JUDGMENT :

Shekhar B. Saraf, J.

1. The instant application has been filed under Section 36 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) by SREI Equipment Finance Limited (hereinafter referred to as the (‘petitioner/award holder’) seeking execution of an arbitral award dated August 27, 2021 passed by the Sole Arbitrator Mr. Samrat Mukherjee whereby Mr. Sadhan Mandal (‘respondent/award debtor’) was directed to pay a sum of INR 65,41,583.12/-(Sixty Five Lakhs Forty One Thousand Five Hundred Eighty Three Rupees Twelve Paise Only) to the petitioner.

2. On July 15, 2018, a Master Lease Agreement was entered into by and between the award holder and the award debtor. By virtue of the said agreement, an amount of INR 87,83,410/-(Eighty Seven Lakhs Eighty Three Thousand Four Hundred Ten Rupees Only) was advanced by the award holder to the award debtor in order for the award debtor to hire on lease assets in the form of two vehicles namely Mahindra Balzo 31 Model Vehicles bearing i) Engine No. EDJZD13898 having registration No. WB-53C-1396, and ii) Engine No. ECJZG18865 having registration No. WB-53C-1495 along with their necessary accessories.

3. On grounds of the alleged failure of the award debtor to pay either the due amount or make over the possession of the assets, the award holder invoked arbitration on January 24, 2020 and appointed Mr. Samrat Mukherjee as the Sole Arbitrator in terms of the following arbitration clause contained in the agreement between the parties –

“18. n) Any disputes or differences arising out of or in connection with the agreement during its subsistence or thereafter between the parties including any disputes and differences relating to the interpretation of the agreement or any clause thereof shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and rules framed thereunder and any amendment, modification, statutory enactment thereto from time to time and shall be referred to the sole Arbitration of an independent Arbitrator appointed by Lessor on its own or upon request of the Lessee and/or guarantors in writing upon intimation to all parties to this agreement.”

4. It is clear as a summer day from the submissions made by the parties and available materials on the record that the award holder unilaterally appointed the Sole Arbitrator, in terms of the aforementioned arbitration clause. The Sole Arbitrator so appointed proceeded to conduct the arbitral proceedings and subsequently also deliver an ex-parte award on August 27, 2021.

5. Normally, the Court would proceed to execute an arbitral award in the execution proceedings. But in a case like the instant one where the arbitral award is given by an arbitrator who has been unilaterally appointed by a party, the arbitral proceedings and the award itself stands vitiated as the arbitrator lacked inherent jurisdiction to adjudicate disputes between the parties. In fact, it is a settled principle of law that an arbitral award rendered by a person who is ineligible to act as an arbitrator cannot be considered as a valid arbitral award as the ineligibility of the said arbitrator goes to the root of his jurisdiction.

6. The Supreme Court in Perkins Eastman Architects DPC & Anr. -v-HSCC (India) Ltd. reported in [2019] 17 S.C.R. 275 judicially expanded Schedule VII of the Act to include arbitrator(s) unilaterally appointed by one of the parties. The relevant paragraphs have been reproduced below :-

“15. ……. We thus have two categories of cases. The first, similar to the one dealt with in TRF Ltd. where the Managing Director himself is named as an arbitrator with an additional power to appoint any other person as an arbitrator. In the second category, the Managing Director is not to act as an arbitrator himself but is empowered or authorised to appoint any other person of his choice or discretion as an arbitrator. If, in the first category of cases, the Managing Director was found in