The main legal point established in the judgment is the court's authority to terminate the mandate of an appointed arbitrator and appoint an independent arbitrator in cases where doubts about impartiality and collusion arise, to promote and secure the interests of justice.

( 1 ) THERE are disputes between the petitioner No. 1 and the respondent No. 1. In view of arbitration agreement between the parties, the matter was referred to the arbitrator and the arbitration is in progress. Initially, the respondent no. 2 was appointed as the arbitrator. However, for certain reasons, which would be stated later at appropriate stage, the respondent No. 2 discontinued with the proceedings and vide order dated 2nd April, 2003 left the parties to appoint a new arbitrator. Thereafter, Mr. Anil Bhalla, the respondent No. 1 appointed respondent No. 3 as the arbitrator and this was communicated to the petitioners vide letter dated 29th April, 2003. The appointment of the respondent No. 3 as the new arbitrator is not acceptable to the petitioners. They feel that the respondent No. 1 earlier objected to the continuation of the respondent No. 2 as the arbitrator on frivolous grounds to ease him out so that the respondent No. 1 could appoint another arbitrator of his choice. This petition is filed under section 14 (2) of the Arbitration and Conciliation Act, 1996 (for short `the act ) for a decision on the termination of the mandate of the respondent No. 3 with the additional prayer that the respondent No. 2 should resume the arbitration proceedings which were being conducted by him.

( 2 ) NOW, the facts in some detail.

( 3 ) THE petitioners had purchased from the respondent No. 1 a plot of land in Sohna, District Gurgaon, Haryana vide agreement dated 6th June, 1989. The petitioners were aggrieved against certain unfair trade practices allegedly indulged in by the respondent No. 1. They approached the Monopolies and restrictive Trade Practices Commission, New Delhi by filing a complaint which was registered as RTPE No. 41/2001. This complaint was, however, disposed of vide order dated 5th March, 2002 whereby the petitioners and the respondent No. 1 were directed to take recourse to remedy of arbitration in view of clause 14 (xi) of the agreement dated 6th June, 1998. In terms of this clause, Mr. Anil bhalla was to appoint an arbitrator in the event of disputes and differences between the parties. The clause is in the following terms:"14 (xi) In the event of any dispute or difference arising out of of relating to this Agreement between the parties, the same shall be referred to the arbitration of a nominee of Shri Anil Bhalla of the Vendor and any award made in such arbitration shall be final, conclusive and binding on the parties. The venue of such arbitration shall be at New Delhi. "

( 4 ) MR. ANIL Bhalla, vide communication dated 13th April, 2002 appointed respondent No. 2 as the arbitrator. Respondent No. 2 commenced the arbitration proceedings. The petitioners filed their statement of claim. Reply to this statement of claim was also filed on behalf of the respondent No. 1. As the petitioners wanted to amend their statement of claim on the ground that certain new facts had come to their knowledge, they moved an application for this purpose before the respondent No. 2/arbitrator. At this stage of the proceedings, in January, 2003, the respondent No. 1 protested about the fee charged by the arbitrator alleging that the same was too high and wrote communication dated 20th January, 2003 in this behalf. Request was also made to reduce the fee. The respondent No. 2, however, rejected that application vide orders dated 28th January, 2003 and adjourned the case to 15th February, 2003. However, before the said date, the respondent No. 1 filed a statement of challenge dated 7th February, 2003 whereby the mandate of the respondent No. 2 was challenged mainly on the issue of fee and allegation was also made that the arbitrator was not a neutral person as he was a friend of Mr. Anil Aggarwal who was the counsel representing the respondent No. 1 earlier. The petitioners filed reply thereto and the arguments on this statement of challenge were heard by the respondent No. 2 who rejected the same vide order dated 2n