Appointment of an independent arbitrator is necessary when there is a lack of confidence in the impartiality of the initial arbitrators.

( 1 ) ON the one hand, the petitioner has sought the appointment of an Arbitrator for settling the dispute while the respondent has through application under Section 340 of Criminal Procedure Code called for action against the petitioner for forgery and fraud committed upon the Court.

( 2 ) AS per the agreement to sell, the balance of consideration amount of Rs. 64 lakhs was to be received by the respondent on the completion of the transaction and the full and final payment was to be received by the respondent on or before 31/12/1998 and Rs. 45 lakhs was payable on or before 26/10/1997. It is alleged that even before the date of final payment to be received on 31/12/1997, Shri B. L. Chawla purporting to acting on 18/12/1997 with a view to avoid and wriggle out of the transaction by giving option either to complete the sale and receive the balance amount of consideration or refund the amount of advance received by the applicant as per terms and conditions of the agreement.

( 3 ) HOWEVER it is contended that the aforesaid notice was not only pre-mature but was a deliberate attempt to avoid the transaction with a view to raise dispute in future and avoid payment for the balance amount in the manner as agreed to between the parties i. e. out of Rs. 64 lakhs, Rs. 45 lakhs was to be paid before the final payment and remaining Rs. 19 lakhs on or before 31/12/1997.

( 4 ) THE substance of the alleged forgery and fraud has been culled out in the telephonic conversation between the husband of the respondent who is a Doctor and mr. Sat Pal who is one of the Arbitrators and property broker also. According to the telephonic conversation, said notice was given at the behest of Mr. Sat Pal and Shri khurana another property dealer, though there is no transcription of the telephonic conversation of Mr. Khurana. There is only reference of Mr. Khurana in the conversation of Shri Sat Pal and the Doctor.

( 5 ) WHAT has been brought out in the telephonic conversation is. according to the applicant/respondent, that the conspiracy was hatched for serving notice upon the respondent/applicant on the purported instructions of the petitioner Mr. Narender saxena whereas no such instruction was ever obtained by the counsel from the petitioner. Another property dealer Shri Brijesh Bansal also got involved during the telephonic conversation with the respondent/applicant who admitted that the notice was got issued by Mr. Khurana and not by Mr. Narender Saxena, the petitioner.

( 6 ) EVEN if the telephonic conversation may reveal that the notice was not issued on the instruction of the petitioner but the fact remains that the petitioner has not denied that the said notice was not given by him. Rather he has referred to service of the notice even in the instant petition. Thus the element offorgeiy and fraud is utterly wanting as both the parties had agreed that if any kind of dispute arises, it shall be referred to the arbitration of Mr. Sat Pal and Mr. Ajay Khurana. At the most, the respondent can take the plea that since he has lost confidence in the impartiality and fairness of both the Arbitrators, an independent Arbitrator may be appointed instead of initiating action under Section 340 of the Criminal Procedure Code

( 7 ) IT is settled law that until and unless it is expedient in the interest of the justice that an inquiry should be made into any offence of forgery and fraud as prescribed under section 195 of the Indian Penal code, no action is required under the provisions of section 340 Criminal Procedure Code Section 195 of the Indian Penal Code recognises the following forgeries:

"whoever gives or fabricates false evidence intending thereby to cause, or knowing it to be likely that he will thereby cause, any person to be convicted of an offence which is not capital, but punishable with or imprisonment for a term of seven years or upwards, shall be punished as a person convicted of that offence would be liable to be punished. none of the revel