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1999 Supreme(Bom) 993

IN THE HIGH COURT OF BOMBAY
D.K. Deshmukh, J.
Cotton Corporation of India Ltd...... Petitioner.
Versus
Sharad Shetkari Soot Girni Niyamit..... Respondent.
Arbitration Petition No. 214 of 1999, decided on 23-12-1999.
Advocates appeared :
Bipin Gandhi, for petitioner.
Girish Godbole, for respondent.

Headnote:Arbitration and Conciliation Act (26 of 1996), Section 8(1)-Reference to arbitration-The term "judicial authority" occurring in Section 8 includes Court of Civil Judge, Senior Division being "judicial authority" Said Court in the circumstances could refer parties to arbitration.- The provisions of Section 8(1) of the Arbitration and Conciliation Act, 1996 shows that a judicial authority, before which an action is brought in a matter which is the subject matter of an arbitration agreement, if the parties so apply, can refer the parties to arbitration. It is clear from the provisions of Section 2(e) that the Court for the purpose of Arbitration Act means the Principal Civil Court of original jurisdiction in a district. Therefore, the Civil Judge, Senior Division, Solapur would not be the Principal Civil Court of original jurisdiction in the district and therefore, it would not be the Court for the purpose of Arbitration Act. It is however clear that the term "judicial authority" is a term of wider import and therefore, it would not only include Court but it will also include all authorities which can be described as judicial authorities, in the sense that they administer justice. It goes without saying that the Civil Judge, Senior Division, Solapur administers justice and therefore can be safely described as judicial authority for the purpose of Arbitration Act Therefore, that part of the order of the Civil Judge, Senior Division, Solapur referring the parties to arbitration by consent of parties would be perfectly within the four corners of the provisions of sub- section (1) of Section 8 of the Act.

JUDGMENT - D.K. DESHMUKH, J.:---By this petition, the petitioner challenges the award dated 27th January, 1999 passed by the learned Arbitrator - Shri V.T. Chari. It transpires that the plaintiff filed a suit for money decree against the defendant before the Civil Judge, Senior Division, Solapur which was Suit No. 303 of 1996. In that suit, the present petitioner was the defendant. He filed an application before the Civil Judge, Senior Division, Solapur stating therein that the dispute between parties should be referred to Shri Chari as an Arbitrator. This application was not opposed by the plaintiff respondent and therefore, the Court appointed by order dated 26th September, 1997 Shri Chari as Arbitrator. Pursuant to that appointment, Shri Chari entered reference and made the award.

2.The learned counsel for the petitioner first submits that the appointment of Shri Chari as an Arbitrator was contrary to the provisions of the Act and therefore, according to the learned Counsel, the award passed by the Arbitrator is liable to be set aside. He relies on the provisions of sections 2(e), 8, 11 of the Act as also Clause 10.2 of the agreement between the parties. The learned Counsel appearing for the respondent, on the other hand, submits that under section 8 of the Act, as a judicial authority, the learned Civil Judge, Senior Division, Solapur can refer the parties to arbitration and the parties were free by consent to appoint any person as an Arbitrator. The learned counsel submits that the petitioner themselves went to the Court and made an application, requesting that Shri Chari should be appointed as an Arbitrator, the respondent acceded to that request and therefore, Shri Chari was appointed as an Arbitrator. According to the learned Counsel, therefore, in substance the appointment of Shri Chari as an Arbitrator is not made by the Civil Judge, Senior Division, Solapur but by both the parties by consent. He submits that as the appointment of Shri Chari as an Arbitrator was made by consent, there is no question of provisions of section 11 coming into play. The learned Counsel submits that though Clause 10.2 of the agreement between the parties provides for appointment of Arbitrator by the Chairman-cum-Managing Director of the respondent, it is clear from Clause 11.4 of the agreement that parties are free to modify or vary the terms of the contract by mutual consent. The learned counsel submits that the proceedings before the Civil Judge, Senior Division, Solapur clearly show that the parties to the contract viz. the petitioner and the respondent modified Clause 10.2 of the agreement when they mutually agreed to appoint Shri Chari as Arbitrator. The learned counsel therefore submits that there is nothing illegal or even irregular in the appointment of Shri Chari as an Arbitrator.

3.Now if in the light of these rival submissions, the record of the case is perused, it becomes clear that according to Clause 10.2 of the agreement between the parties, the disputes or differences between the parties were to be referred to arbitration of an Arbitrator to be appointed by the Chairman-cum-Managing Director of the respondent. Clause 11.4 provides that the parties can by agreement vary or modify any of the terms of the contract. The respondent filed a suit for a money decree against the petitioner. In that suit, the petitioner on its own made an application for referring the dispute to the arbitration and suggested the name of Shri Chari as an Arbitrator. It is clear from the order passed by the Civil Judge, Senior Division, Solapur dated 26th September, 1997 that this application was not opposed by the respondent. This clearly means that the respondent not only agreed to the referring of the dispute raised in the suit to an Arbitrator but they also consented to the appointment of Shri Chari as an Arbitrator. Perusal of the provisions of section 8 of the Arbitration Act shows that a judicial authority, before which an action is brought in a m




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