The main legal point established is that for raising a counter claim in arbitration proceedings, it is not essential to issue a notice invoking arbitration, and lack of authority of the signatory is a procedural defect which could be rectified if put to notice.

NAVIN CHAWLA, J.

1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner challenging the Arbitral Award dated 17.09.2015 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the Agreement dated 07.02.2006 by which the petitioner had awarded the Civil and Structural Work for construction of a Mall/Multiplex, Five Star Hotel at Ferozpur Road, Ludhiana (Punjab) in favour of the respondent.

2. The challenge to the Award is confined only to the rejection of the counter claim of the petitioner by the Arbitrator on the ground that the petitioner had not raised any such claim prior to the filing of the counter claim and, therefore, there was no pre-existing dispute between the parties which would make the said counter claim maintainable before the Arbitrator. The Arbitrator has also rejected the Counter claim on the ground that it had not been preferred by the authorized representative of the petitioner.

3. As far as the first finding of the Arbitrator is concerned, counsel for the petitioner submits that the Arbitrator has erred both in fact and in law in reaching the above finding. Referring to the Mediation Report dated 08.11.2010 as also to the order of this Court dated 29.11.2010 passed in OMP No. 23/2009 titled M/s Ahluwalia Contract (India) Ltd vs. M/s AKM Enterprises (P) Ltd. he submits that not only were these claims raised before the order of reference to the Arbitrator, but also this Court had specifically granted liberty to the parties to raise counter claims. He further relies upon the judgment of the Supreme Court in State of Goa vs. Praveen Enterprises, (2012) 12 SCC 581 and of this Court in Escorts Ltd. vs. Knoor Bremse, 2007 SCC Online (Del) 1541, GAIL vs. Kalyani Mukund Ltd. 2010 SCC Online (Del) 1540, Hindustan Paper Corporation Ltd. vs. Delhi Paper Products and Others (OMP 379/2001, Judgment dated 13.04.2010), BSNL vs. Rivacom Pvt. Ltd. 2017 SCC Online (Del) 11860 and Gokul Projects vs. Cyclone Energy Pvt. Ltd. 2018 SCC Online (Del) 11814 to submit that for raising a counter claim it is not essential that the party raising such counter claim must first issue a notice invoking arbitration. The counter claim itself envisages filing of a claim by one party to which the other party alongwith its reply, files a counter claim.

4. As far as the second issue is concerned, counsel for the petitioner has drawn my reference to Issue no. 26 and paragraph 4 of the reply of the respondent to the counter claim filed by the petitioner and submits that the plea of lack of authorization of the signatory was not even raised by the respondent and the Arbitrator has decided the said issue without giving any opportunity to the petitioner to rebut the same.

5. On the other hand, counsel for the respondent submits that the counter claim was merely an afterthought and was completely frivolous. He has made reference to the Mediation Report dated 08.11.2010 to submit that in such mediation proceedings, the petitioner had infact released various amounts in favour of the respondent which clearly show that the petitioner never had any counter claim against the respondent, as if that was so, these amounts would not have been released.

6. As far as the order dated 29.11.2010 of this Court is concerned, he submits that merely because it allows a party to raise counter claims, such party cannot raise the same without first issuing a notice to the other.

7. As far as the issue of authorization is concerned, while counsel for the respondent does not dispute that this was not an issue raised before the Arbitrator, he submits that the Arbitrator could consider the same as it was a fatal defect in the pleadings of the petitioner.

8. I have considered the submissions made by the counsels for the parties. The relevant extracts from the Mediation Report dated 08.11.2010 are reproduced herein-under:

"During the mediation proceedings with the sinc