JUDGMENT :

Rohit Ranjan Agarwal, J.

1. Present application under Section 11(5) of the Arbitration and Conciliation Act, 1996 has been filed by the applicant/petitioner for the appointment of an independent Arbitrator and further seeking a relief for restraining the proceedings of the arbitration case which was initiated by the sole respondent.

2. Factual matrix of the case is that one Shyam Lal father of applicant Nos. 4 and 5 had purchased shares of one Dynamic Laminates India Ltd., a Company incorporated under the provisions of the Companies Act. As the Company had outstanding dues of State Bank of Patiala, to the tune of Rs. 1,88,00,000/-, the said amount was to be paid by Shyam Lal to the Bank and further a sum of Rs. 2,41,00,000/- to the Company. Thus, the total amount payable was Rs. 4,29,00,000/-. This payment was to be made by 30.11.2014.

3. An agreement to this effect was executed between Shyam Lal and the Managing Director of M/s. Dynamic Laminates India Ltd. on 18.11.2014.

4. One Sri B.S. Mahesh, Advocate of Muzaffar Nagar was witness to the said agreement. Further, in paragraph 2 of the agreement it is stated that, it was executed at the office of Sri B.S. Mahesh, Advocate. The agreement is annexed as Annexure 10 to the application. Subsequently, a memorandum of understanding was signed between Ajai Kumar Maheshwari (present respondent), Ambuj Kumar Maheshwari and Anil Kumar being first party and applicant nos. 1, 2, 3 and Shyam Lal father of applicant nos. 4 and 5 on 21.2.2016. According to the said MOU, the first party, i.e., present respondent resigned from the post of Directorship of the Company and handed over the charge to the newly appointed Additional Director. Further, full charge of all the operations, books of account and other documents were handed over to the second party. It was further averred in the MOU that the first party had cleared all the statutory dues of the Company.

5. Clause 6 of the said MOU provided for the arbitration, in case of any dispute and differences regarding the agreement, the matter was to be referred to sole Arbitrator Sri B.S. Mahesh, Advocate, Civil Court, Muzaffar Nagar.

6. As it appears from the pleadings of the parties, that the answering respondent gave a legal notice to the applicant for payment of certain amount, which was not paid pursuant to the agreement of the year 2014 as such, the respondent filed a reference before Sri B.S. Mahesh, Advocate appointing him as an Arbitrator in pursuance of Clause 6 of the MOU. It was on 13.5.2018, that a notice was issued to the applicants by the Arbitrator so appointed to appear.

7. Present application has been filed challenging the very appointment of Sri B.S. Mahesh, Advocate, as an Arbitrator on the ground, that applicant nos. 4 and 5 were not signatory to the MOU and the appointment of Arbitrator is unilateral act of respondent. Further, ground of challenge is that in view of sub-Section 5 of Section 12 of the Arbitration and Conciliation Act, 1996 (hereinafter called as the "Act"), Sri Mahesh has become de jure unable to perform the function of an Arbitrator in view of Seventh Schedule.

8. The matter was contested by respondent by filing counter affidavit stating that Syam Lal was required to pay respondent an amount of Rs. 2,34,00,000/- pursuant to the agreement dated 20.11.2014, but the same was not complied with, though respondent had handed over the management of the Company to the father of applicant nos. 4 and 5. It is further averred in the counter affidavit that applicants have participated in the proceedings before the Arbitrator and had filed a reply to the claim. It is also stated that arbitration proceedings were initiated due to the existence of Clause 6 in the MOU, which is binding upon both the parties and applicant cannot go beyond the terms and condition of the contract and now cannot challenge the arbitration proceedings under Section 11(5) of the Act.

9. It is also averred, that the applicants were conscious of the