Bombay High Court
C.P.W.D.Nagpur
Versus
Pandit Shankarrao
Decided On:

Headnote:Section 11 (6) and Constitution of India, Arts. 226 and 227-0rder passed under Section 11 (6) by Judge designated by Chief Justice appointing arbitrator is subject to judicial review-Arbitrator already appointed in terms clause in the agreement Jurisdiction under Section 11 (6) not available-Award by such arbitrator appointed under Section 11 (6) is liable to be quashed being null and void.-On 2.11.1994 an agreement was signed between the Executive Engineer, Central Public, Works Division and the respondent for carrying out construction. Accordingly, work order came to be issued on 12.4.1999. The petitioner issued notice to the respondent contractor informing him that in spite of reminders he failed to rectify those defects in the contractual work and, therefore, an amount of Rs. 6,83,105/would be deducted. On 16.7.1999, the respondent approached the petitioner No.1 for appointment of an Arbitrator as per Clause No. 25 of the agreement. The petitioner No. 1 called upon the respondent to submit documentary evidence in support of his claim. Without complying with these requirements the respondent approached the High Court on 25.8.1999 and filed Miscellaneous Civil Application for appointment of arbitrator. The petitioners filed reply opposing the application and it was stated that the petitioner No. 1 had already appointed an arbitrator on 7.10.1999 and the said arbitrator was from the Urban Development Department of the Government of India with his office at Mumbai, resultantly the Miscellaneous Application filed by the respondent did not survive. However, by the impugned order dated 25.2.2000 the Single Judge of the Court allowed the application, declared the appointment of arbitrator by petitioner No.1 vide his order dated 7.10.1999 as null and void and appointed an arbitrator under Section 11 (6) of the Act. In writ petition as filed it was contended that the order passed by the Single Judge as designatee of the Chief Justice was manifestly erroneous and once the petitioner No.1 had appointed an arbitrator under Clause No. 25 of the agreement, pursuant to the demand made by the respondent, the application filed by him did not survive and the Judge failed to apply his mind to this legal position.

       Held, that it is now well settled by a catena of decisions of the Apex Court that the order passed appointing an arbitrator under Section 11 (6) of the Act is an administrative order. The Apex Court in the case of Ador Samia Pvt. Ltd., AIR 1999 SC 3246, though held that a Special Leave Petition cannot be entertained against such an administrative order, it would not, per se, imply that such an order cannot be challenged in a writ petition filed under Articles 32 or 226 and 227 of the Constitution of India. Every administrative order passed by a statutory authority is subject to judicial review by the High Court and an order passed under Section 11 (6) of the Act could not be an exception to this rule. The power of judicial review under Articles 32, 226/227 is a basic and essential feature of our Constitution. The order impugned could not be held to be merely administrative, because the Single Judge had not only appointed an arbitrator but had also given a declaration that the appointment made by the petitioner No.1 of an arbitrator vide his order dated 7.10.1999 was null and void. The order, therefore, carried a judicial pronouncement regarding the status of the order passed by the petitioner No.1 on 7.10.1999 and in fact the said order had been declared as a nullity in law which implies that the order was quashed and set aside. This writ petition challenged both parts of the impugned order, namely, the appointment of the arbitrator by the Single Judge as well as his decision to declare the order dated 7.10.1999 passed by the petitioner No. 1 as nullity in law. The instant petition was maintainable. Though the Arbitration and Conciliation Act has aimed at expeditious conclusion of the arbitration proceedings, that does not mean that the powers of this Court under Articles 226 and 227 of the Constitution are taken away. The order passed under Section 11 (6) of the Act is always subject to judicial review in a writ petition under Articles 226 and 227 of Constitution. The mere fact that during the pendency of this petition, the arbitrator had passed his arbitral award on 4.7.2000 would not shut the doors of this Court and the petition, which was filed on 4.5.2000, would not become infructuous. If the arbitrator has acted without an authority in law, the entire arbitral proceedings would stand vitiated. The legality of his appointment order goes to the very root of the matter. Once such an order is held to be illegal, the entire proceedings must be held to be null and void ab initio. The Arbitrator appointed by the petitioner No. 1 shall start with the arbitration proceedings de novo and complete them as expeditiously as possible and in any case within a period of three months from the date of first appearance.

       Sections 34 and 11 (6)- The legality of the order passed under Section 11 (6) of the Act cannot be gone into by the concerned Court in an application under Section 34.

       For Citatrion : 2000 (4) Mh LJ 267 (Bom) : (2000) 102 (3) Bom LR 813