IN THE HIGH COURT OF DELHI
Mukul Mudgal, J.
Prasar Bharati - Appellant
Versus
Multi Channel (India) Ltd. - Respondent
ARB.P. 25 of 2004
Decided On : 14-12-2004
JUDGMENT
Mukul Mudgal, J. (Oral)
1. This is a petition under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') filed by Prasar Bharati for appointment of an independent arbitrator.
2. The relevant clause Clause 5 of the agreement between the parties dated 1st June, 1996 providing for settlement of disputes by way of arbitration reads as follows:-
"5. In the event of any question, dispute or difference arising under these presents or in connection therewith (except as to any matters the decision of which is specially provided for by these presents) the same shall be referred to the sole arbitration of an Officer appointed to be the arbitrator by the Director General, Doordarshan. It will be no objection that the arbitrator is a Government Servant, that he has to deal with the matters to which these presents relate or that in the course of his duties as a Government Servant, he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to these presents.
In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, it shall be lawful for the Director General, Doordarshan to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid.
The arbitrator may, form time to time, with the consent of the parties to these present enlarge time for making and publishing the award.
Upon every and any such reference, the assessment of the costs of an incidental to the reference and the award respectively shall be in the discretion of the arbitrator. Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause."
3. According to the averments in this application, the Arbitrator could not be appointed as there was at the relevant time no Director General. However, in response to the notice issued on the present petition under Section 11(6) of the Act seeking the appointment of independent arbitrator by this Court by the petitioner. Mr. Rajgopal who appears on behalf of the respondent raised the following preliminary objections:-
(A) The arbitration invoked by the petitioner is not beyond the period of 30 days stipulated under Section 11(5), accordingly, this petition being premature is not maintainable.
(B) That the petition is not maintainable under Section 11(6) of the Act, cited by the petitioner and if at all it is maintainable it is only maintainable under Section 11(5) of the Act and the conditions applicable for invocation of Section 11(5) have not been fulfilled.
(C) That even though the validity of the agreement has not been challenged by the respondent; even in these proceedings which are for appointment of an arbitrator, it is open to this Court to adjudicate upon the constitutional validity of such an arbitration clause in the agreement. It is submitted that the arbitration clause which does not even provide for notice to the respondent, is arbitrary, unreasonable and unconstitutional as it violates Article 14 of the Constitution.
(D) That due to non-compliance of Section 21, this petition is not maintainable.
4. I will deal first with the plea of the constitutional validity of the agreement. In Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. reported as 2002(2) SCC 388, it has been noticed clearly that the functions of this Court are not adjudicatory and are merely administrative. The relevant paragraphs of the judgment in Konkan Railway's case are reproduced as follows:-
"18. There is nothing in Section 11 that requires the party other than the party making the request to be noticed. It does not contemplates a response from that other party. It does not contemplate a decision by the Chief Justice or his designate on any controversy that th