
When the composition or the procedure of Arbitral Tribunal is not in accordance with the agreement of the parties then the parties get a right to challenge the award and the challenge can only be provided the agreement of the parties is in conflict with a provision of Part I which the parties cannot derogate.

JUDGMENT

S.N. Variava, J.-Leave granted.

This Appeal is against a Judgment dated 18th May, 2000.

2. Briefly stated the facts are as follows:

The Appellant and the Respondents are family members who had disputes and differences in respect of the family businesses and properties. All the parties agreed to resolve their disputes and differences through one Mr. Pramod Kumar Khaitan. Subsequently, on 29th September, 1996 they agreed that the said Mr. Pramod Kumar Khaitan and one Mr. Sardul Singh Jain resolve their disputes. For the purposes of this Order we are not deciding whether these two persons acted as Arbitrators or Mediators. That is a matter of contention between the parties which we are, at present, not called upon to decide. For the purposes of this order we are presuming that the parties had agreed to the Arbitration of these two persons.

3. The parties made their respective claims before these two persons. All parties participated in the proceedings. On 6th October, 1996 an Award came to be passed by the said Mr. Pramod Kumar Khaitan and Mr. Sardul Singh Jain.

4. On 22nd December, 1997 the 1st Respondent filed an Application in the Calcutta High Court for setting aside the Award dated 6th October, 1996. On 17th January, 1998 the 2nd Respondent filed an Application for setting aside this Award. One of the grounds, in both these applications, was that the Arbitration was by two Arbitrators whereas under the Arbitration and Conciliation Act, 1996 (hereinafter called the said Act) there cannot be an even number of arbitrators. It was contended that an arbitration by two arbitrators was against the statutory provision of the said Act and therefore void and invalid. It was contended that consequently the Award was unenforceable and not binding on the parties. These contentions found favour with a single Judge of the Calcutta High Court who set aside the Award on 17th November, 1998. On 18th May, 2000 the Appeal was also dismissed. Hence this Appeal to this Court.

5. When this matter reached hearing on 16th January, 2000, the following Order has been passed by this Court:

"Substitution applications are allowed.

A similar question, as is involved in this case, came up before a Bench of this Court in the case of Dodsal Private Ltd. vs. Delhi Electric Supply Undertaking of the Municipal Corporation of Delhi (1996) 2 SCC 576. In that case this Court felt that the question whether a mandatory provision of the Arbitration Act can at all be waived requires consideration by a larger Bench in view of an earlier judgment of this Court in Waverly Jute Mills Co. Ltd. vs. Raymon and Co. (India) P. Ltd. (1963) 3 SCR 209. In the said view of the matter the Bench referred the question to a larger Bench of this Court. It is now noticed that the said Constitution Bench, which was seized of the referred case, did not decide that issue as could be seen from its decision dated 19th July, 1996 in Dodsal Private Ltd. vs. Delhi Electric Supply Undertaking of the Municipal Corporation of Delhi Civil Appeal Nos. 2372-2374 of 1987 [1996 (7) SCALE (SP) 1], but decided the issue on other grounds.

Since that question has not yet been decided and question involved is an important question of law likely to arise in future cases, we feel it appropriate that this issue should be decided by larger Bench, of at least three Hon ble Judges and hence, refer the petitions, namely, SLP (C) 12384 and 13123 of 2000 to a Bench of three Hon ble Judges.

Accordingly, the Registry is directed to place the papers before Hon ble the Chief Justice for suitable orders."

Accordingly, this matter is before this Bench. At this stage we are only deciding the question of law referred i.e. whether a mandatory provision of the said Act can be waived by the parties.

6. It would be appropriate to set out, at this stage, the relevant provisions of the said Act. Sections 4, 5, 10, 11, 16 and 34 read as follows:

"4. Waiver of right to object.-A party who knows that-

(a) any provi